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HomeMy WebLinkAboutMIN PCENRM 2026/09/15 (2024-2026) DRAFT Policy Committee on Environmental and Natural Resource Management 9th Session Hawaii County Building 25 Aupuni Street Hilo, Hawaii September 15, 2026 CALL TO The regular meeting of the Policy Committee on Environmental and Natural ORDER: Resource Management was called to order at 1:27 p.m., in"the Council Chambers, Hilo, by Ms. Rebecca Villegas, Chair. ROLL CALL: Present: Ms. Rebecca Villegas, Chair Ms. Jenn Kagiwada, Vice Chair (came' n'later), Ms. Michelle M. Galimba, Member(came in later) Mr. Holeka Goro Inaba;Member Mr. James E. Hustace, Member(via videoconference from Kona) Mr. Matt Kaneah'i-Kleinfelder,Member (came in later) Ms. Ashley L. Kierkiewicz, Member Ms. Heather L. Kimball, Member Mr. Dennis "Fresh" Onishi, 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 individuals registered to speak on Bill 183 (Comm. 1022), and came forward when called by the Chair: Dell Otsuka: In opposition. (see Comm. 1022.3) Kekoa McClellan: Comment. (representing Outrigger Hospitality Group) Jerry Gibson: Comment. (representing Hawaii Hotel Alliance) Change Order As directed by the Chair and with no objection from the Committee Members, the of Business: following items were taken out of order: PCENRM-9 September 15,2026 Bill 191: AMENDS CHAPTER 10, ARTICLE 1, SECTION 10-8 OF THE HAWAI`I COUNTY CODE 1983 (2016 EDITION, AS AMENDED), RELATING TO EROSION AND SEDIMENTATION CONTROL Establishes administrative enforcement provisions for violations of Chapter 10, including increased fines of up to $1,000 per day. Reference: Comm. 1058 Intr. by: Council Member Inaba (Note: Comm. 1058.1, from Holeka Goro Inaba, dated September 15, 2026, transmitting proposed amendments to Bill 191, was circulated.) Motion to Approve: Mr. Inaba moved to recommend passage of Bill 191. Seconded by Mr. Kaneali`i-Kleinfelder. CHR. VILLEGAS: Council Member, Inaba. MR. INABA: Thank you. This Bill is hopefully very straightforward. Currently, if folks are violating the code when it comes to grading and grubbing, we can punish them by fine, not to exceed,$500, only after they've been convicted. So what this bill does is allow administrative enforcement powers for the Director of Public Works. It requires that the directory upon finding that a violation has occurred, does serve the person responsible for the violation with written notice of violation; and that notice of violation would, at minimum, include a date of the notice, the naive and address of the recipient, the section, or chapter, or permit that'has been violated, and then a date for correcting the violation. If they don't correct'the violation within the timeframe provided by the director, they need to pay a fine of 1,000 per day until the violation is corrected. And there has been some.greater discussion around this specific to culturally significant sites that mightbe another bill that we'll see later. But this is just a general blanket, giving enforcement to the,Director of Public Works to conduct enforcement administratively via fines. So, I ask that Director Segawa and Deputy Corporation,Counsel come forward just to give your mana`o and this is something that we did review with them prior. So Director. (Note: At this time, Department of Public Works Director Wesley Segawa came forward to address the members of the Committee.) MR. SEGAWA: Good afternoon Chairman, Inaba and Council Members. Speaking about this Bill 191, the department is in full support of your bill. We see it as giving us the efficiency and tools we need to better enforce the Chapter 10 of the Erosion and Sedimentation Control Code. Thank you. Page 2 PCENRM-9 September 15,2026 MR. INABA: Thank you, Director. Deputy Corporatin Counsel if you could just provide your legal review, we do have the pending amendment as well, that we'll take up. (Note: At this time, Deputy Corporation Counsel Sinclair Salas-Ferguson came forward to address the members of the Committee.) MR. SALAS-FERGUSON: Yeah I think it's a good amendment. It gives, you know, as it's written right now, the county could prosecute violators with the pettiness of a misdeamor, which you know, it'd have to go through, be sent to the Prosecutor and as far as I know that's never happened.I So this just gives Public Works a realistic tool to enforce violations of Chapter 10,, hich mainly are people doing grading and grubbing without"permits. So this allows the director to give them notice. They don't comply; he can issue an order and then start issuing fines which are real teeth to the director's notice and orders. I think it's a good amendment. MR. INABA: Thank you, Deputy Corporation Counsel. And I just have one simple amendment which was requested by the Office of the Corporation Counsel, and I will jump into that real quick. Motion to Mr. Inaba moved to amend Bill!191 with the contents of Comm. 1058.1. Amend: Seconded by Mr. Onishi. MR. INABA Thank you. And this just removes language regarding the posting of a copy of the notice of the violation for having it done via publication through a newspaper. Deputy Corporation Counsel if you would please. MR. SALASFERGUSON: Yeah. So what our Litigation Division has found, they've done'a lot of research on service and what satisfies the constitutional requirement of due process. The two things that they recommend the two ways to serve people notice of these violations is by handing them the violation and somebody testifying that, "You know, I gave it to them." But the courts also recognize that, can't always do that. So, the courts say that the county or state can satisfy constitutional due process by mailing the notice of violation by certified mail to the person in the act of mailing it, it is service. Even if it gets "return to sender" or whatever, legally, we could proceed with that case. So that's why I was recommending that amendment. MR. INABA: Thank you. That's it on this amendment. I ask for your support. CHR. VILLEGAS: All those in favor of amending the contents of Bill 191with the contents of Communication 1058.1, please say "aye." Is there anybody who is opposed? Page 3 PCENRM-9 September 15,2026 Vote on Motion The motion to amend Bill 191 with the contents of to Amend: Comm. 1058.1 was carried by the following voice vote: (Approved) Ayes: Committee Members Galimba, Hustace, Inaba, Kagiwada, Kaneali`i-Kleinfelder, Kierkiewicz, Kimball, Onishi, and Chair Villegas —9. Noes: None. Absent: None. Excused: None. CHR. VILLEGAS: Sorry. James' empty seat keeps throwing me. And move back to the main motion. MR. INABA: Thank you. And just so you folks know, the reason for this bill, there's been two occurrences just within my own Council District,of illegal grading and grubbing. And we've found although the department has issued notice of violations that there is no fine or enforcement capability just within the department without having to go through the courts system. So that's the reason for the bill. Happy to take any questions and ask for your support. Mahalo. CHR. VILLEGAS: Great. Council Member Galimba. MS. GALIMBA: Thank you. This is a little bit off the subject of the bill, actually. But in the general area, and I just wondering, since we've had disaster in my distric`t'and there's a lot of grading and grubbing that's going on both by state, county, and private individuals,just to get things back to normal. Especially those private individuals, who are good Samaritan type folks that are just like clearing debris to geta,road going. There was a rumor that DPW (Departmentof Public Works) was going to sue them and then I told them, "No, no''no. They will,not get sued because the county is too busy getting sued, so don'tworry about it." But this now, kind of, makes me wonder. What would be the position of such private good Samaritan type individuals? Would they be covered by some kind of emergency declaration, the county for Lala, for instance? R. SEGAWA: Councilwoman, Galimba. I wish I could answer your question. Right now we are so busy trying to open up access on all our county roads. Clear up and put our bridges and culverts back into service. As far as what rumors you've heard, I haven't heard of any. I'll check with our deputy, who's out there every day. He overseeing the, you know,just getting things back in order for us. But if you don't mind, I can get back to you. Page 4 PCENRM-9 September 15,2026 MS. GALIMBA: Oh I checked with him, right away because I wanted to squash that rumor very quickly. But I'm just wondering maybe the legal counsel can help me with that. Are they covered or exempted from grading and grubbing? MR. SALAS-FERGUSON: You know, I don't know. There's inclusion, certain exclusions apply that don't require a permit. Without knowing the facts of, you know, what exactly is happening, I wouldn't be able to speak to that. The county's work, there's an emergency proclamation which allows them to bypass certain rules and regulations. But, for a person, I don't know. I would have to see what the situation is and get the informationto provide an analysis. Sorry. MS. GALIMBA: Yeah. No problem. Maybe we can talk about this some more offline. Because that is, it is so important to not discourage folks from helping out in these kinds of situations. Yeah,even just opening up other people's driveways, I mean obviously that wouldn't trigger, grubbing and grading but, I'm just even, folks, getting that impression that,you know, they're going to be in trouble, is not a good thing. So, maybe we,can talk about it. MR. SALAS-FERGUSON: You know, Deputy„Division Chief of Engineering, Melanie DeMello,justtold me that, you know, if somebody has a question about whether or not what they're doing is legal or not, they,can call the Engineering Division to get clarification on that. MS. GALIMBA: Thank you. Thanks. CHR. VILLEGAS: Thank you, Council Member Galimba. Council Member Kaneali`i-Kleirifelder. MR. KANEALI`I- LEINFELDER: Thank you Mr. Inaba. I see this a lot actually. What is the definition for grading and grubbing? Sorry. Not definition. When is a permit required? (Note: At this time, Deputy Engineering Chief Melani DeMello came forward to address the members of the Committee.) MS. DEMELLO: Good afternoon, Council, Melanie DeMello, Deputy Chief Engineering Division. The Grading Code, Chapter 10 code, requires a grading permit when you exceed 100 cubic yards of cut or filled, or if the cut or fill exceeds five feet in height. Or if the general drainage pattern is altered. For grubbing, it's if the grubbing work exceeds one acre. MR. KANEALI`I-KLEINFELDER: Okay. And grubbing is just clearing out vegetation? Page 5 PCENRM-9 September 15,2026 MS. DEMELLO: Yeah. Generally we consider that just surface clearing of vegetation. Not any kind of change in the grade. MR. KANEALI`I-KLEINFELDER: Okay. Yeah. I like the bill because this happens a lot. It's happening actually near my house too. And so, I think someone actually filed a complaint on that property. But I like to see more teeth in that to protect community and the drainage, the run-off, the loss of vegetation, all of it starts to build, when you look at it across entire swats of land or large parcels, or multiple parcels at a time. And if no one is able to do anything on behalf of the county, then we run into issues with what happens after it's done. So, love the bill. Thank you. CHR. VILLEGAS: Thank you. Council Member Onishi. MR. ONISHL Thank you, Madam Chair. On that regards to grubbing, so you said 20 acres? MS. DEMELLO: One acre. MR. ONISHL One acre., MS. DEMELLO: For requirement for,a permit. MR. ONISHI: Now,you know,with the stoarni that was mentioned by Ms. Galimba, like, I've heard stories, people were kind of grubbing, or cutting,you knew, their vegetation of their trees, dumping in the gulch area, and so forth, right, And I know it's hard to prove that those trees that came down, that blocked the drainage, was theirs, right? But the work was done and we don't know if they took it d6wn'to the landfill or not. So how will this amendment help with those situations? Or do we need to add more into this bill or this amendment to help Public Works to determine that situation? MS. DEMELLO: I think if you're asking how yeah, it is, I agree, it is difficult sometimes to determine who,you know, who is responsible for certain things if we weren't out there to see it at the time, right. It's up to the inspector to kind of make their best determination. I guess I would say this bill is more about the enforcement procedures. Giving us a way to enforce when a violation is found to the best of our ability and knowledge. But I don't think it would directly speak to what you're talking about. In that case I think, you know, we have to go within the availability and resources we have to go out and inspect, being that we're not able to be out there all the time. MR. ONISHL No. I understand. I mean because there was one in my district that I reported to you folks and then you folks sent out someone to there and then like, the next day a neighbor told me that that bulldozer got taken away, right. Page 6 PCENRM-9 September 15,2026 But the grubbing was already done. But what if that grubbing, they had pushed it into like a flood area or a like a stream, right. And then with the storm, it washed it down, right and then it clogged some kind of drainage. How can we protect the neighbors, right, because of this one property owner that did illegal activities? MS. DEMELLO: I guess what I would say and in that particular case it sounds like we, I would assume it would still be fairly obvious if someone, you know, luckily if someone grubs their property, I mean, eventually of course it would grow over. But as long as we're out there in a fairly timely manner, I think it would be fairly evident that some work is done. As far as where it got pushed, that might be sometimes a little bit harder to determine. But,„you know, we would still be able to cite them assuming those triggers are met. As far as citing an owner who happened to grub their property, we'd be able to clarify whether they obtained a permit or not. So'at least in that scenario I would think we'd still be able to issue a violation. MR. ONISHL Okay. So I guess, for public knowledge, if you do see your neighbor doing something, like grubbing, you know, it might be good to call the County's Engineering Division to make sure that that neighbor had the proper permits, right. Because thenif they don't and something did happen, then at least there's something on record right; MS. DEMELLO: Yeah. I would say,you know, we'd definitely encourage people to call our office, or we do have an online complaint system if they want to file something. That is the best way to make sure that we're notified and can send,an inspector out in a timely manner. MR. ONISHI: Would you be able to give the phone number? MS: DEMELLO: I can give our main line, the DPW Engineering Division main line is 961-8327. MR. ONISHL Okay. Thank you. I yield at this time. CHR. VILLEGAS: Thank you, Council Member Onishi. Seeing no more comments, Council Member Inaba, anything else? Okay. All those in favor of passing Bill 191 please say, "aye." Any opposed? Page 7 PCENRM-9 September 15,2026 Vote on Bill 191: The motion to recommend passage of Bill 191, as amended Draft 2 to Draft 2, on first reading was carried by the following (Approved) voice vote: Ayes: Committee Members Galimba, Hustace, Inaba, Kagiwada, Kdneali`i-Kleinfelder, Kierkiewicz, Kimball, Onishi, and Chair Villegas —<9. Noes: None. Absent: None. Excused: None. Return to Order The Chair directed the Committee to return to the order of business. of Business: BILLS FOR The Chair directed the Committee to proceed to the next order of business, ORDINANCES: Bills for Ordinances. Bill 183: AMENDS CHAPTER 21, ARTICLES 1 AND 4, OF THE HAWAI`I COUNTY CODE 1983 (2016 EDITION, AS AMENDED), RELATING TO SEWER SERVICE CHARGES Increases wastewater service rates,.and establishes a new service class with new service rates for hotels. Reference: Comm. f 022 Intr. by: Council Member Villegas (B/R) Postponed: September 1, 2026 (Note: There is a motion by Council Member Hustace, seconded by Council Member Galimba, to recommendpassage of Bill 183 on first reading.) (Note: Comm: 1022.2, from Director Daniel Girvan dated September 11, 2026, transmitting supplemental information for Bill 183,was circulated.) CHR. VILLEGAS: Thank you Mr. Clerk. With that, we will go ahead and—it's on the floor now, right, or it's on the table. Okay,perfect. So with that, I'll go ahead and open it up to you folks to share with us the information that you've brought forward. (Note: At this time, Environmental Management Director Daniel Girvan and Regulatory Administrator Kelly Hartman came forward to address the members of the Committee.) MR. GIRVAN: Good afternoon, Dan Girvan, Director of DEM (Department of Environmental Management) and Kelly Hartman, from our office. I think when we were talking two weeks ago, we were doing questions and answers, and the Page 8 PCENRM-9 September 15,2026 discussion was tabled at that point. So we are prepared to pick back up at that point. CHR. VILLEGAS: Thank you. Would you like to bring forward the Communication with your Hawaii Wastewater, The Rate Study Report? MS. HARTMAN: Sure. I can handle that one. Kelly Hartman. I'm the Regulatory Administrator for the department. CHR. VILLEGAS: I just need to get a motion to bring forward the Communication. Oh, no need? Okay. Never mind, I don't. It's all you, Kelly. MS. HARTMAN: Sounds good. Sorry,wasn't able to pull'up the Communication as it was transmitted to Council. So if I'm out,of order,just, I'll try to help you follow me along.,So I believe the first, so first we submitted the transmittal letter, we referenced that this sewer rate increase was to fulfill the legal mandate under the AOC (Administrative Order on Consent), that was bought before the Council, March 2024. Whore the County agreed to implement a financial plan and to generate sufficient revenues for operation and maintenance. Therefore, Bill 183 proposes to raise our revenue to cover the operational deficit and become self-sustaining by 2031. So the supplemental information that was provided in the Communication was in response to some of the questions that came up in the,September 1't meeting. I believe the first supplement was the sewer rate study itself. So Council can review%how that analysis was done and the cost were calculated. Additionally we have Art Crriffith and.Debi Fortin,our consultants on this study, virtually. So if we have specific technical questions about how the numbers were crunched, they'll be able to help us when those questions come. Second, the draft Wastewater Rate Model, that is Appendix A from the study that was in response to Council Member Kaneali`i-Kleinfelder's question in regard to, you know,the number of billing units per customer class that we had. So that Table 3 in'there will help answer those questions. Third,we have the proposed Wastewater Service Charge Table. The bill the way it was drafted is somewhat misleading; I wouldn't call it an error because the increases are not shown over linear time. So you'll see that, I think it's 2019 is crossed off and that's where we start. So this is to help clarify how the increases are going to change over time. And then we also have the EPA (U.S. Environmental Protection Agency) Summary and Legal Framework. I would have liked the Legal Framework to be Page 9 PCENRM-9 September 15,2026 provided first, that's a table of all of the state, county, federal mandates that support this bill. And they're numbered where excerpts of those statutes are provided for your convenience. Going through the table, if you review the legal framework, it shows that according to state, federal, and county laws, sewer rates must first be designed to produce adequate revenue required for operational maintenance. Second, we must bill the customers based on their proportionate share of operation and maintenance costs. And third, we must charge users discharging pollutants an increased costs to cover the increased costs of the operations that's required to treat their wastewater of unusual strength. In the table we also referenced the Clean Water Act. The state and federal mandates to generate sufficient revenue. Again, the.. administrative order on consent and theparagraphs that explain that the county needs to generate revenue and implement'a financial plan. It outlines penalties for noncompliance and also risks to potential future federal funding, if we do not follow the Federal Code,including grants and low interest loans. And then finally, it references our own County Code, Section 21 through 35, which mandates compliance with the Federal Code ofRegulations, which explains how the users must be charged proportionate, adequate revenue and based on the cost of their pollution. CFMR. VILLEGAS: Thank you, Kelly. Anything else, at this time? If not, I'm going to go ahead and open it up to members of the Council for questions. Oh, please, gel ahead;Director. MR. GIRVAN: There is one point. I've heard a couple times, now in the last few days, that there are some people that feel that we are increasing the hotel rates by a disproportionate amount, up to 300 percent. I've got a copy of the structure, right here and the single-family residence over the next five years, not accounting for the depreciation value of a dollar, is approximately at 100 percent increase over the next five years. In real spending terms, it's something less than that, depending on how you depreciate the dollar. The nonresidential charge, a similar amount, about 100 percent increase. And when we go to the, even the gang cesspools, about 100 percent increases also. Still not accounting for the depreciation value of a dollar. We do have a new grade structure for hotels. But when I look at the rate today and the rate out five years from now, the fixed months we charge goes from Page 10 PCENRM-9 September 15,2026 $96.00 per month to $189 per month. Which is approximately 100 percent increase just like the residential and nonresidential customers. And the per thousand gallons rate, if we pick the 30,000 gallon and above category, goes from $10.85 per thousand to $21.40 per thousand. Still approximately 100 percent increase. So as best I can tell from our rates structure, virtually everybody is increased, not accounting for depreciation of the dollar, about 100 percent. I don't believe we have a 300 percent increase in the rate for hotels here. I think that the rate increase is exactly in proportional to all the other rate structures as far as the increase goes. In addition to that,just some simple math, the accepted norm,nationally for the amount of water that a single room at a luxury resort uses is approximately 300 gallons per day. Now that takes ,into account, laundry, kitchen, swimming pool, toilet, bathtub, shower,you know, all the water that's used, even irrigation. All the water that's used and applied to that one room for one day, that's where that number comes from. Today, at our current rates for a hotel, our charge to them for treating that 300 gallons of water, would be about$3.00. So out of their receipts, for the room for that day, their cost to us is $3.00 to treatthat wastewater. In five years from now, in 2031, under the new hotel rate structure,'that cost will be $6.42. Now that means that that price would have gone up $3.4�, approximately over a 5-year period.' I Would condemn that one, that isnot a 300 percent increase, and two, an increase in cost of$3.42 for a room, which they're charging $300 to $500 a night for that shouldn't be an unreasonable increase in charge. And that increase in charge is supported by the numbers this FG (Fortin and Griffith) does a lot of work to collect,our historical financial information. Get a very good estimate of what it cost unto treat wastewater and then that price is distributed equitably over our users. We have no reason or advantage to apply anymore of that to any single user. So we feel that it's been applied equally and fairly. MR. ONISHI : Can I have Corporation Counsel come up? (Note: At this time, Deputy Corporation Counsel Diana Mellon-Lacey came forward to address the members of the Committee.) MS. MELLON-LACEY: Deputy Corporation Counsel, Diana Mellon-Lacey. MR. ONISHL Okay. So you heard testimony that was presented earlier, right? MS. MELLON-LACEY: Yes, I did. Page 11 PCENRM-9 September 15,2026 MR. ONISHL So they mentioned about creating this new hotel category. Is it legal? Can the County do that? MS. MELLON-LACEY: Well, I believe so. Other counties have classification. MR. ONISHL Does Oahu have that? MS. MELLON-LACEY: Oahu does not, to my knowledge. But I believe that Maui and Kauai both do. MR. ONISHL As this hotel category for MS. MELLON-LACEY: A hotel class,yes. MR. ONISHL Okay. Okay. Butyou said,you think so. MS. MELLON-LACEY: According to what I've reviewed, they do have it. MR. ONISHL No. I know but, like I'm saying,,but is it legal? MS. MELLON-LACEY: Is it legal? MR. ONISHL Yes. Are we able to do this`? Right, creating this category. MS. MELLON-LACEY: Yes. I believe that it's legal. You know, I say that because things can always be challenged. MR. ONISHL I know. But then, if we're doing it correctly then we don't have to worry. Butthen, you know,if you say, "I believe. I think so,"then it kind of makes me wearied. MS. M LLON-LACEY: Well, I'm sorry, I mean things are always relatively loss so, you know, it's aspecific situation. In this situation as I see it, it appears to be legal because we're using the same kind of standard to allocate usage and the same rate increases. MR. ONISHL Okay. Okay good. And then what—well then maybe it's the department now. MS. MELLON-LACEY: Okay. MR. ONISHL You can go. Because I just wanted to clarify that first. So my question is, before you created this hotel category, what were the hotels paying? MR. GIRVAN: Asa nonresidential. Page 12 PCENRM-9 September 15,2026 MR. ONISHL So was it$34.00? MR. GIRVAN: Currently, well it'll be $150 in five years from now. But$79. MR. ONISHL Okay. That's the proposed though, right? MR. GIRVAN: Yes. MR. ONISHL No. So what are they paying now? MR. GIRVAN: $54. MR. ONISHL $54? MR. GIRVAN: $54. MR. ONISHL And then with the new category, them it's going to be raised to $96.00. MR. GIRVAN: The fixed portion of the bill, yes. MR. ONISHL And then in the olds like what they being assessed now, do they pay that extra monthly charge? MR. GIRVAN: Yes. Nonresidential currently pays a fixed charge and a usage charge. MR. ONISHL Okay. And could you give me those numbers? MR. GIRVAN: Well, currently, under nonresidential the usage charge for 30,000 gallons,and over would be $9.50. MR. ONISHL That's a new proposal. MR. GIRVAN: That's the current, what we're currently charging. MR. ONISHL So the chart that we have here, so you have like 401.19 and it's crossed out and then, like say, single-unit residential is 35, that's crossed out, and the proposed January 1, 2027, going be $63.00, is that correct, how I read it? CHR. VILLEGAS: If I can just interject really quickly. Council Member, Onishi, I agree it was confusing. If you go to the last column, where it says 04/01/23, the amount is $52.00, that is the most recent fee that we're paying or that's being paid. Page 13 PCENRM-9 September 15,2026 MR. ONISHL Oh. Okay. Got it. And then I got to go back to the beginning again and all over again. CHR. VILLEGAS: Then you go over to the 2027. MR. ONISHL Okay. Got it. I'm sorry. CHR. VILLEGAS: Please carry on. MR. ONISHL So basically, if you looking at the 30,000 plus, now they being charged $9.50 and then it's going to be raised to $10.8 ,correct? Oh. Okay. So it's not really that big jump. MR. GIRVAN: It is certainly not a,300 percent jump. MR. ONISHL Yeah. Okay. Okay. So I just wanted to kind of clarify'to make sure. And then, also clarify about if creating this category was legal or illegal, right. And then, knowing that Maui and Kauai has this category, right. But Oahu doesn't. MR. GIRVAN: Could we get FG to weigh in on that? MR. GRIFFITH: With your permission,sir. MR. GIRVAN: ff we may ask our consultants at FG, they have experience throughout the islands. MR. ONISHL Okay. Sure. That would be great. R. GIRVAN- ,Art, are you available, sir? (Note: At this time, FG Solutions Consultant Art Griffith came forward to address the members of the Committee.) MR. GRIFFITH: Yes. MR. GIRVAN: Can you speak to—do the other islands have a discreet motel fee and is here any problem with it being legal? MR. GRIFFITH: So, I think the question of who has a hotel fee has been already answered. Kauai definitely does, Maui does, that's posted on their website, and I haven't reviewed City and County of Honolulu's,but I can search and see what I can find. MR. ONISHL Okay. Sounds great. Thank you. I yield. Page 14 PCENRM-9 September 15,2026 CHR. VILLEGAS: Thank you, Council Member Onishi. MR. GIRVAN: Thank you, Art. CHR. VILLEGAS: Alright. Thank you, Art. MR. HUSTACE: Chair. CHR. VILLEGAS: Council Member Kagiwada. MS. KAGIWADA: Thank you, Chair. So you mentioned you ran some numbers about what luxury hotels are consuming. Did you run any numbers on what a small hotel, like the SCP (Soul Community Planet) Hotel here in Hilo, consumes? MR. GIRVAN: No I did not. I don't have a universally accepted amount for a small hotel operation. It was relatively;easy to find the information for a large hotels, I think the record keeping is better. MS. KAGIWADA: Okay. MR. GIRVAN: I suspect that there's a much wider variability from small private hotel to small private hotel. MS. KAGIWADA: Right. I'm just wondering, is there any possiblity of looking at a distinctio ',in charges for these luxury hotels that you're talking about versus some of our small,, kind of mom and pop,you know, entities here. Is there a way to look at a distinction? Can we find some examples from other places? Maybe your consultant knows. Or is there another way to help, so that we're not necessarily painting,you know, everybody with the same brush, even though they don't operate in the same way? MR. GIRVAN: I,agtee that the best thing, we would be happy to look into it and research,that farther, MS. KAGIWADA: Okay. MR. GIRVAN: Whether we can find something or have our consultants find something. MS. KAGIWADA: I would appreciate that. I mean,just in general,you know, these fees are very regressive. They hurt low income people, small businesses, much harder then they do somebody that has wealth, or you know, a much larger company. So,just overall, I think looking at ways we can potentially support our, you know, low income households, as well as maybe our small businesses around some of this. I think would be really a good thing to consider. Whether that's, Page 15 PCENRM-9 September 15,2026 maybe it's not even changing the fees but maybe it's having a pot of money that can be assessed, you know, accessible to people who need the support. I'm also wondering about the increased fees for the portable toilets because I know a lot of our nonprofits are, they have to use the portable toilets for some of the events that they use and I'm just wondering have, you done any looking about how they may be affected and what that's going to look like? MR. GIRVAN: Well, through our consultant we have looked at what the treatment cost is for receiving that material. That's a pretty straightforward number. As to what impact that might have on the people,paying the bill, no we have not looked at that. MS. KAGIWADA: Okay. So in general you're not really tasked with that task. You know, you're not asked hove people will pay for this. You're just trying to figure out, what is that number that pays for the services, basically. MR. GIRVAN: That is correct. MS. KAGIWADA: Okay., So I think it's, I guess, more incumbent upon us and all of us as a County, to consider these other questions and how we go about it. Yeah. So that's just my overall statement is I feel like, you know, for many people, this is totally doable and it's not, and it makes sense and it's needed to support the work that you need done. But for some families, especially right now, when affodab,ility is at such a taunt and you know, challenging point for so many people, I think even what some people might consider relatively small amount of increases, is really going to hurt some of those small businesses and households that can't afford it. So I hope we can figure out ways and I'm happy to work with you on figuring out ways to help those people. Okay. Thank you. I yield. CHR. VILLEGAS,: Thank you, Council Member Kagiwada. Council Member Kaneal `i-Kl einfelder: MR. HUSTACE: Chair. MR. KANEALI`I-KLEINFELDER: Thank you. You have a representative from FG on? MR. GIRVAN: Ask that question again, please. MR. KANEALI`I-KLEINFELDER: Do you have a representative from FG online? MR. GIRVAN: Yes. We do. Page 16 PCENRM-9 September 15,2026 MR. KANEALI`I-KLEINFELDER: I have a couple questions for you sir. What is your name again, sorry? MR. GRIFFITH: My name is Art Griffith and with me is Debi Fortin. MR. KANEALI`I-KLEINFELDER: Okay. I was looking over the Wastewater Rate Model, dated August 10, 2026, is that the Communication that was provided to us? Looking at the budget, so the budget that I see y6u,had actual expenses from '24-'25, and then it jumps to '26-'27 for the fiscal years. MR. GRIFFITH: That is correct. MR. KANEALI`I-KLEINFELDER: And this was August 10th. So by August 10th, I would assume you would've had a closed out budget for '25-'26 or at least something representative of the year for '25-'26. MR. GRIFFITH: So that information in:final form,'the fiscal year ends June 30'', but final budgeted numbers, or excuse me;finial actual numbers after revenues and expenses being accrued,into the prior fiscal year that are realized after July I", were not completed by the time this study was done. MR. KANEALI`I-KLEINFELDER: Okay. MR. GRIFFITH: So we don't have that in this rate study. MR. KANEALI`I-KLEINFELDER: Okay. Looking at some of these different accounts, may actuals for '24-'25,versus projected for the '26-'27, I mean that's like one. One glaring one. Total OCE(Other Current Expenses) Repairs to Facilities actual expenses in"24--�'25 was $18,900. Projected expenses for '26-'27 is $920,000. When reviewing all the numbers, the number of accounts for the projected for '26227, versus the actuals '24225, it's substantially more. And if I'm going to take this study then and say, "You're projecting out the expenses by the department and your projected expenses "I mean if I'm looking at something, it's very inflated versus what the actual costs were last fiscal year. I can't see last years data:right now, presented in this table. But, I'm just wrapping my head around what projected expenses you were going by, what the departments submitted, and then the rate to follow based on your projections. Can you help? I don't know if I should ask you or the department to explain just this one Total OCE Repairs to Facilities projected $920,000 for fiscal year '26227, when your actuals in '24225, were $18,900. That's what's called a $900,000 increase between two fiscal years. And I haven't even touched on debt servicing which was projected at zero, from what I can see in the Rate Study Page 17 PCENRM-9 September 15,2026 Analysis. But if you guys want to help me understand how you projected. This is page 18 of 26. MR. GIRVAN: I can come up with some answer to that. But the person that can really answer that question, unfortunately, is on vacation with her family this week. That would be Robin Bauman. MR. KANEALI`I-KLEINFELDER: Ms. Bauman. MR. GIRVAN: I suspect what happened there, and it's,just a suspicion, is under the earlier number, the County was operating in the same manner that it had been operating in for the last decade. With the later number, is a number that represents what we realize where we should be after we've had,all the activity with the AOC with the EPA. MR. KANEALI`I-KLEINFELDER:,Okay. MR. GIRVAN: Now I can't document that without Robin's help. But I suspect that's what we're looking at. MR. KANEALI`I-KLEINFELDER: Okay. Is debt service built into your rate studies? MR. GRIFFITH: No. MR. KANEALI`I-KLEINFELDER: Okay. Okay those are two that stood out to me and,well, at this point, I almost want to bring in our Finance Director and just wrap my head around your budget'. If the budget you've presented to FG is inflated more--than itshould,be to become the basis of the rates that were looking to pass to ourrate payers, then I really want to review the budget to make sure the budget;is in alignment with the rate that we're asking for. And if we're not even including debt service and this rate increase, is it getting the department where it needs to be to really be breaking even between the rate payers paying their fees and the projected increase of your rates and your actual budget. And is the budget real. MR. GIRVAN: Well debt service is tied to capital investment. And nothing in these numbers addresses capital investment. Capital investment is essentially paid for by the taxpayer. All the numbers in this rate structure are numbers that relate to the user and they are numbers which go up and down as the use goes up and down, where the capital investment is what you expect the money is a fixed amount. And therefore the debt service on that is also calculated straight from that amount. So I don't believe that the debt service should show up in the study at all. But as far as the big change in numbers, I suspect there are people in this room that know even better than I that we under spent prior to '25. And we're Page 18 PCENRM-9 September 15,2026 doing catchup spending after '26. And I suspect that has a lot to do with it, numbers, you're questioning. MR. KANEALI`I-KLEINFELDER: Okay. That was just the two that stood out, so thank you. Thank you for that. I'm going to yield for now. Sorry Chair. CHR. VILLEGAS: Thank you. Yep, Mr. Hustace in Kona Chambers, the floor is yours. MR. HUSTACE: Thanks, Chair. Appreciate the time here. There's a question that Council Member Onishi asked more about the legality side of it. But, excuse me, was more of a question about justifiablity from my stance here. In terms of, Director, you know the difference in rates,here, specifically speaking about hotels, so, nonresidential going from $54.00 to $79.00, 47 percent increase. But hotels are going from $54.00 to $96.00, about a 77 percent increase. So hotels themselves are about 42 percent over the nonresidential then, correct` MR. GIRVAN: Single residences are going from $52.00 to $125.00 over the five year period. Which is— MR. HUSTACE: Right. But ifyou just look at one 'year perspective, when we're rolling from these dated rates, which e haven't changed since '23, then you kind of roll them up to that 2027 line. The nonresidential ones are going from $54.00 to $79.00 and the hotels themselves are going from $54.00 to $96.00. MR. GIRVAN: Yes. But that's the fixed portion of the bill. And in reality, when you calculate the total bill, the fixed portion of it is a very small portion of the total bill, MR. HUSTACE: Sure. And, no I recognized that but what I'm trying to get at herers just for the sake of it here, the hotels, needed their own class, they're effectively 22 percent above, what they would've been if they were stated in the nonresidential tier. Now, does that justify, that 22 percent,justify them being in their own"class altogether? MR. GIRVAN: Okay. Well, an indirect answer to your question would be, if it's a nonresidential, maybe instead of a three quarter inch meter, they have a one inch meter atthe most, an inch and a quarter meter. And there's a certain fixed cost associated, you know, for the County, to have that meter to buy it, to install it, keep it in place. If you're at a hotel,you're probably not going to service that hotel with a one inch or an inch and a quarter meter, It's probably two or two and a half or a three inch meter. So the fixed cost to have a meter located at that building is higher for the County. Page 19 PCENRM-9 September 15,2026 MR. HUSTACE: And you're saying that that equates to a 22 percent being higher is justifiable. That the strength of the effluent, the strength of the wastewater, and the treatment of hotel wastewater can justifiably, you know, enforce the 22 percent increase over nonresidential. You know, considering the oxygen, bi-chemical oxygen demand, the solids, everything. The strength of the wastewater doesn't justify a 22 percent above the nonresidential. MR. GIRVAN: I guess my answer would be is, does good bookkeeping justify the difference? If we don't split hotels off, then the question well could be, "Well they are doing something different then they must be,either more money or less money than we are." If we do the bookkeeping correctly, separate them, and actually put real numbers to their service,then— MR. HUSTACE: But it's not just the bookkeeping thing. It's, you're saying that the 22 percent above for hotels, above nonresidential, means that their effluent is 22 percent stronger. Is there a justification for them being that much higher? Are they producing the waste with, is it stronger,is it,you know, I'm trying to understand how you got to those numbers, rather than just a bookkepping number. Council Member Onishi asked about the legality, I'm just asking about, can we justify, them being thattnuch higher, based upon:what they're putting into the sytem? MR. GIRVAN: And I believe, I'm sorry 1,think I understand your question better now. I,believe the answer to that is,yes. But I'm going to ask Art to step in because he can give you real numbers. MR_ GRIFFITH: The answer from a cost of service perspective, the answer is yes. Wasterwator from hotels typically is stronger than wastewater from commercial or other nonresidential accounts. And in our cost to service analysis, we considered the wastewater from every customer class that you have. The residences, the nonresidential, the hotels, and the private haulers, seperated into three customer classes and the differences in rates are based on the differences in customer characteristics. So, for hotels versus nonresidential, the difference in rates, is the difference in the wastewater strength. Same for the private haulers. The reason why those are also increasing is because we sampled wastewater at the headworks or the County's engineering consultant arranged for that. And so, the rates that you see here are cost of service based rates where the differences in rates_come on customer classes that are based on the characteristics of wastewater from that customer class. MR. HUSTACE: So we're able to, we have sampled and tested the wastewater from each of those accounts to kind of give a perspective of the strength of their effluent. Page 20 PCENRM-9 September 15,2026 MR. GRIFFITH: We used estimated accounts. We did not, we were not able to obtain a wastewater samples from hotels for this rate study. We published estimates from other utilities similarly for residential customers, we used published estimates of per capita BOD (Biochemical Oxygen Demand) and TSS (Total Suspended Solids) loadings. MR. HUSTACE: Okay. So we're looking at estimates from similar accounts then. MR. GRIFFITH: Yeah. Similar accounts and for the hotels we used estimates that were produced on Kauai. MR. HUSTACE: And we can justifiably ,'say,that the 22 percent increase for them, above nonresidential, can account for the strength of their effluent then? MR. GRIFFITH: Yeah, and I want to echo one of the points that Director Girvan made. And that is the, for the hotel, the proposed hotel customer class, the vast majority of revenue comes in the usage charge, specifically the tier that is 30,000 gallons per month or over. And so, if you compare that with the hotel, if you compare that charge with the nonresidential class,it's about 15 percent higher. MR. HUSTACE: Okay. MR. GRIFFITH: And the hotel data that we got from Kauai was for a, they have a split,customer class. Hotels with restaurants and hotels without restaurants. And we used the BOD data from,their work for the hotels without restaurants. So that's even a conservative estimate of the wastewater strength. MR. HUSTACE: Okay: Thank you. I appreciate those details. And thanks for letting me kind,of dig into that a little bit. Director, is there, you have any thoughts aboutphasing in the hotel rates rather than just jumping right into it? And then so that we can have more local testing to get a better understanding of the strength of what's coming into the system. MR. GIRVAN: Well we have not considered that. I don't, I'm not saying we couldn't consider it but at least as far as this presentation, as far as this bill is concerned, we did not consider that, no. MR. HUSTACE: Okay. Thank you. And then,just for an estimate here, if we did not have the hotel class, what would the County kind of be foregoing in those revenue opportunity? MR. GIRVAN: Well we just heard Art say that for the majority of the hotels that the difference is actually about 15 percent, because of larger users. So I suppose it would be 15 percent of whatever our total fees are for the hotel class. Page 21 PCENRM-9 September 15,2026 MR. HUSTACE: Okay. Going back to the bill. We have gang cesspools on here. I thought gang cesspools were no longer allowed? MR. GIRVAN: Well they are but the County is a proud owner of a couple of them. We are working very hard to close those. But until such time as they're closed, there's still in the rate structure. MR. HUSTACE: So that's a rate we pay ourselves as a County then? MR. GIRVAN: No. That's a rate we charge peopl6 in Pahala and Na`alehu. MR. HUSTACE: Okay. But is it worth having that rates structure set? I mean we're trying to phase them out. I mead, I'know we have some years but,just a food for thought for that one, for sure. MR. GIRVAN: Okay. MR. HUSTACE: Yeah. I think that's all I have for now. Thanks, Chair. CHR. VILLEGAS: Thank you, Council Member Hustace. Council Member Kimball. MS. KIMBALL: Yes. Thank you: I kind of want to build up off of Council Member Hustace's line of questioning. From the standpoint of one of the testifiers raised that hotels are not the only form of transient vacation rentals. Sorry guys. Maybe too soon. I would presume that other forms of vacation rentals, such as timeshares, short-term vacation rentals, those are all currently falling'under the residential usage, MR. GIRVAN: That's actually an excellent question and Kelly and I just had this conversation. So I would ask her to answer that question. MS. HARTMAN: Kelly Hartman, Regulatory Administrator. So yes. Currently, short-term vacation rentals are often zoned in residential communities and that is how our accountants pull that information to determine who's in the customer class. With the Planning Departments recent go live registry for short-term vacation rentals in B&B's (Bed and Breakfast), it's an excellent opportunity for the County to have a data set that we can pull from to charge these businesses the non-residential rate. We don't believe we have an accurate cost of service analysis for the short-term rentals because they don't provide the kinds of services the hotels do, to throw them in the same class. They don't have the large commercial laundry mats,you know, maybe they don't have the giant pools, and the commercial kitchens. So, we don't think we have enough information to throw them into the same class. Page 22 PCENRM-9 September 15,2026 But we definitely have enough information to throw them into a commercial class. MS. KIMBALL: Thank you. Yeah, I was going to ask your consultant if they had any sort of information from other jurisdictions, either in the state or more nationally, is there a difference in usage between a typical homeowner residential unit and something that is used as a vacation rental. I know it's not part of our study. But do you have any experience or information,on 'that? MR. GRIFFITH: I do not. This is Art Griffith, MS. KIMBALL: Okay. Thank you. Yeah, something I think,you know, that the idea of treating the hotel class differently, I think, begs to question what was raised by the testifier, is shouldn't some of these other activities that are, in fact, commercial and could influence the amount of wastewater, also be factored in. And like you said, since we now have this tool to more accurately identify those properties, perhaps this is something to consider rolling in or anticipating with further discussion about that. My other question was with respect to—are you familiar with any other jurisdictions? I'm thinking about some of the comments Council Member Kagiwada made about the fact that this is sort of a regressive fee structure, right. And, you know, the way we deal with thatin the Real Property Tax world is to provide an exemption below a certain value amount, right. Are you aware of any structures in the state that uses similar type model to provide a little bit of benefit or relief to lower income families. Is that something worthy of discussion or does that'just get too far outside of the realm of what is typically done? MR. GIRVAN: Well,that for us, I guess it'd be a complicated question. Because on,one side we have county, state, and federal laws requiring us to charge strictly, according to the cost of service. So as soon as we create a different cost structure for a specific category of user, we're at risk of violating that rule. MS. KIMBALL: Right. Okay. MR. GIRVAN: At the same time, we do recognize that this, for some families, is an expensive service. We all benefit from having clean wastewater. So, those two thoughts kind of conflict with each other. Our current thinking is that we would like to put some programs in place, which one are based on existing low- income program structures. Meaning that our customers would be pretty vetted. We don't have the skill or the manpower to do that vetting ourselves. So we would need to rely on other agencies that have a lot more experience doing that than we do, to vet our customers and say, "Yes. This is a family unit that deserves some consideration." And then we have to say, "Okay. How do we provide that consideration?" And our current thinking is, we find a way that Page 23 PCENRM-9 September 15,2026 additional money comes into the system. Quite frankly, one of the answers on the table was that the Council could provide a fund for subsidizing these wastewater accounts that are being helped. Now, I don't mean to be flippant of that, it's certainly a possibility, but in order to stay above the law, we have to find the way to provide that without providing a different cost structure for that class of customer. MS. KIMBALL: I see that you're, Corporation Counsel, wants to lay down that. MS. MELLON-LACEY: Deputy Corporation Counsel, Diana Mellon-Lacey. There is in the Clean Water Revolving Fund Act, and it's in the packet that you have as number three. A section on additional subsidization; which allows the possibility of getting funding to help offset people, who are having difficulty. And one of the criteria is that you do have a rate system set up that�you know, pays for the system. So within that structure, I don't know if this has been done, I haven't checked with the state or see when it's been given. But it's something that we could certainly look into because it exists within the revolving fund. But you have to have good documentation. MS. KIMBALL: Got it; MS. MELLON-LACEY: To show. MS. KIMBALL: Thank you. Thank you for that. And it sounds like we also have the'rates that are imparity with what we're actually paying, which is what we're trying to accomplish here. Chicken and eggs, sort of thing. Okay. Great. One final question, sorry going back to the hotel, would either of you know, I know'some of our hotels are on their own individual wastewater systems. Do you know how many properties we have, in that, that would meet the criteria and be part of this rate? MR. GIRVAN: No I do not. Art, do you have any idea? MR. GRIFFITH: So for the purposes of—we don't have an exact count for the purposes of—doing the rate calculations, we looked at all of your non-residential customers and worked to identify as many of those, which were hotels, as we could, using things like tax map key numbers and addresses and we've identified at least 21. But there may be more. S. KIMBALL: Okay. Thank you. MR. GIRVAN: Thank you, Art. MS. KIMBALL: I'll just conclude by saying,you know, I think obviously we've had some conversations offline prior about the importance of making the rates Page 24 PCENRM-9 September 15,2026 cover our general operating costs. I still continue to have this greater concern about, you know, how few people we actually have connected to our systems and how many, how few people are like bearing the burden of all of these operating costs. And want to ensure that we, as a County, and this is editorial, are doing more to make sure we hit, we broaden the usage of our existing wastewater systems so that we actually have more people feeding into these operating cost systems. Spreading, if you will, the duty and responsibility. With that, I'll yield at this time,just wanting to remind everyone that we do submit this to the Environmental Management Commission (EMC)today, rather than moving it forward, in terms of timing. MS. HARTMAN: Could I respond to your comment? So under the AOC, the department is required to put together a,connection compliance plan, and I believe that's due this December. So, we've been meeting and talking about how to enforce connections and we're going to put together a brief plan and how'we issue letters and that type of thing. So that"ll be forthcoming. CHR. VILLEGAS: Thank you. Council Member Inaba. MR. INABA: Thank you; In our last meeting, f had requested some, a calculator, very basic for us to be able to sec, I mean I know you have the consultants and you've provided explanation of low you folks have come but, did you folks get a chance to put that together so members,of the Council are able to see and just play with rates to see what happens? Because we know we need to send it but unlike other planning bills where we send it to the commissions for recommendation and we can do what we want after, if;we make substantial changes, we would need to send it back again. So we need to make sure we are not tinkering with it too much after it comes back. We need to tinker before. MS. HARTMAN: Kelly Gartman, Regulatory Administrator. Can I make sure I understand what,the request is? You'd like a calculator break down from the class structure so you can plug in numbers to see the increases? Yep. We can provide that. MR. INABA: Okay. Because right now, I mean I think on page ES2, if that's how this numbering works, that there's an attempt that explanation, perhaps. But, yeah, we don't necessarily have just a simple calculator. Kind of like how we do whenwe do our Real Property Tax Rates to show,you know, what the value is. In this case, how many users and what the base rate is plus any additional use fee on top of that. So I think that might be, it is going to be helpful. And I asked for it last time and we still need it. Thank you. CHR. VILLEGAS: Thank you, Council Member Inaba. Council Member Kierkiewicz. Page 25 PCENRM-9 September 15,2026 MS. KIERKIEWICZ: Thank you, Chair. Thank you for all the information. I think yesterday you guys had submitted a couple of other plans, Wastewater Facilities Plan, 229 pages, and Cesspool Conversion Evaluation Report, 219 pages. That's a lot to drop on us the day before we meet. And the reason I bring this up is because last time I wanted to better understand how this particular ordinance, right, the funding piece, fits into the longer-range strategy for what we need to do to get our wastewater treatment facilities in functioning order. And so just kind of high-level review of these reports revealed about$2.3 billion dollars for existing wastewater treatment facilities. And then on top of that, $5 billion dollars for cesspool conversion. That's a lot. That's a lot of money that we do not have and that is one very large and important area of our economy and the essential services we need to provide as a county. But it's not the only thing that we can be thinking of. I bring this up because it kind of springboards off of what Council Member Inaba is asking about this calculator. I'm trying to understand with the changes that are being proposed here how much more additional funding is being generated to essentially meet the gap, fill the gap, meet the goal that's intended for, you know, financing what needs to be done through the facilities plan. Do you have a sense of what these next projected five years will mean'for your department and getting what you need to have done through, like the AOC,,what all those mandates are? Because that's still unclear to me. 1 don't know what the longer-range financial plan is. And'I'm taking a look at one other reports, I think it's part of the docket where it's noted that, we do not have a comprehensive CIP (Capital Improvement Project)„plan for infrastructure or anticipated failures and we do not have an adequate,financial plan with the sustainable funding mechanism to plan cost and financing for necessary CTP projects and repairs. So, that's not lost on me and I again,just trying to understand how will this feed into that larger financial planning strategy.,, MR. GIRAN: Ohs I can answer part of that question. Most of the numbers you're referring to will have, will be paid through capital investment. The County, outinto the future, has some very large investments to make. Whether they be on'behalf of the County or just residents of the island with a lot of these cesspool closures, individual residents are going to wind up bearing that cost. It won't be a county cost, but somebody will be spending new money to achieve a lot of the goals that are in those reports. The money that we're talking about today here in this bill, is not capital money. It is operating money. So this is money which we will spend, day-to-day, year-to- year, to pay wages, buy electricity, buy spare parts, buy chemicals, etcetera. So it's the cost, it's the ongoing cost of operating this system. But the system itself is created through capital investment. Page 26 PCENRM-9 September 15,2026 MS. KIERKIEWICZ: Okay. That's helpful Director. Can you then provide us a report that will let us know how much, less general funds your department will be relying on, with these proposed changes if it's for operations? MR. GIRVAN: Oh. Our goal MS. KIERKIEWICZ: Does that make sense? MR. GIRVAN: Certainly does. And as part of our eery important goal. Our goal and our instructions to FG was that in five years,we Want to be at zero general funds. Then with these increases in rates, we should be self-sustaining. And will not need any additional general fund money to maintain our operations. MS. KIERKIEWICZ: Okay. That's very helpful to have on the record. Thank you. I yield. CHR. VILLEGAS: Thank you, Council Member Kerkiewicz. Council Member Onishi, have you spoken yet? Okay. I'm going to go to Mr. Kaneali`i- Kleinfelder. MR. KANEALI`I-KLEINFELDER: Thank you, Chair. Thank you, thank you. CHR. VILLEGAS: Council Member Hustace,I'll check in with you in just a minute MR. KANEALI`I-KLEINFELDER: And you know, I liked Council Member Kimball's point: If you have a bed and breakfast functioning on a residential lot, they're paying for water, they're paying as a unit,just one unit, $52.00, right. But there's not a per unit charge like, there's not a per thousand gallon charge coming with that costbut, they are housing more people, they have a higher water bill, but their sewage is actually more than, would be a normal residence. That's an interesting, that was a very interesting component of how to get more money into the department. MS. HARTMAN: Clarification. So if you have a short-term vacation rental that is multiple dwelling units, it's being charged a multi-dwelling unit rate,per unit. If it's a single home, it's being charged as one unit. MR. KANEALI`I-KLEINFELDER: Okay. Okay. Thinking down the line, we have a lot, many discussions about ADUs (Accessory Dwelling Unit), `ohana's, additional farm dwellings, all these different pieces out there floating in County Code land, may not be recognized by this system that we have in place. So just a good place to double check to make sure that you are getting the funds you should be for folks connected to this sewer system. Page 27 PCENRM-9 September 15,2026 I got to keep hammering on this. The number of accounts that we have historically and then projected, if I had looked at Hilo's single unit residences, 1830 number of accounts. November 30, 2023, projected for FY (Fiscal Year) 3031, 1961. So that is 130 accounts, we're projecting to grow by for just Hilo's single unit residences. That number points to a problem that we have internally, which is, we're not growing our systems like we should be. But I did the math, and actually, it is hard to pencil it out. If you put what I had, I think I had 1,000 new customers times $52.00, doesn't equal out to that much money. So it's hard to pencil it out. But take a 20-year return on investment to put people on the sewer system. Depending on, for a $1 million dollars,,so I get it. But we have to move in that direction. On the other side of this is, looking at your costs, bringing down your costs, electricity is huge for you folks. Bringing down your costs for electricity, decreased your costs. I'm looking at,kind of holistically at your department, before projecting our cost to get higher ,to run wastewater. If we can'bring that number down, while you increase your rates,you're trying to meet those two lines in the middle, save money for the department, and lessen your needed rate increases for the public taxpayers, while trying:to meet all demands. That in itself should just be part of thatpush, I think, which you bought up Ms. Hartman on pushing that, what'd you say; December, you have something coming in December for this? MS. HARTMAN: The Connection Compliance Plan. MR. KANEALI`I-KLEINFELDER: Okay. Connection compliance. But also to the EMC on directionality for the department to begin decreasing cost for providing,a service versus just projecting upwards and then we're going to keep that rate upwards. It's not;a sustainable approach it's just a"keep it status quo" and was "& what we do."' That make sense Director? MR. GIRVAN: Yes it'does. And we've taken a look at, you know, when you go looking for how you're going to save money,you look at the big costs items first because if you can save five percent of a big item, it's more dollars than five percent of A small item. And for instance, our plant in Kona, we have a motor that drives a blower and that motor is variable speed motor but it can be between three and five hundred horse power. And the electric bill for that motor is very significant. And we are doing an engineering study of that motor and the aeration system that it operates, right now, working with HECO (Hawaiian Electric Company) and some other contractors to see if we can reduce the operating cost of that motor and still get enough oxygen in our water to get adequate treatment. So we are already looking at some of that. There are some things like, wages, equipment costs, chemical costs, we have less control over. But right now we're investigating our electrical costs and what we can do about it. Our electric bill is Page 28 PCENRM-9 September 15,2026 approaching $3.5 million dollars per year. So it's a good place to try and find some savings. MR. KANEALI`I-KLEINFELDER: Okay. When you think sewage, it's,you look at the wastewater, sorry the water usage going to the building and then that's how you get your sewer charge? MR. GIRVAN: Ask me that question again. MR. KANEALI`I-KLEINFELDER: Water in,is your sewage rate out, right? I mean, it— MR. GIRVAN: Water in. Meaning at-the treatment plant? MR. KANEALI`I-KLEINFELDER: Potable water. No, no. Potable water to the residents or to the non-commercial or whatever you want to call it. MR. GIRVAN: Not completely true. In &perfect world, yes. But virtually all gravity flow sewer systems have a certain amount of infiltration. MR. KANEALI`I-KLEINFELDER: No, no. Sorry, to the residents, you deliver 5,000? MR. GIRVAN: Oh yes. Yes. Pm sorry. Yes. MR. KANEALI`I-KLEINFELDER: But humans, I mean we add to the water on the way,back out, right? MR. GIRVAN: Are you aying'add to in volume? MR. KANEAL I`I-KLEINFELDER: Yeah. In a nice way, I mean it's only MR. GIRVAN: I suppose that's mathematically true. It's a significant number I would question at. MR. KANEALI`I-KLEINFELDER: I was thinking about that. The interesting point to this is, interesting in that the dollar amount and the units, almost everything is equal between Hilo and Kona. Even your hotels looks like it's equal for Hilo and Kona, which I did not expect to see in your report. Which tells me that a lot of our Kona facilities are actually not on our county systems. MR. GIRVAN: Well it should be. MR. KANEALI`I-KLEINFELDER: Like our hotels, because Waikoloa Page 29 PCENRM-9 September 15,2026 MR. GIRVAN: It shouldn't be that surprising because the plants are equal size. They're both designed as five million gallon per day plants. MR. KANEALI`I-KLEINFELDER: But Waikoloa is serviced by private? MR. GIRVAN: Yes. MR. KANEALI`I-KLEINFELDER: So they don't even show up on our books. MR. GIRVAN: Yes. MR. KANEALI`I-KLEINFELDER: Yeah. I was trying to figure out, it just seemed unbalanced, till I realized that. Okay.,- Thank you. CHR. VILLEGAS: Thank you, Council Member Kaneali`i-Kleinfelder. "Council Member Onishi. MR. ONISHL Thank you, Madam Chair. On that note, for the hotels, how many hotels on the island is participating in this, using our systems? MR. GIRVAN: Well going back to Art's answer fr6ra'a little while ago, they did a preliminary search and their best estimate at this time is that we have 21 hotels. MR. ONISHL Okay. That's on the system.'Because I think in Hilo, in Banyan Drive;it might be like three hotels that are on the system. Mk. GIRVAN: Art, are you still on sir? MR. ONISHL And there's a couple condos. MR. GRIFFITH: ,Yes. Yes. MR. ONISHL So, would you know, Art, how many hotels in Hilo, on Banyan Drive, are hooked up to the sewer system? MR. GRIFFITH: I don't have that specific number off the top of my head. I'm sorry. MR. ONISHL So, your determination on the cost was, because, like as, Mr. Kaneali`i-Kleinfelder mentioned, Hilo, East Hawaii and West Hawaii, there's like a difference. So, how did you come up with just one rate across the board? MR. GRIFFITH: So, the Cost-of-Service Analysis considered the County's sewer systems, all of them in aggregate. We did not separate and calculate, separately, if there was any difference in costs between a Hilo customer and a Kona customer Page 30 PCENRM-9 September 15,2026 or any of your other smaller treatment plants. That's the way the county budgets are not fully disaggregated. Some costs are, some costs aren't. And so, the rate schedule that was developed is, applies county wide to all of the county's wastewater customers. MR. ONISHL Okay because to my understanding, like for example, Hilo Hawaiian, I think they charge like a$125 a night and not three or four hundred dollars a night. So now they going have to increase their room rates. Was that considered? Or was that looked at? MR. GRIFFITH: We did not factor in any effect of these wastewater rates on retail prices per hotels. What we did is we looked at the wastewater characteristics of the customer class of each customer class and used that to determine the rates based on the system wide amount of revenue that needs to be collected. To operate, maintain,,and replace the system. MR. ONISHL Okay and so then also you didn't look at factoring in, like B&Bs, TVRs (Transient Vacation Rental), correct` MR. GRIFFITH: Any B&Bs or TVRs that are within the existing customer classes, we assumed thatthey Would stay within the customer classes they are currently assigned to. MR. ONISHI: Okay but like, go,ahead. MS. HARTMAN; Kelly Hartman, Regulatory Administrator. So this is a conversation outside the rate study. The rate study is developed in such a way that we have residential rates, we have non-residential rates, which is where our commercial customers get;lumped into. And so, what the county is saying, is we have an opportunity, with now that the Planning Department is collecting data on registering these facilities. We have the ability, our accountants, our billing clerks, can pull that:information and identify, "Okay what residentially zoned units are actually permitted B&Bs," and they can charge as commercial. MR. ONISHI: So now, on saying that, once you folks start finding out that there's more of this commercial use, then they're going to switch classes? So now you guys going be making more money, right? More income going be coming in because they were going to be paying a higher rate, correct? MS. HARTMAN: If we moved short-term vacation rentals to the non-residential rate it would be an increased rate. MR. ONISHL And now, so then does that reduce the residential rates? Page 31 PCENRM-9 September 15,2026 MS. HARTMAN: No. The rates are based on the customer classes, and the customer classes are based on a cost-of-service analysis. MR. ONISHL All this, but you folks basing everything on, is the use. So for the next five years, right, starting from next year, hopefully at the fifth year, operating costs going be covered by all this expense, by these increases, correct. That's what director said, right. So now, if this classification where these bed and breakfasts, TVRs, are now moving to the non-residential,you going get one increase in revenue, in that category. Correct? MR. GIRVAN: Theoretically you could project it that way. I think I'd have to take a"wait and see" attitude. The idea that if we were able to collect more money from a specific justified collecting more money from a specific class that it would impact what portion of remaining classes pay. I think that's a fair expectation. I'm a little less sure of that, we would actually be able to recognize how that's happening, if the numbers would be big enough and significant enough for us to actually take action on them. You know, I'd be hesitant to promise it would work that way, but it could,yes. MR. ONISHL I mean ifyou just do the math, it kind of calculates it's going to be more. It's like, for example, like and I mentioned this to you folks before, that I cannot see banking this cost just'amorig what we have, servicing now, and not looking at the future growth; Because within that next five years we could be adding another thousand users, right. And'we're not going to be seeing any reductions in'those that were already paying that increases, right. So now, that's going to be added income towards the department. Why? MS. 14ARTMAN; It's„going to be an added volume of water that we have to pay to treat and,so it doesn't add to revenue. Mk. ONISHI:`I understand that but, no, but you have operating costs, is including everything like you said, equipment, electricity, and all these kinds of other things, right. But as you moving on into five years you might reduce your electricity becauseyou might be looking at other alternatives. But you are still going to be collecting these funds. You're not reducing the amount of revenue you're bridging in, right. But you are going to reduce your costs, right? MR. GIRVAN: I think theoretically what you're proposing is correct. My only concern is how will we recognize it and act upon that in reality. We're going from a fixed fee of$52.00 a month under the current rate structure to a fixed fee of$54.00 a month. That's only a four percent increase, right. MR. ONISHL No but I mean. Page 32 PCENRM-9 September 15,2026 MR. GIRVAN: It would be hard to recognize it and change the rate structure based on that. MR. ONISHL But like it's just like how you based this rate increases, right, on the five years, to get to that zero general funds, right. Using general funds, there should also be a plan or goal set on how many more users we can have within that five years, right. I mean that would be ideal for the Council to know. MR. GIRVAN: An answer to your question is, five years from now, we're going to need to redo this rate structure again. And we'll have to go back through all the analytical steps that we've done this time and see how it works out five years from now. As to who contributes how much and what the true cost is. MR. ONISHL So, you folks right now don't have a plan of increasing users in the next five years. MR. GIRVAN: In order to increase users in a significant way, the number was put on the table of a thousand users a year, I could see how we could do that. But in order to increase users in a significant way,we would need to expand our collection system. It wouldneed to get bigger, more branches, go out through more of the community. There's nothing I would like more than to branch out our collection system than bring more cesspools in. MR. ONISHI: I know and I understand this., But so, like I'm trying to say is that there's'so many different moving parts,yes, but you cannot just focus just on one, right.„ Your department needs to focus on all the different moving parts to see how we can get,to these certain goals. MR. GIRVAN: And I have a whole department full of people that would like to expand our system. And as scion as somebody finds some money for us to do it, we will,go to work doing that. MR. ONISHL Okay. Thank you. I'll yield at this time. CHR. VILLEGAS: Thank you, Council Member Onishi. At this time we'll go back to Council Member Hustace. I just also want to humbly remind the body that we are, it's ten after three and we have another two committees to get through today,--"So thank you, Mr. Hustace. MR. HUSTACE: Thanks, Chair. I'll be brief. Director the last conversation we had, one of the requests I made was around number of comparables in the study. So the study has four comparables, right, and I think it's a little narrow. There are other PUC (Public Utility Commission) rates that were set on different spaces and different times and, you know, along with the calculator that was been requested by Council Member Inaba, I think it would be good to include some of these other Page 33 PCENRM-9 September 15,2026 figures that are out there. So we get a better picture of what some of these comparables are. It's just too narrow right now. So, to really understand what residentials in different communities, I mean some are higher, some are lower, I mean it's all over the maps. So I just wanted to see if there are those figures out there, if you and your office can gather those figures so at least, we have some baseline figures to kind of put into that calculator. Otherwise it could be all over the place. So really looking for a real clear snapshot here on 1­16wai`i Island. Thank you. MR. GIRVAN: Okay. I understand. CHR. VILLEGAS: Okay. Thank you, Council Member Hustaee, Guess I'll do—Council Member Kaneali`i-Kleinfelder. MR. KANEALI`I-KLEINFELDER: Ju t briefly. Just as a reminder, why I touched on the debt servicing. Is that this was brought up in the last meeting but I cannot make this clearer for everyone to remember. The people who are paying rates are connected to the sewer system. But, the$500 million of debt servicing, the County's about to go into to improve our wastewater systems, is being paid by every taxpayer on the island. So if you look at fairness, people who live and have a septic system in Puna or Volcano'or I,6hala, who aren't-connected to the sewer system that we are talking about rates covering,just the cost of the department to carry, we're all paying for it. So in fairness we have to make that adamantly clear to everybody if we don't like it"1,understand, if hotels don't'like having a class of their own, I understand that. But I'm not connected to the sewer system but I'm paying to improve the sewer system':that's collecting the wastewater from the hotels in Kona, that I pay $800 a night for,to go right now because their prices are crazy or the hotels here in Hilo:. So we all are paying for it. The rates are being paid for by the rate payers, but we're all paying for the wastewater treating itself so. Just keep hammering on that so we understand the fairness that's being addressed right now. Thank you. CHR. VILLEGAS: Council Member Inaba. MR. INABA: Yeah. I asked last time to get the information to us quickly. I will make myself available to meet with you folks this Thursday or Friday, to make sure we get the information in a timely manner. Because these 200 pages were time stamped on Friday and that's just, it's not okay. We need to get information in early so everyone has time to digest and look at it. If not, we're going through Page 34 PCENRM-9 September 15,2026 this exercise right now, and it's not efficient use of our County's resources. So let me know what time Thursday or Friday. Thank you. CHR. VILLEGAS: Thank you. Council Member Galimba. Kimball. MS. KIMBALL: To small questions. Just wanted to clarify regarding a comment. I understand that,you know, both the family dwellings that were CPR'd (Condominium Property Regime) have different ownerships, condominiums, for example, apartments would be charged as individual units. Is that also the case for a property that has, for an example, an `ohana or a second dwelling? Are those charged as individual units, although the property is under the same ownership and how do you folks know that they're individual units? MS. HARTMAN: Kelly Hartman, Regulatory Administrator. So, yes. If it's a ohana with a kitchen and wastewater fixtures, right now, our Wastewater Division folks go out and do an inspection and report back to our accountants to verify whether it's considered an individual unit. And so they are charged based on the unit cost. As long as we can get out there and identify that it should be. And a dwelling unit definition is in line with;Lbelieve, the Planning Department, or definition of dwelling unit, MS. KIMBALL: So, when folks,come in to get a building permit to build a second dwelling, are you guys notified thatthey're putting an additional dwelling on a property at that stage or it is only through inspection that you know there are multiple dwellings on the property? MS:'HARTMAN: I don't have the answer to that question. It's possible that we are not`involved in that part of the process. MS-KIMBALL: Okay. I''m starting to get, like with all the different conversations we had today, there's various points where we need to know things about what's going on on properties and different people know different parts and we neeelto actually have them all talking to each other. And maybe only do one inspection ern any given property rather than send Planning out and you guys out and Real property guys out. You know, that gets a little much. And then just, I know you were just going jump into this, Dan. There was a comment that was made about energy usage, efficiency, all of that and you were about to say something about infiltration and, you know, we talked about potential opportunities for savings down the line with repair and maintenance of existing wastewater lines. Could you just give us a percentage of the energy usage by the department that is being used to push rainwater and ocean water, that is infiltrated of our wastewater systems around and as we do that maintenance that these funds will go towards that we will no longer be pumping around,presumably. Page 35 PCENRM-9 September 15,2026 MR. GIRVAN: I can't give you hard numbers, but I can give you enough information you will at least understand the process. When the tide is out, and whether is reasonably dry, most of the water coming to our treatment plant is wastewater. When the tide comes in, a little bit more of it is ocean water. When we have a Kona Low, the flow rates go way up. For instance, normal flow here in Hilo is 3.5 million gallons per day on a reasonably dry day. When we had the Kona Lows, we had short periods of time when the flow was 11 million gallons per day, when the rain was raining really hard. So infiltration into the system certainly can be significant; But you have to temper that with the Kona Low was "x" many hours out of the month. Other hours during the month were perfectly dry. 'So what portion of the month do we experience these excessive flows because of excessively wet weather? And that's obviously going to change day-to-day, month-to-month, year-to-year. We have enough information to know that there is real savings available if we can reduce infiltration. Towards that, we have two crews, west side crew and an east side crew, that are out scoping our collection,systems, trying to find these leaks, and then scheduling them for the repair. Andif we are making a very nice progress in developing our GIS (Geographic Information System) system, that's our electronic map, of our sewer system. And that information now as we're collecting it is going on that map, and as we go forward, we'll be able to use that map to schedule these repairs. Now, that's not only a good thing, but that's also required by our AOCs. MS. KIMBALL: I don't want to go too far into this and I, because we got to get into the next meeting, but, you know, some of the basic number that I've seen, keard'reported;is about one third of our energy usage and wastewater is moving water around, infiltrating this system, and so, spending repair maintenance money will actually,potentially, bring down those costs. With that, I will make the motion to postponed. CHR. VILLEGAS: Actually, I'd like to say a few things, thank you. Sorry. Didn't get to last time. Just a couple of things,you know, we had this opportunity to'sit in a forum in Maui at HSAC (Hawai`i State Association of Counties) and talk about energy saving performance contracts. And I`m hoping, after eight years, that something, maybe our County could return to, because that is a huge expenses, the energy, to process all this water. Second thing I want to say, is I feel like these increases in rates it's reflective of a catchup. So is the agreement with EPA to move forward in updating all of our wastewater infrastructure. So, we're having to pay and catchup for what Page 36 PCENRM-9 September 15,2026 should've been done, decades ago. I honestly think that hotels should've had their own rate decades ago. I think that there is some opportunity for timeshares to be looked at because timeshares very often do have their own. I know that Kingsland does their own laundry and has full kitchens and all that kind of stuff. So I think that's something to take into consideration when it comes to Air B&Bs and vacation rentals and homes in general, I don't know how far down the rabbit hole of minutia we want to go. But these are just a couple of the things. I also just want to commiserate with those from the hotels who were concerned about a 300 percent increase, this graph was really challenging to take a look at just because, but I do understand that's the way it's presented in code, so that's the way it came forward. Lots of conversation here today,.-Sticky subject. Nothing's going to get cheaper. It's only going to cost more moving forward and as we navigate climate change, sea level rise, who knows what'll happen with the feds and the EPA, recently. But we know we have an obligation and a responsibility to future generations to provide safe and healthy drinking water and an ocean to swim in. So, thank you for leaning„in at a time when this is not fun to try to navigate. Nobody wants to pay more when we're already getting pinched all over the place. The one thing I did want to mention and I'm not sure if it assuages your concern, Council Member Kagiwada, but with'a smaller hotel they are less apt to have the, you know, monthly usage, there's a charge for 1,000 gallons and I'm assuming they would have a lower amount"of discharge, so there is a bit of a difference that would be provided to them. And with that I'll come back to you, Council Member Kimball,;if you wanted to make the motion. Motion to Postpone: Ms. Kimball moved to postpone Bill 183 to October 6, 2026. Seconded by Ms. Galimba. Vote on Motion The mention to postpone Bill 183 to October 6, 2026, to Pos erne: was carried by the following voice vote: (Approved)'_ Ayes: Committee Members Galimba, Hustace, Inaba, Kagiwada, Kaneali`i-Kleinfelder, Kierkiewicz, Kimball, Onishi, and Chair Villegas -9. Noes: None. Absent: None. Excused: None. CHR. VILLEGAS: And seeing no further business on the Policy Committee on Environmental and Natural Resource Management, I am closing this Committee. Page 37 PCENRM-9 September 15,2026 ADJOURN- There being no further business, Chair Villegas adjourned the meeting MENT: at 3:24 p.m. Approved: Ms. Rebecca Villegas, Chair (Date) Policy Committee on Environmental and Natural Resource Management RV/mp Page 38