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Home My WebLink AboutCOM 0566.005 2002-2004 APR-16-2004 FRI 1216 PM Cf~'ORATIOPI COUNSEL FAX ti0, 961gs22 P, 02 Harry Kim „4y idawln S.T. AadiAw Mayn• furyurwann Caunl p~ ~ Gtrald'lAkaae ~h 4j'wr~ Aaxlttont CurporaNon Giurusr ~l;uuztfg of ~:zfuttii OFFJfCE OF THE CORPORAT'ION' COT1hISEL IOI Aupuni Strut, Suitt 325 • Hilo, Rawaii 9677A-42fi2 • (808) %1-8251 • I?AX (808) 96]-8622 November 2S, 2002 C c Peter Boucher, WastewalerDivisionChief ~ EnvironmentalManagerrent ` 108 Railroad Avenue r - Hilo, Hawaii 96720 Dear Mr. Boucher: RE: Conseauences of Failure to Remove Exemptions from Sewer Connection: Com. Counsel V1'RK 02-29'16 This is in responss to your request for an opinion as to the legal consequences of the retention of the exem 3tions to sewer com)ection contained in Hawaii County Code ("HCC"), Section 21-5(b.l. These include eXemptions for grandfatheringpre- 7uly 1, 1989 plumbed lot:;, lots requiring pumps to bring sewage to discharge level, and private development sew~:rs. Tn summary, the Federal Environmental Protection Agencv ("EPA") has been concerned about underuti lization of the Hilo Wastewater Treatment Plant, for which EPA provided $12.7 million in grant money. The EPA has audited the project and warned that the sewer ordinance connection exemptions hampered the County's ability to make full utilization of the plant capacity, and that this could result in reduction of the grant. The grant conditions require tae County to make efforts to maximize hookups. There is technically some potential for tk e EPA to re-evaluate whether the plant is underutilized due to the exemptions, and seek some sanctions, which may include return of funds. However, the EPA regulations co not specifically prohibit all exemptions. Further, the State peparlment of Health ("DOH") has repeatedly expressed its concern that the County exemptions conflict with State administra.tivexules which require all lots with access to sewers to :onnect. The DOH is considered the approving regional authority for review of the County ordinances under the Crant Agreements, which also require compliance with :Mate law and rules. Thus, [he retention of the connection exemptions puts the County rector: tally at risk of being found in violation of the terms of the Crrant Agreements, as well a:; the federal requirements of havvag an acceptable Sewer Use Ordinance. However, Sina Stsffany at the DOl-1 has nut indicated that the State will Comm. No• 5 Ref. To: <<~~ ref. Cate r APR-I6-2004 FRI 1217 PM C(?~'ORATIOfI COUNSEL FAX f10, 96122 P, 03 Peter Boucher, WastewaterDi~isionChief November 25, 2002 Page 2 pursue any legal action against the County. On the positive: side, she notes that the elimination of the exemltions would facilitate State enforcement of connections. Thus, the exemptions ma}' contribute to potential ceshnical violations of grant or loan conditions and are inconsi>tc:nt with State rules. Thesr, potential violations might be pursued ifthey become rnore o:Fa priority to the enforcing ;authorities. However, to date there seems to be little real threat of legal action against the Coutn:y due to the exemptions. A more detailed tiiscussion follows. I. The EPA Cttants The current exemptions were last amended in 1996 in Ordinance No. 96-51. Then Mayor Stephen Yamashiro allowed the Ordinance to become law without signature, noting: In review;ng the b ll, l have a concern that we are not in accordance with atr Environmental Protection Agency grant condition relates'. W the funding for the Hilo Wastewater Treatment Facility. The grant condition states in part t:~at every existing dwelling within th. service area will be competed to the sewer system. This is a concern which should not be discounted. As eazly as September 27, 1990, the U.S. Ens ironmental Protection Agency completed a Special 1Zeview audit of ConstrurtionGrant No. C150062-02 for tL,e Hilo Wastewater Treatment Facility. The audit report stated ~ part: In an effi~A to address the underutili::ation problem, the County, in May 1989, adopted Ordinance No. 89-f.8. While this ordinance provic ed the County with additio 1a1 aufaority to require connection to thr, wastewater treatment facilities, i° allowed for too many exa.ptions to be an effective enforcement toil. * s W~. believe that the ordinance is a positive action which will help the Coutny move in the right direction. However, it contains too many exceptions to be effectively used as an enforcement tool. In our opinion, the ordinance should be revised APR-16-2004 FRI 12 17 PM C~DpORRT10N COUNSEL FAX fd0. 961°~22 P. 04 Peter Boucher, Wastewater Di~~ision Chief November 25, 2002 Page s to require all residences accessible to a sewer system to connect to the system without exception. Further, all developments in pnpulatec. areas s} cold be required to install interceptors and collection, system:, even if sewers are not planned within the next ten years. The underlying problem is that as a condition of these EPA loans and grants, the County needs to have in place a Sewer Use Ordinance ("SIJO"} which meets with the approval of the EPA Relional Administrator's approval in comph.ance with EPA rules. 40 CFR, Section 35.212:?. The audit report recommended that the Regional Administrator, among other things: "instruct DOH and the County to adopt a sewer use ordinance that is enforceable and without exceptions." In a letter dated PQarch 25, 1991, Harry Seraydarian, Director of the Water Management Division o~'DOH, wrote to Bruce Anderson, :Ph.D., Deputy Director for Environmental Health, DOH, regarding the County SUQ noting: In addition, we find that the SUO contains ~xceptions'to the requirement for timely hook-up to the County's se~sver systems. These exceptions may result in underutilization of the Hilo Wastewater Treatment Plant and may jevpa: dine the $12.7 million in constrti ction l;rmt funds awarded for the ~onstntetion of the Hilo Wastewater Treatment Plant. By letter dated November 1A, 1991, john Ong, Chi~;fofthe EPA Construction Grants Branch, wrote to then Chief Engineer Bruce McClure regarding acceptability of proposed actions to resolve the audit issues. These actions included special grant conditions addressing underutilization and user charge system issues, which were the major concerns. Among the special grant requirements was an evaluation of the "number of dwelling units and dwelling °quivalents to be connected versus those excepted by the sewer use ordinance." The County was to enforce the ordinance ~md require "each and every existing dwelling, or dwelling equivalent within the defined service area" to connect, according to a schedule, up to 100% within five years of completion of the construction. However, the connection ~.alculation was to "exclude any system that has been formally excepted from the sewer use ordinance." Condition 16 required reports every six months to the Hawaii DOH on progress on implementation of the SUO. If the County failed to meet thn deadlines of the approved schedule of corrective actions, EPA was to "withhold payments or reduce the federal share of tae grant in proportion to the unused capacity ofthe wastewater treatment plant." APR-16-2004 FRI 12 17 PM CORPORATION COUNSEL FAX NO. 9618622 P. 05 Peter Boucher, Wastewater Division Chief November 25, 2002 Page A Updated versions of these conditions have been includedrn later EPA project grants, including the following "Other Conditions" No. 3, ~.vhich reads, "The County shall take the necessary actions to m a~:imize the benefits of this Project such as assuring the timely hookup of existing residences of the cwnmunity for which this Project is serving." A memorandum dated :March 14, 1996 from Gus Gustafson, DOH, to Peter Boucher, Wastewater D ivision Chief, noted the Specie] Conditions for the following projects: ¦ Hilo Wastewater Treatment Plant and Conveyance Project, Ph 1 (Grant) ¦ Ainako Interceptor Sewer, Parts A & B (SRF) ¦ Waiakea Houselot lnterceptor Sewer (SRF) ¦ Hilo Wastewater Treatment Plant and Conveyance Project, Ph II, D, G, & H ¦ Kalaniana`ols Collector Sewers ¦ Kealakehe Land Disposal ¦ Ali`i Drive Interceptor Sewer, Part A & B ¦ Ali`i Drive Interceptor Sewer, Part C & D Mr. Gustafson noted: `Pay particular attention to tae conditions added to the Kilo project by the EPA Earl;? Warring Audit. They include Nos. 12 19." Regarding EPA ;;rant c ~nditions, the sanctions for non-compliance may include: ¦ Issue estop-work order; ¦ Withhold pa;~rtent; ¦ Suspend or terming°e your assistance agreement for cause; ¦ Annul your assistance agreement; ¦ Debar or sus!>end you as an eligible recipient; ¦ Take other appropriate administrative action; o- ¦ Institute judicial proceedings. 40 CFR., Section. 30.900. Thus, underutili2ation l.a:: been along-standing coucem efthe EPA regarding the wastewater treatment phmt gratrt. Patt of this problem has been perceived excessive exemptions from connection regt:irements. While not expressly requiring elimination of all exemptions, conditions have been attached to the grants to try to ensure sufficient connections. Underutili:~ation may result in a reduction of the available grant funds, or other sanctions. APR-16-2004 FRI 17_ 18 PM CnRPORATIOW COUNSEL FRX N0. 967A822 P, 06 Peter Boucher, Wastewater Di~~i:•ion Chief November 25, 2002 Page 5 We do not have information about the factual history of ETA/DOH follow-up on these Conditions, but we expect chat the Environmental Management Commission and the Council will want to have information on that from you. 17. Conflict with State F.eeu(ations The other area o'. concern is conflict with State DO7~ regulations. In his September l2, 2002 Sewer System Maintenance Inspections repo 2 letter, Thomas Arizumi of the DOH Wastewater branch noted that the sewer maintenance programs were satisfactory, but noted that "Sections 21-5(b)(1) and 21-5(b)(3) of Chapter 21, Hawaii County Code need to be deleted because the}~ conflict with our Hawaii Administrative Rules (`93AR'~ " More specifically, in hrr July 30, 2002 inspection report, DOH Cnspector Sina Steffany noted the conflict with Section 11-62- 06(b), HAR, which states, "AU building(s) generating wastewater and located within or neaz proximity of an av~ ilable public sewer system as determined by the duector, shall connect to the public sewer." The County Code exetr,ptions aze facially in conflict with the State rules. This doesn't prevent the Statc; DOH from enforcing their rules if they want. However, Ms. Steffany tells us that the exemptions raise questions about the, discretionary enforcement by DOH of connection of buildings "in neru proximity of an available public sewer." She tells us that the el .m ination of exemptions would make it easier for the State to enforce connection. Of more potential consogaence is the fact that the grant agreements, such as the State Revolving Fund Grant-in-t?.id Agreement for the Hilo Wastewater Treatment and Conveyance Project No. C150(162 09 pazagraph 19, inchtde clauss that require that the County shall "comply with and r~;quire its contractors and ~;ubcontractors to comply with all applicable federal anti state taw, rules, guidelines, regulations, and requirements." Moreover, the Sewer Use Ordinance "shall be reviewed and approved by the DIRECTOR annually. The COLINTI! is deemed the "applicant" and th~~ DIRECTOR is deemed the "Regional Administrator" for the application here of this federal regulation." The DIRECTOR in these agreements is the Director of the State Department of Health. Hence, to the extent that the County SUO is in conflict with the state regulations, and the Director of DOE: does not approve of the connection exemptions in the SUO, the County would be in technical violation of the terms of the ;rant agreements. Thus, there is the potential for cancellation or reduction or other adverse effects. APR-16-2004 FRI 12 18 PM C~GPORAT O~J COUNSEL FAX N0. 961Q5~2 P. 07 Peter Boucher, WastewaterDivi~ionChief November 25, 2002 Page 6 The State has net indica4.d any current intention to pursue such potential technical violations against the; County. However, these could become a problem if the State begins to consider them s higher priority for whatever reason. Please contact the undcrs igrred should you need further assistance with these issues. Thank you. Sincerely, IVAN M. TO of peputy Corporation Counsca IMT:mkk s:\deptlemUtr to pboucher re exemp[iou removal111-02\IMTmkk.doc