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HomeMy WebLinkAboutORD 1992-136 1988-1992COUNTY OF HAWAII: STATE OF HAWAII BILL NO. s 91 (Draft 8) ORDINANCE NO. 92 136 AN ORDINANCE AMENDING CHAPTER 21, HAWAII COUNTY CODE 1983, ENABLING THE COUNTY OF HAWAII TO GUARANTEE LOANS AND EXTEND LOANS TO PROPERTY OWNERS REQUIRED TO CONNECT TO SEWERS. BE IT ORDAINED BY THE COUNCIL OF THE COUNTY OF HAWAII: SECTION 1. Chapter 21 of the Hawaii County Code, 1983 is amended by adding a new article to the chapter, to read as follows: "Article 5: Sewer Connection Loan Program Section 21-37 Findings and Purpose Increasingly strict Federal and State government requirements springing from the Federal Water Pollution Control Act, P.L. 92-500, commonly called the Clean Water Act have been placed on local governments to upgrade the treatment of wastewater The County of Hawaii as a condition of receiving federal construction grants for wastewater treatment facilities. has been mandated by the Environmental Protection Agency to construct sewer lines and laterals in Hilo and Kona and to expedite full utilization of the collector lines by requiring existing houses adiacent to those sewer lines and laterals to connect to the sewer system. While sewer connections to future new subdivisions can be planned to minimize the cost and the cost can be amortized in the mortgage sewer connections to existing houses are more problematic The cost of connecting an existing house to the sewer can be very expensive and varies greatly with the geology (soil or rock) the elevation of the house in relation to the lateral the distance from the house to the lateral and the topography and improvements between the house and the lateral. Many of the houses mandated for sewer hookup are owned by elderly pPOple on fixed incomes who may find it financially difficult or impossible to pay for the connection at an estimated cost ranging from $3 000 to over $30 000 Section 21 5 Article 2 of this chapter requires connection to the sewer of lots accessible to a sewer Conditions of Federal Environmental Protection Agency grants for construction of wastewater facilities in Hilo and Kailua-Kona also require the Cn„n~v of Hawaii fn PP AIITP full utilization of those facilities by mandating connection of existing houses to the sewer systems For the Hilo Wastewater Treatment and Conveyance Proiect Federal EPA Grant No C150062 02 Condition No 14 of Grant Amendment No. 1 requires the County of Hawaii to enforce the sewer use ordinance and require each and every existing dwelling or dwelling equivalent accessible to a sewer in Hilo to connect to the collection system For the Kailua Kona Sewerage System Federal EPA Grant No C150080 06 Condition No. 8 requires the County of -2- Hawaii to assure the timely hookup of residences to collection sewers. The connection cost may be financially burdensome for many owners Therefore the Council finds that. in order to assure thaf- all nnc¢ihla lnts arP connected to the sewer to meet Federal and State requirements it is in the public interest to create, in cooperation with a bank or other financial institution a program by which the County of Hawaii assists owners to connect to the sewer by guaranteeing loans for this purpose The guaranteed loan program would allow the owner to get a ~~~~nty-guaranteed loan from the bank or other financial institution after it agrees that the County of Hawaii shall place a lien on the property at the time the loan closes The lien would be for the hookup cost interest loan fees and loan costs The County of Hawaii would guarantee the bank or other financial institution that it will pay the balance of the loan in full should the owner default on the loan. If the owner cannot qualify for a loan the County of Hawaii will pay a contractor for the hookup and charge the same interest rate as the bank or financial institution that handles the County-guaranteed loan program This law shall cover the sewer connections which will be rPnuired in the following increments: Waiakea Hous Waiakea Mill Ainako "A" Kalanianaole Ainako "B" {Optional Ho Alii Drive " ~1_ ots 110 lots P n 100 lots 119 lots Laterals 125 lots 93 lots ku 100 lots A - "F" 200 lots -3- section 21-38 Definitions For purposes of this article the following words and phrases, unless the context otherwise requires shall be defined as indicated• "Default" shall mean the failure of a guaranteed borrower to make a required ~avment to a designated bank within 90 days of the date upon which the payment is due as stated in the contract between a designated bank and a guaranteed borrower "Designated bank" means anv bank or financial institution approved by the director of finance pursuant to this article to provide loans to owners who are required to connect property to aewer5 by Chapter 21 Article 2 Section 21-5 of the Hawaii County Code. "Guaranteed borrower" means an owner who has executed the appropriate agreements with the Countv of Hawaii required by this article and whose loan with a designated bank is guaranteed by the County of Hawaii in accordance with this article "Increment" means anv one of the planned sewer construction proiects stated in Section 21-37 of the Hawaii Countv Code "Owner" means• 1a) a person or persons including___ioint tenants tenants in common tenants by the entirety corporations and partnerships who hold the fee title to real property which is required to be connected to sewer lines pursuant to Chapter 21 Article 2 Section 21-5 of the Hawaii Countv Code: or (b) a person or persons, including ioint tenants, tenants in common tenants by the entirety corporations and partnerships to -4- whom has been entrusted pursuant to law the legal or equitable }itles to real property which is required to be connected to sewer lines pursuant to Chanter 21 Article 2 Section 21-5 of the Hawaii County Code and who are empowered to act as trustees of that real property for the benefit of another or others or as trustees of a self-trusted revocable living trust• or Sc) a person or persons who hold equitable title pursuant to an agreement of sale of real property which is reguired to be connected to sewer lines pursuant to Chapter 21• or (d) a person or persons who hold under a lease for a term of five years or more for residential purposes real property which is reguired to be connected to sewer lines pursuant to Chapter 21. "Self-trusted revocable living trust" means a trust formed for the purpose of management and administration of real property aid in which the owner(s) of an interest in real property becomes aPrtlor(s) and trustee(s) of the trust by making said real property the trust res and administering said property for the benefit of the owner(s). Section 21-39. Sewer Connection Loan Program. a) Before the chief engineer pursuant to Hawaii County Code Section 21-5 notifies property owners in an increment of the requirement that they connect their properties to the sewer line the director of finance shall be authorized to develop a sewer connection loan program for the purpose of guaranteeing loans used to connect lots which are a part of that increment to the sewer lines The -5- dire ctor of finance may con sult with an y banks or financial inst itutions about particip ation in a p rogram of l oan guarantees for owners of prope rties wh o are requir ed to conne ct to sewers purs uant to Section 21-5 of the Hawaii County Code After cons ultation the direct or of finan ce shall deSlgnarP one or more banks or financial institutions to handle the county guaranteed loan program In designating a bank or financial institution the director shall consider the interest retas offered on the loans by the bank, the number of months and monthly payments of the loan and the willingness of the institution to make the same agreed-upon rate offered on the county guaranteed loans available to others borrowing money to pay for sewer hookup fees whose loans are not guaranteed by the County of Hawaii Anv bank or financial institution which complies with the terms of the loan program shall qualify as a designated bank r) The director of finance shall require that a designated bank agree that• 1) The loan to a guaranteed borrower will be at a rate of interest and terms agreed upon at the inception of the program for that increment; 2) The lo an will be guaranteed b y the Cou n ty of Hawa ii• 3) In the event that a guaranteed borrowe r fail s to pay the required payment on the loan within 90 days of the date upon which the payment is due the loan shall be considered in default and the designated bank shall immediately notify the director of -6- finance of the County of Hawaii, as well as the guaranteed borrower. 4) In the event of a default of any guaranteed borrower a designated bank shall accent payment in full from the County of Hawaii as full satisfaction for the loan• and d) The director of finance shall inform the mayor and the county council of the names of banks and financial institutions which are designated banks and shall provide them with copies of the agreement negotiated with the designated banks and the rnntract which the designated banks will execute with guaranteed borrowers. Section 21-40. Loan Application. a) Anv owner who is required to connect his or her property to a sewer pursuant to Hawaii County Code Section 21-5 and who has been reiected by any bank or financial institution for any ~vpe of a loan to pay for the sewer connection based on insufficient ability to repay said loan may apply to a designated bank for a sewer connection loan which is guaranteed by the County of Hawaii Anv application for a guaranteed loan must be submitted to a designated bank no more than 40 calendar days after the date of the notification by the chief engineer requiring the owner to connect to the sewer. ~ All such timely applications for guaranteed loans shall be sent by any receiving designated bank to the director of finance Any owner whose application for a sewer connection loan is referred to the director of finance by a designated bank may -7- participate in a loan guaranteed by the County of Hawaii and become a guaranteed borrower As conditions of participation the applicant shall execute: 1) A loan agreement with a designated bank, with the County of Hawaii as guarantor of the loan, providing that: A) The money will be paid by the bank directly to the contractor performing the connection; and B~ In the event the guaranteed borrower fails to pay the required pavment on the loan within 90 days of the date upon which pavment is due the loan shall be considered in default and the Countv of Hawaii will repay the loan in full to the designated bank and will assume the designated bank's status as creditor 2) An agreement with the Countv of Hawaii giving the County of Hawaii a lien on the property to be connected. In situations in which the guaranteed borrower is a corporation or an owner holding property in a trust other than a self-trusted revocable living trust the Countv of Hawaii shall initiate foreclosure proceedings immediately upon default by the owner and pavment by the County of Hawaii In situations in which the guaranteed borrower consists of two people holding as tenants by the entirety the County of Hawaii shall initiate foreclosure proceedings immediately upon the death of the survivor of the tenancy by the entirety or upon the sale exchange transfer or forced sale of the property In all other situations upon the death of the guaranteed borrower or the sale exchange transfer or forced sale of the property or the death of the last surviving -8- catrlor of a self-trusted revocable living trust foreclosure action shall be brought concerning any amounts remaining on the amount owed to the County of Hawaii Upon execution the loan agreement and the lien document shall be recorded at the Bureau of Conveyances. r~ For the protection of the interest of the County of Hawaii a title search for any property upon which the County of Hawaii will have a lien shall be conducted prior to execution of any agreements and the cost of the search shall be paid from the loan proceeds. SP~r;on 21-41 Default Procedure In the event of a aPfault after the County of Hawaii has paid the designated bank or financial institution the director of finance shall have the dierrPtlOri to negotiate with the guaranteed borrower a plan for rPnavment of the loan to the County of Hawaii In negotiating the loan re~avment the director of finance shall take into rnna;~aration the following guidelines• a) in the event that the guaranteed borrower is capable of waving the monthly interest on the loan the repayment plan shall include a minimum monthly payment at least equal to the amount of monthly interest and at the same rate of interest charged by the designated bank. b) in the event that the guaranteed borrower is unable to pay an amount equal to the monthly interest the director of finance may negotiate a smaller monthly payment than the amount equal to the monthly interest provided that in every case the -9- guaranteed borrower in default shall pay no less than one dollar [$1 00) per month c1 If no agreement on the plan for repayment is reached within 90 days of default the County of Hawaii shall immediately initiate foreclosure proceedings against the subiect property d) in the event that the guaranteed borrower is a rprpOratlon or is an owner holding property in a trust then the County of Hawaii shall initiate foreclosure proceedings immediately upon default by the owner and payment of the loan by the County of Hawaii. e) In the event that the guaranteed borrower is an owner holding property in a self trusted revocable living trust or is any type of owner described in the definition of "owner with the evronfinn of thncP ~PSriihPd in Section 21 41(d) then upon the death of the guaranteed borrower or the sale exchange transfer forced sale of the property or termination of a trust created pursuant to Chapter 558 Hawaii Revised Statutes as amended foreclosure action shall be brought concerning any amounts owed to the County of Hawaii. f) In the event that the guaranteed borrowers are owners holding as tenants in the entirety, then upon the death of the surviving spouse or the sale exchange transfer or forced sale of the property foreclosure action shall be brought concerning any amounts owed to the County of Hawaii Section 21-42 Connection Contract. a) Prior to notification of the owners within an increment pursuant to -10- Section 21-5 the chief engineer shall authorize a request for proposal (RFP) for licensed contractors to connect all of the properties subiect to guaranteed loans Such a proposal shall esquire the contractor to give the chief engineer an estimate for the cost of connection for each property in the increment b) As a condition of selection by the county of a proposal a contractor submitting a proposal shall agree to connect the property of any owner who becomes a guaranteed borrower to the sewer at the price estimated in the proposal ~ The chief engineer shall inform the mayor and the county council of the selected proposal d) All guaranteed borrowers shall have their properties connected to the sewer by the contractor selected pursuant to this article This shall be a condition of any loan guaranteed by the County of Hawaii. Section 21-43 Nonqualifving Applicants a) Where an owner is unable to obtain a guaranteed loan from any designated bank the County of Hawaii shall contract with the contractor selected and approved pursuant to this article to connect the nonqualifying applicant's premises to the sewer The applicant shall execute an agreement with the County of Hawaii giving the County of Hawaii a lien on the property This agreement shall be identical to those executed between the_County of Hawaii and the qualified, uaranteea borrowers. -11- b) Upon connection of the nonaualifyina applicant's premises to the sewer the County of Hawaii shall proceed in the same manner provided for in the event of a default on the loan Section 21-44 Waiver of Liability. The contractor selected pursuant to this article as well as the guaranteed borrower shall execute agreements with the County of Hawaii in which each of them agrees to defend indemnify and hold harmless the County of Hawaii in the event of any personal iniurv or property damage resulting from the connection of the property to the sewer Gar+ion 21-45 Reserve Fund. a) For the purpose of payment of a„aranteed loans in default there shall be created a reserve fend to be known as the Sewer Connection Reserve Fund which shall at all times be not less than 15$ of the total amount of loans guaranteed and shall be funded by the general fund or other available sources if a guaranteed borrower defaults on a loan the bank shall be paid from this reserve fund without further council action If this repayment of the loan causes the reserve fund to fall below 15$ of the total amount of loans guaranteed the director of finance will then submit to the council a bill for an ordinance to transfer the money from the oanPral fund or other available sources if such a transfer is nacessarv to maintain the required level of the fund All intarest generated by the fund shall be deposited into the County of Hawaii general fund. b) At least once every three months the director of finance shall prepare and submit to the council a report on the status of the loan program including but not limited to the followina• -12- 1) The number of guaranteed loans outstanding; 2) The total dollar value of all guaranteed loans outstanding; 3) The balance in the reserve fund; and 4) The number of hookups to be required in the next increment. Section 21-46 Loan Fund a) For the purpose of funding loans to owners under Section 21-43 there shall be created a loan fund to be known as the Sewer Loan Fund and which shall be funded by the general fund or other available sources b) At least once every three months the director of finance shall prepare and submit to the council a report on the status of the Sewer Loan Fund including but not limited to the following• 1) The number of loans which the Sewer Loan Fund is funding: 2) The total dollar value of all such loans; and 3) The balance available in the Sewer Loan Fund." SECTION 2. New material is underscored. In printing this ordinance, the underscoring need not be included. SECTION 3. If any provision of this ordinance or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of the ordinance which can be given effect without the invalid provision or application, and to this end, the provisions of this ordinance are declared to be severable. -13- SECTION 4. This ordinance shall take effect upon its approval. ~ ~ i IV uv ~R, OU F HAWAII IL BER, COUNTY O HAWAII ~ ti~ ~ ~~ ~ - L MBE ~ COUNTY ~ OF HAWAII _-2. ~ ` ~ __ L MEM B ER, COUNTY OF HAWAII Mr. ~ + J IL BER, COUNTY OF HAWAII Hilo, Hawaii Date of Introduction: D1ay 20, 1992 Date of 1st Reading: May 20, 1992 Date of 2nd Reading: December 2, 1992 Effective Date: December 4, 1992 -14- Introduced By: Date Introduced First Reading: Published: OFFICE OF THE COUNTY CLERK County of Hawaii Hilo Hawaii Lai/De Lima/Hale Makuakane/Ruddle �-,Tay 20, 1992 Mav 20, 1992 (DRAFT 4) ROLL CALL VOTE MOORE Second Reading: To Mayor: Returned: Effective: Published: REMARKS: December December December December December 2, 3, 4, 4, 21, 1992 1992 1992 1992 1992 Will WIN (DRAFT 4) ROLL CALL VOTE (DRAPT 8) ROLL CALL VOTE MOORE Will WIN (DRAPT 8) ROLL CALL VOTE I DO HEREBY CERTIFY that the foregoing BILL was adopted by the County Council and published as indicated above. C0!?,P0n,A-V)N COUNSEL COUNTY Oc 11AVIAN Approvday th* of 19 MAYO -R, COUNTY OF AWAII COUNCIL CHAIRMAN _,.fie t � ,��' COUNTY CLERK Bill No.: 591 (Draft 8) Reference: 1-11,TC--211 (:Amended) Ord. No.: NEVER Will I DO HEREBY CERTIFY that the foregoing BILL was adopted by the County Council and published as indicated above. C0!?,P0n,A-V)N COUNSEL COUNTY Oc 11AVIAN Approvday th* of 19 MAYO -R, COUNTY OF AWAII COUNCIL CHAIRMAN _,.fie t � ,��' COUNTY CLERK Bill No.: 591 (Draft 8) Reference: 1-11,TC--211 (:Amended) Ord. No.: