HomeMy WebLinkAboutCOM 0277.001 2012-2014 Margaret Wille �Mtvos,,��,
Phone No. Hilo: (808)961-8027
Council Member :cR•'L.;;: .., .. Phone No. Waimea: (808) 887-2043
District 9-North and South Kohala .� � �� �
LI'�'�' Fax No.: (808)887-2072
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HAWAII COUNTY COUNCIL
County of Hawai`i
Hawaii County Building Holomua Center West Hawaii Civic Center Bldg.A
25 Aupuni Street 64-1067 Mamalahoa Highway,Suite C-5 74-5044 Ane Keohokalole Hwy.
Hilo, Hawaii 96720 Waimea, Hawaii 96743 Kailua-Kona, Hawai'i,96740
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TO: J Yoshimoto, Council Chair — —I
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and Members of the Hawai`i County Council Tic)
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FROM: Margaret Wille, Council Member *23
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DATE: May 10, 2013 us
SUBJECT: Circuit Court Decision in the Richard and Patricia Missler versus County of
Hawai`i Board of Appeals, Malama Investments LLC, Loren and Mary
Saxton and B.J. Leithead-Todd Case
Attached is the Circuit Court decision referenced in Resolution 114-13.
If there are any questions please call me or my staff at (808) 887-2043.
Thank you.
MW/dh
Att.
Comm. No. a•1 7• I
Serving the Interests of the People of Our Island Ref.To: i f
Hawai`i County Is An Equal Opportunity Provider And Employer Ref. Date MAY 1 5 7013
IN THE CIRCUIT COURT OF THE THIRD CIRCUIT
STATE OF HAWAII
RICHARD MISSLER and PATRICIA Civil No. 12-1-449K
MISSLER, (Kona) (Agency Appeal)
Appellants,
• FINDINGS OF FACT, CONCLUSIONS
vs. OF LAW AND DECISION AND ODDER
BOARD OF APPEALS OF THE - rfl
COUNTY OF HAWAII, '4
Appellee, f° rs
:7;17 Lrt "
and -° 0
MALAMA INVESTMENTS LLC,a Hawaii
limited liability company; LOREN 11"..7
SAXTON AND MARY SAXTON, Go-
Trustees of the Saxton Trust dated March
17, 2005; and B.J. LEITHEAD-TODD,
Planning Director, Department of •
Planning, County of Hawaii,
Appellees.
FINDINGS OF FACT. CONCLUSIONS OF LAW
AND DECISION AND ORDER
This matter came on for Oral Argument on January 17, 2013 at 8:00 a.m. before
the Honorable Ronald Ibarra, Judge of the above-entitled Court. Appellants Richard n
Missler and Patricia Missfer(hereinafter collectively referred to as"Appellants") were -,
represented by Michael J. Matsukawa, Esq.; Appellee Board of Appeals of the County
of Hawai`9 (hereinafter the "BOA') was represented by Renee N.C. Schoen, Esq. of the
Office of the Corporation Counsel of the County of Hawaii;Appellees Materna €'
•
Investments LLC, Loren Saxton and Mary Saxton (hereinafter collectively referred to as'%. .
"Sextons")were represented by Jacob Laurence Matson, Esq.; and Appellee B.J. s
Leithead-Todd, Planning Director, Department of Planning, County of Hawaii
(hereinafter referred to as "Director") was represented by Amy G. Self, Esq. of the Office
of the Corporation Counsel of the County of Hawaii. The Court, having reviewed the
record for the above captioned matter and having heard the arguments of counsel,
being otherwise fully advised in the premises,
HEREBY FINDS, CONCLUDES AND ORDERS:
FINDINGS OF FACT
To the extent that any of the following Findings of Fact shall be determined to be
Conclusions of Law, they shall be deemed as such.
Background
1. Saxtons are owners of the Property identified on the Tax Map of the
County of Hawai'i as Tax Map Key (3) 8-7-008:002, 033 and 034 for which a Planned
Unit Development ("PUD") was approved by the Director (hereinafter the "Property").
Record on Appeal (hereinafter "ROA") at 00591-00594.
2. Vincent J. Saxton is the owner/member of Appellee Malama Investments,
LLC, and is the representative of the applicants of the PUD. ROA at 00591-00594,
02232.
3. Appellees Loren Saxton and Mary Saxton are co-trustees of the Saxton
Trust dated March 17, 2005, and are the parents of Vincent J. Saxton. ROA at 00591-
00592, 02232.
4. Appellants own that certain 5-acre subdivided lot identified on the Tax
Map of the County of Hawai'i as Tax Map Key No. (3) 8-7-008:060 that adjoins the
mauka/north corner of the Property. ROA at 01590- 01591, 00071.
2
5. The County of Hawai'i ("County") Planning Department ("Planning
Department") is a governmental department of the County,
6. Respondent-Appellee Planning Director is the administrative head of the
Planning Department and is a party in this Appeal pursuant to the Board's Rules of
Practice and Procedure Rules 1-3(7), (10), (12) and Rule 2-2(a).
7. The Property consists of a total of approximately 72.178 acres and is
located within the District of South Kona, Hawaii, on the mauka side of Mamalahoa
Highway, approximately 13 miles south of the town of Captain Cook at the 1,120 feet to
1,920 feet elevation. ROA at 00643, 00953.
8. The Property is situated within the State Land Use Agricultural District and
currently designated as Extensive Agricultural and Important Agricultural Land by the
County General Plan, Land Use Pattern Allocation Guide (hereinafter"LUPAG") Map.
ROA at 00613, 00954,
9. The County zoning designation for the Property is Agricultural— 5 acres of
land area per dwelling unit (A-5a). ROA at 00613, 00954,
10. The total allowable density for the Property's A-5a zoning is determined by
dividing the total land area of 72.178 acres by the minimum lot size of 5 acres, resulting
in a total of 14 lots permitted under the Zoning Code. ROA at 00659, 00954.
11. The Property is currently vacant of any use or structure and is covered
with some substantial tree canopies, including Ohia forest, in the upper areas of the
Property. ROA at 00650, 00954, 00865.
PUD APPLICATION
12. On September 23, 2010, Richard Lewis and Jim Petty submitted an
application authorized by the Saxtons for a fourteen lot Waikaku'u Ranch PUD
3
(hereinafter, "PUD Application"). ROA at 00589-00691. See also, Planning Department
Rules of Practice and Procedure ("Department Rule(s)") Rule 7-4(b)(1).
13. According to the PUD Application, the project is an "agricultural planned
unit development" consisting of thirteen 2-acre lots clustered at and above the
Property's 60-inch annual rainfall line at the 1,650 foot elevation on the mauka (easterly)
portion of the Property and one large 40-acre lot on the makai (westerly) portion of the
Property. Id., Application Pages 2-2 and 5-2, Department Record Pages 25, 42 and
102.
14. The PUD application does not disclose the large ravine, the old-growth
ohia forest and habitat, observable archaeological sites and historic features on the
Property. ROA File 4, Item 77, transcript March 9, 2012, M. Riehm, pp. 35, 52-53; R.
Missler, Pages 83-87; File 2, item 19, Department record p. 277-78; File 3, Item 44,
transcript, December 9, 2011, L. Nakayama, P. 28.
15. As early as 1995, the Planning Department has declared that "{t}horough
biological surveys early in the planning process are essential" and that "the regulating
agency should be required to come see what's on the ground." ROA File 1, Item 14,
Missler Exhibit 41, Pages 5-7.
16. The PUD Application sought the following thirteen variances: allowance of
flag lots below minimum 5 acre building site ("Variance Request No. 1"); reduction of
building site area and average width below minimum standards set forth by HCC 25-4-
31 ("Variance Request No. 2"); reduction of building site area below minimum area as
set forth by HCC 25-4-32 ("Variance Request No. 3"); reduction of building site area
below minimum area as set forth by HCC 25-5-74 ("Variance Request No. 4"); reduction
of building site average width below minimum width as set forth by HCC 25-5-75
4
("Variance Request No. 5"); waiver of lot side line requirements ("Variance Request No.
6"), waiver of minimum right-of-way and pavement widths ("Variance Request No. 7"),
waiver of cul-de-sacs requirements ("Variance Request No. 8"); waiver of grades and
curves requirements ("Variance Request No. 9"); waiver of sidewalks requirements
("Variance Request No. 10"); street lights ("Variance Request No. 11"); waiver of street
name and traffic signs requirements ("Variance Request No. 12"); and waiver of right-of-
way improvement requirements ("Variance Request No. 13"). ROA at 00665-00681.
17. The PUD application states that the project would be agriculturally-based
and that the agricultural activity would be defined by project CC&R's that are not set
forth in the application. Id., Application Pages 2-2, 5-2 and 5-5, Department Record
Pages 25, 42 and 45.
18. On November 1, 2010, the Director acknowledged receipt of the PUD
Application and set January 3, 2011 as her deadline to render a decision, pursuant to
Section 25-6-4 of the Code. ROA at 00824-00827.
19. The Saxtons confirmed a number of deadline extensions that ultimately
set September 15, 2011 as the Director's deadline for the PUD Application. See (in
order of deadline extension) ROA at 00884, 00888, 00889, 01214-01217, 00952; and
see generally, ROA at 01613-01617.
20. By letter dated November 1, 2010, the Director sent copies of the PUD
Application to various agencies, including the Hawaii State Historic Preservation
Division ("SHPD") of the Department of Land and Natural Resources ("DLNR"),
requesting written comments on or before December 1, 2010. The Director received
comments from the Department of Public Works—Traffic Division and Engineering
Division, Police Department, Fire Department, Department of Environmental
5
Management, Department of Parks and Recreation and Department of Water Supply,
ROA at 00828-00829, 00834, 00836, 00858-00860, 00870-00873, 00882-00883.
21. Notice of the applications were mailed to surrounding land owners,
including Appellants, on October 1, 2010, and on November 12, 2010, as well as
published in the Hawaii Tribune Herald and the West Hawaii Today on November 5,
2010, and posted on the Property. ROA at 00820-00823, 00838-00853, 00875-00877.
22. On November 24, 2010, the Saxtons replaced Richard Lewis and Jim
Petty as applicants for the PUD Application. ROA at 00867-00868, 01670-01608.
23. The Director received a total of seventeen letters and emails in opposition
to the PUD Application, five of which were from the Appellants. The correspondence
expressed concern regarding legal access over private roads, road improvements and
maintenance, reduced lot sizes and deviations from normal standards, and disturbances
to habitat and potential flooding post-development. ROA at 00692-00695, 00835,
00854-00857, 00861-00866, 00869, 00874, 00885, 00890-00891, 00943-00951, 00959-
00960.
24. During the public participation process for the application, the Appellants
provided the Director with letters that describe the old-growth, healthy ohia forest and
habitat on the Property, together with endemic and protected species and observable
archaeological sites and historic features thereon. ROA, File 2, Item 19, Department
Record Pages 277-278, 302-303, 361; see also list of subjects in Opening Brief,
Appendix 3, which include their record references.
25. The Director did not consult with the Appellants as to the Property's
resources and characteristics during the public participation process. Nor did she or her
Department conduct a site inspection of the Property. ROA File 3, Item 44, Transcript,
6
December 9, 2011, Pages 12-13; File 4, Item 77, Transcript, March 9, 2012, R. Missler,
Page 101.
26. The Director approved the PUD application by letter dated September 14,
2011 (hereinafter "decision letter"). ROA at 00953, 00959-00960, 02032-02033.
27. In the decision letter, the Director stated that the project is "consistent with
the objectives of the Kona Community Development Plan" and is "consistent with the
requirements of the Zoning Code and the land use policies of the General Plan." Id.
28. In addition, the Director stated that "Vegetation within the property area
consists of a combination of kiawe, koa haole, and a variety of grass, shrubs and
weeds. The plants found on the Property are generally alien and introduced species,
none being considered rare or endangered. No endemic species of animals were
located nor were their habitats. No archeological survey of the Property was conducted
by the Applicant; however, prior to any ground disturbance to construct the project's
internal subdivision roadway system, the petitioner shall prepare an `Archaeological
Inventory Survey' (AIS)." Id.
29. The decision letter, in its findings of facts, states, "The project is designed
to address the needs and lifestyle of those residents who want to live in a residential
community that promotes social interaction, encourages outdoor activities, and is
pedestrian oriented. The project consists of 14 agricultural lots with a streetscape
designed to create a sense of place reminiscent of our older, more traditional
neighborhoods. Emphasis is placed on the design of the streets to provide a safe
setting for pedestrians and to mitigate the speed of the automobile." The decision letter
also finds that the grade throughout the Property is approximately 16%. Id.
7
30. A map accompanying the decision-letter shows that the residential lots fill
the mauka portion of the property that is above the 60" rainfall line; Lot 1, designated for
open space, falls makai of the 60" rainfall line. Id.
31. At least 60 inches of rain occurs on the Property annually at the 1,650 foot
elevation and the Landowner-Applicants intend to use that rainfall as a source of
potable water for the project. ROA File 2, Item 19, Application Part 4.12.1, Application
Pages 4-8 to 4-9, Department Record Pages 37-38.
32. Walter Kahiwa, Jr. offered undisputed testimony on the Property's
watershed as a source of water that also affects offshore waters and the offshore
fishery. ROA File 3, Items 65, 66; File 4, Item 79; File 5, Item 135, Transcript, April 13,
2012.
33. The parties stipulated that personnel from various State and Federal
agencies are available for consultation regarding the Property's characteristics,
including the Division of Forestry and Wildlife of the State Department of Land and
Natural Resources, the United States Geological Survey and the United States Fish and
Wildlife Service. ROA File 4, Item 81.
34. The parties also stipulated to a report that Marcos Gorresen and others
had prepared on the Hawaiian Hawk or i'o, which was admitted as an exhibit. Id.; ROA
File 1, Item 6, Missler Exhibit 35-A.
35. In his statement to the BOA, Paul Conry of the DNLR informed the Board
that "We find that the subject property is characterized by habitat that is known to be
used by the Hawaiian hoary bat and the Hawaiian hawk for breeding, foraging, and
roosting." He added that "records of endangered plants such as loulu palm (Pritchardia
8
spp.) are known from the area indicating that listed plants may potentially exist within
the subject parcel." ROA file 3, Item 62.
36. Paul Conry concluded that "Activities that include the cutting or clearing of
vegetation in forests that support those species have the potential to result in take of
listed species" under Federal and State laws that protect designated species and their
habitat. For this reason, he recommended that "biological surveys (to include plants
and animals) be conducted for the project area" Id.
37. The Director determined that the PUD Application was complete pursuant
to Section 25-6-3, County Code. ROA at 02276.
38. The Director, subject to the conditions set forth in the decision letter,
approved Variance No. 1 (flag lots), Variance No. 2 (minimum building site
area/minimum average width), Variance No. 3 (reduction of building site below minimum
area), Variance No. 4 (minimum building site area), Variance No. 5 (minimum building
site average width); Variance No. 6 (lot side lines); Variance No. 9 (grades and curves);
and Variance No. 10 (sidewalks). ROA at 00960-00962.
39. The Director denied the requests for Variance No. 7 (minimum right-of-
way and pavement widths), Variance No. 8 (cul-de-sacs), Variance No. 11 (street
lights), Variance No. 12 (street name and traffic signs), and Variance No. 13 (right-of-
way improvement) because the Director determined that said variances were
unnecessary. ROA at 00962.
40. SHPD sent written comments to the Director on October 18, 2011,
approximately a month after the date of the Director's decision, indicating that an
archaeological inventory survey ("AIS") should be undertaken for the Project. ROA at
01270; 00828; 01623, 01642-01643.
9
41. On October 13, 2011, the Appellants filed an administrative appeal from
the Director's September 14, 2011 decision to the Appellee BOA. ROA File 1, Item 1.
42. Hearings before the BOA occurred over the course of five days: on
December 9, 2011, March 9, 2012, April 13, 2012, May 11, 2012, and July 13, 2012.
ROA at 01590, 02005, 02181, 02272, 02630. The evidentiary portion of the hearings
ended on May 11, 2012. ROA at 02272.
43. The attendance record of the BOA members at each of the five meetings
is as follows: a) December 9, 2011 --four present, K. Dillman,1 H. Kaaihue, C. Hart, K.
Maedo; three absent --W. Joseph, D. Yoshina, and R. Watanabe. ROA at 01590; b)
March 9, 2012 -- seven present. ROA at 02005; c) April 13, 2012 --six present, N.
Carr-Smith, C. Hart, R. Watanabe, K. Maedo, D. Yoshina, H. Kaaihue; one absent, W.
Joseph. ROA at 02181; d) May 11, 2012--seven present. ROA at 02271; and e) July
13, 2012 --seven present. ROA 02630.
44. After the evidentiary portion of the hearings, and before argument
scheduled for July 13, 2012, the Board ordered that the parties submit Proposed
Findings of Fact and Conclusions of Law on June 12, 2012 and Objections to the
Proposed Findings of Fact and Conclusions of Law on June 26, 2012. ROA at 02265,
02313.
45. All BOA members were present at the final hearing date of July 13, 2012.
ROA at 02630.
46. The July 13, 2012 hearing consisted of the BOA receiving the parties'
respective Proposed Findings of Fact and Conclusions of Law and Objections thereto,
Kim Diliman's term ended on December 31, 2011. She was replaced by BOA Member Nancy Carr-
Smith. ROA at 01549, 02181.
10
and hearing closing arguments. ROA at 02314-02381; 02382-02419; 02420-02461;
02467-02582; 02583-02597; 02598-02610; 02650-02653.
47. On August 10, 2012, the BOA voted to deny the Appellants' administrative
appeal and to uphold the Director's September 14, 2011 decision. (ROA File 5, Items
122 and 123). The motion passed with six BOA members voting "aye" and one BOA
member, Charlene Hart, recusing herself from voting. ROA at 02653.
48. On August 24, 2012, the Appellants filed this appeal from the BOA's
August 10, 2012 decision.
49. The Appellants Missler present the following questions for decision:
1. Can the Director and BOA nullify or invalidate a duly enacted
ordinance that they are directed to administer?
2. Can the Director issue a permit for a planned unit development
without following all applicable legislative requirements governing such a
development?
3. Is a planned unit development permit valid if the Director and BOA
did not review the development in context of the public natural resources trust?
4. Can the Director approve an application for a planned unit
development that has been previously withdrawn or deemed denied?
5. Is a permit for an alleged agricultural planned unit development
valid if it does not contain specific measures that require project lots to be used
for bona fide agricultural uses?
6. Is the BOA's decision valid if it did not follow Hawaii Revised
Statutes (HRS) Section 91-11?
CONCLUSIONS OF LAW
To the extent that any of the following Conclusions of Law shall be determined to
be Findings of Fact, they shall be deemed as such.
1. This Court has jurisdiction over this matter pursuant to HRS § 91-
14(g)(2004). The appeal has been timely filed.
11
2. Pursuant to Section 25-6-6, Hawaii County Code (HCC), the Director had the
authority to approve the PUD Application. ROA at 02275.
3. The Court reviews the BOA's August 10, 2012 decision pursuant to HRS §
91-14(g):
Upon review of the record the court may affirm the decision of the
agency or remand the case with instructions for further proceedings; or it may
reverse or modify the decision and order if the substantial rights of the
petitioners may have been prejudiced because the administrative findings,
conclusions, decisions, or orders are:
1) In violation of constitutional or statutory provisions; or
2) In excess of the statutory authority or jurisdiction of the
agency; or
3) Made upon unlawful procedure; or
4) Affected by other error of law; or
5) Clearly erroneous in view of the reliable, probative, and
substantial evidence on the whole record; or
6) Arbitrary, or capricious, or characterized by abuse of
discretion or clearly unwarranted exercise of discretion.
4. The BOA's findings of fact must be supported by underlying "basic facts,"
In Re Hawaiian Electric Co., 60 Haw. 625, 641-642, 594 P.2d 612, 623-624 (1979), and
must be complete, IBEW Local 1357 v. Hawaiian Telephone Co., 68 Haw. 316, 328,
713 P.2d 943, 953 (1986); see also Mahuiki v. Planning Commission, 65 Haw. 506,
511, 516-519, 654 P.2d 874,877, 881-882 (1982); accord, Hui Alaloa v. Planning
Commission, 68 Haw. 135, 137, 705 P.2d 1042, 1044 (1985). The Court must be able
to "track" the manner in which the BOA reached its factual determinations. Kilauea
Neighborhood Association v. Land Use Commission, 7 Haw. App. 227, 229-230, 232-
233, 751 P.2d 1031, 1034-1035 (1988).
12
5. Findings of fact are reviewed under the "clearly erroneous" standard. The
BOA's findings of fact are "clearly erroneous" if they are not supported by reliable,
probative and substantial evidence or if the Court is left with a firm and definite
conviction that the BOA had made a mistake. Leslie v. Board of Appeals, 109 Hawaii
384, 391, 126 P.3d 1071, 1078 (2006). "Substantial evidence" is credible evidence that
is of sufficient quality and probative value to enable a person of reasonable caution to
support a conclusion. State v. Kotis, 91 Haw. 319, 328, 984 P.2d 78, 87 (1999); Jou v.
Schmidt, 117 Haw. 477, 482, 184 P.3d 792, 797 (Haw. App. 2008).
6. The BOA's conclusions of law are freely reviewable. Paul's Electric,
Service, Inc. v. Bifetel, 104 Haw. 412, 420, 91 P.3d 494, 502 (Haw. 2004). Further, the
BOA's decision is not entitled to a presumption of validity if the Board acted in violation
of law. "If the legislature has not granted the agency discretion over a particular matter,
then the agency's conclusions are subject to de novo review. Id.
7. Mixed questions of fact and law are reviewed under the clearly erroneous
standard because the conclusion is dependent upon the facts and circumstances of the
particular case. Price v. Zoning Bd. of Appeals of City and County of Honolulu, 77
Hawaii 168, 172, 883 P.2d 629, 633 (1994). When mixed questions of law and fact are
presented, an appellate court must give deference to the agency's expertise and
experience in the particular field. Dole Hawaii Division-Castle & Cooke, Inc. v. Ramil, 71
Haw. 419, 424, 794 P.2d 1115, 1118 (1990). To be granted deference, however, the
agency's decision must be consistent with the legislative purpose. Camara v. Agsalud,
67 Haw. 212, 216, 685 P.2d 794, 797 (1984).
8. Under HRS § 91-14(g), conclusions of law are reviewable under
subsections (1), (2), and (4); questions regarding procedural defects under (3); findings
13
of fact under subsection (5); and an agency's exercise of discretion under subsection
(6). Trivectra v. Ushijima, 112 Hawaii 90, 98, 144 P.3d 1, 9 (2006) (citations omitted).
9. Statutory interpretation is "a question of law reviewable de novo."
Diamond v. State, Bd. of Land and Natural Res., 112 Hawaii 161, 172, 145 P.3d 704,
715 (2006) (citation omitted).
10. Although the construction given to a statute by public officials whose duty
it is to administer the statute is entitled to great weight, the Supreme Court has stated
that"neither official construction or usage, no matter how long indulged in, can be
successfully invoked to defeat the purpose and effect of a statute which is free from
ambiguity, nor will the courts be influenced by the construction placed upon a statute by
the officials whose duty it is to execute it where such construction is manifestly
incorrect." State v. Dillingham Corp., 60 Haw. 393, 409, 591 P.2d 1049, 1059
(1979)(quotation and citation omitted). Consequently, the Supreme Court has not
hesitated to reject an incorrect or unreasonable statutory construction advanced by the
agency entrusted with the statute's implementation. See, e.p., Government Employees
Ins. Co. v. Dang, 89 Hawaii 8, 15, 967 P.2d 1066, 1073 (1998); In re Maldonado, 67
Haw. 347, 351, 687 P.2d 1, 4 (1984).
Procedural Challenges
11. The Court first considers Appellants' two procedural challenges; (1)
whether the Director may approve a PUD application that has been previously
withdrawn or deemed denied; and (2) that the BOA's decision is invalid because the
Board did not follow HRS § 91-11.
14
12. Appellants argue that the application must be "deemed denieds2 as a
matter of law pursuant to HCC Section 25-6-6(e) of the County Zoning Code because
the Director did not act to deny or to approve the application within 60 days of
accepting the application on November 1, 2010.
13. Appellees argue that the Director did not violate any applicable law by
extending the deadline to grant or deny the Saxtons' Application beyond the initial sixty
day time period in HCC Section 25-6-6(a), pursuant to Department Rule 7-8(a), and
subsequently approving the Saxtons' PUD Application.
14. The Director has the authority to promulgate Department Rules to enforce
the Zoning Code pursuant to Charter§ 6-7.2(b).
15. Department Rule 7-8(a) provides for an extension of time beyond the
initial sixty day time period for review, with the applicant's assent: "Within sixty days
after the filing of a proper application or within a longer period as may be agreed to by
the petitioner, the Director shall deny the application or approve it subject to conditions."
16. Department Rule 7-8(a) apparently contradicts the plain language of HCC
§ 25-6-6(e), which states, "[Of the director fails to act upon a PUD permit application
within the prescribed sixty-day period as required by subsection (a) above, the
application shall be considered as having been denied and the director shall
immediately inform the applicant of such denial."
2 Appellants argued in their Opening Brief that the application was "withdrawn" when Lewis and
Petty requested the Director to withdraw the PUD application on November 12, 2010. However,
the owners of the Property—the Saxtons—never requested the PUD be withdrawn and instead
requested that the Director continue processing the request. See Appellants' Opening Brief,
sec. IV.A. at 15; ROA at 00837, 02038, 02233, 00867-00868. The Director has authority to
accept a PUD application, see HCC § 25-6-4, and in the instant matter did not withdraw it.
There is nothing clearly erroneous or unlawful about the Director's decision. As a result, this
portion of Appellants' argument fails.
15
17. However, review of the Director's actions cannot stop there. "Seemingly
absolute time periods for administrative action ... are often considered mere guides for
the conduct of business with dispatch and for orderly procedure. They have generally
been characterized as directory, unless time is of the essence of the act required, the
statute contains negative language denying the exercise of authority beyond the period
prescribed for action, or a disregard of the relevant provision would injuriously affect
public interests or private rights. And the word 'shall' may be held to be merely directory,
when no advantage is lost, when no right is destroyed, when no benefit is sacrificed,
either to the public or to the individual, by giving it that construction." Perry v. Planning
Comm'n, 62 Haw. 666, 676-677 (1980)(citations and quotations omitted). The Court in
Leslie cited Perry with approval, explaining Perry's three-pronged test as requiring: (1)
that the statute's purpose "confutes the probability of a compulsory statutory design;" (2)
that no "unjust consequences" will result; and (3) as herein stated, that no advantage is
lost, no right destroyed, no benefit sacrificed. 109 Hawaii at 394; 126 P.3d 1081.
18. in the instant case, the extensions of time were made with the agreement
of the applicant. They provided additional time for the Director to review the application
and objections thereto. An automatic denial or approval could very well result in more
harm to the applicant and to other interested parties than a short extension of time, as
contemplated by the Perry Court, and as applied in the instant matter.
•19. Department Rule 7-8(a) falls within the guidelines established by the Perry
Court, allowing business still to be conducted with dispatch while the decision-making
process can be handled in an orderly fashion. The Director's reliance on Department
Rule 7-8(a) in applying an extension of time, while remaining in contact with the
applicant and considering other parties' interest is not clearly erroneous and does not
16
violate HCC Section 25-6-6(a). Accordingly, the Saxtons' PUD Application was not
deemed withdrawn or denied.
20. Appellants also contend that the BOA failed to follow HRS § 91-11.
21. HRS § 91-11 reads:
Whenever in a contested case the officials of the agency who are to
render the final decision have not heard and examined all of the evidence,
the decision, if adverse to a party to the proceeding other than the agency
itself, shall not be made until a proposal for decision containing a
statement of reasons and including determination of each issue of fact or
law necessary to the proposed decision has been served upon the parties,
and an opportunity has been afforded to each party adversely affected to
file exceptions and present argument to the officials who are to render the
decision, who shall personally consider the whole record or such portions
thereof as may be cited by the parties.
22. Appellants argue in their opening brief that five of the BOA's six voting
members did not attend all of the BOA's four evidentiary hearings; however, all five
participated in the vote, thus failing to follow the procedure set forth in HRS § 91-11.
Appellees argue that HRS §91-11 does not require that all board members attend all
hearings in order to render a decision.
23. The Supreme Court has held that HRS § 91-11 requires that those
persons who are responsible for the decision shall have mastered the record, either by
hearing the evidence, or reading the record or by receiving briefs and hearing oral
argument. White v. Board of Education, 54 Haw. 10, 501 P.2d 358 (1972).
24. In the instant case, where the BOA members heard and examined the
evidence in the case, received proposed Findings of Fact and Conclusions of Law by all
parties, objections to the proposed Findings of Fact and Conclusions of Law by all
parties, and heard oral argument before the BOA voted, the BOA did not violate HRS §
91-11.
17
Public Natural Resources Trust
25. The Court next considers Appellants' third question: Is a planned unit
development permit valid if the Director and BOA did not review the development in
context of the public natural resources trust?
26. According to the Hawai'i Constitution and sovereign reservation, the
public trust doctrine "applies to all water resources without exception or distinction." In
re Water Use Permit Applications ("Waiahole I"), 94 Hawaii 97, 133, 9 P.3d 409, 445
(2000).
27. The term "water resources" includes watersheds. Id. at 129; see also HRS
§174C-3 (a "water source" is "a place within or from which water is or may be
developed, including but not limited to: (1) generally, an area such as a watershed
defined by topographic boundaries....").
28. Merriam-Webster's Dictionary defines "watershed" as "a region or area
bounded peripherally by a divide and draining ultimately to a particular watercourse or
body of water." www.merriam-webster.com; 2013, Merriam-Webster, Inc.
29. Since at least 1995, the County has included the Property in its watershed
area maps. ROA File 1, Item 14, Missler Exhibit 41.
30. The DLNR designates the Property to be part of a "Watershed Protection
Priority I" area. ROA File 1, Item 6, Missler Exhibit 27.
31. The Hawaii Supreme Court has recognized that agencies addressing the
public trust doctrine are required to balance public and private interests. See e.d.,
Waiahole I, 94 Hawai`i at 142, 9 P.3d at 454 ("we hold that the Commission inevitably
must weigh competing public and private water uses on a case-by-case basis,
according to any appropriate standards provided by law").
18
32. The Supreme Court has given further guidance on how that balancing test
must be done. "The duties imposed upon the state are the duties of a trustee and not
simply the duties of a good business manager." Id. at 143, 9 P.3d at 456 (quotation and
citation omitted). As guardian of the water quality in this state, [governmental agencies]
then "must not relegate [themselves] to the role of a mere umpire . . . but instead must
take the initiative in considering, protecting, and advancing public rights in the resource
at every stage of the planning and decision-making process." Id. (quotation and citation
omitted). Thus, "the state may compromise public rights in the resource pursuant only
to a decision made with a level of openness, diligence, and foresight commensurate
with the high priority these rights command under the laws of our state." Id. The trust
requires planning and decision-making from a "global, long-term" perspective. Id.
33. Appellees, citing Kelly v. 1250 Oceanside Partners, 111 Hawai'i 205, 224,
140 P.3d 985, 1004 (2006), argue that the Director's authority with respect to its public
trust duty to protect the natural water resources of the State is found in Chapter 180C,
HRS, entitled "Soil Erosion and Sediment Control."
34. Under Chapter 180C, HRS, the county governments are required to enact
ordinances for the purpose of controlling soil erosion and sediment resulting from a land
disturbing activity. The ordinance for erosion and sediment control must be based, in
part, on "relevant physical and developmental information concerning the watersheds
and drainage basins of the county and/or State including but not limited to data relating
to land use, soil, hydrology and geology, size of and area being disturbed, approximate
water bodies and their characteristics, transportation, and public facilities and services."
HRS § 1800-2(b)(1)(1974).
19
35. The Appellees argue that enforcement of Chapter 180C falls under the
jurisdiction of the Department of Public Works ("DPW"), Engineering Division. They
argue that "because the Planning Director is not an engineer and has no jurisdiction
over Chapter 10 or any other matters relating to engineering, the Planning Director
sends all land use applications such as PUD applications to DPW/Engineering Division
for comments. ROA at 00818-00823. Further, they state that the comments received
from DPW/Engineering Division regarding the Saxtons' PUD Application were
incorporated into the PUD and Condition 10 of the PUD requires the Saxtons to
continue to coordinate and work with DWP/Engineering Division and all other agencies
throughout the design and development of the site to address concerns and meet the
requirements of those agencies. ROA at 00953-00966.
36. Appellees miss the mark with this argument in two crucial ways. First, as
already determined by the Supreme Court in Kelly, Appellee Director may not avoid
obligation to uphold the public natural resources trust doctrine and its "affirmative duty
to preserve and protect the state's water resources," by arguing that another agency
carries the responsibility. Kelly, 111 Haw. at 226, 140 P.3d at 1006. Indeed, HRS §
1800-2(b)(1) contains no such limitations. Second, Condition 10 of the PUD fails to
meet the duty by deferring decision-making to a future time.
37. Affirmative obligation to preserve the public natural resources trust
according to law is among the responsibilities of the Director as an officer of the County.
"At the time of the introduction of fee simple ownership to these islands the king
reserved the ownership of all surface waters ... [and] a public trust was imposed on all
the waters of the kingdom." Robinson v. Arivoshi, 65 Haw. 641, 674, 658 P.2d 287, 310
(1982)(citation omitted). The "public interest in the waters of the kingdom was
20
understood to necessitate a retention of authority and the imposition of a concomitant
duty to maintain the purity and flow of our waters for future generations and to assure
that the waters of our land are put to reasonable and beneficial uses. This is not
ownership in the corporeal sense where the State may do with the property as it
pleases; rather, we comprehend the nature of the State's ownership as a retention of
such authority to assure the continued existence and beneficial application of the
resource for the common good." Id.
38. "The State unquestionably has the power to accomplish much of this
through its police powers. We believe however that the king's reservation of his
sovereign prerogatives respecting water constituted much more than restatement of
police powers, rather we find that it retained on behalf of the people an interest in the
waters of the kingdom which the State has an obligation to enforce and which
necessarily limited the creation of certain private interests in waters." Id., at fn. 31
(citations omitted).
39. Article XI of the Hawai'i State Constitution reads:
Conservation and Development of Resources
Section 1. For the benefit of present and future generations, the State and its
political subdivisions shall conserve and protect Hawaii's natural beauty and all
natural resources, including land, water, air, minerals and energy sources, and
shall promote the development and utilization of these resources in a manner
consistent with their conservation and in furtherance of the self-sufficiency of the
State. All public natural resources are held in trust by the State for the benefit of
the people. HRS Const. Art. XI, § 1.
40. Article XI, section 7 further provides:
Water Resources
Section 7. The State has an obligation to protect, control and regulate the use of
Hawaii's water resources for the benefit of its people. The legislature shall
provide for a water resources agency which, as provided by law, shall set overall
21
water conservation, quality and use polices; define beneficial and reasonable
uses; protect ground and surface water resources, watersheds and natural
stream environments; establish criteria for water use priorities while assuring
appurtenant rights and existing correlative and riparian uses and establish
procedures for regulating all uses of Hawaii's water resources. HRS Const. Art.
XI, § 7.
40. "Questions of constitutional law are reviewed on appeal under the right [or]
wrong standard." Freitas v. Admin. Dir. of Courts, 108 Hawaii 31, 37, 116 P.3d 673, 679
(2005) (internal quotation marks omitted) (quoting State v. Jenkins, 93 Hawaii 87, 100,
997 P.2d 13, 26 (2000)).
41. As was recognized by the majority of the Supreme Court in Wai'ola,
"maximizing the water resource's social and economic benefits includes the protection
of the resource in its natural state." Kelly, 111 Hawaii at 223, 140 P.3d at 1003
(citations and quotations omitted).
42. The County's duty to conserve and protect is clear. Id. at 225 140 P.3d at
1005.
43. The Director may not defer decision-making action with regard to the
public natural resources trust to another agency nor to a future date. The Director, as
an officer of the County, has a constitutional duty to "conserve and protect Hawaii's
natural beauty and all natural resources, including ... water," in her official decision-
making. In deferring this responsibility, the Director's decision violated constitutional
provisions.
44. The purpose of a PUD permit is "to encourage comprehensive site
planning that adapts the design of development to the land, by allowing diversification in
the relationships of various uses, buildings, structures, open spaces and yards, building
heights, and lot sizes in planned building groups, while still insuring that the intent of the
Zoning Code is observed." HCC § 25-6-1.
22
45. While a PUD permit may not be "a ground disturbing permit," this does not
free the Director from her obligation to protect the public natural resources trust.3
46. Appellees have not cited any authority to support their argument.4
Instead, the clear weight of authority requires the Director to consider the public natural
resources trust without regard to the stage of the planning.
47. This position has long been recognized by the executive branch. The
Attorney General has previously opined that county officials must take before-the-fact
measures to ensure that a developer (and its lot purchasers) will use the land in
conformance with State law. State Att'y Gen. Op. No. 75-8 (Sept. 3, 1975); HRS § 205-
12.
48. The Director's argument in her answering brief that the public trust
doctrine has limited application to private lands is an incorrect interpretation of the law.
The proponents of amendments to Article XI intended to impose upon the State and its
political subdivisions an affirmative duty to preserve and protect the State's water
resources.5 Cf. Waiahole I, 94 Hawai'i at 133 n.31, 9 P.3d at 446 n.31 (rejecting the
contention that the reference in Article XI, section 1 to "public natural resources"
indicates an intent to exclude "privately owned waters" from the public trust inasmuch
County Policy ENV-1.5, relating to the contents of an application for a land use permit, states
that, "[T]he following natural and cultural resources shall be considered sensitive and therefore
shall be inventoried, as part of any permit application to the County Planning Department."
While application of the KCDP is discussed later in these Conclusions, this Policy clearly
envisions an effort between applicant and the Director in the initial planning stages to consider
natural and cultural resources.
Appellees' reference to Hui Malama Aina 0 Ko"olau v. Pacarro, et al., 4 Haw. App. 304, 320,
666 P.2d 177, 187 (1983) is misplaced. (quoting: "the inference is that the development is still in
the planning stages since [this permit] . . . [is] required prior to actual construction." The
reference stands merely for the fact that a PUD is required prior to actual construction. It says
nothing about the County's obligations toward the public trust, nor when in the PUD permitting
process the County must consider the trust. This case is inapposite to the issue at hand.
In November 2010, Hawaii County voters adopted a parallel public natural resources trust
provision as Section 13-29 of the Hawaii County Charter that also extends to "cultural
resources."
23
as "apart from any private rights that may exist in water, 'there is as there always has
been, a superior public interest in this natural bounty" (quoting Robinson, 65 Haw. at
677, 658 P.2d at 312)). Kelly, 111 Hawaii at 226, 140 P.3d at 1006.
49. Appellees argue that there is no expert testimony or any other evidence
produced at the BOA hearing that specifically shows the Property's tax map key
numbers as lying wholly or partially within the watershed area. Appellee's decision is
clearly erroneous. The County Council included the Property in the watershed map for
South Kona (KCDP Ordinance, Figure 4-8a) and declared a watershed protection
policy.6
50. The Hawai'i Supreme Court has held that agencies and their officials,
such as the Director and the BOA, must demonstrate in their permitting decisions that
they took a "close look" at the public natural resources trust and acted with a "high level
of openness, diligence, and foresight" in their treatment of an affected water source. In
Re Water Use Permit Applications, supra, 94 Haw. at 143, 9 P.3d at 455.
51. In the instant matter, the record shows that the Director and the BOA have
not met this standard — that they deferred decision-making about the public natural
resources trust to other agencies and to a future date.
6 The KCDP Ordinance, at Page 3-1, states that "The watershed, including coastline, flood
plains, important agricultural land, open space and areas mauka of Mamalahoa Highway shall
be protected. Guided by a principle of respect for the land, environmental and natural resources
shall be preserved and protected to ensure clean air and water, thriving native species,
conservation of shorelines and open space, improvements in watershed management and flood
control, and reductions in solid waste." (emphasis added)
The council also described high-level groundwater recharge areas above the 1,500 foot
elevation as being "sensitive resources" and any project that has "significant, unavoidable,
adverse impacts" thereon should be presumptively "denied." Policy ENV-1.5. (emphasis
added)
24
52. In addition, the decision itself improperly describes the and in question.
The Director described the vegetation on the Property as "a combination of kiawe, koa
haole, and a variety of grass, shrubs and weeds. The plants found on the Property are
generally alien and introduced species, none being considered rare or endangered. No
endemic species of animals were located, nor were their habitats."
53. When questioned about this portion of the decision letter during the May
11, 2012 appeals hearing, the Director admitted that the language had been included in
the decision letter in error, that it was taken from an unrelated decision letter that was
being used as a sample, and that even without that language included, the Director
would have approved the PUD application. Transcript from BOA hearing, May 11,
2012. ROA 02279-02280; 02296-02297. Upon further questioning from Appellants'
attorney, the Director stated that her staff could have considered comments made by
neighbors that characterized the Property as including an old 'ohi'a forest, but that
these would not be required to be included. Id. However, the geographical makeup of
the Property is relevant. The public natural resources doctrine empowers the Director
to investigate exactly what natural resources will be affected by the application and to
consider the impact on these resources and on the public trust the permit will have.
Accurate findings of fact are essential to protecting the rights of the parties and the
public and to creating a record that may be effectively reviewed on appeal. "The
purpose of the statutory requirement that the agency set forth separately its findings of
fact and conclusions of law is to assure reasoned decision making by the agency and
enable judicial review of agency decisions." In Re Hawaiian Electric Co., 60 Haw. at
641-642, 594 P.2d at 623-624 ("In order that we might be informed of the factual basis
upon which the Commission relies, the Commission's findings of ultimate facts must be
25
supported by findings of basic facts which in turn are required to be supported by the
evidence in the record." The statement in the decision letter is clearly erroneous in view
of the reliable, probative and substantial evidence on the whole record, which shows
that the land is covered with substantial ohi'a canopies and frequented by the
endangered Co.
54. The actions of Appellees failed to meet obligations and duties pursuant to
the public natural resources trust and are in contravention of Appellees' duty under the
Constitution, as further elucidated by the Hawaii Supreme Court. See In Re Water Use
Permit Applications, 94 Haw. at 143, 9 P.3d at 455.
Archaeological Inventory Survey ("AIS") Requested by SHPD
55. Under Section 6E-42, Hawaii Revised Statutes and the Historic Sites
element of the 2005 General Plan, the Director is required to seek comments from
SHPD on historic properties that may be on the Property and that may be affected by
the project.
56. SHPD is required to send its written comments to the Director within thirty
(30) days of receipt of the Director's letter requesting comments. See Hawaii
Administrative Rules ("HAR") § 13-284-5(b).
57. If SHPD fails to send comments within the thirty day deadline, SHPD is
presumed to concur with the PUD application. HAR § 13-284-3(e).
58. To fulfill her obligation under HRS § 6E-42, the Director had to obtain
relevant information from the Saxtons (or on her own) on such historic properties, but
did not do so. Such information can be obtained by a site inspection, by a review of
State Surveyor records, by consultation with kama'aina witnesses of the area, or by a
before-the-fact archaeological inventory and cultural assessment.
26
59. Before the Director issued her September 14, 2011 decision-letter, Robert
Chang had submitted a comment letter to the Director stating that family burials exist on
the Property. ROA File 2, Item 19, Department Record Page 281 . Appellant Richard
Missler also informed the Director during the public participation process of observable
archaeological sites and historic features on the Property. Id., Department Record
Page 361.
60. The Director did not make a finding on the Property's watershed and
habitat characteristics or the endangered and endemic species on the Property and
clearly erred when she described the Property as a "kiawe wasteland," devoid of any
resources of value, not covered by an old 'ohia forest and habitat and not occupied by
endangered and endemic species. Id., Decision Page 2, Department Record Page 366.
Kona Community Development Plan
61. Appellants ask: (1) Can the Director and BOA nullify or invalidate a duly
enacted ordinance that they are directed to administer?; and (2) Can the Director issue
a permit for a planned unit development without following all applicable legislative
requirements governing such development?
62. Appellants argue that the Director and BOA have nullified or invalidated
the Kona Community Development Plan ("KCDP") in, respectively, approving and
upholding approval of the PUD application.
63. Appellees argue that the Director's decision to approve the PUD and
refrain from requiring compliance with the KCDP provisions raised by Appellants was
not erroneous, was not a violation of the Zoning Code, and was not arbitrary, capricious,
characterized by an abuse of discretion, or clearly unwarranted exercise of discretion.
27
Further, they argue that even if the PUD is required to comply with the regulatory
actions set forth by the KCDP, it is consistent with the General Plan and KCDP.
64. The Director must interpret, apply and enforce all ordinances, statutes,
rules and other laws pertaining to planning and land use matters in the County,
including the General Plan and KCDP, to fulfill the responsibilities as the Chief Planning
Officer of the County. Hawaii County Charter §6-7.2(b).
65. The General Plan was adopted as an ordinance by the Hawaii County
Council on February 2, 2005. Ordinance No. 05 25. See also, County of Hawaii
Charter § 3-15.
66. The KCDP was adopted as an ordinance by the Hawaii County Council
on September 25, 2008. ROA at 00641. 26.
67. A community development plan is a part of the general plan and
implements the general plan. GATRI v. Blane, 88 Hawai'i 108, 114, 962 P.2d 367, 373
(1998).
68. Conformance to the 2005 General Plan, of which the KCDP is a part, is a
decision criterion under Section 25-6-10(b) of the County Zoning Code and 7-7(a)(2).
An application must contain an "analysis" of the general plan and community
development plan as required by Section 25-6-3(2)(E) of the County Zoning Code, The
petition must also include how the proposed development substantially conforms to the
General Plan. Department Rule 7-4(b)(2)(D),
69. The Court reviews the KCDP Ordinance in accordance with established
rules of statutory construction.
70. First, the County Council's enactments are entitled to a presumption of
validity. Lum Yip Kee, Ltd. v. City and County of Honolulu, 70 Haw. 179, 189, 191, 767
28
P.2d 815, 822, 823 (1989); see also Save Sunset Beach Coalition v. City and County of
Honolulu, 102 Haw. 465, 474, 78 P.3d 1, 10 (2003).
71. Second, courts defer to the County Council's exercise of the council's
legislative powers. Lum Yip Kee, Ltd., supra; Save Sunset Beach, supra.
72. Third, in interpreting an ordinance, courts follow the same principles that
are used to interpret statutes and must look at the language of the ordinance as a
starting point. Leslie, 109 Hawaii at 393, 126 P.3d at 1080.
73. Fourth, every part of an ordinance must be read together so that all parts
of the ordinance are given full force and effect. Dejetely v. Kaho'ohalahala, 122 Hawai'i
259, 263, 226 P.3d 421, 433 (2010); Leslie, supra; Coon v. City and County of
Honolulu, 98 Hawai'i 233, 250, 47 P.3d 348, 365 (2002).
74. Fifth, in interpreting a county's general plan, courts defer to the county
council's own interpretation of the general plan that it enacted, if reasonable. Protect
Ala Wai Skyline v. City and County of Honolulu, 6 Haw. App. 540, 547-548, 735 P.2d
950, 955 (1987), reversed on other grounds in GATRI v. Blane, 88 Haw. at 114, 962
P.2d at 373, and must avoid interpretations that lead to absurd results. Morgan v.
Planning Department, 104 Hawai'i 173, 185-186 P.3d 982, 994-995 (2004); Keliipuleole
v. Wilson, 85 Hawai'i 217, 221-222, 941 P.2d 300, 304-305 (1997).
75. Sixth, the BOA may not nullify an ordinance that it is charged to
administer. HOH Corp. v. Motor Vehicle Industry Licensing Board, 69 Haw. 135, 141,
736 P.2d 1271, 1275 (1987.
76. When the County Council enacted the 2005 General Plan Ordinance 05-
25, the council stated in Section 15.1 of the 2005 General Plan Ordinance that a
community development plan "may contain ... detailed land use and zoning guide maps
29
architectural design guidelines, planning for watersheds ... and any other matters
relating to the planning area." Section 15.1, Page 1, 2005 General Plan Ordinance.
77. The County Council also stated in Section 15.1 that a community
development plan "shall recommend amendments as appropriate to the codes, maps,
or administration and enforcement" (Id.), i.e., future legislative action as to described
subjects.
78. The County Council did not, by the use of the words "shall recommend,"
intend to limit or confine the subject matter or measures that the council may insert in
the text of a community development plan.
79. The BOA's narrow interpretation of Section 15.1 would limit the County
Council's legislative power and would restrict the council to "recommending" to itself that
the council (or a future council) enact at some future date amendments or supplements
to various land use regulations even though the council already has that present
authority and ability to enact such amendments or supplements.
80. The BOA erred when it determined that the County Council is prohibited
from inserting Policy ENV-1.5, Policy LU-3.3, Policy 3.4 and Attachment "C" in the
KCDP Ordinance.
81. The BOA's ruling on Bill 333's title is wrong. The title of Bill 333 reads "An
Ordinance Adopting the County of Hawai'i Kona Community Development Plan."
82. Since a community development plan may contain "regulatory measures"
such as Policy ENV-1.5, Policy LU-3.3, Policy 3.4 and Attachment "C," Bill 333's title is
adequate. In Re Application of Tom Ponq, 17 Haw. 566, 570, 572-575 (1906); Schwab
v. Ariyoshi, 58 Haw. 25, 33-35, 564 P.2d 135, 140-141 (1977) (bill title sufficient if the
30
bill's subjects are "connected with or related to each other" and are "parts of, or
germane to, one general subject").
83. The BOA's determination that the KCDP Ordinance does not mention
Chapters 23 and 25 of the Zoning Code is wrong. The KCDP Ordinance states on its
face (at Page 4-48, Policy LU-3.3a), that the County Council "Amends Chapter 25
Zoning Code and Chapter 23 Subdivision Code to establish Clustered Rural Subdivision
PUD (Enacted by plan)."7
84. The BOA also erroneously construed the KCDP Ordinance's substantive
provisions in question as being inapplicable to a planned unit development. Board
Decision, Finding Nos. 30-31.
85. The BOA did not file an Answering Brief to support its interpretation that
the KCDP Ordinance does not apply to a planned unit development. Nor did the
Director address this point in her Answering Brief.
86. In reaching its erroneous conclusion, the BOA relied upon the KCDP
Ordinance's "grandfather clause" that protects existing entitlements, but that also makes
clear that landowners with such pre-existing entitlements must still comply with the
substantive provisions of the KCDP Ordinance if the landowners were to apply for "new
changes of zone, time extensions on existing zoning requiring County Council action,
state land use boundary amendments, and Special Management Area (SMA) permits,
when applicable." KCDP Ordinance, Page 4-2, Part 6; Page 4-32.
In her Answering Brief, the Director advances two additional grounds to support her argument
that Bill 333 is defective, stating that in enacting Bill 333, the County Council violated Sections
3-10(c) and 3-10(g) of the Hawaii County Charter relating to notice and incorporation by
reference. Answering Brief, Pages 24-25. However, the BOA did not rely on these alleged
violations to support its decision and there is no evidence in the record to show that the County
Council violated the notice provision of charter Section 3-10(c) or that the County Council
violated charter Section 3-10(g) by physically attaching the KCDP to Bill 333.
31
87. More importantly, the "grandfather clause" does not exempt the Applicants
or the Property from the KCDP Ordinance's substantive provisions governing a planned
unit development.
88. The KCDP Ordinance plainly states that it applies to "any permit
application" (Policy ENV-1.5) and applies to a planned unit development. Policy LU-3.3,
Policy LU-3.4 and Attachment "C."
89. Attachment "C" states that the Clustered Rural Subdivision Guidelines
"apply to a special type of 'Planned Unit Development' (PUD) for North and South Kona
for lands outside the Urban Area" and "supplement the requirements and procedures for
PUDs and subdivisions set forth in the zoning Code, Subdivision Code and Planning
Department Rules." Attachment "C," Page 1, Part 2.
90. In its August 10, 2012 decision, the BOA erred in statutory interpretation
by exempting the PUD application under the "grandfather clause," and when it
concluded that the KCDP Ordinance's substantive provisions in question, viz., Policy
ENV-1.5, Policy LU-3.3, Policy 3.4 and Attachment "C," could not be enforced or
applied. BOA Decision, Finding Nos. 29-39, Conclusion No. 10.
91. Appellants also argue that the BOA erred when it concluded that the
substantive provisions of the KCDP Ordinance in question are directory and not
mandatory. See BOA Decision, para. 36.
92. The Court has previously ruled that the word "shall," as it appears in the
County of Hawaii's Subdivision Code, must be interpreted as being mandatory and
binding. Leslie, 109 Haw. at 393-394, 126 P.3d at 1080-1081. The Leslie decision
distinguishes the general rule that the word "shall," when used in statutes, refers to
provisions that are mandatory and not discretionary, from the conclusion reached in the
32
Perry case. Id. at 393. Perry carves out a narrow exception to the general rule when
the three-pronged test articulated in Perry is met. The BOA states broadly that "[u]se of
the word `shall,' by the KCDP and in the context of this contested case is directory and
not mandatory because the KCDP, as applied to the Saxtons' PUD, lacks a compulsory
statutory design, and no advantage is lost, no right destroyed, and no benefit is
sacrificed, either to the public or to the individual by giving it a directory construction."
The BOA misses the mark in this blanket evaluation of the KCDP and in its relation to
this entire matter according to the Perry standard, and its conclusory statement of no
harm, without any evaluation, or even enumeration of the particular language it is
considering.
93. Moreover, the County Council declared in the KCDP Ordinance that "The
policies that use the word 'shall' are mandatory directives legally binding on County
agencies." Page 4-2, Item 6, KCDP Ordinance. This clear language indicates the intent
of the Council with regard to the use of the word "shall" in the KCDP.
94. The BOA's conclusion that the use of the word "shall" in the KCDP is
directory is an error of law.
95. Although the BOA made no reference to Policy LU-3.5 of the KCDP
Ordinance in its decision, the Director in her testimony before the Board (ROA File 4,
Item 102, Transcript May 11, 2012, Page 10) and at oral argument asserted that Policy
LU-3.5 indicates that the KCDP Ordinance's substantive provisions need only be
applied in a manner so as to "encourage" (but not mandate) compliance.
96. The Director's argument is in error because Policy LU-3.5 does not apply
in this instance for two reasons. First, Policy LU-3.3, Policy 3.4 and Attachment "C" on
33
their face apply to a planned unit development. To say that Policy LU-3.5 applies
instead would render Policy LU-3.3, Policy LU-3.4 and Attachment "C" meaningless.
97. Second, Policy LU-3.5 applies only to land that is zoned at densities
"between Ag-la and Ag-5a," which necessarily excludes land zoned Ag-la and land
zoned Ag-5a. In other words, Policy LU-3.5 applies only to land that may be zoned at
densities of Ag-2a, Ag-3a or Ag-4a, but not to land that is zoned at densities of Ag-1 a or
Ag-5a. The Property in question is zoned Ag-5a.
98. The Director's conclusion is in error of law.
99. The project's conformance to the 2005 General Plan, of which the KCDP
is a part, is a decision criterion under Section 25-6-10(b) of the County Zoning Code
and an application must contain an "analysis" of the general plan and community
development plan as required by Section 25-6-3(2)(E) of the County Zoning Code.
100. The PUD application does not contain such information and the Director
and her staff did not request or seek such information or conduct a site inspection to
confirm the Applicants' representations or to identify any errors and omissions.
101 . The application does not contain the information required by Policy ENV-
1 .5 and Attachment "C" of the KCDP Ordinance and the Applicants' representatives did
not follow the procedural requirements of Attachment "C" of the KCDP Ordinance when
they prepared and filed the application.
102. The Kona Design Center did not prepare the planned unit development
report as required by Attachment "C" (Part 3.C, Page 5) of the KCDP Ordinance.
103. The BOA and Director's failure to apply the standards set forth in the
KCDP and yet to conclude that the application met the standards of the KCDP is in
violation of statutory provisions and an error in law.
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104. Appellants also argue that the PUD permit is not valid because it does not
contain specific measures that require project lots to be used for bona fide agricultural
uses.
105. The BOA found that the Project would establish agricultural lots consistent
with permitted density allowed by zoning and consistent with agricultural uses that
prevail in the surrounding area. BOA Decision, para. 48.
106. According to the application, each of the thirteen 2-acre lots would support
a "farm dwelling," the design for which will be "governed by the CC&R's." However, the
CC&R's (as well as any drawings of the proposed structures) do not appear in the
application as required by Section 25-6-3(3)(A) of the County Zoning Code. Id.,
Application Page 5-5, Part 5.7.4, Department Record Page 45.
107. The application does not contain an agricultural plan as part of the
"comprehensive site plan" and "general development plan covering the entire area" as
required by Sections 25-6-1 and 25-6-3(3) of the County Zoning Code.
108. The Director's own September 14, 2011 decision-letter described the
project as a "housing" project to be built as a "residential community" and in a manner
that is "reminiscent of ... traditional neighborhoods." Id., Decision Pages 11-12,
Department Record Pages 375-376.
109. The Director's decision contravenes Sections 25-6-1 and 25-6-3(3)(A) and
thus is in violation of statutory provisions.
110. Still, the BOA concluded that the "Saxtons' PUD met all the legal criteria
for granting a PUD Permit set forth in HCC § 25-6-10...." BOA Conclusion #12. The
BOA's conclusion that the decision of the Director is not in violation of the Zoning
chapter or other applicable law is in error.
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DECISION AND ORDER
Based on the Findings of Fact and Conclusions of Law herein, the BOA and the
Director in their decisions violated constitutional and statutory provisions, made errors in
law, and made findings of fact that are clearly erroneous in view of the reliable,
probative and substantial evidence on the whole record pursuant to HRS § 91-14(g)(1),
(4), and (5) as follows:
a. The permit is not valid because the Director and BOA did not comply with
the General Plan and KCDP. The Director and the BOA violated HRS §
91-14(g)(1) and (4).
b. The permit is not valid because the Director and BOA did not review the
PUD application pursuant to their constitutional duties and responsibilities
with regard to the public natural resources trust. The Director and the
BOA violated HRS § 91-14(g)(1), (4) and (5).
c. The permit is not valid because it does not contain specific measures that
require project lots to be used for bona fide agricultural uses. The Director
and the BOA violated HRS § 91-14(g)(1) and (4).
IT IS HEREBY ORDERED that the matter be remanded for further proceedings
consistent with these Findings of Fact and Conclusions of Law and Decision, pursuant
to HRS § 91-14(g).
Dated at Kealakekua, Hawaii: APR 2 4 2013
Ronald lbarr° (seal)
JUDGE OF THE ABOVE-ENTITLED COURT
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