HomeMy WebLinkAboutREP FC 411 07/09/1991 �. ._. REPORT OF THE
COMMITTEE ON FINANCE
Date: July 9, 1991 Re: Comm. 2662
Place: Councilroom
Time: 10 : 00 a.m.
Chairman and Members
Hawaii County Council
Hilo, Hawaii 96720
Your Committee on Finance, to which was referred Bill 459 , reports
as follows :
Bill 459 proposes to amend Ordinance 91-51, the Capital Improvement
Budget for Fiscal Year 1991-92, by adding the following project:
Department of Public Works
Kealakehe Wastewater Treatment Plant Expansion - HFDC $5, 100, 000
(110-699-5697 .27-115)
Funds for this project shall be provided from the State Housing
Finance and Development Corporation (HFDC) .
The Finance Director states in Communication No. 2662 dated July 1,
1991 the $5 . 1 million is HFDC' s pro-rata share of constructing
necessary improvements at Kealakehe Wastewater Treatment Plant
(WWTP) for the Villages of La ' i 'opua consisting of fourteen (14)
villages . The 1. 6 MGD expansion will service 4, 100 mixed
residential units in HFDC' s planned community development . Your
Committee was told $5 .35 million was appropriated but $250, 000 would
be held as a HFDC construction contingency.
Attached to Communication No. 2662 are two (2) correspondences sent
to the County from HFDC on the subject. The first is a letter from
Joseph K. Conant, Executive Director, HFDC, dated June 18, 1991,
authorizing the County of Hawaii to proceed with the wastewater
expansion project as a change order, subject to approval and release
of funds by the Governor . It states, a draft "agreement" is
forthcoming for County review, comment and eventual execution which
will specify certain terms and conditions of HFDC' s pro-rata share
to construct the necessary wastewater improvements .
The second correspondence is the "FOR ACTION" recap as approved by
Board of Directors, HFDC, and dated June 14, 1991. Therein, the
facts surrounding the change order are outlined in terms of budget,
scope of work, discussion and recommendations . The authorization
of a change order is based on the findings outlined by the Board of
Directors .
FC REPORT N0, 411
ADOPTED: JUL 18 1991
FC-411 Page 2 July 9, 1991
According to the Chief, Wastewater Division, the Kealakehe
Wastewater Treatment Plant (WWTP) is designed to accommodate the
next 20 years ' growth in development. Phase I includes ponds which
will accommodate 2 . 8 mgd of effluent of which 400, 000 g.d. are
expected to evaporate. 2 .4 are planned for delivery to the
Kealakehe Golf Course for disposal . The HFDC planned community will
require an additional pond to accommodate 1 . 6 mgd. Should the State
develop an additional 2,300 mixed/residential units makai of the
highway, another . 8 mgd capacity will be needed.
The Kealakehe Golf Course is of sufficient size to handle Phase I
(2 .4) and HFDC mauka development (1. 6) . About midway through HFDC
development of La ' i 'opua Villages, the County will need to explore
alternative disposal sites, additional force mains or horizontal
tapping of the force main to address the increased effluent.
Your Committee voiced its concerns on a number of points surrounding
the HFDC proposed expansion. First, it proposes the entire
$5 .35 million be appropriated to the County for its discretionary
use, rather than HFDC retaining $250, 000 in construction contingency
account .
Second, your Committee questions the adequacy of HFDC pro-rata
share, as the amount is only sufficient to pay the costs of
expanding the pond capacity, but doesn' t include funding for
transmission of effluent for disposal . Based on the $1. 5 million
share, the State is paying only $1,200 per/unit . The County has an
agreement to sell its effluent to the golf course developer.
Neither negotiations for disposal of State effluent nor contingency
for developing alternative disposal sites for excess effluent are
sufficiently addressed in HFDC proposal .
Third, the Executive Order is still unsigned by the Governor which
puts the entire project in a precarious position.
Fourth, HFDC retains rights to allocate its effluent disposal
credits to other State agencies or selling the same to private
entities . The County' s effluent plant is to be owned and operated
by the County, and as proposed the savings afforded to HFDC by the
change order can be passed on to others without sufficient
compensation to the County.
FC- 411 Page 3 July 9, 1991
Fifth, the entire project has a negative visual impact on mauka,
mountainside developments and, in addition to landscaping, screens
such as those used at neighboring OTEC Lab should be considered.
According to the Chief, Wastewater Division, the draft agreement
from HFDC should be received prior to the Council meeting July 18 .
Your Committee agreed to amend the amount of appropriation in
Bill 459 from $5. 1 million to $5.35 million and pass the Bill, as
amended, to full Council for consideration.
Your Committee still questions several terms and conditions proposed
in HFDC "For Action" recap and therefore requests a member of HFDC
be present at the Council meeting July 18, 1991 to discuss fund
agreement and suggests Administration review the agreement prior to
the Council meeting and be prepared to provide their opinions and
suggestions during the discussion.
Your Committee on Finance agrees with the intent and purpose of
Bill 459 , as amended, and recommends that it pass first reading.
` /
HELENE H. HALE, CHAIRWOMAN
dier
ROBERT . MAKUAKANE, VICE CHR. BR AN J. ' : LIMA, MEMBER
��� �. tic 1.1 1 ) (Q.TAKASH DO INGO, 4, MBER MER K. L: , M
K14411A--.
_.�
HARRY S. RUD E, MEMBER SPENCE- K. SCHUTTE, MEMBER
POL