HomeMy WebLinkAboutREP FC 022 2017/06/06 (2016-2018) REPORT OF THE
COMMITTEE ON FINANCE
DATE: June 22, 2017 Re: Comm. No. 315/Res. No. 227-17
PLACE: Council Chambers
Kailua-Kona, Hawai`i
TIME: 2:02 p.m.
Council Chair and Members
Hawai`i County Council
Hilo, Hawai`i 96720
Your Committee on Finance, to which was referred Resolution No. 227-17 reports as follows:
Resolution No. 227-17, transmitted by Council Member Valerie Poindexter, via Communication
No. 315 dated June 1, 2017, authorizes the Finance Director to invite proposals for lease by negotiation
of 900 acres of agricultural County-owned lease lands,being Tax Map Key: 4-2-005:001, Koholalele,
Hamakua, Hawai`i, pursuant to Chapter 2, Article 19, Section 2-114 of the Hawai`i County Code 1983
(2016 edition, as amended).
All or a portion of this 900-acre parcel would be leased through negotiation for the purpose of
diversified agriculture, eco-tourism, and pastoral uses. Ms. Poindexter stated that the lands became
available because of unpaid real property taxes, and added that leasing the property affords the County
a method of generating revenue.
Property Manager Hamana Ventura provided a brief background, noting that in 1994 the County
acquired approximately 3,500 acres as part of a settlement agreement, and he identified potential
revenue sources for the County through leasing of the properties. He estimated that potentially
$40,000 per year could be generated as lease income, and said the funds would go into the General
Fund.
In response to an inquiry from Councilmember Chung, Mr. Ventura stated it is the department's
intention to come up with a proposal and go out to bid for leasing the property for cattle. Based
on the size of parcel, Mr. Ventura anticipates that it would be large ranch entities and not a smaller
mom-and-pop operation that would be targeted, unless a smaller family-type business would be
willing to invest time and money to install fencing and infrastructure. In answer to Mr. Chung's
inquiry, as to the purpose of leasing the land, Mr. Ventura stated it would be to generate income for
the County, with an estimated range of$20,000 to $30,000, and on the high end, up to $40,000 a year.
Council Member Sue Lee Loy stated her concerns relating to the location and identity of owners of
neighboring lands, and whether these neighbors would be competing for watersheds or putting a strain
on existing streams, to which Mr. Ventura responded that neighboring lands belong to Kamehameha
Schools. He further stated that water is not available in the area, and that the lessee would need to bring
in their own water or construct a catchment or reservoir system.
FC Report No. 22
FC-22 Page 2 June 22, 2017
Ms. Lee Loy also expressed her concern of where the money generated would go to, and asked if it
would be possible to earmark these revenues to address specific impacts and issues in those areas,
Deputy Finance Director Deanna Sako came forward to address the members of the Committee and
stated that revenues are not earmarked for those specific purposes, and added that the department is
aware of certain responsibilities to carry out in the future. Currently, all revenue sources are listed
together to balance the budget, and expenditures are distributed throughout all districts.
Council Member Tim Richards asked about the type of terms being offered on similar lands.
Mr. Ventura stated that they are usually 10-year leases with options. Mr. Richards commented that
longer lease terms would help smaller agricultural operators get loans. He requested Ms. Sako to
consider looking at longer lease terms, to encourage small farm operations participation. He mentioned
"good land stewardship with a financial return is important." Mr. Ventura stated that is something they
will look into. Ms. Poindexter commented that she is aware that Kamehameha Schools has been in
contact with Mr. Ventura.
Council Chair Maile David inquired about lands in other districts, which are acquired in this manner,
and whether it would provide agricultural incentive opportunities in those districts. Mr. Ventura stated
that Kapalena consists of 1,700 plus acres, of which 441acres were allocated to the Hamakua Farm
Bureau so that they could start the pilot program related to community grazing. They are waiting to see
the results of that pilot program; however, he does see future additional revenue sources in more than
one type of use. He noted there are potentials out there such as cattle, agriculture, or even biomass for
alternative energy, that being the reason and the need to start looking at these avenues.
Pursuant to Chapter 2, Article 19, Section 2-114, Subsection (a) of the Hawai`i County Code 1983
(2016 edition, as amended), the Council hereby finds that it is in the public's interest that all or a portion
of the 900 acres of Hamakua land as described herein shall be leased by negotiation.
Your Committee on Finance is in accord with the purpose and intent of Resolution No. 227-17, and
recommends its adoption.
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AYES NOES ABS EX Respectfully submitted,
CHUNG X
DAVID x COMMITTEE ON FINANCE
EOFF X
KANUHA X
LES LOY X ..0
1111110
O HARA X 411111 : -.#41111
POINDEXTER x MAILE DAVID, CHAIR
RICHARDs X FC REPORT NO.: 22
RUGGLES X ADOPTED: JUL 0 7 2017