Loading...
HomeMy WebLinkAboutMIN FC 2017/05/16 2016-2018COMMITTEE ON FINANCE 111h Session Hawaii County Building 25 Aupuni Street Hilo, Hawaii May 16, 2017 CALL TO The regular meeting of the Committee on Finance was called to order at ORDER: 10:16 a.m. in the Council Chambers, Hilo, by Ms. Maile Medeiros David, Chair. R(1T T CAT r Present: Ms. Maile Medeiros David, Chair Ms. Karen Eoff, Vice Chair Mr. Aaron S. Y. Chung, Member Mr. Dru Mamo Kanuha, Member Ms. Susan L. K. Lee Loy, Member Ms. Eileen O'Hara, Member Ms. Valerie T. Poindexter, Member Mr. Herbert M. "Tim" Richards, III, Member Ms. Jennifer Ruggles, Member (came in later) STATEMENTS The Chair directed the Committee to proceed to the next order of business, FROM THE Statements from the Public on Agenda Items. PUBLIC ON AGENDA ITEMS: (There were none.) COMMUNI- The Chair directed the Committee to proceed to the next order of business, CATIONS: Communications. CHR. DAVID: So if it's okay with my colleagues, I would like to take Communication 280 out of order. It's the nomination of Dr. Sharon Bintliff Change Order As directed by the Chair and with no objection from the Council Members, the of Business: following item was taken out of order: Comm. 280: NOMINATION OF DR. SHARON BINTLIFF TO THE BOARD OF ETHICS From Mayor Harry Kim, dated April 26, 2017, submitting for the Council's review and confirmation the above nomination. Requires Council Confirmation by: June 13, 2017 (Section 13-4(l), Hawaii County Charter) FC -11 May 16, 2017 Vote on Comm. 280: Mr. Richards moved to recommend confirmation of the (Approved) appointment of Dr. Sharon Bintliff to the Board of Ethics. Seconded by Mr. Kanuha and carriedby the following voice vote: Ayes: Committee Members Chung, Eoff, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, Ruggles, and Chair David - 9. Noes: None. Absent: None. Excused: None. Committee Members spoke in favor of the appointment. CHR. DAVID: You don't have to appear for Council. If we can take a short recess, we'd like to congratulate you. Really quickly, come shake our hands. We're in recess. Thank you. Recess: At 10:34 a.m., the Chair called for a recess. Reconvene: The meeting reconvened at 10:40 a.m. Return to Order The Chair directed the Committee to return to the order of business. of Business: CHR. DAVID: Mr. Clerk, please, could you read in Communication 7.9, please? Comm. 7.9: FINAL MONTHLY BUDGET STATUS REPORT FOR THE MONTH ENDED MARCH 31, 2017, FROM THE DEPARTMENT OF FINANCE From Finance Director Collins Tomei, dated April 18, 2017, transmitting the above report pursuant to Hawaii County Charter Section 6-6.3(h). Vote on Comm. 7.9: Ms. Ruggles moved to close file on Comm. 7.9. Filed Seconded by Ms. Poindexter and carried by the following voice vote: Ayes: Committee Members Eoff, Lee Loy, O'Hara, Poindexter, Richards, Ruggles, and Chair David - 7. Noes: None. Absent: Committee Members Chung and Kanuha - 2. Excused: None. CHR. DAVID: Mr. Clerk, Communication 14.11, please. Page 2 FC -11 May 16, 2017 Comm. 14.11: REPORT OF CHANGE ORDERS AUTHORIZED: MARCH 16 - 31, 2017 From Finance Director Collins Tomei, dated April 13, 2017, transmitting the above report pursuant to Hawaii County Code Section 2-12.3. Vote on Comm. 14.11 Filed Mr. Richards moved to close file on Comm. 14.11. Seconded by Ms. Eoff and carried by the following voice vote: Ayes: Committee Members Eoff, Lee Loy, O'Hara, Poindexter, Richards, Ruggles, and Chair David - 7. Noes: None. Absent: Committee Members Chung and Kanuha - 2. Excused: None. CHR. DAVID: Mr. Clerk, Communication 259. Comm. 259: SINGLE AUDIT OF FEDERAL FINANCIAL ASSISTANCE PROGRAMS FOR FISCAL YEAR ENDED JUNE 30, 2016 From Legislative Auditor Bonnie S. Nims, dated April 19, 2017, transmitting the above report prepared by external auditor N&K CPAs, Inc., pursuant to Hawaii County Charter, Section 10-13. ; and Comm. 259.1: From Legislative Auditor Bonnie S. Nims, dated April 19, 2017, transmitting a letter detailing significant audit findings from N&K CPAs, Inc., and a copy of the Comprehensive Annual Financial Report prepared by the Department of Finance for the fiscal year ending June 30, 2016. (Note: Comm. 259.2, from Legislative Auditor Bonnie S. Nims dated April 27, 2017, transmitting a hardcopy of N&K CPAs, Inc.'s, PowerPoint presentation, was circulated.) Motion to Close File: Ms. O'Hara moved to close file on Comm. 259 and all related communications. Seconded by Mr. Richards. (Note: At this time, Legislative Auditor Bonnie S. Nims came forward to address the members of the Committee.) CHR. DAVID: So, Ms. Nims, would you please identify yourself and the people that are here with you, and proceed? Thank you. MS. NIMS: Good morning. Bonnie Nims, Legislative Auditor. My part is very brief. I think most of you know, I'm not sure about the new Council Members, we do a four-year contract, typically to audit the Comprehensive Page 3 FC -11 May 16, 2017 Annual Financial Report, or the CAFR as we so frequently get lazy and call it, and the Audit of Federal Awards or the Single Audit. For the last three years, I think we've had N&K CPA from Honolulu do the work, so I'm going to turn it over to them to report on what they found. From N&K, we have Chad Funasaki and Ryan Iwane. CHR. DAVID: Thank you very much. Gentlemen, would you please come forward? And then if you could, please, in the microphone identify yourself for the record and then proceed. Thank you. (Note: At this time, Senior Manager Ryan Iwane and Audit Principal Chad Funasaki, representing N&K CPAs, Inc., came forward and provided a PowerPoint presentation regarding the results of the County of Hawaii 2016 Audit. For viewing of the subject presentation, please see the DVD copy of the meeting proceedings on file in the Clerk's Office. Hard copies of the presentation are made a part of the record, see Comms. 259.1 and 259.2.) MR. IWANE: So in a nutshell, that's a brief summary of the results of our audit. Does anybody have any questions regarding any of the results of our audit? CHR. DAVID: Ms. Lee Loy, question? MS. LEE LOY: Yes. Thank you, Chair. Good morning, Ryan. MR. IWANE: Good morning. MS. LEE LOY: I'm assuming that it's on page 27, the internal controls for financial reporting, the significant deficiencies identified. That's the area that you folks were talking about, in the IT (Information of Technology), correct? MR. IWANE: That's correct. MS. LEE LOY: But you also—if I read this correctly, this was from the previous year? MR. IWANE: Correct. MS. LEE LOY: Okay. And then if I understand correctly, Deanna, are remedies for this actually being addressed in this fiscal cycle? Okay. So assuming those things come together and we perform another audit, are remedies in this fiscal cycle—this significant deficiency would change, correct? MR. FUNASAKL Correct. Yeah, every year, when there's a reportable finding issued, what we need to do is follow-up on the status. So we do take a look as Page 4 FC -11 May 16, 2017 to what was done to remedy the finding. Like if it's satisfactory then, yes, it will not be in next year's report. MS. LEE LOY: Thank you. I yield. CHR. DAVID: Thank you, Ms. Lee Loy. Mr. Richards. MR. RICHARDS: Yeah, thank you, Chair. So am I understanding in reading, this was a repeat finding of the same problem previous? MR. FUNASAKL Correct. MR. RICHARDS: So then I guess I'll pose the question, why wasn't it addressed in this cycle? And, I don't know who to ask that question to. CHR. DAVID: I think it's Ms. Sako. (Note: At this time, Deputy Finance Director Deanna Sako came forward to address the members of the Committee.) MS. SAKO: Hi. Deanna Sako, Deputy Director of Finance. This actually started out as a rather long finding a few years ago, and slowly over the years IT has taken care of most of the issues. The last ones we're down to is the service security at Civil Defense. It's a disagreement, to a small extent, but basically, we feel the servers are secured. Civil Defense itself is a secured location, even though the door isn't locked because we have concerns about them overheating. So we continue to look for other places, but our other server room is in the tsunami zone, so trying to find the right fit. We are applying for grant funds to build a separate location that would meet all of the requirements. But I think we've slowly over the years attacked and remedied pretty much every finding, and we're just down to these last couple. It may or may not get resolved by June 30th of this year, but hopefully by the following year, if we were to find a location to move them to. MR. RICHARDS: Okay, so just to follow-up then. My understanding is that this was identified and it's being addressed over time. It's just like you said, some discrepancy. So, it's not being ignored? MS. SAKO: No, it hasn't been ignored. MR. RICHARDS: Okay. Yeah, alright. That's what I was concerned about. MS. SAKO: IT continues to work on it. It used to have a lot of additional things, and they've worked to update their policies and procedures and do things like that. Page 5 FC -11 May 16, 2017 MR. RICHARDS: Right. MS. SAKO: But in addition, I think we also said we do back up the servers every night. We keep the back-up tapes at a different location; so if something were to happen, we feel that our data is secure and not at risk. MR. RICHARDS: Okay, thank you. I yield. CHR. DAVID: Thank you, Mr. Richards. Mr. Chung. MR. CHUNG: I just have one question right now, maybe my last question. Did any of you address—well, let me back up. During the course of our departmental reviews, and in particular, Mass Transit Department, but this also translates I guess to other departments, there were some concerns relating to the handling of cash. Did you guys consider any of that in here, when you talk about internal controls? MR. FUNASAKL As it relates specifically to that department MR. CHUNG: Maybe not just to Mass Transit, but any department that handles cash. MR. FUNASAKL Yes, we do perform—we do assess the procedures performed for cash receipts. We address the design. We assess the controls and checks and balances in place; and if we feel the need to, we do test for effectiveness of those functions. But as it relates to a specific department, I couldn't really tell you offhand which ones it's MR. CHUNG: Maybe in general then. Where is it in here, in general? MR. FUNASAKL As it relates to procedures performed over those functions, yeah, it's not going to be in the report. MR. CHUNG: Okay. MR. FUNASAKL It's just part of the audit process, though. MR. CHUNG: So what's your thought on that? You have any thoughts? MR. FUNASAKL If there were concerns based on what we've looked at, there would be—and there was an issue, we would have identified it and reported it in the report. MR. CHUNG: Okay, so from your perspective, no issues? Page 6 FC -11 May 16, 2017 MR. FUNASAKL No, not as it relates to a specific department because— MR. IWANE: Yeah, and just to kind of clarify. For the audit, we use like a materiality threshold in determining the areas that we feel we need to address or those that might be MR. CHUNG: What do you mean by materiality? MR. IWANE: Well, I guess the easiest way to put it is the quantitative dollar amount, magnitude. MR. CHUNG: Amount. MR. IWANE: And that amount is based on the County operations as a whole, not necessarily the planning or housing but as the County as a whole. So as you can imagine, the materiality threshold's relatively large. To kind of add to what Chad was saying, our responsibility is to gain an understanding of internal controls over financial reporting, that includes cash handling, in order to adequately design and perform the audit procedures that we need in order to issue our opinion on the financial statements. Some departments we may assess as being a significant, say, for example, a large amount of cash, relative to the County, is collected, we'd probably go in there and dig a little bit deeper for those departments versus a smaller one where maybe the impact would not be as material to the County as a whole. So we don't dig in detail of every department as far as the cash handling, but we look at—we assess it more as a whole. MR. CHUNG: So basically, in particular then, it's not within the scope of your audit. Is that what you're saying? MR. IWANE: It is within the scope, initially. But at a certain point, we need to make a decision as to whether or not it's material. It could have a material impact on financial reporting. MR. CHUNG: Okay. I mean, I still don't really understand because I'm not an accountant, of course. If it is outside of what you're tasked, to do, then that's fine. I'm just saying that we had some concerns relating to this issue, and whether you guys looked at it or not; and if you guys considered it, then I'd like to know what your thoughts were on it, or are. If you guys didn't and it's outside of the scope of what you are tasked to do, then just say it's something that you guys didn't look at. I'm not quite clear that's why onI see Bonnie I'm not trying to put you guys on the spot, I just want to know within the context of what you guys do, whether it was considered. Page 7 FC -11 May 16, 2017 MS. NIMS: Sure, I'll add my two cents onto that. Basically, they look at the internal controls for the County as a whole and what is material going to affect the financial statements. So, you're looking at real property tax, things like that. A smaller revenue stream isn't going to make—even if 100 percent of it was stolen, it would not materially affect the financial statements, and so they may choose to not go look at that. MR. CHUNG: Probably not going show up, of course. MS. NIMS: Right, exactly. MR. CHUNG: Right, yeah. MS. NIMS: So I guess I would answer your question, and that a smaller revenue stream such as Mass Transit would not materially affect the financial statements, so probably not within their scope. MR. CHUNG: So who would be the watchdog for something like that? MS. NIMS: In part, our office, the Office of the Legislative Auditor. MR. CHUNG: I mean—well, we're getting off the topic now that I find out it's really not something that they'd be looking at. Maybe we can talk to you about that because I know it's something that Ms. Lee Loy and others brought up in the past. MS. NIMS: Right, yeah. And I'm happy to talk to you about some of the preliminary work we've done on cash receipts. MR. CHUNG: Okay, that's fine. Thank you. CHR. DAVID: Thank you, Mr. Chung; and thank you, Ms. Nims. Council Members, any more questions? Ms. Lee Loy. MS. LEE LOY: Thank you, Chair. Chad, Ryan, we've done a lot of work together at the Water Board, so I really do appreciate your folks' audit. What I hear Mr. Chung saying, is you guys have like a big scope, right? Our clerk actually helped me understand this. You guys are looking at the whole checkbook, right? The whole checkbook? But if we had change, like coins in the car, which is something that happens, right, in maybe these smaller departments, it doesn't materially affect the checkbook, right? You guys are looking at the whole checkbook? MR. FUNASAKL Correct. Page 8 FC -11 May 16, 2017 MS. LEE LOY: Okay, thank you. Thank you for helping me kind of connect the dots here. Thank you. CHR. DAVID: Thank you, Ms. Lee Loy. Anymore questions, Council Members? Mr. Chung. MR. CHUNG: Yeah, thank you. How much are we paying for this audit anyway? About? $200,000? Okay. Because it's required by Charter, right? Yeah, okay, I just wanted to know that. Thanks. CHR. DAVID: Thank you. I see no other questions. Mr. Chung, your light's still on. MR. CHUNG: Oh, I'm sorry. No. CHR. DAVID: Okay, seeing none, do you folks have any more things to inform us on before we move on? MR. FUNASAKL Yes, there was one more section. CHR. DAVID: Thank you. MR. FUNASAKL It's just Required Communication with Governance (see Comm. 259.2.) CHR. DAVID: Thank you. MR. FUNASAKL And I just wanted to highlight some of the bigger areas of it. CHR. DAVID: Thank you, Chad. Council Members? Mr. Richards. MR. RICHARDS: Okay, thank you, Chair. Going back to your initial—the Significant Accounting Estimates and all that, as well as the Significant Accounting Policies. Am I understanding correctly that you are highlighting that for our Council, just to make us aware that our financial group is keeping up to speed with current acceptable practices? MR. FUNASAKL Correct. MR. RICHARDS: And that you found that no deficiencies and that we're doing well as far as that's concerned. MR. FUNASAKL Whatever accounting policies that were applicable or applied to the County for 2016, were implemented, either implemented or really had no impact on the County's financial statements. But, they were adequately implemented during the year. Page 9 FC -11 May 16, 2017 MR. RICHARDS: Okay. And then, spring boarding off of that, I don't know, Deanna, if this may be a question for you. All of this folds into our bond rating, going forward, is that my understanding? Is that a correct assumption? MS. SAKO: I mean, definitely having a clean audit is one of the parts of the bond rating. So our estimates that we do, I mean we update it. Some of them for the bond rating may be used as well; some of them are the same concerns they have. But I think year-to-year, I think the significant part is that we have our policies and procedures in place and we're following them, and it helps us both financially and with our bond rating. MR. RICHARDS: Okay, thank you. I yield. CHR. DAVID: Thank you, Mr. Richards. Council Members? Ms. O'Hara. MS. O'HARA: Just the previous slide, I believe it was the previous slide, you had five bullets, Significant Accounting Estimates, that will of course affect financial statements, and these are estimates. Do you in your audit, look at whether or not these estimates are realistic and updated? I know for the last one, the last bullet is "Landfill closure and post closure costs liability." We were tossing around estimates for that more than 10 years ago, and it seems to be the same dollar amount, in nominal terms, and I don't know. Is that accurate? How do you review that? MR. IWANE: I think the Department of Finance could probably give you more details on the details of how they come up with the estimate. During the audit process, what we look at is the methodology used, some of the significant assumptions used by management, and we make an assessment as to whether or not we feel those are reasonable. It also includes some of the data that might be used as part of the accounting estimates. So that's essentially at high level what we do to audit accounting estimates. One of the reasons we pointed out and we presented to the Council is because of the uncertainty that surrounds estimates to begin with. So we communicate these to you so Council is aware of the line items in the financial statements that are estimates that might be subject to significant changes from year to year. It doesn't make it wrong. It doesn't make it unreasonable. But inherently, it's more likely to have a big swing from year to year, just because of a lot of uncertainty. So in a nutshell that's kind of what we do. MS. O'HARA: So these are the items that there's quite a bit of potential variance from our estimates? MR. FUNASAKL Correct. Yeah, correct. Like, for example, your other post employment benefits, that estimate changes due to healthcare trust trends, Page 10 FC -11 Vote on Comm. 259 Filed May 16, 2017 mortality, and those things change year to year and that could significantly impact what that estimated—the liability is going to be. So there are a lot of factors that go into it, and we do make an assessment of those. So, I'm hoping that answers your MS. O'HARA: It does. Yes, thank you. MR. FUNASAKL Thank you. CHR. DAVID: Thank you, Ms. O'Hara. Anyone else? No? Well, I guess we can move on. Do you have any other presentation aside from that, Chad, or are you done? MR. FUNASAKL No. I believe that concludes what we wanted to cover, but we're open to any other questions or comments. CHR. DAVID: I think my colleagues asked a lot of questions that we were thinking about as you were going along. I, myself, don't have any specific questions because they've already been answered. But I want to thank both of you, Ryan and Chad. Also, Ms. Nims, would you like to say anything? No? Okay. Then I guess we're ready to—thank you very much, gentlemen. Council Members, we're ready for the vote. All those in favor of filing Communication 259 and all related communications please say "aye." The motion to close file on Comm. 259 and all related communications was carried by the following voice vote: Ayes: Committee Members Chung, Eoff, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, Ruggles, and Chair David - 9. Noes: None. Absent: None. Excused: None. MR. FUNASAKL Can I just add one more? CHR. DAVID: Sure. MR. FUNASAKL I just wanted to thank Bonnie and Shari and the Office of the Legislative Auditor for being very helpful, as well the Department of Finance, Deanna and Kay. The departments—the audit time iseverybody's busy but everybody made time to cooperate and we really appreciate the help, so thank you. CHR. DAVID: Thank you very much for saying that, and we appreciate them too. Mahalo. Page 11 FC -11 May 16, 2017 MR. FUNASAKL Thank you. CHR. DAVID: Alright, I think we can move on to—Mr. Clerkoh, hang on. Thank you. Mr. Clerk, Communication 260. Comm. 260: REAL PROPERTY ASSESSMENT CERTIFICATION REPORT FOR TAX YEAR 2016-2017 From Finance Director Collins Tomei, dated April 19, 2017, transmitting the above report pursuant to Chapter 19, Section 19-90(d) of the Hawaii County Code. The total value of net taxable real property is $30,456,654,447. Motion to Close File: Ms. Eoff moved to close file on Comm. 260. Seconded by Ms. Poindexter. CHR. DAVID: Council Members, do we have—Council Members, do you have—we have questions or discussion on this communication. I think we have Ms. Sako here, and Director Tomei is outside? Yes he is. Alright, Council Members, discussion is open. No discussion? Communication 260. Okay, Ms. Eoff Mr. Tomei? Would you like him to come up? MS. EOFF: Probably, yes. (Note: At this time, Finance Director Collins Tomei came forward to address the members of the Committee.) CHR. DAVID: Director Tomei, aloha and welcome, and please identify yourself for the record. MR. TOMEL Hi. My name is Collins Tomei, Director of Finance. CHR. DAVID: Aloha. MS. EOFF: Good morning, Mr. Tomei. MR. TOMEI: Good morning. MS. EOFF: My question just has to do with the disputed assessments. I just was wondering how you factored that in when balancing the budget, because they're sort of a significant amount of money that may be in dispute. MR. TOMEL Okay. MS. EOFF: So I just was wondering how. MR. TOMEL I'd like to ask Deanna to address that. Page 12 FC -11 May 16, 2017 MS. SAKO: Deanna Sako, Deputy Director of Finance. So whenever we have the appeals, the reason we have the deadline of April 9, is so that we do get in time to certify the values. So half of the value that's in dispute is deducted from the certified values already, so what we're certifying already has that removed. Fifty percent is pretty consistent based on historical experience, so we feel good with that estimate. MS. EOFF: Yeah, I'm sorry I didn't ask you that the other day, when I was asking you a lot of questions. MS. SAKO: No problem. No problem, yeah. MS. EOFF: It just kind of came clear right now. So you require that deadline in order to determine the difference. MS. SAKO: Right. We handle all of that. MS. EOFF: Normally half of what MS. SAKO: Normally half is what we deduct, so that's already been taken into account. So if we win more than half, that's great; and if we lose little more, then we tighten our belts a little bit. MS. EOFF: Thank you. CHR. DAVID: Mr. Kanuha. MR. KANUHA: Thank you. In terms of the appeals, how long does it usually take to go through that process, for an individual trying to appeal what came out? I've gotten a few complaints from individuals saying it takes longer than normal. MS. SAKO: Actually I would like to think we're the best in the State. MR. KANUHA: Maybe, but how long does it take? MS. SAKO: So they file in April, and then we have our Tax Board of Review meet during the months of July, August, September, if we need to into October, but each person is scheduled and we do it in half-day increments. In addition, the appraisers contacting them ahead of time, trying to work out anything. So, the longest time period they're really waiting for is for their scheduled meeting. In a year, when we have a lot of appeals, I guess they could be more later in the fall. But, everything's resolved, I would say, by the end of October? Yeah, by the end of October pretty much they're all resolved and in the system. If any—some of the other counties don't even meet, or get them all resolved in the current year. And, in addition, our board makes their decision right there in front of the Page 13 FC -11 May 16, 2017 taxpayer. So I mean, they're getting really their decision right away, and then we try to get it into the system as quickly as we can as well. MR. KANUHA: Definitely. I just brought that up becauseI mean there's not like a mass group coming to my office saying that you have big problems, just like one or two here and there. MS. SAKO: Right. MR. KANUHA: I get a lot of good answers from the department, and trying to relay back to them the process. It's a pretty—it's very easy to follow. I know there's—not everybody will be satisfied with that, but I just wanted to bring that up because it's just something that came to my office. MS. SAKO: No, good. Thank you. MR. KANUHA: Thank you. CHR. DAVID: Thank you, Mr. Kanuha. Ms. O'Hara. MS. O'HARA: Thank you. And thank you, Deputy Director and Director for being here to answer questions. I just have a couple. We did hear from the Real Property Tax Department that they are going to be implementing new software, hardware for doing the assessments. MS. SAKO: The cost tables, yes. MS. O'HARA: Cost tables. And these assessments don't reflect that yet. This is done in the old style? MS. SAKO: The current way, yes. MS. O'HARA: The current way. MS. SAKO: Yeah. MS. O'HARA: Okay, the old style. Okay, so next year, we might actually see some differences in the assessments? Potentially? MS. SAKO: Stan and Lisa are here, as well. But, I'm not sure if it would be next year or the following year, but we're going to continue to look at them so that there are no abrupt changes into the assessments that we do. MS. O'HARA: Great, yeah. That's good to make a smooth transition. Page 14 FC -11 May 16, 2017 My next question is, I'm going to put it in layman's terms, was there anything in the validation of these assessed values that came as a surprise to either of you? MS. SAKO: No, they—our staff are really good, and they did run all their analysis and coefficient of whatever, and everything looks great, yes. MS. O'HARA: Okay, good to hear. Thank you. CHR. DAVID: Thank you, Ms. O'Hara. Anyone else? Council Members, questions? No? Well, before we close and take a vote, I have one. Speaking of assessments and appeals, and what Mr. Kanuha was saying as far as the process, now, say if someone comes in and their amount that they need to pay is based on an assessment that they're appealing, and they are required to pay that upfront, that new assessment amount, right? Then they go through the appeal process; it takes a few months to complete that. After it's determined, say they win the appeal and their amount that they needed to pay came out to be less, how long does it take, or what's the process of refunding the overpayment to the person? The reason I'm asking is because I've had calls about that, and I'm not sure how to answer that; but I'm thinking that since we're discussing that here, I think it's a good process to MS. SAKO: I think most have it applied to their second -half payment. So their second half payment would just be less. CHR. DAVID: So that would be—the process would be they would get credited for the next MS. SAKO: Yeah, so then their second -half payment would just be significantly less. CHR. DAVID: Would be less, perfect. Okay, great. Thank you. Because I think they assume that they would get a refund, but it would be credited. That makes sense and less paperwork. Okay, thank you very much. That's all the questions I had. Thank you, Director. Thank you, Deputy. MS. SAKO: Thank you. CHR. DAVID: Alright, Council Members, all those in favor of filing Communication 260 please say "aye." Page 15 FC -11 Vote on Comm. 260 Filed May 16, 2017 The motion to close file on Comm. 260 was carried by the following voice vote: Ayes: Committee Members Chung, Eoff, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, Ruggles, and Chair David - 9. Noes: None. Absent: None. Excused: None. CHR. DAVID: Mr. Clerk, Order of Resolutions, please. Resolution 192-17. ORDER OF The Chair directed the Committee to proceed to the next order of business, RESOLUTIONS: Order of Resolutions. Res. 192-17: AWARDS A PUBLIC ACCESS, OPEN SPACE, AND NATURAL RESOURCES PRESERVATION MAINTENANCE STEWARDSHIP GRANT TO HAWAII WILDLIFE FUND Approves a grant of $13,200 to Hawaii Wildlife Fund, a 501(c)(3) nonprofit organization, for the purpose of protecting, preserving, and restoring the Kawa properties (Tax Map Keys: 9-5-016:006 & 025; and 9-5-017:005 & 007), pursuant to Section 10-16(a) of the Hawaii County Charter. Reference: Comm. 261 Intr. by: Ms. David Motion to Approve: Ms. O'Hara moved to recommend adoption of Res. 192-17. Seconded by Mr. Richards. CHR. DAVID: If it's okay, I just want to make a comment regarding this award for the Maintenance Fund. It's based on the recommendations of Parks and Rec.'s, and to continue the maintenance of the Hawaii Wildlife Fund to preserve and protect the Kawa lands down in Ka`u. So I ask for your support, and thank you. Any other questions? Ms. Eoff MS. EOFF: Thank you, Madam Chair. I'd just like to congratulate the Hawaii Wildlife Fund. Kawa is a huge parcel, and the more we can do to take care of it the better. So, I am in support of this grant award. CHR. DAVID: Thank you very much. Ms. O'Hara. MS. O'HARA: I am just trying to determine the granting agency. CHR. DAVID: Parks and Rec? MS. O'HARA: Parks and Rec. Oh, Parks. Page 16 FC -11 May 16, 2017 CHR. DAVID: Maintenance Fund. It's the PONC's (Public Access, Open Space, and Natural Resources Preservation Commission) Maintenance Fund. MS. O'HARA: I got you. So they had money they could give over. Got it. CHR. DAVID: This was based on the recommendations at the end of the year and the annual report. MS. O'HARA: Okay, great. Thank you. CHR. DAVID: So we have to follow through with a resolution. MS. O'HARA: Okay. CHR. DAVID: Alright. MS. O'HARA: Thanks for the clarification. CHR. DAVID: Thank you. Anyone else? Oh, Mr. Kanuha. MR. KANUHA: Thank you. Just real quickly. I know they're going to get stewardship grant in the amount of $13,200; but like what was said earlier, this is a huge piece of property, $13,000 just doesn't go a long—so I don't know. I forget exactly when we discussed this previously, about what they're doing to maintain this property, but that's not a lot of money at all to help out with Kawa. So, I don't know. To look at further, maybe, if they need more money or something. I don't know. CHR. DAVID: Thank you. And I think what they're not the only ones that are applying for grants for Kawa, and I believe that there are other organizations. And I think that's the intention, is that we have different organizations that provide different services or different maintenance aspects of it. We're certainly hoping that we will have a lot more or a lot more organizations that are coming out that can provide different aspects of maintenance for Kawa or any other PONC purchase that the County has. Because I think it makes sense; and I think if everybody collaborates, we can get a lot done. So I agree with you, $13,000 is just not enough. MR. KANUHA: And I think it might have been, also, that they got funding from a different source to maximize the amount of funding got from the County. CHR. DAVID: Yes. MR. KANUHA: I'm prettyI think I remember that too. Page 17 FC -11 May 16, 2017 CHR. DAVID: Yes, they have matching funds and other things. But I want to thank Alex and Hamana for working so hard with all our organizations to help them with their applications for the PONC maintenance, because it's really important. If we're actually depending on our communities to step up and help us maintain these properties that we purchase, I think that it's very important that we help them in as many ways as we can, and the Maintenance Fund is one way that we can do it. So thank you, my colleagues. No other discussions? All those in favor, please, of approving Resolution 192-17 please say "aye." Vote on Res. 192-17: The motion to recommend adoption of Res. 192-17 was (Approved) carried by the following voice vote: Ayes: Committee Members Chung, Eoff, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, Ruggles, and Chair David - 9. Noes: None. Absent: None. Excused: None. CHR. DAVID: Thank you very much, everybody. And we are now on Bills for Ordinances. Bill No. 32, Mr. Clerk. BILLS FOR The Chair directed the Committee to proceed to the next order of business, ORDINANCES: Bills for Ordinances. Bill 32: AUTHORIZES THE MAYOR OF THE COUNTY OF HAWAII TO ENTER INTO AN INTERGOVERNMENTAL AGREEMENT FOR A STATE WATER POLLUTION CONTROL REVOLVING FUND LOAN FOR SOLID WASTE IMPROVEMENT PROJECTS; AND AUTHORIZES THE ISSUANCE OF $20,000,000 OF GENERAL OBLIGATION BONDS OF THE COUNTY OF HAWAII FOR THE PURPOSE OF FINANCING THE SOUTH HILO SANITARY LANDFILL FINAL CLOSURE PROJECT Funds would be used to satisfy closure requirements of the south Hilo Sanitary Landfill, to be repaid by the County over a 20 -year term through the General Obligation Bond issuance. Final design for the closure is anticipated to be complete by the end of 2017. Reference: Comm. 274 Intr. by: Ms. David (B/R) Motion to Approve: Ms. O'Hara moved to recommend passage of Bill 32 on first reading. Seconded by Ms. Eoff CHR. DAVID: And I see Director Goodale is here. Would you please come up to the table? Before I open it up for discussion, if you could introduce yourself, Director? Welcome. Page 18 FC -11 May 16, 2017 (Note: At this time, Solid Waste Division Chief Greg Goodale came forward to address the members of the Committee.) MR. GOODALE: Good morning. Greg Goodale, Solid Waste Division Chief, not Director. CHR. DAVID: Oh, sorry. MR. GOODALE: Good morning. CHR. DAVID: Alright, Council Members, any questions for Chief Goodale? Ms. O'Hara. MS. O'HARA: Thank you. Good morning, Chief. Can you just walk us through this process? I don't know how familiar everyone on this Council is with closure plans and post closure maintenance of landfills, and how you've arrived at the figure $20 million. Maybe you can just give us a little more background, and then we might have some more questions. MR. GOODALE: Sure. Okay, so the Hilo landfill, for many years, everybody's been talking about when the landfill's going to close, and really; it just depends upon the waste going into the site. So, this discussion's been going on since, from my record, going to the records since 2000 and prior to that even. So now, based on survey and everything that we've been doing at the South Hilo Sanitary Landfill, we have a much clearer picture as to what the time period we have left at the site. So based on that, there are requirements based on the regulations written by Department of Health for when you have to begin the closure process. We've begun the closure process with the Department of Health, and that starts with basically coming up with a plan. We contracted an engineering firm to draft a plan for the closure of the site, and that's where we're at right now. The money we're requesting also will cover the cost of that engineering for the closure. The first phase of that is going to be essentially coming up with the plan, then we're going to take that plan to the Department of Health, and we'll work with them to assure that we're presenting a plan that they like and that they believe is feasible and achievable, and according to the regulations that require the closure to be done in a certain timeframe and per certain engineering specifications. So, the next process we'll undergo is to take that plan to Department of Health to seek their concurrence with the plan. Once we feel like we have that concurrence with the State, then we'll proceed on to the next phase, which would be to actually write the plans and specifications, which will allow us to put it out for actual construction, to construct the final closure, the cap of the site. The idea behind that is essentially to try and limit the amount of Page 19 FC -11 May 16, 2017 infiltration of precipitation, rainfall, through the refuse mass so you're not essentially allowing water to percolate through the refuse. Fortunately, we've had clean groundwater results coming out of South Hilo Landfill for many years, so that's a positive thing. A lot of landfills that are unlined, such as Hilo landfill, don't necessarily always end up with that result, but we are fortunate that the groundwater results that we've been getting for many years showed the groundwater that runs essentially under the Hilo landfill remains within all monitoring parameters. It's essentially clean. As I said, this, what's before you here today, is to essentially secure the funding through the Clean Water Loan Fund, the SRF (State Revolving Fund) Loan Program, which allows for the low interest loans to make this happen. This will save the County significant money, and that we would be able to pay a much lower interest rate on this. MS. O'HARA: Thank you, and I just have a couple follow-up questions, and this is more for public who may be listening in, who aren't aware of why we have to close the landfill, so maybe you can address that question. Also, it seems like when we—the Kona landfill, the historic Kona landfill at Kealakehe, it continued to have fires underground, but I don't think we have that problem at Hilo, probably due to moisture. So is capping it going to create any more problems? And the third part of my questions is, when do we anticipate this process actually happening, where the closure begins? MR. GOODALE: Okay, starting with that question. So the closure, as I said, wouldn't begin until after we've got a plan that's approved of by DOH (Department of Health). We would anticipate that if things go well and we can get their concurrence, we could see—well, obviously, we're not going to start closure until the site's completely full. We believe that's probably right around—two years off yet. So once the site is completely at its capacity, at that point, then we would essentially give a notice to proceed for a contractor to begin doing the work to actually close it. As to your other question, as far as for the public, as to why we're closing the landfill, I mean essentially the landfill has a specific defined capacity, and essentially we are at the point of reaching that capacity. The State essentially gave parameters with which we have to stay within. Essentially, we can't go outside the parameter that was kind of established for the South Hilo Landfill and we can't go above a certain height. So essentially, when it's full, it's full, and that's basically the point at which we're at now. Page 20 FC -11 May 16, 2017 MS. O'HARA: Alright. And the question about potential underground fires once it's capped? MR. GOODALL Well, good thing is that obviously technology is improved since the Kona landfill was closed, and there were other issues that were going on at the site at that time. Good thing with that site, we seem to have that basically under control. But as for South Hilo, yeah, the high precipitation in Hilo does help to keep anything like that from becoming a big issue. But we also believe that with the controls that will be put in on the closure, that we'll have a lot less likelihood of any issues like that, that could come up. But we'll also be required to continually monitor that site. Even after we're done closing it, we'll still be required to monitor the site. MS. O'HARA: And how long does monitoring have to occur on a closed landfill? MR. GOODALL Well, the regulations state 30 years, but I've seen that occur where close closure monitoring has occurred beyond that. It just really depends upon when the Regulatory Agency sees that the site has essentially achieved all the parameters for becoming stable. MS. O'HARA: And is there a potential for alternative use for the hill that we've graded? MR. GOODALL It would be a good place to view Hilo Bay, I suppose. Those will be things that will come up as part of the plan. We'll be looking at those types of things. We'll task our consultant to try and come up with some things to—but I mean in terms of a landfill, most uses that have occurred at closed sites have been very low -impact type. You can't build or anything like that on a closed landfill site like that. So it's going to be pretty low -impact type uses that I would imagine would come out of that discussion. MS. O'HARA: Thank you. It does provide a really excellent view of Hilo Bay. You're absolutely right, it's one of the highest points around. So, excellent. MR. GOODALL True. MS. O'HARA: Okay, thank you. I yield. CHR. DAVID: Thank you, Ms. O'Hara. Mr. Kanuha. MR. KANUHA: Thank you. Yeah, one of my questions was the actual timeline, when this was all going to occur, and you already answered that. So for $20 million, is this—the money's just going to be used to start the closure? Or how much money are we looking at throughout this entire length of Page 21 FC -11 May 16, 2017 this closure? Is it just $20 million? Or are you going to come back two years from now saying, "Okay now that we've started the closure, we're going to need another $40 million to do the closure, and then another $30 million to watch over the"I don't know. Is that what we're looking at? MR. GOODALL For me to tell you the $20 million is all we're going to need, I would hope that what we're looking at, that $20 million may be enough to complete the closure. However, in the case that we get to a point, where based on the design, based on the actual physical closure that we go through, it may increase. The good thing is that based on consultation with the SRF program within the State, there is a significant amount of money in that fund. So it's very likely we would be able to go back to that fund for whatever additional money, if that was to occur. At this point, this is basically our estimate. But we hope, as we proceed into the next phase, which once we get concurrence from the Department of Health, then we would be able to put together a much better engineering estimate as to what the actual cost of this is going to be. The good thing on this is traditionally with the SRF, they don't fund the engineering as part of the—usually it's up to the County with the engineering first. In this case, they were able to put the engineering cost into this loan that we're asking for, so that's a good thing for us. It allows us to move forward. Even though we'd already budgeted money for this, but we'll get that reimbursed through this loan, back to the County. MR. KANUHA: Yeah, and I mean obviously the big questionI mean we already knew, over the decade or whatever, that the landfill is supposed to be closed. It's what are we going to do once it is closed? That's the ultimate question, and that's what we've been trying to deal with this entire time, of what's going to happen. I mean, what is going to happen two years from now when we start the closure of it? What are we going to do? That's—yeah, we're going to ship it all to Kona? I know that was part of the Solid Waste plan, but it's—you know, that needs to be part of this closure. That's the big elephant in the room. MR. GOODALL Correct. And as part of our engineering, we'll be doing an environmental assessment as part of this closure plan, which—will actually include an update of the traffic study that was done as part of the Hilo Sort Station. That had the traffic pattern going through Waimea, and when we evaluate the traffic pattern for taking the refuse from East Hawaii to West Hawaii sanitary landfill, we'll be looking at the route going across Saddle Road, taking into consideration the improvements that have been made to Saddle Road. But as far as the plan, yeah, you're correct. I mean the plan is to take the refuse, after we've gone through significant diversion. I mean, that's obviously the Page 22 FC -11 May 16, 2017 goal is to increase the amount of diversion that takes place so that we're not having to haul as much of the refuse—our goal obviously is to minimize the amount of refuse that actually needs to be hauled over to that site. MR. KANUHA: Yeah, and that's the ultimate goal, reducing the amount that goes into the landfill. I know we're all working on that aspect, which I hope we come up with some solutions and some viable solutions. I'll yield at this time. Just wanted to ask that question. CHR. DAVID: Thank you, Mr. Kanuha. I think Ms. Eoff and then Mr. Richards. MS. EOFF: Okay, thank you. Following up with that train of thought, timing would be of most importance then, to make sure that we're in good—we're ready to start diverting more trash and separate the trash and compost. Question that I think should be clarified too is, if that all takes place ahead of time and we're reducing the amount that needs to be transferred to Pu`uanahulu, how many trucks a day did you estimate would be actually traveling from one side of the island to the other? MR. GOODALL The last study we did took place in 2011, and that was to basically further clarify the numbers that were given out of the previous Integrated Resource Solid Waste Management Plan, which said to essentially do just that, to further evaluate. In that planning document, essentially it estimated, based on the amount of refuse coming into Hilo landfill, right now it would be about eight trucks a day. So, that's essentially what we're planning for. But we believe that with some of the programs that have gone into effect, like the compost program and other diversion programs, that there's potential to see that quantity of trucks going over Saddle Road be reduced. But right now, we're using the number eight trucks per day. Just so we're clear, there is refuse going over to West Hawaii landfill now, that's occurring. We're utilizing that for what we call "select waste" that goes into the new cells. But, there's been regularly one to two trucks per day going to the West Hawaii landfill. MS. EOFF: So if there's, say two trucks a day currently and a prior analysis put the number up to eight, do you think that by the time we start closing the Hilo landfill, and no more trash can be accepted there, that we will have enough of our recycling and possibly compost facilities in place that we could see somewhere in between two trucks and eight trucks, like, in reality? MR. GOODALL I hesitate to say that it would, I mean I would tell you that that would be our goal to see the number be reduced to less than eight, but right now, just based purely on the tonnage, I'd have to stand by the eight trucks per Page 23 FC -11 May 16, 2017 day. But for us, like I said, that's a goal, is to try and see that number be reduced. MS. EOFF: Okay, thank you. CHR. DAVID: Thank you, Ms. Eoff. Mr. Richards. MR. RICHARDS: Thank you, Chair. And thanks, Chief, for being here. Just to echo and springboard off of Councilman Kanuha's and Councilwoman Eoffs statement, this is all coming from the west side. And then what? Question being asked, okay, once we close East Hawaii, and then what? What's going to happen to solid waste? Transferring to West Hawaii is not a popular plan on the west side, and I raise that as a concern going forward. We have time for planning now. We are embracing the redirecting of our waste, the greenwaste, et cetera, and all that, but planning for that eventual closure, we have to be very mindful of the popularity of that. So, I yield. CHR. DAVID: Thank you, Mr. Richards. Anyone? Oh, Ms. O'Hara MS. O'HARA: Okay, I could talk for eons on this particular topic. I am aware that the intersection of the Saddle Road and 190 is a bit dangerous. Solid Waste Division has had at least one recent accident of an overturned truck. This weekend, an army, a large convoy truck overturned, and it was closed for a good period of time. I've heard some of the workers who do the driving, who have their CDL (Commercial Driver License), express that the grade is extremely steep there, and it's a bit challenging to make that turn, either going uphill or downhill. Is there any chance that we can get federal assistance in doing some modifications to that particular intersection, to ensure that we have a safe route for trucks going both directions? Thank you. MR. GOODALE: Well, I support the safety, obviously, of our drivers and our equipment without any hesitation. The design or any of those things of that roadway falls way outside of my purview. I will tell you that became a conversation I had with our safety driver coordinator, because obviously part of any accident that we might have is post -accident assessment. We look at what were the conditions; what caused it; what could be changed; what needs to be improved; how can we improve equipment, training, all those things. So that was the discussion that we had in terms of looking at that would become the regular route. All those things come up as far as for us, as to how are the drivers trained in approaching a steep grade like that? How heavy are the loads that they have? Is the equipment appropriate, and all those types of things. I believe from our end, the equipment that we've specified, and those things are appropriate. It's adequate. We've asked for new equipment. Page 24 FC -11 May 16, 2017 And, I also believe that the training that our drivers receive is adequate. It's continuous; I mean we don't take safety for granted. That's something that we look at on a daily basis. It's addressed with our drivers, with our personnel, on a very regular basis. That's not something we ever take for granted. We want to make sure that it's always constantly on our employees' minds. MS. O'HARA: Okay. And you have come before us requesting some new rig and some new hauling vehicles. Will we have enough to accommodate the estimated eight loads a day, by the time the landfill is closed? Will we have new trucks and the best equipment for our guys? MR. GOODALL Yeah, we believe that with the additions that we've requested, and we're obviously continuing to request replacement of old equipment that needs to be replaced, but we believe we'll be ready for the hauling that we'll need to do. MS. O'HARA: Okay, because as Mr. Richards said, this was not a popular solution on the west side of the island, and the worst thing could happen for us as a County, is to have a really nasty accident and have trash blowing all over Waikoloa, which is a windy area of the island. That would put a real bad—that would paint a really bad picture of this effort. So, I want to make sure that we have the right equipment, that our drivers are properly trained, and that we're taking all safety precautions because it is a steep grade and it is a challenging turn right there. So, just putting that out there. Thank you. CHR. DAVID: Thank you, Ms. O'Hara. Mr. Chung. MR. CHUNG: Good morning, Greg. How much is this initial engineering cost going to be? MR. GOODALL So the original contract that we have with our design engineer is just a little over $700,000 for the engineering. There will also be a component of the management of the actual construction that we would incorporate. So that's not incorporated into this contract at this time, but we would anticipate that would be. That's going to be a function also of the actual construction cost. MR. CHUNG: And then this $700,000 is already in our budget? MR. GOODALL Correct. MR. CHUNG: Right. So we're looking to recoup it from the Revolving Fund? MR. GOODALL Correct. Page 25 FC -11 May 16, 2017 MR. CHUNG: Is there a timing element in terms of getting this approved, relating to our eligibility to get monies from the Revolving Fund? Does it have to be soon? Can we wait a little while? MR. GOODALL With any program like this, things could change within the State or Federal Government that are obviously outside of our control. It's also a competitive program. While we don't necessarily anticipate the fund becoming depleted to the point of not having the funds available for us to participate from our end, we would encourage that we move forward on this without too much delay because that does become a possibility. But in terms of just being able to move forward on the actual construction aspect, obviously this moves us a lot closer to that. The County hasn't—we haven't necessarily set aside an appropriation for the closure of this magnitude for the full closure. MR. CHUNG: Of course this is for an amount which shall not exceed $20 million, but what is your best guess? I know several people tried to get that out of you, but what's your best guess as to how much this is going to cost? MR. GOODALL Well, like I said, until I can get an actual finalized engineer's estimate for the actual work that needs to take place, I'm going to have to stick by the $20 million. MR. CHUNG: So, that's the $700,000 that we're talking about? They're going to come up with the estimate? MR. GOODALL Correct. MR. CHUNG: So maybe—wouldn't it be better, since we've already budgeted the $700,000, to wait and see what they come up with before we approve something? I mean unless time is of the essence and that will enable your department to really work with members of our West Hawaii group to at least see what— well, at least you can address some of their concerns and we can get a better picture of what the game plan is going to be. I've got to tell you, Greg, you weren't involved in this whole thing with the compost thing, but had this been maybe two or three years ago, I would have said "aye" without even asking a question. But this whole composting thing really left a really, really bad taste in my mouth with regard to your department. Not you, but your department's ability to really come up with a good game plan. I'd be willing to vote in favor of it too, but I think the better way is to just kind of wait unless—here comes Deanna again unless our eligibility is at stake. But then, my next question would be, why don't we bump it up to $30 million or something like that because it's not to exceed a certain amount? Page 26 FC -11 May 16, 2017 (Note: At this time, Deputy Finance Director Deanna Sako came forward to address the members of the Committee.) MS. SAKO: Greg can speak probably better to it, but I just wanted to clarify that I think this is kind of a way that we are able to enter into a preliminary loan agreement with the State, to kind of set these funds aside for the County of Hawaii for this purpose. It's so much cheaper to go with the SRF route than the regular GO (General Obligation) bond, that we prefer to get on that list and make sure that money is held for us. In terms of the amount or what not, I'll let you guys work that out. But it's moreI do want to ensure that we can get the SRF borrowing capacity. MR. CHUNG: So what you're saying is the sooner the better to get on that list? MS. SAKO: Right, because I think they're already working out the preliminary loan agreements and terms. But definitely, I think the State's willing to amend. In the future, we can approve more, but otherwise they would come back to amend at a later date, when they have better details. Because it is something that is hard to estimate right now, what the full cost is going to be. MR. CHUNG: But then it becomes very difficult for us because what if it exceeds that amount? MS. SAKO: Right. MR. CHUNG: Right? So if you were to say, "It might be about $19 million," then I'd say, "Then why don't go for $25 million?" Given that, I'd be willing to approve it today at the Committee level. Maybe it will give us more time. You can get a better glimpse into how much this thing is going to cost in the meantime, from the engineering firm, maybe they can give you some preliminary figures. I'm not trying to be facetious or anything like that, but I'm inclined to put in every one of these types of ordinances or resolutions that whenever you authorize the Mayor to execute documents, it doesn't come with the authority to cancel. It's got to come back to theI mean it might not be, really, and I know there's a bit of sarcasm in there, but really I'm quite serious. I don't know if it would be applicable to something like this, but those are my thoughts. Thank you, Greg. CHR. DAVID: Thank you, Mr. Chung. Mr. Richards and then Ms. Lee Loy. MR. RICHARDS: Actually, she was up first. Page 27 FC -11 May 16, 2017 CHR. DAVID: Oh, really? Okay, he's going to yield to you. Ms. Lee Loy, go ahead. MS. LEE LOY: Thank you, Chair. Thank you, Chief I'm going to back up a little bit, and maybe you guys can help me answer this question because I don't understand the nexus between safety water funds and the solid waste closure plan. Help me understand how these two things kind of become eligible for each other. MR. GOODALE: In the past, the State Revolving Loan Fund hadn't always funded Solid Waste's projects. However, my previous employee, working in Alaska, we did regularly go through this fund, the Federal fund, that was administered by the State of Alaska, for these types of funds. The State of Hawaii hadn't traditionally allowed for these types of loans to go to solid waste projects. However, the fund is significant enough, right now, that the State has made these allowances for projects that they do believe could have the potential to impact groundwater. So on that basis, and that was our approach to the State, was that we believe this is a project that does help to mitigate some of those groundwater issues. The State obviously concurred with us. On the same basis, they concurred with our request for the loan that we are in the process of getting for the closure of the Kealakehe Scrap Metal facility. So from our end, as Deanna has already said, we believe this is one of the most economical ways for the County to get some of these projects done. So we believe it's on us to try and find those mechanisms whenever possible, as long as it fits into the framework of the loans. MS. LEE LOY: Thank you. And I appreciate that kind of creative posturing so that we can make ourselves kind of in a perfect position. Do you folks know what is in that total fund right now? MR. GOODALE: I would have to ask the loan administrators with the State what the total fund value for the State of Hawaii is, but I don't know that amount. MS. LEE LOY: Yeah, maybe if you could share that between now and our next meeting? Because when I hear my colleagues sharing, is that we want to do the right thing and approve the money because this is the next step. But, we want tc put ourselves in the best position to get it done. We've waited a long time. So, I'm going to try and go back. When we closed Kona's landfill, what was the cost there? MR. GOODALE: I don't have that. I can get that, but I don't have an answer for you on that. Page 28 FC -11 May 16, 2017 MS. LEE LOY: Yeah, and if you could provide that. I think if we can let some of our historical data kind of reveal itself, and then we'll be able to tack on years and growth and all that other stuff, and maybe we can get a better grip on what that number is, if we could compare it to something we've done, I believe it's now 20 years ago. Yeah, 25. How old was I? Yeah, 25 years ago. I think it will help us. Even if we need to act, like Ms. Sako is asking us to do, but act in a manner that we're actually setting ourselves up in the best possible position, from maybe 20 to 25, or 30. That's what I would like to see to help make a better decision. Then with the closure plan, you mentioned the monitoring piece. Is that a separate cost item from this amount? MR. GOODALL So that would essentially become part of our operations and maintenance. For our annual budget, would be doing that monitoring and maintenance of the site. So it wouldn't be part of the—the construction of the cap and all that would just be that. It would be that construction. So what we do would take place under our operations and maintenance after that was completed. MS. LEE LOY: So those types of monitoring devices, are they water quality monitoring devices or are they air quality monitoring devices? What are those monitors? MR. GOODALL So currently we have groundwater monitoring wells around the site, which we continually monitor. We also have landfill gas monitoring probes that we regularly monitor for any type of landfill gas migration. The cap, given that it's what they call an impermeable type cap, would require monitoring of, for the integrity of the cap, whether it was—somehow there was settlement that occurred that needed some repairs made to the actual materials on the cap, those types of things. It may also involve installation of things like gas, landfill gas vents, which would allow for the landfill gas to be—so that it doesn't become trapped within the liner material and that type of thing. There are different runoff channels and controls of that nature for storm water runoff that would have to be monitored and maintained. A lot of different types and things like that, that would just need to be regularly evaluated and monitored. And then when they need some updating or maintenance, then we would also conduct that. MS. LEE LOY: Because what I'm thinking is if these monitors, whatever type, whether it's channelizing for the gas, the vents, all that kind stuff, if we could put that all in this amount, and then later on, as we have to upgrade them or they begin to deteriorate, we could look at that further down the road. But I just want to kind of try and get to a number that really makes this closure Page 29 FC -11 May 16, 2017 happen in a smart way and not have to keep coming back for money, because we found out the structure integrity of the cap isn't working, you know, whatever it is. That's just my concern. I want to get this one right; and if it means rethinking and looking and looking at our historical data from the closure of our Kona landfill, let's take a good hard look at that. Because I rememberI worked for Harry Ruddle when we were going through that closure. We needed to get it done, and everybody was rushing to get it done and then it was on fire, and then it began to deflate because that's how that landfill was managed 20, 30, 40 years ago. I remember Harry jokingly say, "We go put one football field on top of that landfill," and now looking back, it wouldn't have worked because it's deflated since then. I just have some thoughts of what it was like back then, and I want to get this one right. I just want to look around the corner a little bit. So if you can help us provide the historical data as far as cost for the Kona landfill, and then what those monitoring devices are, and maybe we can tweak the numbers a little bit better. So, I yield. CHR. DAVID: Thank you, Ms. Lee Loy. Mr. Richards. MR. RICHARDS: Thank you, Chair. I want to echo Councilman Chung's and then also Councilwoman Lee Loy's concern about going forward. I don't think the Councilman's comments were sarcastic at all. I think that the point is well -taken. We're in a very fiscal tight time, and we're concerned about total dollars coming forward. Now listening to Deanna, and she's looking for that magic to control our expenses and getting on the list, I get that, to make sure we can see through that funding. But we're also very mindful of what we're saddling the County with, so I have to agree with needing that information going forward. I can support getting out of committee and going forward, but we need those numbers to make that better determination for, like Councilwoman Lee Loy said, "Looking around the corner." So, thank you. I yield. CHR. DAVID: Thank you, Mr. Richards. Ms. O'Hara. MS. O'HARA: Just a quickie. We are still doing post -closure monitoring of the Kealakehe landfill aren't we? MR. GOODALE: Yes, correct. MS. O'HARA: What is our annual operations amount for that? Do you know off your—because I'd have to dig it up, and I don't have it in front of me. Page 30 FC -11 May 16, 2017 MR. GOODALL No, I have those amounts. But just to clarify also on that, because of what was brought up earlier about the Kona landfill. With the fire mitigation, that's obviously costing us more money to deal with, the mitigation of that. So we're currently between, I believe it's less than $300,000 a year we're spending on that, but it's between $250,000 and $300,000 a year we're spending on the MS. O'HARA: And the money we can borrow, the fund from the State Water Pollution Control Revolving Fund, it's eligible to be spent on post -closure monitoring as well? MR. GOODALL We haven't approached the State because typically what they're interested in funding are things that are more like a construction project that would help to mitigate. They're typically not inclined to fund things. It would be looked at as more like operations and maintenance. MS. O'HARA: So that's going to be an operational issue going forward, and the $20 million is for the closure alone? MR. GOODALL Correct. MS. O'HARA: Okay, just clarifying. Thank you. CHR. DAVID: Thank you, Ms. O'Hara. Anyone else before we Ms. Poindexter. MS. POINDEXTER: Yeah, and I want to agree with what everybody had said so far. I'm feeling a little uncomfortable to just say, "Here, $20 million, do what you want," and like Councilman Chung had stated with what had happened previously. So, Deanna, I don't know if Collins is not here for me tobecause the letter Collins, but he's not here. Okay, so that is a concern. Do you guys have a breakdown on how Collins came up with that amount, or what? MS. SAKO: The $20 million came from the department, and they've been working with the State Department of Health to work on that. MS. POINDEXTER: So when it came to Collins, he didn't ask for, "Okay, $20 million, what is $20 million? What are you guys going to do?" What is the process? MS. SAKO: Right. That's kind of the process for a lot of our, even the sewer projects. We go with the best estimates of the department to get it kind of the preliminary loan agreement and then as the project continues and we get better estimates, they're sometimes amended. They're either up or down. Page 31 FC -11 May 16, 2017 MS. POINDEXTER: So you guys never require—okay, so if Iif they would come to you for $50 million, you would have said, "Okay, we want $50 million," but not ask for, "Why $50 million?" MS. SAKO: I think it's because right now I know they're still in that process of trying to get the estimate and the design done. Knowing that after they get that done, we'll all have better estimates of how much it's going to be. MS. POINDEXTER: Okay, so what is the rush? Why getting a rush of $20 million when you don't have all that information, is the question. MS. SAKO: I don't know how big—like the rush, rush is, but we want to ensure that they don't give the $20 million away to another county or to a state agency. We just want to ensure it comes to us. And also, this is just like the borrowing authorization, and entering into that side of it. This isn't like the capital project, appropriation, or things like that. There are other pieces of it that still have to happen between now and then. So this is just the piece to borrow, and I'm just trying to ensure we get the lowest borrowing rate. They're still going to have to go through the design. They're still going to have to come forward for the appropriation to do that part of it. MS. POINDEXTER: Right. But once this is done, we don't it doesn't come back to Council for anything that we see coming in and out of—what it does from when you do the allocations, it should come— MS. SAKO: Right. So that's what we were kind of saying, that we don't have like the appropriate—the appropriation still has to come before you guys. So after they get the bids back is when they would have final determination of the amount. So actually the lower you keep it, kind of ensures it would come back to you guys. Because let's say the estimate comes in at $25 million, then they'll have to come back in to amend this piece of it. I'm not sure if I'm answering the right questions. MS. POINDEXTER: So like what Councilman Chung had stated, then why don't we do a little higher because it's not to exceed? MS. SAKO: I know right now they've allocated $20 million to us based on everyone's best estimates that they've put together, what it's going to cost. don't is it going to change, I can't say. MS. POINDEXTER: Okay, thank you. CHR. DAVID: Thank you, Ms. Poindexter. Anyone else? Oh, Ms. Eoff MS. EOFF: Is the $20 million borrowed all at once? Page 32 FC -11 May 16, 2017 MS. SAKO: Like all of our State Revolving Fund loans, the approval is upfront. And then as we spend the money, we ask for reimbursement and that's when it was considered borrowed or drawn down. So right now, I mean we would maybe use the first $700,000 to design and determine what we would need, but that's all we would draw down. So, it doesn't get borrowed until we need it. MS. EOFF: And that doesn't affect our debt service until it's borrowed? MS. SAKO: Right. Correct. MS. EOFF: So I guess myI mean we have to do it. It's really not a choice anymore. My concern is just the timing and the plan for diversion and for decreasing the amount of tonnage that's going to need to be hauled to Pu`uanahulu. And I'm still not real clear on that plan. You don't have to do it today, but that's something that, I believe is super important not just to me or the west side people but to all of us. That's why we reacted strongly when the thought of canceling the composting contract came before us, because that kind of all factors in to what we're going to do with our waste, and into the future. Pu`uanahulu doesn't have a forever lifespan either. And reducing our waste and diverting as much as we can is, I think, a goal that—and composting is a goal that we have. So, I would like to make sure that we, at the same time we're working on closing the Hilo landfill due to the requirement, that we are solidifying our plan for the waste stream in general. And of course, the trucking has been said wasn't popular. I think, to me, the two trucks besides some of the safety hazards, and that's a good idea to maybe to look at a way to decrease the grade at the end of the highway. I think there's a comment period right now on the EIS (Environmental Impact Statement). I don't know if that's something that you folks could comment on, but when the new segment is built maybe that's the time to relook at that intersection. I think if we can work towards minimizing the numbers of truck loads a day, that I think with the new highway, I think it's—it's more okay now than it was many years back, when the argument was very—Council Members, I remember, were very against hauling altogether. So, I think we can handle the two trucks. That seems to not have been too much of an impact, like I said besides the safety issue, but going to eight trucks could become an issue. But if we can keep reducing our tonnage, then we're going to be looking good as far as reducing the number of loads as well and improving the highway. So, those were my thoughts, and I know you guys are thinking the same thing. So maybe just reporting to us on the plans for reducing the tonnage would be something I'd like to see on a regular basis as we go forward. Page 33 FC -11 May 16, 2017 MR. GOODALE: And I just want to say that we are at a point right now, within the Solid Waste Division, that we are beginning the update to the Integrated Solid Waste Management Plan. A big portion of that will be going through and developing the plans for how we're going to do the things that you brought up. We are just in the beginning stages of starting to work on that plan. We're in the consultant selection process to begin working with a consultant on developing that plan. So just to let you know that, that is occurring right now. MS. EOFF: Thank you for everything you do. CHR. DAVID: Thank you, Ms. Eoff Mr. Chung. MR. CHUNG: You know, while I'm okay with moving this forward, but I really don't know how anybody else feels about it. I still am very uneasy about the fact that we don't have too much information here. I'm just wondering, is it necessary for this ordinance to be passed before you guys can apply for monies from that fund? Or can you guys just do it, and if you are approved then we come in with—because this is something authorizing the Mayor to do something, to execute. But it doesn'tI don't thinkI don't know what the process is for applying for these funds. But nothing in here says that it's a condition precedent to us applying for those funds, it's just an authorization for the Mayor to do something. And I know you guys are only deputies, next time we should get the directors over here, yeah? We can—yeah, but you know anything about that, Greg? MR. GOODALE: So, it's my belief that in order to move this forward to the SRF program, that it requires your concurrence to do that. MR. CHUNG: What about a resolution? MR. GOODALE: I don't know. Deanna, do you? MS. SAKO: So my understanding, from the wastewater ones that we've done in the past, is that they have asked and they've been granted $20 million. So the next phase is to enter into what's called, I believe, the Preliminary Loan Agreement, and that's like the estimated amount that they're basically reserving for us. So I think we're to that point, which is why the resolution is to enter into the Intergovernmental Agreement, which is between us and the State, as well as to give the General Obligation Bond borrowing, backing, to this SRF loan. So, we're still like early on in the process, but it is kind of what sets it aside for us. MR. CHUNG: Right. MS. SAKO: And, yeah. Page 34 FC -11 May 16, 2017 MR. CHUNG: But, Deanna, but what I'm asking is do we need the ordinance for you guys to apply or to put us in that line? MS. SAKO: Yes. I mean, because it's the Preliminary Loan Agreement that we're at, this is one of the requirements to get that Preliminary Loan Agreement. MR. CHUNG: Oh, okay. Alright, thank you. CHR. DAVID: Thank you, Mr. Chung. Ms. Poindexter. MS. POINDEXTER: Yeah, even if we should pass this today or maybe not, is there any way Exhibit A could be a little more than just a one liner? MS. SAKO: In terms of describing the project or? MS. POINDEXTER: Yeah, I mean MS. SAKO: Oh, okay. Sorry, I wasn't sure what, yeah? MS. POINDEXTER: Yeah, just a little bit more. What does that entail? Whether it's in draft or—what are you guys looking at it? How did you come about to $20 million? We may say, "Hey, it looks like it's more like $40 million should be the cap instead of $20," but we don't know until weI mean it just doesn't feel right, right now. You're just giving a number, and we're just trusting that number without any—you heard what my colleagues had stated and the questions they had. So, it's just feeling a little uncomfortable. MR. GOODALE: No, I understand what you're saying. And looking at that, yeah, obviously we do have a much more significant write-up on. I mean in order to pursue, even our engineering contract, we impressed upon the engineers what we wanted from them, so, we do have a description of what we're expecting. The other thing is that, from that end, the County's obligated to perform these things within what the regulations state. That's why I said that a lot of this relies upon the State Department of Health to give their approval for what we come up with. Whatever the plan that we bring before the State, they may come back to us and say, "You know what, we don't think you'd go far enough, or maybe you need to this or do that," and we'll need to adjust our plan on that basis, because they're, after all, the ones that are responsible for protecting what the regulations say in that regard. So from our end, we'll take what we believe is the appropriate plan before DOH, but they have the final say-so. So it's really not just kind of whatever we think. It's what we read in the regulations, and that's why we hire good consultants because we also know that they know what the expectation is. Page 35 FC -11 May 16, 2017 MS. POINDEXTER: Right. And I want to reiterate what Council Member Chung said, with this big of an amount, $20 million, and the importance of this, and I agree deputy should be here as well, but I would love to see the directors up here answering the questions. They direct the departments. And the letter and memos come from them, so they need to be here to answer our questions as well. So I just want to bring that to the departments' attention, and I'm sure that the department heads are listening, that they should be in this room as well. Thank you. MR. GOODALE: Well, I'll take responsibility because I told our director I felt like I could field the question. So I'll take that on my back. CHR. DAVID: Thank you, Ms. Poindexter. Ms. Lee Loy. MS. LEE LOY: Thank you, Chair. I don't know how the rest of my colleagues feel. I am okay with moving this forward. But I'm going to make that request, I want to see those numbers. I want to see how we got there. Good information helps us make good decisions. It's just that plain and simple. I also appreciate what you're saying about taking responsibility, for telling the director, "It's okay." But I think it's helpful for them to feel the energy in this room and what we're trying to convey, that I think is what's more important. Whether they're here to answer the question or not, it's looking at all of us in the eye, and nodding or shaking their head, whatever it may be. I think that's way more important and way more critical to effective communication, because we're going to keep doing this month after month after month, not only on this project but future projects. So, thank you. I yield. CHR. DAVID: Thank you very much, Council Members. And I think if everyone else is done, I will close. Thank you, Chief Goodale. And I do have just really short questions. When is the timeline for that plan due to the State? MR. GOODALE: Which plan, the Solid Waste Management Plan? CHR. DAVID: The DOH. The Solid Waste, yes. MR. GOODALE: So, it's a plan that's required every 10 years. So 2019 is when we'll need to have an updated plan to the State. CHR. DAVID: Okay, and so in this request for $20 million, and in the planning for the closure, is there any consideration for a location of a new Hilo landfill as opposed to trucking to Kona or to the west side? MR. GOODALE: So based on our discussions with State of Hawaii Department of Transportation airports, they're not going to consider an Page 36 FC -11 May 16, 2017 application for a new landfill in South Hilo. There was essentially discussion about the possibility of expansion of the South Hilo Landfill to the south of where the landfill exists currently. In conversations that we've had with Department of Transportation, essentially they've told us, given the proximity to the Hilo airport, that it falls within their, what they call "exclusion zone," and essentially they wouldn't give an approval for any type of application that would come for expanding that site. CHR. DAVID: Or relocating, whatever. MR. GOODALE: Well, yeah. I mean when you look at the area around, I mean that obviously is the area that would make the most sense. I mean not to say that there wouldn't be other areas within the east side of the island, but I do know that there were evaluations that were done for other areas and they didn't meet with very positive response at that time. Well, I can't tell you that we've conducted an evaluation for an alternate site outside of the South Hilo landfill area, but I can tell you that in terms of expansion of the landfill at South Hilo that, that wouldn't be good. CHR. DAVID: I was just curious whether that would be something that they'd be considering in the study. MR. GOODALE: In the Solid Waste Management Plan? CHR. DAVID: Yeah. MR. GOODALE: They would take it into consideration in that, that wouldn't be one of the options. CHR. DAVID: Options. And that's what we're looking at, is basically what my colleagues have been talking about, and that's trucking. MR. GOODALE: Correct. CHR. DAVID: Okay. Alright. That's all I have. And thank you very much for being here, Deputy Deanna and Chief. And on that note, I think we can take a vote on Bill 32. All those in favor of approving Bill 32 please say "aye." Page 37 FC-11 May 16, 2017 Vote on Bill 32: The motion to recommend passage of Bill 32 on (Approved) first reading was carried by the following voice vote: Ayes: Committee Members Eoff, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, Ruggles, and Chair David- 8. Noes: None. Absent: Committee Member Chung - 1. Excused: None. CHR. DAVID: So, I believe that concludes our agenda for this morning. ADJOURN- There being no further business, at 12:22 p.m., Mr. Richards moved to adjourn MENT: the meeting. Seconded by Ms. Eoff and carried by the following voice vote: Ayes: Committee Members Eoff, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, Ruggles, and Chair David- 8. Noes: None. Absent: Committee Member Chung - 1. Excused: None. CHR. DAVID: We are adjourned. Approved: r e iip ,/,21.)6/070/7 Ms. Maile Medeiros David, Chair (Date) Finance Committee MD/na Page 38