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HomeMy WebLinkAboutMIN FC 2017/12/04 2016-2018Committee on Finance 24th Session Hawaii County Building 25 Aupuni Street Hilo, Hawaii December 4, 2017 CALL TO The regular meeting of the Committee on Finance was called to order at ORDER: 10:04 a.m. in the Council Chambers, Hilo, by Ms. Maile Medeiros David, Chair. ROLL CALL: Present: Ms. Maile Medeiros David, Chair Ms. Karen Eoff, Vice Chair Mr. Aaron S. Y. Chung, Member Mr. Dru Mamo Kanuha, Member (via videoconference from Kona) Ms. Susan L. K. Lee Loy, Member Ms. Eileen O'Hara, Member Ms. Valerie T. Poindexter, Member Mr. Herbert M. "Tim" Richards, III, Member Absent & Excused: Ms. Jennifer Ruggles, Member STATEMENTS Chair David directed the Committee to proceed to the next order of business, FROM THE Statements from the Public on Agenda Items. PUBLIC ON AGENDA ITEMS: The following individuals registered to speak and came forward when called by the Chair: Ren6 Siracusa: Comm. 608, in support. Jon Olson: Bill 82 (Comm. 606), in support. Alapaki Nahale-a: Res. 412-17 (Comm. 607), in opposition. (representing Kamehameha Schools) Steven Araujo: Bill 82 (Comm. 606), in opposition. FC -24 December 4, 2017 COMMUNI- Chair David directed the Committee to proceed to the next order of business, CATIONS: Communications. CHR. DAVID: Mr. Clerk, please, Communication. 7.13. Comm. 7.13: MONTHLY BUDGET STATUS REPORT FOR THE MONTH ENDED JUNE 30, 2017, FROM THE DEPARTMENT OF FINANCE From Finance Director Deanna Sako, dated November 3, 2017, transmitting the above report pursuant to Hawaii County Charter Section 6-6.3(h). Vote on Comm. 7.13 Filed Ms. Eoff moved to close file on Comm. 7.13. Seconded by Ms. O'Hara and carried by the following voice vote: Ayes: Committee Members Chung, Eoff, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, and Chair David - 8. Noes: None. Absent: Committee Member Ruggles - 1. Excused: None. CHR. DAVID: Mr. Clerk, Communication 14.23. Comm. 14.23: REPORT OF CHANGE ORDERS AUTHORIZED: OCTOBER 1 — 15, 2017 From Finance Director Deanna Sako, dated October 31, 2017, transmitting the above report pursuant to Hawaii County Code Section 2-12.3. Vote on Comm. 14.23 Filed Comm. 15.19 Ms. Poindexter moved to close file on Comm. 14.23. Seconded Mr. Richards and carried by the following voice vote: Ayes: Committee Members Chung, Eoff, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, and Chair David - 8. Noes: None. Absent: Committee Member Ruggles - 1. Excused: None. CHR. DAVID: Mr. Clerk, Communication 15.19. REPORT OF FUND TRANSFERS AUTHORIZED: OCTOBER 16 — 31, 2017 From Controller Kay Oshiro, dated November 9, 2017. Page 2 FC -24 December 4, 2017 Vote on Comm. 15.19: Ms. Poindexter moved to close file on Comm. 15.19. Filed Seconded Ms. Eoff and carried by the following voice vote: Ayes: Committee Members Chung, Eoff, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, and Chair David - 8. Noes: None. Absent: Committee Member Ruggles - 1. Excused: None. Comm. 608: REQUESTS DISCUSSION WITH CORPORATION COUNSEL JOSEPH KAMELAMELA REGARDING PUBLIC PURPOSE AND PROCESS FOR THE USE OF CONTINGENCY RELIEF FUNDS From Council Member Jen Ruggles, dated November 15, 2017. CHR. DAVID: Because Ms. Ruggles is not here today, she has requested that this matter be postponed to the call of the Chair. So please, if any Council Member would so move? Motion to Postpone: Ms. Lee Loy moved to postpone Comm. 608 to the call of the Chair. Seconded by Mr. Richards. CHR. DAVID: Discussion? MR. CHUNG: I'm just wondering if we can start the discussion today and then table it until she gets back. Because based on what Ren6 Siracusa said, I didn't realize the extent of the problem. A lot of things being held up. I think we should at least get some information. CHR. DAVID: Council Members, your preference? If that's the case, then I think MS. LEE LOY: Yeah, I don't mind withdrawing. But I guess some final decision—and I'm sure Ms. Ruggles has a number of questions of her own. CHR. DAVID: Right. So, in deference to her, we'll withdraw the motion. We'll have our little discussion, as Mr. Chung suggested, and then we'll postpone. Alright. MS. LEE LOY: I agree. CHR. DAVID: Thank you. Withdraw Motion Ms. Lee Loy withdrew her motion to postpone. to Postpone: Page 3 FC -24 December 4, 2017 CHR. DAVID: The motion has been withdrawn. Mr. Chung. MR. MAEDA: We need a motion for 608. CHR. DAVID: Oh, I'm sorry. Yes, then please a motion to file Communication 608. Motion to Close File: Ms. Poindexter moved to close file on Comm. 608. Seconded by Ms. Lee Loy. CHR. DAVID: Now discussion, Council Members. MS. LEE LOY: Thank you, Chair. If you don't mind? CHR. DAVID: Ms. Lee Loy. MS. LEE LOY: Thank you. I guess, if we could have Mr. Kamelamela come forward? (Note: At this time, Corporation Counsel Joseph Kamelamela came forward to address the members of the Committee.) MS. LEE LOY: I know the Office of Corporation Counsel had provided some training for individual Council Members and staff, I believe, almost a month ago. Maybe we can just start there, Mr. Kamelamela, and just provide that framework. I know Mr. Chung seems to have questions; and based on our testifier, where the hiccups are. MR. KAMELAMELA: Joseph Kamelamela, Corporation Counsel. Thank you. Sure. Wait, let me just look at my notes. I've done some training. I had two because there were certain things that I saw that were some issues. Not only with the administration and how they would look at the request, but also some of the Council Members. So what I did, I set up two trainings. One was on October 24, 2017. It was attended by about 25, no 23 people. Had County Council people and County Clerk. There were several administrative departments that were there. We had DEM (Department of Environmental), Prosecutors, Housing, R&D (Research and Development), Fire, P&R (Parks and Recreation), Finance, and Planning. Subsequent to that, I also did training in Kona because I didn't feel like—you know, people from Kona shouldn't be driving over, so I drove over to also provide training for the Council Members there. The training was conducted on November 8, 2017. They were given a PowerPoint presentation. There were some handouts that were provided during that time. So, I felt that was a good class. I thought the evaluations were like so but it was important to give Page 4 FC -24 December 4, 2017 training, only because a lot of issues were coming up. We want to make sure that we could comply with the provisions of the code. CHR. DAVID: Thank you, Mr. Kamelamela. MS. O'HARA: Mr. Kamelamela, you keep referring to issues. What issues? MR. KAMELAMELA: You know, some of themI'm not sure if I'll address it publicly. But essentially, what I would state, just generally, that there's several sections that we looked at: Section 137, 138, and 139. That's the expression of the public purpose that had been set aside in terms of the Contingency Relief Funds. So there are requirements that are set out in those thing that we looked at. So the basic threshold question that we should look at—and because it was a new administration, there were a few things that they—you know, I didn't feel had the—analyzed it correctly. And also, there were changes that we had been able to—contract side, to ensure that these Contingency Relief Funds are permittably determined. I also had Council Members contact me about various issues, and not only me but some of the other staff members had provided answers to many different questions. MS. O'HARA: Okay, so with regard to the issues, some of these Contingency Fund requests are time -sensitive, and we try to advance them as quickly as possible. You refer to changes in the contractual procedures, could you please enlighten us further? Because in the past, we did not have such overriding scrutiny from Corporation Counsel per se. The process for Contingency Funds: we meet with constituents who are in need of funding for specific projects; we advance that to a department within the County to issue that contract. The money needs to be passed over either to an agency within the County or to a nonprofit, and that's a 501(c)3 type of nonprofit. There are plenty nonprofits out there. So that's our basic procedure and that's what we've been following until this administration inserted some extra steps to that procedure, which meant everything had to go through Corporation Counsel and before the Procurement Officer. Now, I understand the Procurement Officer—we are going to enter into contract, and I would imagine that Corporation Counsel would review the final contract because that's standard procedure. But there seems to be an insertion of activity before we even get to the contract stage because there's some activities that have still not been contracted that were approved by the Council last year, in the last fiscal year. MR. KAMELAMELA: Yeah, right now I have no knowledge as to what—was it approved? The only thing now that I have is that there a lot of things that I have approved. Page 5 FC -24 December 4, 2017 Let me just add a couple of things here. On the contract side, for example, there needs to be some assurance kind of reporting gets done. It's the same thing with the grants-in-aid, that these nonprofit people know what the code requirements are for reporting. Many of these contracts or agreements didn't have that. So we added those so that the nonprofit knows as to what their duties are with respect to these Contingency Relief Funds. We had worked with the departments to ensure that those provisions get put into the contracts. So that was one of the changes that was done. There is no requirement that the County Council themselves would always seek our approval. Because there are certain things that, to me, it's obviously, you know, satisfy the code. What I've experienced, the County Council Members asking me about certain areas, and then to ensure that there's consistency, we would give them our analysis so it's consistent. For example, when I look at the County Code, Section 2-137, it's clear that one of the threshold issues is that, is this nonprofit providing a service or activity? To me, a service and one activity doesn't mean a request for Capital Improvement Projects because that Capital Improvement Project is not a service or it's not activities. So, sometimes we get issues like that. What I have noticed by the research that I did with prior Corp. Counsels on this matter—very few requests that actually get denied on our side, because it's really less than one percent that we're talking about. So sometimes, also, just to add on to this, is that the reason provided by the department didn't provide by a the department is not accurate. Public purpose for example, if a department tells me that a public purpose is established because it's a nonprofit, that's wrong already. So I have to dig deep and say, "What you mean by that?" Just because an organization is a nonprofit, doesn't make it public purpose. So it's things like that, that we deal with. MS. O'HARA: Okay, I understand the public purpose doctrine. I also believe that in many regards the individual Council person who is working with the community on said project has a better understanding of what that public purpose is than, perhaps, Corp. Counsel. While it may not be conveyed through the application process properly, and it may have something to do with how the departments develop the contract, I understand that it may be lacking at that level. But most of the projects that I'm aware, that are still not in contract from last year, have serious public purpose and benefit. This thing about Capital Improvement, I think we're redefining what Capital Improvement is in some regards. Because it's not a Capital Improvement Project undertaken by the County, it's a capital, what you think may be a Capital Improvement Project by the community, may be something as simple as building bus stops. They don't perceive that as Capital Improvement. In the past, these Page 6 FC -24 December 4, 2017 types of projects had been funded through Contingency Funds, and now they're being called out. This is where I'm seeing the problem. Now, I'm not going to advance this any further because this is with regard to not my ask, not my request. But we will come back to discuss this when Ms. Ruggles is present because I know this has occurred for her, and it's still being hung-up and the community is still asking questions as to why they can't receive the money that the County Council allocated to them. The only instance that I've had some problems was when we were coming forward for something that is related not just to public health. It's related to agriculture, it's related to tourism, it's related veterinarian medicine, it's related to many things that is a focus of our Research and Development. Now, that's where I ran into some problems with misinterpretation of the nature of the project and the public purpose and public benefit thereof. Fortunately, we were able to move this pass. But it was time sensitive, and I was not getting a timely response from Corporation Counsel in order to move this forward. I'm just saying with certain projects, it is going to be time -sensitive because it may come to an event or it may come up to an opportunity that is there and going to disappear. So, we sometimes have to move rather quickly. I would ask if there are questions, that there be a faster way to interact with the particular Council people that are working on the project. MR. KAMELAMELA: I do appreciate it. Because you had called me on something recently, that we were able to move quickly on, and part of it is because I was there to make sure that there was a—you know, we were to do this. MS. O'HARA: I'm not sure that 21 iterations of the application move quickly. That's what it took us to get that resolved. So, I'm sorry but that isn't the reason provided by the department. MR. KAMELAMELA: Well, I disagree that it was 21. But we want to make sure that we followed what's in the code. I do appreciate that Council Members have talked to me in the past for certain things, which is kind of important. As far as what you mentioned about the shelter, we had approved that because I reasserted a little bit more. But like I said, it's better to get the correct information. I didn't have the correct information at the time, and soI actually brought the department in and asked them, "Next time that you guys work with the Council Members, get good information." I cannot work without good information. So that was part of the impetus of getting training; to emphasize, provide us with good information. MS. O'HARA: Thank you. I'll yield. Page 7 FC -24 December 4, 2017 CHR. DAVID: Thank you, Ms. O'Hara. Mr. Chung, you were next and then we go to Mr. Richards. MR. CHUNG: Thank you. And of course, I think we all appreciate Joe's concern for the County and making sure that we do things right. What concerns me about this, and I'm going to break this into its simplest component, as far as I can tell. It looks like the Corp. Counsel, Corp. Counsel's Office, maybe more specifically, the Corp. Counsel is the gatekeeper for our use of Contingency Relief Funds by making the determination as to what constitutes a public purpose. Now, public purpose is a very subjective term. I think we make the decision as to what constitutes a public purpose. Perhaps we should put more information in those resolutions, you know, making an affirmative statement that it is in the public's interest that these funds be used for this particular purpose. Or, we could redo our County Code and say that, you know, require the County Council to make those affirmative findings, and they will be final, not subject to approval by any other department. You guys do your administerial duties. Move it along, and move it along quickly because people cannot be waiting around for things, not knowing whether they're going to come out of your office or not. If you're following the law, I've got no problem. If we need to tweak it, that's what we should do, and we should move on that forthwith. If we do something like that, will that take you out of the loop? Will you feel comfortable with that? MR. KAMELAMELA: Well, there's a certain kind of things that we cannot do because the code itself has statements as to what's not public purpose. For example, there's a section in the code that says you cannot use it to discriminate. MR. CHUNG: Yeah, of course. MR. KAMELAMELA: Things like that. Or, you can't use it for entertainment purposes. For example, the nonprofit cannot use it for their own parties. MR. CHUNG: Right. MR. KAMELAMELA: I mean, there's are the obvious kind of things. And plus that, there's a provision in there already that says you can't use it for perquisites. MR. CHUNG: For what? MR. KAMELAMELA: Perquisites, they call it. MR. CHUNG: Yeah, okay. Page 8 FC -24 December 4, 2017 MR. KAMELAMELA: So, that's defined. The County's prior Council had already said, "Well, we're not going to have public purpose in these areas." But what's clear so far, with what the Council have done, they have established what public purpose is, and then it had stated in what areas, you know, public health. I mean, there's a whole list of items that they had listed, but the threshold issue is it has to relate to services or activities. MR. CHUNG: Right. We all agree with that. MR. KAMELAMELA: Yeah, so that's in there. It's just that there's this area that I think is hard to overcome. Capital Improvement, for example, part of it is my own experience with nonprofits. When we go out to do fundsI have been with two nonprofits where we have either State or County land, so it's easy for us to get public funds to help build facilities, you know, in those kinds of situations. So if we want to do capital improvements, you know, that's hard because it's not spelled out in the County Code. That's going to require a lot of requirements just to get there, and I'm not too sure if that's something that the County Council wants to get into, you know, to fund the capital improvements. MR. CHUNG: We do because we don't have too much money to begin with. MR. KAMELAMELA: Yeah. MR. CHUNG: We started with a $100,000, and we tried to play ball with the administration and we got it down to $75,000. I will tell you this, Joe, I still believe we should make the call, okay? MR. KAMELAMELA: Oh no, that's— MR. CHUNG: Yeah, you guys shouldn't get involved in it because too much subjectivity. But if this is, and I'm not in any way suggesting that it is, it's some attempt by the administration, with whom I've got to say we don't have the greatest relationship with. If it is some kind of power move, then I'm going to tell all of you right now what we should do is, during the course of our budget, we sequester a whole bunch of money under emergency relief, we shave so much off of the administration's budget; and we keep it with us and have them come to us periodically to have those monies disbursed, if that's the kind of game. I'm not suggesting that you are an emissary for anybody from the administration; but if it is, and ifhen that's what we should do. But if not, short of that, I would say this, I'm going to do something to try to keep you, Joe, out of this controversy, and hopefully that will solve everything. Because I don't think you want to be in there. You don't want to be caught in this position, where you become the tsar for determining what a public purpose is. We all have good sense or senses as to what these things are. I will attest to each of my Council Page 9 FC -24 December 4, 2017 Members' integrity, they have been exercising it responsibly. So if you need us to make an ordinance, just say so. If not, I would say just stay out of it, okay? MR. KAMELAMELA: Anyway, thank you, Council Member Chung. Anyway, there's no really power -play. It's just that, like I said I've been dealing with both sides. I think it's going to get better only because now I feel like training was provided so that there's a clear message. There is a process that had been set up, but I want to make sure that people that work with me understand fully what the guidelines are. Because in the end public purpose had been determined by the County Council through enacting of the code already. My first thing that I look at is to make sure how can we make it happen? That's why it might take 21 iterations of something. But we're trying to find a way to how to make certain things happen under the code. MR. CHUNG: Right. MR. KAMELAMELA: So, I think it's getting better and it's going to get better. MR. CHUNG: Well, I don't know if it's going to better. I mean, that's your perspective. But the training, you keep on talking training. But your training, something that we disagree with, so I don't understand what the purpose of the training. I mean, I guess within the context of how you view it, yeah, it's effective training; but from how we view it, it's not really good. MR. KAMELAMELA: No, but I'm willing to see. Like if there's any kind of disagreement with the training that I'm giving, I want to know so that I can see if there's ways to—if there's a need to change the code to make it clear, that'll be helpful for me. MR. CHUNG: Okay, right. Alright. Thank you. CHR. DAVID: Thank you, Mr. Chung. Finally, Mr. Richards and then Ms. Poindexter, then Ms. Eoff. MR. RICHARDS: Thank you, Chair. Thank you, Mr. Kamelamela. I have to agree with essentially everything Mr. Chung has said. I appreciate you exercising to be a keeper of the gate as far as being fiscally responsible. Everybody up here on the Council wishes for fiscal responsibility and strives for it. That being said, the determination for the Contingency Relief Funds, being in the public good, we are elected by the public and we are accountable to the public for our responsibilities, and we are the checks and balances for that determination. So to echo once again what Mr. Chung has said, that is our kuleana as far as dealing with that. Page 10 FC -24 December 4, 2017 Though I appreciate the intent, I got stuck in the same maelstrom with Council Woman O'Hara, concerning something that was so obviously evident for the public good. It was frustrating. I know my staff was getting very frustrated trying to get something through this so obviously evident. I don't want to take up a lot of time because I know Council Woman Ruggles wants to participate in this. But getting these things out in the open, I think, is really good. So, at this point I'm going to yield. CHR. DAVID: Thank you, Mr. Richards. Ms. Poindexter and then Ms. Eoff. MS. POINDEXTER: Thank you, Mr. Kamelamela, for being here and answering some of the questions and concerns. But something that you had said earlier made me feel a little uncomfortable because I respect all 501(c)3's. They're highly -regulated entities. They always serve a public purpose. They're regulated through the IRS (Internal Revenue Service), the Feds, and also with the State. So when you spoke that we cannot use it for anything that is a cause of any discrimination or for parties, personal parties, and all of that. If we're going through the nonprofit, that's their purpose. Their whole goal is not for profit, and their whole being is of public service and for a public purpose. Contingency funds that we give out, if it's not just given to a department, you know, if it's just given to Parks and Recreation, say I need a basketball goal for Honoka`a gym, I'll go to Parks and Recreation and just go directly and give money over there. If it's going to be to a nonprofit, then I can find the department that it should go through. But going to the nonprofit, again like I stated earlier, they're all for public purpose. We all own all of the nonprofits. It's all of our money, the people's money. For me, a nonprofit is working for the good of the public. So that alone should satisfy anything that we're doing. The main thing that we're going through, that 501(c)3, that is held accountable through being highly -regulated. So, I just want to leave you with that thought. So, thank you very much. MR. KAMELAMELA: Being a nonprofit actually gets you into the door, but there is still a need then to comply with all of the requirements in the code. I've dealt with a lot of nonprofits too because I've been involved in many of them, too. Yes, they're all set up for specific public purposes; but at the same time, the code requires certain kind of things. That's why I stated earlier too, it's just less than one percent are the more difficult ones, where I've gotten the questions from many County Council Members. Page 11 FC -24 December 4, 2017 I like nonprofits. They serve a great purpose, and that's why people like me have always worked with nonprofits. CHR. DAVID: Thank you, Ms. Poindexter. Go ahead, Ms. Eoff. MS. EOFF: Thank you, Madam Chair. We can get into this more detailed at the next meeting because I know Ms. Ruggles wanted to be part of that discussion, as well. When you mentioned that we have a problem using Contingency Funds for Capital Improvement Projects, yes, I understand that issue, if it's going to be used for a Capital Improvement Project that may benefit the nonprofit's own property or something like that. But when a nonprofit wants to be involved to do a Capital Improvement Project that benefits, say a County facility, or a bus stop, or a County park, wouldn't that be a different situation? Oh, okay. Thank you. CHR. DAVID: Thank you, Ms. Eof£ Take us home, Ms. O'Hara, on discussion. Go ahead. MS. O'HARA: I just wanted to point out we're talking in somewhat generalities and that bothers me a little bit because if you're familiar with the IRS code, there's many forms of nonprofits, and in this case, we're only dealing with the 501(c)3, which is an organization for public purpose. So, I just want to point that out because the Chair said that by default you're dealing with public purpose. Also, when you're talking about capital improvement for that organization, that organization may be a community organization, so it is representing a very large community. In my district, which is Puna, and Ms. Ruggles represents Upper Puna, we have some of the largest subdivisions in the United States. They are managed, in some cases, by their community associations. So when you're doing something in connection with one of those community associations, the reach of the project is very broad in terms of the full public that it impacts. Every community association that does have a facility in the Puna area that I'm aware of, at least in my district, those facilities aren't just available to the members of that particular subdivision, they can be leased and rented and used by others, so it has a very broad reach in public impact. If we didn't have those community association buildings, we won't have anywhere to hold public meetings and have public events. So this is very, very important in my community. When the Army Civil Affairs guys come and they're asked to evaluate public County buildings that can be used in emergency situations, for shelter, I don't have a single such building in my district. Our community sheltered in their community association buildings. So, this is—it's different, and we have to take a clear perspective. That's where I'm saying that the Council person who is proposing this action has a much better understanding of the public purpose that's involved there, then say somewhere here in Hilo who doesn't have that Page 12 FC -24 December 4, 2017 connection with the community. So, I think it's very important that decision rest with the Council. Thank you. CHR. DAVID: Thank you, Ms. O'Hara. Mr. Chung. MR. CHUNG: Thank you. You know, Joe, I'm looking at this; yes, it's a training handout relating to Contingency Relief Funds. You talked about—and it's entitled "What is the difference between CRF (Contingency Relief Fund) and the County's Grants -in -Aid program?" I think what it means is what's the difference between CRF and the County's Grants -in -Aid program. But that's a good topic because one would ask, well, what is the difference? Then what you said in here, well, I'm guessing that you're the author of this, that the County criteria for qualification is that for Grants -in -Aid, public purpose only for the CRF, County -related program or service and public purpose. Where did you get that County -related program part? MR. KAMELAMELA: That's from the County Code because you have to do it via resolution. MR. CHUNG: Right, it passes through. MR. KAMELAMELA: Yeah, so that's the pass-through. MR. CHUNG: I don't see anything in this saying there has to be a County -related program, though. MR. KAMELAMELA: No, but that's why you pass it through. MR. CHUNG: No, you have to find a vehicle. MR. KAMELAMELA: Right. MR. CHUNG: Right. I don't see anything in here that says it had to be a County -related program. Where you got this, County related program? You're kind of putting one -and -one together and coming up with four. MR. KAMELAMELA: No, it says in the code itself. MR. CHUNG: This is what the code says. MR. KAMELAMELA: No, but see the County department is not going to pass this through unless it satisfies one of its goals and objectives. So that's why like it's easy for a nonprofit to do certain things for County buildings or a sport court. Page 13 FC -24 December 4, 2017 MR. CHUNG: No, no, no, I disagree with that. I mean, I guess we could clean it up, if we tried to amend our code. But this is what it says—and I agree it does pass through. MR. KAMELAMELA: Right. MR. CHUNG: And that's how the makers of this ordinance did it many years ago. But I really don't think that they were intending it to be a County -related program. We could just as well make it straight through like we do with the Grants -in -Aid and that would get you guys off the hook completely, but we still want some connection with the County, right? MR. KAMELAMELA: Right. MR. CHUNG: Because that's why sometimes we send it through Liquor, or R&D (Research and Development), whether it's cultural, educational. Even through Liquor, Prosecutors, we do those things to get them involved. MR. KAMELAMELA: Right. MR. CHUNG: But not to stop the process. All it says is, this is for grants from Contingency Relief Funds, "appropriations from the District Contingency Relief accounts shall be transferred to an accepting County department agency via resolution, identifying nonprofit organization and the specific program project, event, activity, service, equipment, materials and/or supplies for which the grant shall be used." But nothing says it has to be—nothing specifically says it has to be a County -related program, and that's how we've been doing it all these years. I'm not saying that only because we've been doing it all these years makes it right. If this thing specifically said it had to be related a County -related program, then case closed. We just change it, of course. But it doesn't say that. You are saying that based on some loose reading of this. It's not right, Joe. MR. KAMELAMELA: No, but that has always been the position of the Corporation Counsel that I know of, anyway. If it wasn't for the requirement, via resolution that requires—accepting department, I think it would make it harder to establish a public purpose when you come to these kinds of contingency funds; because that's what it is, it's contingency funds. There are things that happen after the budget cycle, you know, that people need help. If there's a way to change the ordinance, to make clearer, then— MR. CHUNG: Okay. Well, at least we know where you stand, where we stand. I guess what's also troubling here is, and I don't know if it's true or not. and I don't know if Renee is still over there, the time it's taking your office to make decisions on this thing is reeking havoc on everyone. Us, the nonprofits, that's not a good way of doing business, Joe. At least say yay or nay, and let's get on with business. I'm not saying that what she related was correct. Maybe it's not Page 14 FC -24 December 4, 2017 three months, maybe only three days, I don't know. But people got to know where they stand. MR. KAMELAMELA: No, no, I fully agree with that. Some things take a little more research than others. MR. CHUNG: Well, yeah. It does, but cannot take that much research, really. mean, if it's a subjective thing, just use your common sense and say, "Well, this doesn't fit." I cannot see how researching something like this is going take months. Cannot, impossible. But I think it's all moot, because it's probably going to move to change some things; to tweak our ordinance and make you comfortable. And thank you very much again, Joe. MR. KAMELAMELA: Okay, thank you. CHR. DAVID: Thank you, Mr. Chung. I believe Mr. Kanuha has a question. Go ahead, Mr. Kanuha, in Kona. MR. KANUHA: Thank you. I'm not going to take too much time because I want to definitely hear from Ms. Ruggles and why she brought this up in the first place. But with regards to public purpose, I do think we as a Council, when it comes to us, we'll determine whether it's a public purpose or not. When it's passed by the Council, the administration, or the Mayor will see for himself if it's a public purpose on his point because he's going to have to sign this anyways, so he'll determine on his side whether that's a public purpose or not. But I do want to thank the departments for working with us in the first place, all the complex issues that we deal with and how we get monies to the community. In terms of County -related projects, that Mr. Chung was saying, it might not be in the code but it's in our Council rules, where it specifically accounts for County -related projects. If you look at Rule 27, Section 3 (a), it specifically states that it has to be used for County -related projects. So I don't know if it says that—if doesn't say that in the code, it says it within our Council rules. That's easily that we can change, too. I don't know if Corporation Counsel got it from our Council rules, but it does say that, specifically for County -related projects. So, I just wanted to bring that up just for future reference. I don't need to discuss it anymore. I definitely want to hear from Ms. Ruggles and why she brought this up in the first place. So, thank you. CHR. DAVID: Thank you, Mr. Kanuha. Ms. Lee Loy. MS. LEE LOY: Thank you, Chair. I was going to wait, but there's a lot of conversation. Page 15 FC -24 December 4, 2017 First and foremost, my colleagues know that I have always advocated for good information helps us make good decisions. The backdrop that I keep hearing from the rest of my colleagues is that we do go get real, good information. We work with the community; we do the due diligence. Every single one of us up here, we're smart. We can read the rules, and we can make it fit. And what has become extremely frustrating, which emerged during those training classes, Mr. Kamelamela, was the frustration of the timing. We work with the departments, and they sign off on a Contingency Relief application form. We have to draft the resolution. Setting it on an agenda doesn't happen overnight. For example, we have some critical path deadlines to help some of these communities. We set it on an agenda. It's agendized for the public to weigh in, very transparent, and then it goes over to Corporation Counsel for more questions or more delays and more stalls. That is what appears to me to be extremely unfair. And if like Mr. Chung is suggesting, improving the rules or improving the policy, that's what this body is intended to do. But the integrity of all of us serving the community, that's why we sit here. I wasn't going to say anything. There's a lot of information out there. I just want to leave it there and pick it up later because there's a long process for these Contingency Relief Funds. And I also am looking at language myself, in adding into the resolutions, maybe like a four -corner checklist, so that we can ensure the department and Corporation Counsel that it's passed its test. But one thing that's not being mentioned today, is sometimes these monies go into a department and all of it is not utilized. They come in, request $2,500. We submit receipts, and for whatever reason costs have gone down or they weren't all utilized, and only $2,000 of it has been spent. That extra $500 does not get returned back to us to then further help community. So I think the conversation is right, where we're looking at opportunities to improve policy. That's just my thoughts. I know Ms. Ruggles is not here. I'm going to ask the Chair if everybody's done sharing, I want to maybe make a motion to defer. CHR. DAVID: Thank you, Ms. Lee Loy. I think everyone's done. Motion to Postpone: Ms. Lee Loy moved to postpone Comm. 608 to the call of the Chair. Seconded by Ms. Poindexter. CHR. DAVID: Any discussion on the postponement? No? Thank you, Council Members, for the discussion regarding this. I believe when Ms. Ruggles is able to be here, we will actually expand on some of the concerns that you've been hearing from the Council Members. So, thank you very much. All those in favor please say "aye." Page 16 FC -24 December 4, 2017 Vote Motion to The motion to postpone Comm. 608 to the call of the Chair Postpone: was carried by the following voice vote: (Approved) Ayes: Committee Members Chung, Eoff, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, and Chair David - 8. Noes: None. Absent: Committee Member Ruggles - 1. Excused: None. CHR. DAVID: Thank you very much. Mr. Clerk, please move on to the next item. Resolution 410-17, please. ORDER OF Chair David directed the Committee to proceed to the next order of business, RESOLUTIONS: Order of Resolutions. Res. 410-17: AUTHORIZES THE OFFICE OF THE MAYOR TO ENTER INTO AN AGREEMENT WITH THE UNIVERSITY OF HAWAII Provides $9,680 from the Department of Research and Development to the University of Hawaii, to fund its "Innovative Agricultural Research to Control Rough Sweet Potato Weevil" research proposal. Funds would be used to evaluate two promising insecticides and evaluate 12 sweet potato varieties reported to have resistance to insects. Reference: Comm. 604 Intr. by: Ms. David (B/R) Vote on Res. 410-17: Ms. Poindexter moved to recommend adoption of (Approved) Res. 410-17. Seconded by Ms. Lee Loy and carried by the following voice vote: Ayes: Committee Members Chung, Eoff, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, and Chair David - 8. Noes: None. Absent: Committee Member Ruggles - 1. Excused: None. CHR. DAVID: Mr. Clerk, please, Resolution 411-17. Page 17 FC -24 December 4, 2017 Res. 411-17: AUTHORIZES THE PAYMENT OF FUNDS OF A LATER FISCAL YEAR AND OF MORE THAN ONE FISCAL YEAR FOR A MULTI-YEAR LEASE FOR ONE PITNEY BOWES DIGITAL MAILING SYSTEM Authorizes the Mayor to enter into a five-year lease agreement at an estimated monthly cost of $176.74 to be used at the Police Department's South Hilo Storeroom at the Public Safety Building Complex. Vote on Res. 411-17 (Approved) Reference: Comm. 605 Intr. by: Ms. David (B/R) Ms. Poindexter moved to recommend adoption of Res. 411-17. Seconded by Mr. Richards and carried by the following voice vote: Ayes: Committee Members Chung, Eoff, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, and Chair David - 8. Noes: None. Absent: Committee Member Ruggles - 1. Excused: None. CHR. DAVID: Mr. Clerk, please, Resolution 412-17. Res. 412-17: AUTHORIZES THE ACQUISITION OF PRIVATE PROPERTY BY EMINENT DOMAIN OF TAX MAP KEY: 9-6-002:018, SITUATED AT PUNALU'U- PA`AU'AU, DISTRICT OF KA`U, COUNTY AND STATE OF HAWAII, FOR THE PAHALA WASTEWATER TREATMENT PLANT Authorizes the Corporation Counsel to initiate proceedings to acquire private property containing an area of 42.5 acres, more or less, to construct a wastewater treatment plant in Pahala, in compliance with Environmental Protection Agency regulations requiring the elimination of large capacity gang cesspools. Reference: Comm. 607 Intr. by: Ms. David (B/R) Motion to Approve: Ms. O'Hara moved to recommend adoption of Res. 412-17. Seconded by Ms. Poindexter. CHR. DAVID: Discussion, Council Members? Please note that we already have some testimony from Mr. Nahale-a. Ms. O'Hara, go ahead. MS. O'HARA: With regard to this, I think we will be movingI hope we move to defer this because I think that Kamehameha Schools was caught a bit offguard by this. Who is here to speak to this acquisition from the department? CHR. DAVID: Mr. Kucharski is here. Page 18 FC -24 December 4, 2017 (Note: At this time, Environmental Management Director William Kucharski came forward to address the members of the Committee.) MS. O'HARA: Mr. Kucharski. Eminent Domain is a pretty serious action, and I'm surprised that the landowner was not informed before, or is that not correct? Why has this become such a surprise to the landowner? MR. KUCHARSKI: Bill Kucharski, Director of DEM (Department of Environmental Management). We have been in discussions with Kamehameha Schools about the property. There was no question, but that they were involved in the process. What didn't happen, was a communication to them that it was coming up to Council today, and that was an error on our part in communication. Kamehameha Schools cannot sell property. They need condemnation. There is no disagreement between Kamehameha Schools and the department on this that I am aware of. But we are in agreement that we will defer this. We agree with the deferral so that we can have additional discussion. So that if there are any things that are not understood, we have the opportunity to get them clarified. MS. O'HARA: Well, thank you for the explanation. I see another light on, so I won't make the motion yet. CHR. DAVID: Thank you, Ms. O'Hara. Mr. Richards, go ahead, please. MR. RICHARDS: Thank you, Chair. Mr. Kucharski—and, Mr. Nahale-a, if you could come up as well, please? (Note: At this time, Mr. Alapaki Nahale-a, Senior Director of Community Engagement and Resources at Kamehameha Schools, came forward to address the members of the Committee.) MR. NAHALE-A: Aloha, Alapaki Nahale-a, Senior Director, Kamehameha Schools. MR. RICHARDS: Thank you for your time and for coming up. This question will be directed for both of you. Echoing off of what Council Woman O'Hara has articulated, Kamehameha Schools cannot sell land outright. Is that a fair statement? MR. NAHALE-A: That's not correct. We can and do sell land. MR. RICHARDS: Okay, so what bothers me, Director, on this one, is that I see Kamehameha Schools is a great partner, going through, running our County and all. Even if that wasn't the case, that a talk -story should occur, and that this was Page 19 FC -24 December 4, 2017 coming forward. I have to agree with the Council Woman that eminent domain condemnation is kind of the end of the road, as far as the conversation goes. If that's what has to happen, fine. But I think the talk -story is first, especially months in advance. I'm aware that the property was being evaluated back in July, I think it was, or maybe a little bit later. That doesn't mean something's going to happen, that's just doing homework. So it bothers me that Kamehameha Schools found about this through the newspaper on Friday rather than being contacted months ago. Because I would assume that this has been in process for a little bit, so we have a communication problem coming forward. I think in order to have good working relationships, we talk story first. I appreciate the fact we need to get something done; I understand that. I'm just bothered by how this was brought forward. It was a taking rather than a conversation first, so I'd like you to respond to that. MR. KUCHARSKI: Bill Kucharski. The only response I can give is that if the communication was not going forward, that's a problem that I need to look into. Conversations were going on with Finance and Property, and going through the process of evaluating this piece of property. So, I will ensure that any kind of miscommunication we've had within the department has been clarified. There was never an intent to go around Kamehameha Schools. They have been very cooperative. They're great citizens for the State and landowners. If we've gone into the condemnation route, it was my understanding that was necessary; if not, that's something that we can get clarified. I can only come in and say that there was never an intent to bypass, or to cut corners, or to go into, or to create any adversarial situation. There was never an intent to do that, and I apologize for the department—and getting down this path with a misunderstanding of this type. MR. RICHARDS: Okay, I appreciate that, Director. I appreciate also your comments about—we're having conversations with Real Property Tax, with Finance, with everybody except the landowner. I think that's kind of a key issue there that should have been realized. So with that, I don't want to take a lot of Council's time. I'm going to yield. I'm going to be supporting a deferment to have the talk -story. Because I think we don't need to start rattling sabers right now, we need to talk story first. With that, Chair, I will yield. CHR. DAVID: Thank you, Mr. Richards. Mr. Chung. MR. CHUNG: Just briefly. How much money were you guys looking at spending for this 42.5 acres? Page 20 FC -24 December 4, 2017 MR. KUCHARSKI: I don't have that number, I'm sorry. That is being done by Finance and the Property people. Once it gets into condemnation, it's essentially out of the hands of DEM. MR. CHUNG: Okay. MR. KUCHARSKI: So, I don't have that number. My understanding was that it was a number that was agreeable to Kamehameha Schools. MR. CHUNG: I see. MR. KUCHARSKI: And that's my understanding. MR. CHUNG: Okay, you've got any idea how just ballpark figure, how much that would cost, more or less? MR. KUCHARSKI: Unfortunately, no. MR. CHUNG: Okay. And how much would the Wastewater Treatment Plant cost? MR. KUCHARSKI: The Wastewater Treatment Plant in Pahala is estimated, as I recall in the area, about over $9 million. MR. CHUNG: That's not too bad. How large is our Hilo Wastewater facility area? MR. KUCHARSKI: In property size, I'm not sure. Since it's a mechanical system, it's much smaller than we use for our biological systems. So it's maybe 20 acres. MR. CHUNG: Well, what's the difference between? MR. KUCHARSKI: In a mechanical system, you have things like bio -towers and aerobic digester. We have mechanical clarifiers. The kind of systems that we use generally outside of Hilo because of the conditions, we use natural aerobic ponds, where we treat them with minimal of mechanical equipment. It takes a little bit more space, but you get the same kind of treatment for an R-2 treatment. It's much less operation maintenance cost on those facilities. MR. CHUNG: Okay, thank you. CHR. DAVID: Thank you, Mr. Chung. Ms. Lee Loy. MS. LEE LOY: Thank you, Chair. I'm going to be supporting the deferment, but I'm not going to pass up the opportunity to get some backdrop on this particular Page 21 FC -24 December 4, 2017 site. Maybe you can help me, Mr. Kucharski, how was the site identified? You know, what are the infrastructure costs as it relates to—and if you don't have a number, what was the due diligence that went into this particular site as it relates to the large gang cesspools that we're trying to close or mandated to close? I do want to say for the record, when this gang cesspool legislation was going through the State, I submitted testimony to support that because the environment—and I know every single one of my colleagues completely support the idea of protecting the environment, and I know the landowners to be stewards of protecting the environment, too. So, if you could just provide some of that backdrop on how this site, why this site? Yeah, could you just share with us? MR. KUCHARSKI: Yes. Bill Kucharski again. The process that we went through, was to identify, again, where our connections are coming down. Looking at property that is available that is as close as we can get to where our sewer system is to minimize the distance to the treatment facility; and the ability of that property to handle not only the treatment system but also to do it in such a way that there's minimal upset to the community. This was a piece of property that was selected. There were two or three. Generally, we go to Finance and the land office in there to take a look at various properties. We then take a look at them from the technical side. We go to our design engineers and say, "Is this is suitable for the preliminary design that you have?" From then, we come in and we start to develop the plans, and then we see if this property is going to be available. We did those things. In the communications with Kamehameha Schools and the people on the ground, we've been in discussion with them for many months. Again, this just fits the criteria. We will be doing an environmental assessment prior to any construction. We will probably also be going in and doing it, just to make sure that the use of the property is acceptable under our environmental rules, in addition. MS. LEE LOY: You mentioned you were in discussion with Kamehameha Schools, but we heard our Senior Director from Kamehameha Schools saying that they found out in the paper. So, when was the last communication with Kamehmeha Schools? MR. KUCHARSKI: Ms. Lee Loy, we were in discussion about the property. The communication breakdown was when it was the condemnation would be coming to Council. Sometimes we have a lot in common; some things come up to us and some things don't. In this, there should have been communication to Kamehameha Schools. I accept full responsibility that communication did not occur properly. But the other communications have been going forward. And again, I don't believe that there is a disagreement in principle on the property. It's simply getting more information and making sure that this is the actual correct thing and the correct time. Page 22 FC -24 December 4, 2017 MS. LEE LOY: I, too, was alerted to it in the newspaper. Like the rest of my colleagues have mentioned, eminent domain, it really is the last tool in the tool -belt. I mean, it is an enormous amount of power that government has with eminent domain. There's a section in the statute. It's HRS (Hawai`i Revised Statutes) 101-23. I was just wondering, you know, some criteria—you know, you have to pass test, or tests of public interest, public purpose. I was wondering if you could expand how did we get to this step? What thresholds did we cross to say, "Hey this is the route?" MR. KUCHARSKI: I can't go over the legal points. Corporation Counsel provides that for us. I will say that I was under the impression that a condemnation was necessary, and I've always characterized this as a friendly condemnation not an adversarial one. If I'm incorrect on that, then my apologies. But that was my understanding. MS. LEE LOY: One final question. This parcel is a 42 -acre site, and that's large. I was wondering, why such a large parcel? Do we need it all? MR. KUCHARSKI: I need to check with our engineers. We use, again, biological systems. It is a large parcel, and part of that is this was a macadamia nut orchard. The plan, as I understand it, was to leave a buffer zone on the outside of the property such that the operations of the facility would not be, essentially, seen by the public. Also, we need a large area because we're going to be using the effluent with an uptake of that water and the nutrients by other plants and trees inside the facility. So, it is a large area. I'm not certain what the minimum size is for this flow, and I can check on that. But we don't generally go for significantly more property than the design calls for. I can't say that that's the case in this, but that's my impression. I can get into more detail on this study. The only other thing to state is we are in consent agreement with EPA (Environmental Protection Agency). This is not an optional plant. The location might be optional but the plant is not. So we are working under the constraints of our Administrative Order of Consent to get this done. This facility is supposed to be online by 2020. MS. LEE LOY: Thank you for that. Yeah, 42 acres is a large site. I would love to see the engineering calculations that went in to identifying how large this facility is and what type of waste that we're trying to manage. Because we clearly have other landowners adjacent, and we want to hear what their long-range master plans are. If this is the site, then how do we work with our community partners and our neighboring landowners, and understand what their long-range master Page 23 FC -24 December 4, 2017 plans are? It might ideal for Kamehameha Schools to be at that table so that this site actually would be ideal for everybody in that area. MR. KUCHARSKI: Once again, I'm not aware that—in the discussions that—Kamehameha Schools' staff was not involved in the discussion; I could be wrong. Apparently, there's a number of things that I'm not aware of. But that is one area that was pretty certain that the communication was ongoing. MS. LEE LOY: And I do want to follow-up, because you mentioned the mandate and the timing of it. This is just something, food for thought. With condemnation proceedings comes the idea that it's now County -owned, and I'm just wondering if through this process, have you folks explored maybe working with Kamehameha Schools to develop the asset? Maybe some cost sharing or some public/private partnerships, that could actually get this done to meet the mandated deadline, where it's not being paid for by our tax dollars, and we're frontloading all these costs. That, I think, would be great conversation for you and all the stakeholders at the table because there might be, other opportunities that's not going to be borne on the backs of taxpayers. I'm going to leave it there for now. I'm going to support the deferment when that motion is up. But thank you. I think all of us want to see that white sheet, that due diligence that went into it, and I think the landowner would appreciate the same. MR. KUCHARSKI: Understood. CHR. DAVID: Thank you, Ms. Lee Loy. MS. LEE LOY: We'll go to Ms. O'Hara and then Mr. Richards. MS. O'HARA: Okay, this is actually a question for the landowner. I understand that this 42 -acres currently supports a mac orchard. MR. NAHALE-A: Yes, that's correct. MS. O'HARA: And you're leasing to a private party, who is doing the macadamia nut. Now, macadamia nut is a nut tree that takes a number of years to be harvestable. So, you've got some serious time invested. Is this a very mature orchard? Does the orchard cover the entire 42 acres? How is this private party going to be impacted and how might the landowner deal with that? MR. NAHALE-A: To be honest, I don't have personally the details. I could get that pretty easily. Over the weekend, due diligence, it looks like the entire Page 24 FC -24 December 4, 2017 42 acres is immature mac nut trees. Anytime for us that we lose productive ag lands, is a challenge. It's one of the concerns we have. I do want to say in defense of my colleague here, because we have shared challenges with large systems, I think it's true that there was talk -story going on. I think there just was a breakdown as we added more divisions and people in the conversation that there was a breakdown. I take that for face -value. We've certainly done that on our part, as well. I think this is just an opportunity to come back together, which is great. MS. O'HARA: Right, thank you. And then this question would be for you. Mr. Kucharski, you mentioned that you're going to be using an environmental type system, which would produce the potential for R- 1, and you said would be used on the trees within the compound that the County acquires. Would there be any opportunity for that use by the local ag community? Because jobs do hit that area, and they've had prolonged droughts before. Is there any potential for that? MR. KUCHARSKI: We're going to be using R (Recycling). Currently, it's planned for R-2. But even with R-1, I'm not certain that can be used on food crops, so that is an issue. That's part one of the challenges that we face. MS. O'HARA: So R-2 is what you'll be producing. Even if it was R-1, it could not be used on orchards? MR. KUCHARSKI: My understanding is it cannot be used on a food crop. That's one of the things we looked at, as to just watering the mac nuts. MS. O'HARA: Please get clarification on that because I think it goes deeper than that. Of course, it's not going to be used on vegetables and annual food crops. But with I think with orchards, like tree crops, I don't know that that's true. I just would encourage to double-check that. MR. KUCHARSKI: We will check. Thank you. CHR. DAVID: Thank you, Ms. O'Hara. Mr. Richards. MR. RICHARDS: Just a quick—Council Woman O'Hara posed a question. Both of us, Chair and Vice Chair of the Committee on Agriculture, so anytime we're losing agricultural lands or changing use were concerned, I would also echo the same thing, Mr. Kucharski, check into the use of that wastewater. Because if we can keep that and keep production in line, or even enhance production because we're using consistent water, that might be a really good thing. And please do understand, I'm not questioning your ethics as far as raising this concern. I understand breakdown of communications without question, but I'm Page 25 FC -24 December 4, 2017 glad this is a time to help Mr. Nahale-a's statement, bring back together, talk story. So with that, I yield. CHR. DAVID: Thank you, Mr. Richards. Mr. Kanuha, go ahead. MR. KANUHA: Thank you, Madam Chair. I agree. I have no problem with supporting a deferment or postponement until everybody can be on the same page with this. But I did want to hear from you, Madam Chair, because I know you've been dealing with this issue for really long time and this is your district. All conversations we've had, I really want to hear from you and your perspective of what is going on and how you guys have been dealing with this issue. I know you've been dealing with this for a long time. So if I could, like reallyI want to hear from you. That's all I really wanted to say. So, thank you. CHR. DAVID: Mahalo, Mr. Kanuha. I was just patiently waiting my turn. As to this Committee, I get to talk last, right? Thank you for that. Any other discussion from Council Members? Alright, then it's my turn. Number one, I think Mr. Kucharski and his whole department have been diligently looking for property in Pahala. If everyone here knows Pahala, there's not really many choices where a facility like this can be placed. So initially the other potential was, I think, closer to the town; but that has other issues related to that, it's closer to the subdivision. When I was told that, by Mr. Kucharski, the parcel that the mac nut orchard was on, for me, I thought that was a pretty decent place because it's far from the community. It's all downhill, and things flow downhill. And then, I just left it up to them. They were going to work diligently with the landowner. Up until this morning, I thought that people were talking stories. The fact that it got put on the agenda made me think, you know, "oh great, they came to a decision." Kamehameha Schools was not really posing the they were working together with the department and the County for an agreeable sort of eminent domain process. Until I found out this morning, that there was a communication breakdown. and listening to my colleagues here, as far as the place, I think we need to sit back and resume negotiations. I'm not an engineer or anything, but just knowing Pahala and the area, I think that would be a great place. It still needs to be negotiated to a point where everyone is not probably 100 percent, but it can be a fair solution, hopefully, and that's what we're hoping for. Because I agree, eminent domain is sort of like the last resort. I know if we put our collective heads together, not only will we meet our requirement and not be dinged further from EPA—but also, if we go through eminent domain, the process, that is also a costly process. Page 26 FC -24 December 4, 2017 I think if everybody agrees, I'm really supportive. I really thank you, gentlemen, for coming to that conclusion. I thank Kamehameha Schools mostly. The postponement, I think, is a very timely one, and I think it's the one that will provide this Council a lot of information the next time you come before us. With that said, Ms. Lee Loy. Motion to Postpone: Ms. Lee Loy moved to postpone Res. 412-17 to the call of the Chair. Seconded by Mr. Richards. CHR. DAVID: Any discussion, Council Members? No? Alright, all those in favor of the postponement? Oh, Mr. Kanuha. Go ahead. MR. KANUHA: Thank you, Madam Chair. I support that, but is there anyI know we have that mandated thing from the EPA. How long is this process of talking story going take? Is it going to take months? Is it going to take a couple of weeks? Can we have this meeting in January? Is there a timeline on this whole thing? CHR. DAVID: Yes, thank you. I think Mr. Kucharski and also Mr. Nahale-a are going to be talking story, and this will be probably back on our agenda, maybe not the next—but hopefully, maybe, our next meeting. But we're allowing them some opportunity, Council Member Kanuha, and that's why the call of the Chair postponement. Because as soon as they can come to some sort of an agreement, they told us that they will be back here as soon as possible to meet their deadlines. MR. KANUHA: Okay. CHR. DAVID: But Mr. Kucharski's here. MR. KANUHA: Director Kucharski, is there any timeline of this eminent domain? Or requiring a property for the wastewater treatment plant, what's the timeline of that in finding a piece of property? MR. KUCHARSKI: Bill Kucharski, DEM. The issue that we have is that we need to have the facility permitted and start construction by mid to end 2019, so we have time but we don't have a lot of time. MR. KANUHA: Okay. MR. KUCHARSKI: So it's about a year construction. To be in operation by 2020, we need to do that. We also need to be sewering the communities, and we need to know where they're going to go. So those are our only constraints. MR. KANUHA: Thank you. I have concerns about a lot of—you know, when we're dealing with Environmental Management and putting sewers into Page 27 FC -24 December 4, 2017 communities, it takes a really long time. Just something I'll state now, but I don't want to see the process be dragged out for months. So, I'll just state that. CHR. DAVID: Thank you, Mr. Kanuha, and thank you, Mr. Kucharski. Just as a reminder before we take a vote, that when you do come back you will have the detailed information that the Council Members were discussing today as far as costs, as far as the facility, and that sort of thing? MR. KUCHARSKI: Yes, I will. CHR. DAVID: Alright, thank you very much. Okay, Council Members, on the Motion to postpone, all those in favor please say "aye." Vote on Motion to The motion to postpone Res. 412-17 to the call of the Chair Postpone: was carried by the following voice vote: (Approved) Ayes: Committee Members Chung, Eoff, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, and Chair David - 8. Noes: None. Absent: Committee Member Ruggles - 1. Excused: None. CHR. DAVID: Thank you very much, gentlemen. Mahalo for coming. BILLS FOR The Chair directed the Committee to proceed to the next order of business, Bills ORDINANCES: for Ordinances. CHR. DAVID: Mr. Clerk, our last item on the agenda, please, Bill 82. Bill 82: AMENDS CHAPTER 20, ARTICLE 4, OF THE HAWAII COUNTY CODE 1983 (2016 EDITION, AS AMENDED), RELATING TO SOLID WASTE FEES Increases disposal fees from the current $85 per ton to $101 per ton, to further increase by $3 per ton on July 1st of each year, from July 1, 2018, through July 1, 2022. Also increases fees to be applied when the scale cannot be used due to outages, for special handling and all types of vehicles. Reference: Comm. 606 Intr. by: Ms. David (B/R) (Note: Comm. 606.3, from Environmental Management Director William Kucharski, dated December 4, 2017, and Comm. 606.4 from Environmental Management Commission Vice Chair Richard Bennett, Ph.D., dated November 29, 2017, transmitting support of Bill 82, were circulated.) Page 28 FC -24 December 4, 2017 Motion to Approve: Ms. O'Hara moved to recommend passage of Bill 82 on. first reading. Seconded by Ms. Lee Loy. (Note: At this time, Environmental Management Director William Kucharski and Solid Waste Division Chief Greg Goodale came forward to address the members of the Committee.) CHR. DAVID: Council Members, discussion, please. Ms. O'Hara. MS. O'HARA: I want to bring to the attention of the Council that we have an amendment to this bill, in the form of Communication 606. 1, and I would like to amend Bill 82 with the contents of Communication 606.1. CHR. DAVID: Okay, can I say something right before that? Before we second that motion, I would ask first that Director Kucharski come up and explain the original bill first, so we can kind of meld the proposed amendment. If that's okay? MS.O'HARA: Perfect. CHR. DAVID: So hold that thought, until after Mr. Kucharski's presentation. Thank you very much. Mr. Kucharski and Mr. Goodale, please identify yourselves for the record, and go ahead. MR. KUCHARSKI: Bill Kucharski, Director of DEM. The original Bill 82 that was submitted was for an increase in tip fees from the existing $85 to $101 a ton. There being initial review with the fact that this tip fee was last changed in 2007. A two percent a year increase, from 2007 to 2018, would get us like $217 and some cents per ton by 2018. Initially, when we had our preliminary budget numbers in, we felt that this increase from $85 to $101 would bring in sufficient fees to allow us to make necessary improvements to our service, to fix our transfer stations, and to take care of other issues. I'll be going over some more detail in my presentation. But once we looked at the numbers and we finalized the numbers, we found that we had an additional charge facing us, from moving to Pu`uanahulu when we closed Hilo. That additional $2 million had not been taken into account in my initial bill. Taking a look at that, we felt that it would be appropriate for us to go back to essentially my original number that I deferred back, thinking that was too much. We didn't need that much money, and I didn't want to take more than we needed. Unfortunately, what I needed was more than I thought. So, I came in and put this amendment in for $108 a ton. Increasing that every year by $2 a ton, and we wind up by 2022 being, I believe, it's $2 a ton, more than it would have been with the original $101. This will just—advancing the fee will give us the opportunity to take care of operational costs associated with Page 29 FC -24 Vote on Amendment (Approved) December 4, 2017 moving to Pu`unanahulu, and I will be getting in more detail on that in the presentation. But that is the basis. CHR. DAVID: Thank you, Mr. Kucharski. Go ahead, Ms. O'Hara. MS. O'HARA: Are we actually having a presentation? CHR. DAVID: Actually, I believe the presentation is going to be referencing the proposed amendment. MS. O'HARA: Oh, because we have handouts here (see Comms. 606.2 and 606.3). CHR. DAVID: Right, but we're not discussing the amendment yet, so the PowerPoint is going to justify the numbers on the amendment. Yeah, I'm sorry. It's kind of confusing. MS. O'HARA: Oh, really. CHR. DAVID: So he was giving us the breakdown on the original bill, Bill 82. MS. O'HARA: Now, I shall move to amend Bill 82 with the contents of Communication 606.1. CHR. DAVID: The proposal, yes. Ms. O'Hara moved to amend Bill 82 with the contents of Comm. 606.1. Seconded by Ms. Lee Loy and carried by the following voice vote: Ayes: Committee Members Chung, Eoff, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, and Chair David - 8. Noes: None. Absent: Committee Member Ruggles - 1. Excused: None. CHR. DAVID: Whoever is speaking can go ahead. Identify yourself again for the record, thank you. MR. KUCHARSKI: Bill Kucharski, Director, DEM. What I have before you is a description of our proposed modifications to Bill 82 to Section 20. Page 30 FC -24 December 4, 2017 (Note: At this time, Mr. Kucharski and Mr. Goodale provided a PowerPoint presentation to the members of the Committee. For viewing of the subject presentation, see the DVD copy of the meeting proceedings on file in the Clerk's Office. A copy of the PowerPoint presentation is made a part of the record, see Comm. 606.2) MR. KUCHARSKI: Our presentation is complete. Thank you. CHR. DAVID: Thank you. Ms. O'Hara. MS. O'HARA: Thank you so much, gentlemen, for the presentation. I have several questions that came up during the presentation. You mentioned earlier on that the County's covering a good portion of the waste disposal. What is the average paid by tip fees, of the total cost of managing Solid Waste? For similar size, jurisdictions, county, cities, what is the rule of thumb? MR. KUCHARSKI: We're running only about 30 percent, 31 percent here. Greg, do you? MR. GOODENOW: Greg Goodale, Solid Waste Division Chief. It's a difficult thing to because they're not talking about apples and apples. The County of Hawaii is much different than any of our other neighbor counties, in that we have a much more robust system of transfer stations. So when you look at the amount of services that are provided to the people of the County of Hawaii, it's very different. Like, say for instance, City and County of Honolulu has a mandatory refuse collection, so in most areas in the City and County of Honolulu, it's mandatory that you have refuse collection for your property. That's not the case here in Hawaii County. Maui County, very similar. Maui County only essentially has two refuse transfer stations for the entire County, whereas we have 22 on this island. MS. O'HARA: I understand. I'm sorry to interrupt, but I do understand that. I just wondered if we had looked to see if there were jurisdictions that handle the situation in a similar manner. I know ours is unique. Our system is unique. But I just wondered if there was any metric that we could compare to, in terms of how much of the tip fees are covering the Solid Waste management? In situations where they are similar. I know we don't have similar system to the other counties here. Maybe somewhere on the mainland or something, I'm just thinking. Yeah, if you don't have the answer to the question now, that's fine. I just kind of throw it out there because I'm curious. Now, scrap metal has its own funding through the vehicle fees. Now, you've put that on the list of things that could potentially be chopped, but isn't it—and covering itself from its own source funding? Page 31 FC -24 December 4, 2017 MR. KUCHARSKI: The only thing that we have on scrap metal is the abandoned vehicle. The other white goods are just part of our cost. MS. O'HARA: Okay. So the licensee fee does cover the Abandoned Vehicle program and not in excess of that? MR. KUCHARSKI: Yes, ma'am. MS. O'HARA: Okay. Now, what is the current unpaid tip fee amount? I know for a period of time there, we were running a huge deficit on that. Where do we stand now? I see Robin's here. MR. KUCHARSKI: I'd ask Robin to come up. She can tell you probably to the penny. (Note: At this time, Business Manager Robin Bauman came forward to address the members of the Committee.) MS. BAUMAN: Good morning. I'm Robin Bauman, the Business Manager for Environmental Management. Currently, our account receivable balance is about $1.3 million, of which a little under 10 percent is over 90 days past due. MS. O'HARA: So it's way better than it's been in the past. MS. BAUMAN: Yes. MS. O'HARA: Thank you for that. I appreciate that. But it's still something to work on. It sounds like you're giving a shorter time period for payment of bills under this amendment or under this change. Do you see that causing that accounts receivable to escalate? MS. BAUMAN: Actually that change is expected to bring the receivables down, as a way to encourage more timely payments. MS. O'HARA: Okay, great. I hope that works. Now if we increase recycling reduced—if we increase our recycling activities, we automatically reduce the quantity of regular trash going to Pu`uanahulu. So it makes sense to spend any extra that comes out of this tip fee increase to promote more recycling and reduce amount of money we're paying Waste Management, right? MR. KUCHARSKI: Yes, and that is another potential benefit of the increase, and that commercial entities may find it more cost effective to do more source separation than they currently do, to reduce their tip fees from increased collection cost. So that's one we're hoping to see, as well. Page 32 FC -24 December 4, 2017 MS. O'HARA: Well, that would be great. But I think the public should be aware of what it cost us per ton, generally, to do mixed recycling. You do have number there, don't you? MR. KUCHARSKI: That cost us approximately $170 a ton to process our mixed waste. MS. O'HARA: Our mixed -waste or mixed-recyclables? MR. KUCHARSKI: Mixed-recyclables. Excuse me, yes. MS. O'HARA: Okay. Yeah, okay. So, there's kind of a balancing act there that I can see. Will we be able—you didn't mention in your slides, and it may be something that we're not going to be able to do automatically, but will we be able to extend hours at the transfer stations that were curtailed during the great recession to operating only three days a week because we have quite a few that are down to the three-day week schedule? MR. KUCHARSKI: I can't guarantee that we can do that because any time we increase the hours, if you remember the discussion on adding one police officer in Pahoa and all of the back that you get, it's the same kind of situation, different task. But if we have one more day, that's two more people, that's three more people. Because they're not going to always be there, the next thing you know our budget has increased. I'm not saying we can't do that. We'll be looking at it, and we'll do what we can to address that. We may try and do things like do a six-month test with four days rather than three days, and see if we get 30 percent more trash or more materials deposited. But we would look at that. It's something that we have on our radar, but it is a very expensive alternative, and we're in the zero -some gain. MS. O'HARA: Okay, the metric on that may not be the amounts of tons increased but the reduction in litter; because by not opening transfer stations in the rural area, it's increased the amount of litter. I know you're trying to roll out an island -wide anti -litter campaign, which I totally support, and personnel to deal with that; and the polystyrene, which is also partly litter. Perhaps, when we get to the renegotiation of the contract in April with Waste Management, can we agree that any cost savings or gains that we might make through that renegotiations we could redirect towards keeping the transfer stations open longer? MR. KUCHARSKI: We will definitely take a look at that. I can't sit here and guarantee that we'll make the increase in time, but I will guarantee that we'll take a look at it very closely; and if we don't, there will be a much better reason for not doing it. Then, we will go ahead. But we will definitely take a look at that. Page 33 FC -24 December 4, 2017 MS. O'HARA: Okay. MR. KUCHARSKI: And I promise to give it very, very serious consideration. MS. O'HARA: Alright, thank you for that. With that, I yield. CHR. DAVID: Thank you, Ms. O'Hara. And I believe—Ms. Poindexter, you were next and then Ms. Eof£ Thank you. MS. POINDEXTER: Thank you, Council Member O'Hara, for bringing that up, about opening the transfer stations to maybe everyday. I'd like to see maybe even a pilot project. You know, Parks and Recreation has come up with a, you know, the Friends of the Park kind of agreement, where the community takes ownership of that park, and to care for it. I'm sure the communityI can pilot you one in Pa`auilo. I know Pa`auilo the community has been wanting it to be open more. We never had—back in the day, we never had to have security guards to watch our transfer station. I know people not going in to steal rubbish. It's putting things there. Dumping things that maybe not supposed to be dumped there, or whatever. But if you work with a community I believe that they can be stewards of that transfer station, and that if they want it open every day that they would help be the eyes and ears of that. I would strongly suggest piloting something like that. I don't know what you would call it. But I would want to definitelyI'd step up to the plate and ask our community if they'd be willing to look at that. Because dumping in the gulches havePa`auilo, you took away where they can dump now, like stoves or refrigerators. That is no longer allowed there, am I correct, in that Pa`auilo one? Because now in the forest they're finding refrigerators and stoves. Mattresses in my community, over the guardrail, so that the County's got to come pick them up; they throw them over the guardrails throughout the Hamakua Coast. I've worked with Neil Azevedo on that, to come and look at some dumping areas that they've got to go clean up. But do you know if they took away that from Pa`auilo Transfer Station? MR. GOODALL What I'll say, is it wasn't taken away. It was never there in the first place. Unfortunately for that site, because it's such a small site there were several sites that we identified that didn't have the permits. This last round that we went through for permitting of our transfer stations, we were able to get the sites that have adequate area permitted, adequately, so that they met all the State's requirements for the collection of the scrap metal and white goods and other recyclables. Unfortunately, Pa`auilo is such a small site that it never had a permit. So, it's basically people inadvertently dropped that stuff. MS. POINDEXTER: In that corner. Page 34 FC -24 December 4, 2017 MR. GOODALL We let folks know "Please take this this to Honoka`a" because it is permitted. But we also tell our folks don't cause confrontation. That if someone brings that we're not going to cause a confrontation, and often times what happens is people will leave them at those sites. So, we're continuing looking at that. Actually, one of the things that I've talked with the Director about, is that as we look at our sites and ways maybe potentially to reconfigure, to allow for—because that's what the State takes into consideration, is the way it's laid out, how can it adequately be done? MS. POINDEXTER: Right. MR. GOODALL So, we've had that discussion. There are possibilities that we could reconfigure that to make allowance. But again, cost money. MS. POINDEXTER: It's the site, and I understand, it's a small site. But again, right next to it, they closed down for years now, where there was the rifle range right there. That's a huge site. I mean, we could have a recyclable kind of activities going on there. Because they all go all up to the dump to try and recycle, too. I know they leave things on a certain side. If you want to take it, it's good stuff. So, they're kind of doing that. But if you're talking about needing more area, I'll work with you on that because we have a lot of area that we could, you know, dropping off recyclable things that people would—like Laupahoehoe has a tent, where you do it. But we have more land that the County owns in Pa`auilo, right next to the transfer station itself. So, that can be worked out. It's a growing community. We have a lot of things that can happen there that can be good. But we're not open enough, so things are getting into the forest and into the gulches. MR. KUCHARSKI: Thank you. Again, we will take a look at that. That's one of the things that we're looking at. To make these improvements so we can make this easier, so that we can make this more convenient, so that we can generate more of this material being put somewhere that we can properly handle it. MS. POINDEXTER: And I'm serious about the offer about working with the community, to police ourselves. MR. KUCHARSKI: We can check with Department of Health. We have a requirement to have those facilities people'd whenever it's open. I'm just not sure whether requirement is that it be a County employee or not, but that's something that we need to check on. A lot of these things we'd love to do, but we have higher powers that are telling us what we can and can't do. Page 35 FC -24 December 4, 2017 MS. POINDEXTER: Right, we need to have those higher powers do their job, as well. But anyway, thank you. MR. KUCHARSKI: Yes, ma'am. CHR. DAVID: Thank you, Ms. Poindexter. Ms. Eoff, go ahead. MS. EOFF: Thank you. And thank you for explaining everything to us and for the earlier phone so that we understand what's happening and why. One of the things the testifier this morning brought up that I thought was kind of important, and maybe we can help fix that particular situation. I remember back in 2007, when we had a rate increase. We had some other changes, I'm not sure if that year or when, but regarding commercial haulers of greenwaste not being able to go to transfer stations. There were severalI helped organize several community meetings with the landscapers and with the haulers, so they would know exactly when and where, and how much increase they were looking at, because they had to have time to tell their clients and prepare them that their bills were going up and adjust all that. So I'm wondering if maybe, you know, between now and next reading even, or in the next—as soon as you can, it might be well worth it to bring some of those people together. I mean, they were pretty understanding. Of course, there were some push -back about not being able to go to the transfer stations with the greenwaste. But as far rate increases, I think as long as they have enough time to tell their customers and they know what's happening, it might help them. MR. KUCHARSKI: Thank you. Yes, we intend to go out and explain. And again, one of the reasons we're now here, early December, is so that we would have time for these to be implemented in the next fiscal year. But going in and talking to them, I think is appropriate. We've already planned on having these presentations. Depending on what happens with the passage of this bill, we'll know what to tell the people. But yes, thank you. MS. EOFF: Thank you. CHR. DAVID: Thank you, Ms. Eof£ Oh, Ms. Lee Loy. Go ahead. MS. LEE LOY: Thank you, Chair. Thank you, Mr. Kucharski. I'm not sure if this is related, but does the County pay additional fees to Department of Health or EPA (Environmental Protection Agency) related to managing a landfill? Because we're asking constituents to pay to dump their rubbish, but I was just wondering if there was a fee requirement. I see somebody nodding their head. Go ahead. Page 36 FC -24 December 4, 2017 MR. GOODALE: The answer to your question is yes, we do pay Department of Health. It's currently 35 cents per ton, which goes to Department of Health to fund their program. There's been various attempts by the Department of Health to increase that amount, but it stayed at the 35 cents per ton, and it's been that way for quite a few years. So that is a fee pay for all tonnage that goes into either landfill, that 35 cents. As part of this, we focus purely on the rate increase. There are other counties that have chosen to incorporate that fee into the tipping. As a way to keep it simplified, you know, keep it just to this specific issue, we kept it just to this. But there has been discussion that potentially in the future those will be things that could be as other counties have done. But again, trying to keep it focused in on just this one thing, we kept it to this. MS. LEE LOY: Thank you for that. Because that was my concern, is that we're going to raise tip fees in one area but then cost associated with just the landfill itself, by way of Department of Health fees. But from what I'm hearing you say, that's kind of not on the horizon. MR. GOODALE: As far as them raising their fees? MS. LEE LOY: Yes. MR. GOODALE: It may come about again in the next Legislative Session. The department may choose to bring that to the legislature, I don't know. They typically will communicate that to us. So again, as we're talking about with our haulers, at least that way from our end we can try and plan accordingly. At different times within our budgets, we had actually gone to the point of increasing that amount and then it didn't pass in the legislature. But at least you try and plan ahead. So, the State has been very good about trying to communicate that to us so that we can plan accordingly. MS. LEE LOY: And then, the white goods contract. I know there's the scrap metal, that's for disposing cars. But then there's the white goods contract, where are we on the white goods contract and when is that—like, the next—we had a vendor and MR. KUCHARSKI: Well, two issues on there. One, on the anti -litter campaign, one of the requests will be for a white goods point of purchase fee to cover the expenses for the white goods, because currently now we're paying for the scrap dealer to take these materials. If all of a sudden things flip, we might be able to get some of our cost back. But right now, it's going in. With the scrap collection, just add something in. Page 37 FC -24 December 4, 2017 MR. GOODALL So we currently have a contract. These contracts, they're typically set up as one year initial, and then you'd get option years. So we're in the midst of exercising one of our option years on this contract. But as we've looked at the market, the market for scrap metal is still down significantly. We're nowhere near where we were several years ago, when we were actually getting paid for the material. But that just really is a matter of what the market is doing. Right now, the market for scrap metal is very low. So, we do have a contract which specifies the rates on that. But if that were to improve one way or the other, it would give us the ability in the following year to potentially either put it back out for bids or choose to exercise another option year for that. MS. LEE LOY: You know with the increase of the fees, what I heard you is we're going to be doing more education. Is that the only vehicle we're going to be using to help reduce the diversion rate or are we looking at other alternatives in addition to the educational recycling? Or are there other options for us? MR. KUCHARSKI: I'm not certain this will increase our diversion rates. But I believe that if we get a very strong anti -litter campaign going, we may bring more materials in. Maybe not recycle, but we would get them more materials properly disposed of, which is sort of contrary to waste reduction, but more appropriate for, what I view our tasks and goals should be as government is to keep our County beautiful and not turn it into a waste dump, which bothers everybody. But going in, one of the other things is we're looking at ways to have to encourage more recycling. Again, we have a very difficult time with our location in getting any cost-effective recycling programs available, but we are continuing to push on that. So, we will be looking at ways to encourage more of the recycling; keeping materials out of landfills. Even if it's more expensive in the long-term, it is, I think, a benefit to all of us. MS. LEE LOY: Part of the proposal, it says tipping fee will increase by $2 per ton per year until 2022. What's the plan after 2022? MR. KUCHARSKI: To come back to the Council with an appropriate adjustment, whether it be higher or lower. MS. LEE LOY: I actually have some thoughts on that. On this one slide, I guess it's page 8, Site Improvements (see Comm. 606.2), you mentioned the greenwaste at Haw! Transfer Station; expanded disposal Glenwood; and then improvements to Kea`au Transfer Station. Is this the priorities as it's bulleted here or is it just? MR. KUCHARSKI: I will speak for Greg and say this is an example of improvements that need to be made. We know that there are others that Page 38 FC -24 December 4, 2017 need—we are so far behind on upgrading and maintaining our transfer stations, but I could've given you another couple of pages of items. But will go through the prioritization once we know the funds that we will have and anticipate having, and then we will prioritize those and go forward. But they should be taken as examples, not as a firm, solid list. MS. LEE LOY: Thank you for that. Because what I was interested in was the water improvements at the Kea`au station; that's something you mentioned, Greg. I'm assuming we're repairing leaky pipes over there. MR. GOODALE: That's correct. MS. LEE LOY: But I also know that there's an option for a composting facility, or one site that's being explored with a composting facility. Is the water being tied to that? MR. GOODALE: I'll just speak to the site as it exists now because we have no idea where we'll wind up with a composting site. Regardless of where that site goes, the water system would need to be repaired within the site, as it exists now. MS. LEE LOY: I'm going to yield right after because I just want to leave it on the table for the department. Especially with the Department of Health fees, here we are writing a piece of legislation to increase the tipping fees, but I'm just wondering, and maybe Diane can help with this, is maybe creating a place -holder language in the policy, so that if the Department of Health does increase their fees, we'll have some tack -on opportunities. Just something to consider. You know, if we're going to make an amendment, we're going to make a change and tackling the section of the that might be a good place in a place -holder. Or, you know, create another tool for our tool -belt that we can use at the time that we cross that bridge. Just some food for thought. I yield. Thank you. CHR. DAVID: Thank you, Ms. Lee Loy. Ms. O'Hara. MS. O'HARA: Thank you, and thank you, Ms. Lee Loy. Yeah, an automatic stabilizer, I think they call that in the context of the bill. I mean, we've got 35 cents per ton right now. What if they go back and we get 50 cents per ton at the next Legislative Session? We're back to rolling backwards instead of forward. So, that would be a good idea. You had talked about needing a person for that island -wide anti -litter campaign, the Styrofoam reduction. This is great. I think that's a warranted position. But you also mentioned a position to help with the negotiations of the upcoming contract and its administration moving forward, I'm not so sure that is a position that is needed within the department so much as maybe a consultant hired in to help with that contract negation. I just want to put that out there as a thought. Page 39 FC -24 December 4, 2017 That maybe it's better as a contractual or consultant contract from your professional service's list, potentially. And with the POP (Point of Purchase) fee, have you given much thought to what that would be in terms of—is it going to be a percentage of value, is it going to be a set amount? Have you looked at what other jurisdictions are doing with the POP for white goods? MR. KUCHARSKI: The answer is yes. We will be looking at—we'll be evaluating alternatives when we get to that point. We're looking at maybe a fixed fee; $10, $20. It might be valued -centered. But we would take a look at what our costs are to collect, then we would come in with something that would match that. So, we're not making money but we're just paying for the service that we're providing, and I don't know what that is yet. But we would look at the similar for electronics as well, since the State has pulled back all of their funding on those for us. MS. O'HARA: Good point. Thank you. CHR. DAVID: Thank you, Ms. O'Hara. Anyone else? Any other comments? Mr. Kanuha, would you like to? Alrighty. All right, seeing none— MR. CHUNG: Yeah. CHR. DAVID: I didn't see your light earlier. Mr. Chung. MR. CHUNG: Bill, I really do appreciate your candor regarding that Waste Management contract. I think many of us in the County had felt the same way for many years. Of course, there is a school -of -thought that unfavorable contracts can be subject to cancellation at any time, but I'm not going there. I'm glad that you guys are in the process of renegotiating that contract. But, I'm going to be voting against this proposal for various reasons. I think, of course, I'm going to be in the minority. I certainly see the need for it. I think there was a reasonable expectation on the part of the public that we wouldn't be raising taxes and fees, but sometimes cannot help. Right after the election, now we raise real property taxes, which totally went against the flow of conventional thinking, I mean, in terms of the line-up here. And then we're on the frontlines, of course, of all of those things. Then, fuel tax, which I believe we're going to generate a great benefit as a result thereof. And then now, tipping fees. Just as a matter of my conscientious objections, I'm going to be voting against it. But more, I think, importantly, I'd like to see what's going to happen with the negotiations with Waste Management. It's hard for me to approve something that's going to earmark $2 million for Waste Management when we're in the process of trying to renegotiate terms with them. So, I just think now is not the Page 40 FC -24 December 4, 2017 time. I'd be willing to reconsider it after April. I'd even be willing to reconsider it over next several weeks if someone can convince me otherwise. But for now, I've just got to say I'm going to be voting against it. Thank you. CHR. DAVID: Thank you, Mr. Chung. Mr. Kucharski, you want to care to respond. No? Okay. MR. KUCHARSKI: The contract that we have, yeah, it's a very tough contract. It was negotiated initially when Waste Management was the sole operator, and then we went in with the Kono decision and we took over operations. Some of our negotiating skills might not have been the best. But there's nothing we can do about what was negotiated, we can only look forward. There is no termination for convenience in that contract, so that's not even worth—even desired. It would not be an option. The only thing we have in the contract is a requirement to negotiate in good faith. So, it's going to be interesting discussions as we go forward. I don't know what they're going to be, but there's going to be some tough negotiations I expect. But thank you for comments. I fully understand the position. CHR. DAVID: Thank you, Mr. Kucharski. Ms. O'Hara. MS. O'HARA: Thank you, Chair. And this is more in response to Mr. Chung's comments. I know it's difficult to do a rate increase on solid waste, but we have been operating in a deficit for as long as I've been involved in this subject, which is a good 20 years. The tip fee increases that were instigated that culminated in the 2007, $85 per ton, I was in Solid Waste when that was happening. Those fees at that point were $40 a ton, and they hadn't been raised in well over a decade. And here we are again, a decade later, not having accounted for all the increases in expenditures. We have a two percent CPI (Consumer Price Index) in our contract with Waste Management. Whether we like it or not, that's the way it reads. I believe that was a 20 -year contract. We had a renegotiating at one point. I can't remember when. MR. KUCHARSKI: The contract does not end. MS. O'HARA: The contract never ends. It's a non -ending contract. So we renegotiate, what every 10 years is or something? Do you know, Greg? MR. GOODALL There was a 15 -year point that things were supposed to be brought by mutual agreement. There were a few things that came out of that, but not—so what the director is referencing, for 2018, again as part of that—within the contract, there is basically timelines for bringing these things forward. It doesn't say it has to, it says these are time points at which you can. Page 41 FC -24 December 4, 2017 MS. O'HARA: Right. MR. GOODALL So our goal is to the financial aspects are one thing. There's a lot of other contract issues that we're also hoping to bring up. The financial aspect is one, obviously pretty major in terms of how much the County pays for this contract. But it's also the contract, overall, that we believe needs to be redone. So we're trying to utilize this point -in -time as that vehicle to achieve that. MS. O'HARA: Okay, understood. It isn't just Waste Management that has the two percent CPI. You have that in other contracts. With your waste dollar for recyclables and MR. GOODALL Just to interject on that. Two percent has been more or less like an average. It's based on the Consumer Price Index, which fluctuates based on what the conditions are. MS. O'HARA: Right. MR. GOODALL So one year it might be two percent, one year it might be three or, you know, much less than that. So again, we go based on what the specific index is for Honolulu. MS. O'HARA: Thank you. And the point being that we haven't kept you guys at a flat budget, we have kept you at a deficit budget each year because we haven't been keeping up with these costs increases. So this is the reason that I would support it, regardless of what gets negotiated in April. We are paying way too much out of our General Fund to support Solid Waste, and the whole goal is for them to be more dependent on the Solid Waste Fund than on the General Fund, because that's making it more difficult to expend money on other very needy projects throughout the County. So, that's why I would support this now. Whatever possible gains that we could make in that negotiation in April, there is more than enough projects in Solid Waste for that money to go towards, to help reduce over time not only diversion from landfill but also to reduce our operating costs in the future. So that's why I'm seeing this as an infusion that is necessary at this point and time, given we haven't raised fees in over ten years. Thank you. CHR. DAVID: Thank you, Ms. O'Hara. Ms. Eoff. MS. EOFF: Thank you. Yeah, I agree with what Ms. O'Hara has just stated. I want to support this increase for those reasons. However, I feel, as Mr. Chung said too, that it's hard to, at this point in time, be raising fees anywhere. But it's so unfortunate we waited 10 years. I think we're having to catch-up with a big step right now, which is always harsh. So, I'm hoping that it doesn't hurt our constituents too much. I mean, I don't know. It's going to be spread the haulers are going to adjust for it by charging their customers, so I don't know how much Page 42 FC -24 December 4, 2017 that means per month for people who have their waste picked up. Do you have any idea? MR. KUCHARSKI: Well, the fee increase amounts to about 27 percent increase. For those that have small residential pick-ups, the residential credit increases by that amount as well. It depends on whether you're a big hauler or small hauler, but the fees will increase about 27 percent. I get my waste picked up and I pay $80 or $90 a month, and from PFI Rubbish Service, so I can expect that will go to $10l or $102. It's a lot of money, if that's what you do. But I think when you take a look at free disposal, if you go to go to a transfer station, for those people that couldn't afford that rate increase, they'd probably already take their material to a transfer station. MS. EOFF: And they won't see any MR. KUCHARSKI: At the transfer station, we're not increasing from zero to anything but zero. MS. EOFF: Right, that's still free. MR. KUCHARSKI: Yeah. MS. EOFF: So we're looking at people who pay—(inaudible). MR. GOODALL But just take into consideration, the director pointed out, that the residential credit increases along with this rate increase. The majority of the small collectors that are taking advantage of the residential credit, typically by the time there's an adjustment made for the residential credit, are not paying a tipping fee to the County. So by the time we take into consideration their residential credit, the tonnage that they brought inessentially, they have enough customers this is the majority, I can't speak for all, but when we look at this, typically most of small haulers don't end up paying a tipping fee to the County because of that adjustment with the residential credit. The folks that put their rubbish on the street corner and have somebody come pick it up, they may see a small increase due to whatever operational cost their hauler has, but it wouldn't necessarily be because of the County's increase. Because the residential credit would increase along with this, they would get more money for that as it goes up. So, it's not a desperate impact to those folks. MS. EOFF: So that would be the kind of thing that would be very useful to explain and share that with the haulers who—like the gentleman this morning, so that they really understand what kind of costs they're going to have to pass on or not. That would be great information. Page 43 FC -24 December 4, 2017 MR. GOODALL I believe that they have an awareness because they filed these residential credits with the County, I mean, they're required to file these regularly in order to get that credit from the County. So they're required to provide the County with their number of customers, et cetera. Because it's residential only, it's not commercial. MS. EOFF: Right, I understand. MR. GOODALL So they're aware of what they're submitting, I guess, to the County to request that residential credit. The only thing this would really impact, and I think Director Kucharski brought this up, is the folks that are specifically commercial. Because there is no mechanism for them to have any—and then it just goes purely along the cost of doing business. It's increases that you see for anything; whether it's the cost for electricity, any type of utility cost increase. So that's what we're looking to try and adjust for, is the increase, you know, over the past decade of no cost adjustment. MS. EOFF: Right. Well, thank you very much. CHR. DAVID: Thank you, Ms. Eof£ Mr. Chung. MR. CHUNG: Thank you. Bill or Greg, maybe if you could explain this group of statements on page five. I know, Bill, you started by saying the residents are getting a good deal over here. This part, that says "County carries 100% of collection, transportation, and disposal costs for transfer station waste; In FY 2017, transfer station waste deposited amounted to 82,0128 tons; this residential tonnage represents 42% of all solid waste disposed of in our landfills." Explain that a little bit for me. MR. KUCHARSKI: In our transfer stations, we accept people coming in and taking any of their trash or recyclables. The recyclables are our separate contract. When we take that waste, we take that to either—currently either to Hilo or to Pu`uanahulu. When we weigh that material, again that's about 82,000 tons out of approximately 200,000 tons that we have a year. So 42 percent of the waste does not come from a commercial hauler, it comes from a County hauler. You just take a look at the tip fees, but that comes to a good chunk of money. But the operation of our transfer stations, the transportation from our transfer stations to the landfill, those costs are all 100 percent County cost. They're not anywhere but coming out of the General Fund. Or if we take the materials from our tip fees, we still don't exceed the costs of our operations. MR. CHUNG: So it's this 42 percent of all solid waste, the payment of those operational costs is paid for solely by the County or is it partially by the tipping fees? MR. KUCHARSKI: The money all goes into the same pot. Page 44 FC -24 December 4, 2017 MR. CHUNG: Same pot, right? MR. KUCHARSKI: I can't say where it comes from. MR. CHUNG: Right. MR. KUCHARSKI: Currently, we get $9 million on the tip fees after the residential, and we have a $29 million budget. MR. CHUNG: Yeah, okay. And that's what I thought it meant. Again, therein lies the kind of unfairness of this whole program too. I mean, I go to the transfer stations a lot, right? But the guys who are paying the tipping fees are basically paying for me and others who go to transfer stations. Now when you're talking about 42 percent of the Solid Waste stream, that's a big chunk. So this whole system is kind of stacked against the commercial people. But, that's not really the reason why I'm voting against this thing. I'm not going to change my mind right, if I do at all. But in addressing what Ms. O'Hara said, yeah, it's been a long time since we increased this. I'm not afraid to vote in favor of tax increase. I've done it for Harry way back when, when I was here. I did it again this year, real property taxes. I voted for the fuel—and I could easily do it for this one. In fact, I just came out in an article saying how I'm in favor of the GET (General Excise Tax), right? Increasing taxes, if necessary, doesn't phase me. I'll do it, if it's in the public's best interest. Look, I pointed out—and actually it was less than $7 million, not more than $7 million, that's being subsidized to the Mass Transit. If we go with a GET increase, we could use that $7 million and put it over here, right? And yet, Mayor Kim, early on his administration he was talking about reducing those Mass Transit fees back to zero. So, I cannot understand the fiscal policy that's going on. I'm getting an angst and I'm getting short-circuited, and it's very difficult for me. If I could see everything in a really good, clear picture, then yes, I can understand all of this; then yes, I can vote for it, I can vote for it, I can vote it. I'm just saying I'm doing this as symbolic gesture. No, I cannot do it because there's a bigger picture involved in all of this. Okay, it's not just a matter of, well we haven't raised it for awhile. Look at the pay raise. No offense to anybody who's being affected to that; but only because we didn't raise it for a long time, we've got to increase it, you know, a huge amount? That's ridiculous. That's poor thinking. You know why, because the public gets a bad impression of us. So just think about those things, okay? I'm not urging anyone to vote against it. I'm just explaining why I'm voting against it. Thank you. Page 45 FC -24 December 4, 2017 CHR. DAVID: Thank you, Mr. Chung. Ms. O'Hara. MS. O'HARA: Okay, I'm still not entirely clear, Mr. Chung, but that's okay. You brought up a point that I've been hammering on for ages. And we have a system here for funding Solid Waste, that is, geez, forgive me if I get beeped but "ass backwards." I have never anywhere I've lived seen residential rubbish hauled away for free or taken to transfer stations for free. I've been dealing withI was a landscaper 40 years ago on the mainland. I had my own landscaping company. I would put all the greenwaste in my trucks at the end of the day, and we would haul it to the landfill where they took greenwaste separately, and you paid at that point to dump your rubbish. We have a really poor system. We don't monitor the difference between residential and commercial using our transfer stations. I did a study when I was at Solid Waste in 2006, I believe it was, that demonstrated that 30 percent of the users of our transfer stations are actually commercial, and yet they're getting that service for free. So our system is not real functional in terms of how we're collecting the money and how it should be. That's why it's so difficult for us to compare it to other jurisdictions. I don't think anybody in the US (United States) is doing it quite the way we do it. It doesn't make that much sense to me either. So I'm just trying to make sense out of the system that we currently have. I would like to see some major changes to it in the next 10 years. But we're always doing this crisis management of our budgets. That's what it's constantly facing the County of Hawaii in the 20 years I've been involved. You've been a legislator for a lot longer than I; I'm only here one year. I just don't see some of these long-term problems really being addressed. When we talk about fairness or unfairness of different taxes and different user fees, we need to really step back and look at what we're doing, relative to best practices out there in the world today, and make some major changes to how we are fiscally managing the County of Hawaii. That's my feeling about it. And this is just a small piece of it. We're just juggling right now. We have a contract. As they've pointed out, that's never made a whole lot of sense. So, this is what we're stuck with and these are the confines. We have to deal with our garbage every day. At the end of the day, it has to be up on that hill out there and buried. That much we know. But other than that, it's really difficult with the mechanisms that we've put in place that are carryover from 30, 40 years ago, and we're still trying to adjust them. They don't service well in today's world. So it's really a matter of taking a much broader and bigger look at how we fiscally manage things like essential services like solid waste. So, I just wanted to say that. It's not that I'm in disagreement with you or trying to convince you to vote yes or no, it's just I agree with many of the points that you just made. Thank you. CHR. DAVID: Thank you, Ms. O'Hara. Ms. Lee Loy. Page 46 FC -24 December 4, 2017 MS. LEE LOY: Thank you, Chair. Mr. Chung nailed it on the head. It's challenging for us to raise taxes in these tiny little silos; with Real Property Tax, with the Highway Fuel Tax, and now this one, when we're not really getting a clear fiscal picture from the Mayor. Because if we raise fuel tax, we're going to offset the Mass Transit and busses, but that doesn't mean he's not going to mean he's not going to make the administrative decision to take it back down to zero. Mr. Chung also mentioned in another discussion, you know, we're having a challenging relationship with the Mayor. Having conversations, about how we move this County forward. I hope that can improve. Having said that, I am going to be supporting the bill right now. But I mentioned opportunities that we have with this bill right; that we can fold in, look around the corner so we're not constantly raising taxes in our tiny, little silos. But also more importantly, that there's an expectation to the community about the costs associated with everything that goes on here in Hawaii County and what we are mandated to take care of in the Charter. I say this all the time, that we're supposed to be taking care of rubbish, we're supposed to be taking care of sewers, we're supposed to be thinking of public safety, Police and Fire, and our parks. This is what we're supposed to be doing. But if there's other areas that are fluctuating at the whim of an administerial decision, I think that's completely unfair. So, I'm going to support it at this time. I'm hoping to see a Draft 2 come forward from the administration, from the department, that folds in some of the stop -gap measures that we talked about. Maybe we can get a piece of legislation that will set a corner -stone for truly taking pressure off of the General Fund, while not being adjusted at the whim of the administration. So, thank you. I yield at this time. CHR. DAVID: Thank you, Ms. Lee Loy. I believeoh, I spoke too soon. Mr. Richards, go ahead. MR. RICHARDS: I think I'm taking Councilman Chung's position. Initially, I wasn't going to say something, but now after listening to conversation, I've got to say something. I fully hear what the director's saying, concerning the budgetary constraints in our Solid Waste Management issues, got it. But the whole concern for fiscal management of the County as a whole, we went through the Real Property then we went through the fuel tax, and I voted against the Fuel Tax because we didn't do a good enough job on the Real Property side. I'm really tangled in this because our constituency has, at least my constituency, very concerned about raising taxes. In this timeline, we saw our budget goes from $471 to $494 million and we approved the Fuel Tax and added an extra $5 million income, and we're going to spend it. Page 47 FC -24 December 4, 2017 I agree with Council Woman Lee Loy's statement about the silos. I don't disagree that we need to fund here. But I'm also concerned about the bigger picture, not just looking isolated, by isolated, by isolated, because we did that last year and I don't want to do that anymore. I am on the fence on this one. Now, though I fully support and understand what the director is saying, I hope the director understands what I'm hearing. So, I'll put that—I'll yield at this point. CHR. DAVID: Thank you. I don't believe Mr. Chung has anything to say, but we'll wait for him to come back. In the meantime, I have a question for you. Given the conversation that we've been having on this Council, about whether we should or should not, or support or not support an increase on the tipping fees, what would be the impact if we stayed status quo, without any increase, on your department and on our communities, basically? MR. KUCHARSKI: Pretty much the status quo, is that we would—we used to have a stand-alone budget with current income. We would probably be reducing or removing essentially our entire Recycle program. Those funds, I think, there's a total of $7 million or so that goes into the Recycle program. Recycling is not a health and safety issue. So if we had to prioritize, that's where we would go. CHR. DAVID: I see, okay. I believe we're all ready to move forward. So, I'm going to speak last. I think what I'm hearing from Council Members, and I think everybody has experienced this in this Council term, that we have been the recipients of having to do things that should have been 10, 15 years ago; and why they weren't done at an appropriate incremental stage, which would have been less of an impact on our people, we have no explanation for that. But that is one of the biggest things I think this Council is having to deal with, and herein lies another situation such as that. I understand what we need to do, and I understand that this is something that has to be done. In the long term, that will benefit this County. But, Council Members, our code requires that we prior to taking Council action, that this bill be reviewed by the commission, and recommendations by the commission and also the Director. I don't believe we have anyI know Mr. Olson testified that at a commission meeting, it was unanimously supported. So, Council Members, we can MS. EOFF: Ms. David? CHR. DAVID: Yes? MS. EOFF: We did get a communication from the Vice Chair of the commission, stating that they reviewed it at their last meeting (see Comm. 606.4). Is that enough? Page 48 FC -24 December 4, 2017 CHR. DAVID: Is that enough or do we need the minutes also? Okay, I'm not going to—go ahead, you can comment. MR. KUCHARSKI: The only issue that we have is the scheduling of meetings. There is no December meeting for the commission. And we have a 45 -day, if you don't respond, it's a "no recommendation." Trying to get another commission meeting within that 45 days may be an issue, which is why we gave them a copy of this submitted bill. They reviewed that and gave support for that bill. I don't know if that meets the absolute letter of the law of the requirements, but that's why it was reviewed then. CHR. DAVID: I see. Okay, and your testimony obviously is pretty much a recommendation on your support for this too. MR. KUCHARSKI: And I did send in a communication this morning with a written support of that (see Comm. 606.3). CHR. DAVID: Okay, great. Thank you very much. So in that case, Council Membersoh, Ms. Eoff, did you want to comment before we take the vote? MS. EOFF: Does that mean that eventually we would see minutes? MR. KUCHARSKI: We can provide that portion of that. We don't take verbatim minutes, but we can have that and I can provide that portion of the meeting, in which that was discussed, reviewed, and approved. MS. EOFF: Alright, by our next meeting? CHR. DAVID: Would you be able to do that? MR. KUCHARSKI: Yes. CHR. DAVID: Okay, by the December 20'h meeting. MS. EOFF: Thank you. CHR. DAVID: I think we're ready to thank you, Ms. Eof£ I guess we're ready to proceed on the vote. Council Members, on Bill 82, as amended with Communication 606. 1, all those in favor say "aye." Page 49 FC -24 December 4, 2017 Vote on Bill 82: The motion to recommend passage of Bill 82, as amended Draft 2 to Draft 2, on first reading was carried by the following (Approved) voice vote: Ayes: Committee Members Eoff, Kanuha, Lee Loy, O'Hara, Poindexter, and Chair David - 6. Noes: Committee Members Chung and Richards - 2. Absent: Committee Member Ruggles - 1. Excused: None. CHR. DAVID: Alright, so Bill 82, as amended, moves forward to Council with a positive recommendation. Motion to adjourn, please, someone? ADJOURN- There being no further business, at 12:59 p.m., Ms. Poindexter moved to adjourn MENT: the meeting. Seconded by Ms. O'Hara and carried by the following voice vote: Ayes: Committee Members Chung, Eoff, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, and Chair David — 8. Noes: None. Absent: Committee Member Ruggles - 1. Excused: None. CHR. DAVID: Alright, we are adjourned. Thank you very much, Council Members. Approved: Ms. Maile ede , Chair Finance Committee MD/na /- .2,D Id (Date) Page 50