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REPORT OF THE <br /> COMMITTEE ON FINANCE <br /> DATE: June 3, 2019 Re: Comm. No. 302/Bill No. 75 <br /> PLACE: Council Chambers <br /> Hilo, Hawaii <br /> TIME: 2:20 p.m. <br /> Council Chair and Members <br /> Hawaii County Council <br /> Hilo, Hawaii 96720 <br /> Your Committee on Finance, to which was referred Bill No. 75, reports as follows: <br /> Bill No. 75, transmitted by Finance Director Deanna Sako, via Communication No. 302 dated <br /> May 15, 2019, amends Chapter 2, Article 25, Section 2-139 of the Hawaii County Code 1983 <br /> (2016 Edition, as amended), authorizes the Mayor of the County of Hawaii to enter into an <br /> intergovernmental agreement for a State Water Pollution Control Revolving Fund loan for wastewater <br /> public improvement projects; and authorizes the issuance $10,000,000 of General Obligation Bonds of <br /> the County of Hawaii for the purpose of financing qualified wastewater public improvements of the <br /> County of Hawaii. <br /> The funds will be used for the following projects: Na`alehu Wastewater Treatment and Disposal System <br /> and Drainage Modifications ($7 million), Na`alehu Wastewater Collection System ($2 Million), and <br /> Nd'alehu Sewage Pump Station and Force Main($1 million). <br /> Council Member Karen Eoff asked for clarification, and Committee Chair Maile David confirmed that <br /> this bill is not about location but whether or not to support the issuance of the obligation bonds. <br /> Council Member Herbert "Tim" Richards, 111, questioned what the annual liability would be on the <br /> $10 million bond. Ms. Sako responded the interest rate would remain low at around half percent for the <br /> full 20 years. The County would start paying back on each draw and payment would be based on each <br /> draw down. Ms. Sako noted the County starts paying on the$10 million at such time it is drawn. <br /> Council Member Matt Kaneali`i-Kleinfelder asked why the system is being replaced. Ms. Sako <br /> responded that ten years ago the town was hit with the Environmental Protection Agency (EPA) ruling <br /> that Na`alehu had to get off the gang cesspool, at which time the County agreed to take care of it. <br /> Dora Beck,Wastewater Division Chief, explained this issue goes back to the early 2000's. She <br /> explained that the previous owners, C. Brewer, anticipated going through dissolution and asked if the <br /> County would help them by taking over the cesspool as well as closure of the system. At that time, <br /> consultants were hired to look at options, such as installation of septic tanks or a county-owned and <br /> maintained sewer system. A vote was taken amongst the community members to put in a county-owned <br /> sewer system. <br /> Ms. Beck explained that in 2010 the County became owners of the Large Capacity Cesspool (LCC), <br /> and since then had been trying to move the LCC closures along, which she stated is the main driver. <br /> C. Brewer's system needed to be replaced with a system acceptable to the Department of Health (DOH) <br /> and the EPA, so field tests were performed at the same time. Ms. Beck stated that disposal of effluent <br /> was also an issue, and said the grounds receiving the effluent did not have the acceptable percolation <br /> rate. Council Member Ashley Kierkiewicz questioned why it has taken more than a decade to address <br /> FC Report No. 40 <br />