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HomeMy WebLinkAboutREP FC 040 2019/06/03 2018-2020 REPORT OF THE COMMITTEE ON FINANCE DATE: June 3, 2019 Re: Comm. No. 302/Bill No. 75 PLACE: Council Chambers Hilo, Hawaii TIME: 2:20 p.m. Council Chair and Members Hawaii County Council Hilo, Hawaii 96720 Your Committee on Finance, to which was referred Bill No. 75, reports as follows: Bill No. 75, transmitted by Finance Director Deanna Sako, via Communication No. 302 dated May 15, 2019, amends Chapter 2, Article 25, Section 2-139 of the Hawaii County Code 1983 (2016 Edition, as amended), authorizes the Mayor of the County of Hawaii to enter into an intergovernmental agreement for a State Water Pollution Control Revolving Fund loan for wastewater public improvement projects; and authorizes the issuance $10,000,000 of General Obligation Bonds of the County of Hawaii for the purpose of financing qualified wastewater public improvements of the County of Hawaii. The funds will be used for the following projects: Na`alehu Wastewater Treatment and Disposal System and Drainage Modifications ($7 million), Na`alehu Wastewater Collection System ($2 Million), and Nd'alehu Sewage Pump Station and Force Main($1 million). Council Member Karen Eoff asked for clarification, and Committee Chair Maile David confirmed that this bill is not about location but whether or not to support the issuance of the obligation bonds. Council Member Herbert "Tim" Richards, 111, questioned what the annual liability would be on the $10 million bond. Ms. Sako responded the interest rate would remain low at around half percent for the full 20 years. The County would start paying back on each draw and payment would be based on each draw down. Ms. Sako noted the County starts paying on the$10 million at such time it is drawn. Council Member Matt Kaneali`i-Kleinfelder asked why the system is being replaced. Ms. Sako responded that ten years ago the town was hit with the Environmental Protection Agency (EPA) ruling that Na`alehu had to get off the gang cesspool, at which time the County agreed to take care of it. Dora Beck,Wastewater Division Chief, explained this issue goes back to the early 2000's. She explained that the previous owners, C. Brewer, anticipated going through dissolution and asked if the County would help them by taking over the cesspool as well as closure of the system. At that time, consultants were hired to look at options, such as installation of septic tanks or a county-owned and maintained sewer system. A vote was taken amongst the community members to put in a county-owned sewer system. Ms. Beck explained that in 2010 the County became owners of the Large Capacity Cesspool (LCC), and since then had been trying to move the LCC closures along, which she stated is the main driver. C. Brewer's system needed to be replaced with a system acceptable to the Department of Health (DOH) and the EPA, so field tests were performed at the same time. Ms. Beck stated that disposal of effluent was also an issue, and said the grounds receiving the effluent did not have the acceptable percolation rate. Council Member Ashley Kierkiewicz questioned why it has taken more than a decade to address FC Report No. 40 FC-40 Page 2 June 3,2019 this issue since the decision was made in early 2000, to which Ms. Beck answered, part of the reason was the site location, both from a technical standpoint and also from a public standpoint. Ms. Kierkiewicz asked if there were any federal monies coming in for the project, and Ms. Beck responded that there is about $1.8 million in federal grants in an account directed to the Pdhala project. Ms. Beck also stated that the EPA has granted extensions, and her contact with the EPA has been through the justification for extension requests, which were granted by the EPA. She pointed out that the EPA has been kept apprised and understands the problem the County has been having with the siting issues. Council Member Susan Lee Loy asked Ms. Beck if she knew the who the property owners are adjacent to the proposed wastewater treatment plant. Ms. Beck responded Na`alehu Hongwanji is one of the owners but could not recall the names of the other property owners. Ms. Beck also indicated that the site itself is part of the 2,000-acre Kahu-Mahi site. Ms. Lee Loy commented that the issue before Your Committee is a request to float the bond, go through the design, disposal system, which would trigger the Environmental Impact Statement and a notice to property owners. Ms. Sako stated the measure will allow the County to enter into an agreement with the State to pass down the funding, allowing the County to begin the process. She noted the County will not start paying back until the funds are drawn down. Ms. Beck stated that the draft Environmental Assessment (EA) is expected to be completed by October of this year and that these funds will also cover preparation of the draft EA and possible notice for an EIS. Council Chair Aaron Chung asked if the process requires tapping into the State Revolving Fund in order to move forward. Ms. Sako confirmed that the money is needed to allow them to move forward with the process. Mr. Chung asked whether this will then come back to the Council by way of a resolution or an appropriation or if it will all be done administratively. Ms. Sako replied that there are some appropriations that will be done administratively since this project has already been through the system, and further stated that it will probably come back to Council to amend appropriations. She also stated the EA would have public notice and input as well, and that this authorization is not site specific. Your Committee on Finance is in accord with the purpose and intent of Bill No. 75, and recommends its passage on first reading. dmm AYES NOES ABS EX Respectfully submitted, CHUNG X DAVID X COMMITTEE ON FINANCE EOFF X KANEALI`I-KLEINFELDER X KIERKIEWICZ X LEE LOY X POINDEXTER X MAILE MEDEIROS DAVID, CHAIR RICHARDS X FC REPORT NO.: 40 VILLEGAS X ADOPTED: JUN 1 9 2019