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HomeMy WebLinkAboutMIN FC 2019/06/03 2018-2020CALL TO ORDER: ROLL CALL: Present: STATEMENTS FRC)N4 TNF PUBLIC ON AGENDA ITEMS: CC)N4N4T TNT - CATIONS Committee on Finance 12th Session Hawaii County Building 25 Aupuni Street Hilo, Hawaii June 3, 2019 The regular meeting of the Committee on Finance was called to order at 2:20 p.m., in the Council Chambers, Hilo, by Ms. Maile Medeiros David, Chair. Ms. Maile Medeiros David, Chair Mr. Herbert M. "Tim" Richards, III, Vice Chair Mr. Aaron S. Y. Chung, Member Ms. Karen Eoff, Member Mr. Matt Kaneali`i-Kleinfelder, Member Ms. Ashley L. Kierkiewicz, Member Ms. Susan L. K. Lee Loy, Member Ms. Valerie T. Poindexter, Member (came in later) Ms. Rebecca Villegas, Member The Chair directed the Committee to proceed to the next order of business, Statements from the Public on Agenda Items. The following individuals registered to speak and came forward when called by the Chair: Jon Olson: Jerome Warren: Shelley S. Mahi-hanai Sandra Demoruelle: Bill 75 (Comm. 302), comment. Bill 75 (Comm. 302); and Bill 76 (Comm. 303); in opposition. Bill 75 (Comm. 302); and Bill 76 (Comm. 303); comment. Bill 75 (Comm. 302); and Bill 76 (Comm. 303); in opposition. CHR. DAVID: I'm closing public testimony, and we shall move on to Communications. Mr. Clerk, please, Communication 10.12. The Chair directed the Committee to proceed to the next order of business, Communications. FC -12 June 3, 2019 Comm. 10.12: REPORT OF CHANGE ORDERS AUTHORIZED: APRIL 1 — 15, 2019 From Finance Director Deanna Sako, dated May 3, 2019, transmitting the above report pursuant to Hawaii County Code Section 2-12.3. Vote on Comm. 10:12: Ms. Lee Loy moved to close file on Comm. 10.12. Filed Seconded by Ms. Poindexter and carried by the following voice vote: Comm. 11.10 Vote on Comm. 11.10 Filed Ayes: Committee Members Chung, Eoff, Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy, Poindexter, Richards, Villegas, and Chair David — 9. Noes: None. Absent: None. Excused: None. REPORT OF FUND TRANSFERS AUTHORIZED: APRIL 16 — 30, 2019 From Controller Kay Oshiro, dated May 7, 2019. Mr. Kaneali`i-Kleinfelder moved to close file on Comm. 11.10. Seconded by Ms. Eoff and carried by the following voice vote: Ayes: Committee Members Chung, Eoff, Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy, Poindexter, Richards, Villegas, and Chair David — 9. Noes: None. Absent: None. Excused: None. Comm. 119.1: THIRD QUARTER REALLOCATION REPORT: JANUARY — MARCH 2019 From Human Resources Director William V. Brilhante, Jr., dated May 13, 2019. Vote on Comm. 119.1: Ms. Villegas moved to close file on Comm. 119.1. Filed Seconded by Ms. Poindexter and carried by the following voice vote: Ayes: Committee Members Chung, Eoff, Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy, Poindexter, Richards, Villegas, and Chair David — 9. Noes: None. Absent: None. Excused: None. Page 2 FC -12 June 3, 2019 ORDER OF The Chair directed the Committee to proceed to the next order of business, RESOLUTIONS: Order of Resolutions. (There were none.) BILLS FOR The Chair directed the Committee to proceed to the next order of business, ORDINANCES: Bills for Ordinances. Bill 75: 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 OF $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 Funds would 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 Na`alehu Sewage Pump Station and Force Main ($1 million). Reference: Comm. 302 Intr. by: Ms. David (B/R) Motion to Approve: Mr. Kaneali`i-Kleinfelder moved to recommend passage of Bill 75 on first reading. Seconded by Ms. Villegas. CHR. DAVID: Council Members, discussion? I believe we have Ms. Sako here; and I believe Dora Beck is here if we have questions, Council Members. MR. RICHARDS: Chair, not first reading, coming out of Committee. CHR. DAVID: Oh, I'm sorry. Thank you. So anyone has questions on this one? Ms. Eoff, go ahead. MS. EOFF: Thank you. Well, it's my understanding that we are mandated to get off of the cesspool situation, and this State Revolving Loan Fund is a very low interest rate for us. I know there's been some concerns about the location, but this really—the location is not really what we're discussing here now. It's whether to support and approve the issuance of the obligation bonds, correct? CHR. DAVID: I believe that's correct, yes. Would you like Ms. Sako to come up? MS. EOFF: No, I kind of just wanted to clarify that. Page 31 FC -12 June 3, 2019 CHR. DAVID: Alright. Are you done, Ms. Eoff? MS. EOFF: Unless if they have something that they wanted to add, I'm good. CHR. DAVID: Okay. Mr. Richards, go ahead. MR. RICHARDS: Thank you, Chair. Deanna? (Note: At this time, Finance Director Deanna Sako came forward to address the members of the Committee. MS. SAKO: Good afternoon. Deanna Sako, Director of Finance. MR. RICHARDS: Thanks, Deanna, for being here. This is for a $10 million bond, and it says up to 20 years. What's your expectation as far as the bonding? know we have the low interest rates. What's our monthly liability on this, excuse me, annual liability going to be on this? MS. SAKO: I didn't calculate it, specifically. But the interest is still maintaining at that really low percent, half -percent or so, and then we do usually take the full 20 years. We start paying back when we draw, and then it's based on each drawdown. So if the project takes five years for us to spend and we draw it down over a five-year period, we kind of have those staggered payments. So we don't start paying back on the whole $10 million, until such time as we've drawn it. MR. RICHARDS: Okay, thanks. I yield. CHR. DAVID: Thank you, Mr. Richards. Anyone else? Mr. Kaneali`i-Kleinfelder, go ahead. MR. KANEALI`I KLEINFELDER: Deanna, what's the background? I know Bill (Kucharski) is not here. Maybe Dora. I'm new, so I'm just kind of wondering what the background of this and why we're replacing. Sounds like there's a lot of questioning in the community about what's going on. So, quickly. MS. SAKO: Dora can probably explain it better. But several years ago, probably 10 or so, we did—the town got hit with the EPA (Environmental Protection Agency) ruling that everybody else did, that they had to get off the gang cesspools, and at that time I believe the County agreed to take care of it. (Note: At this time, Environmental Management Wastewater Division Chief Dora Beck came forward to address the members of the Committee.) MS. BECK: Good afternoon. Page 4 FC -12 June 3, 2019 CHR. DAVID: Good afternoon. MS. BECK: Dora Beck, Wastewater Division Chief The background—boy, this goes back way, way far, to early 2000. The system was owned by C. Brewer. As I recall, they had asked the Mayor at that time, C. Brewer did, because they were anticipating that they were going to be going through dissolution and asked if the County would help them out with taking over the cesspool, including the closure of it. Again, that was some time in early 2000. I believe the administration at that time had hired a consultant to look into options for them, including I believe, putting in sceptic tanks; or the other option was also to put in a county -owned, and maintained sewer system. As I recall, a vote had taken place amongst the community members, and the vote was to put in a county -owned sewer system and treatment and disposal system. I'm probably skipping some details. So the County agreed to an MOU (Memorandum of Understanding) to take over the system byI believe it was 2010, because that was the date of when they would be dissolved, C. Brewer. So that date came around and the County became the owners of the LCCs (Large Capacity Cesspool) at that time. So since then, we've been making efforts to try and move the LCC closures along. That's really the main driver to this, is to close those LCCs, but at the same time we need to replace the C. Brewer system with the system that is acceptable to DOH (Department of Health) and EPA (Environmental Protection Agency), as well. MR. KANEALI`I KLEINFELDER: So it's a Federal mandate we're following to replace the LCCs with. I guess it was our choice to replace with a large system. MS. BECK: Yes, it was a system that would be serving the entire community. MR. KANEALI`I KLEINFELDER: Okay. Why was that decision made? MS. BECK: Well, it's a mandate. MR. KANEALI`I KLEINFELDER: No, I mean, on the County, if you have to MS. BECK: Oh, the agreement was to replace it in 2010. Oh, I'm sorry, they would take over the system in 2010 and then work towards replacing the system, the existing system, and close the cesspool. MR. KANEALI`I KLEINFELDER: And why not just a large sceptic tank? Is that out of the question? MS. BECK: We looked into that. Fuel tests were performed, and it turned out that the disposal, the effluent, was the issue. The grounds that would be receiving the effluent didn't have the acceptable percolation rate. MR. KANEALI`I KLEINFELDER: Okay. Study was done by? Page 5 FC -12 June 3, 2019 MS. BECK: I don't recall the name of the consultant. I want to say Fujioka. Masa Fujioka or something like that. But there is a document that explains this. MR. KANEALI`I KLEINFELDER: And then if the—sorry—the percolation factors, if what you're saying is right, then what would happen? What is the percolation? What is that? MS. BECK: Percolation means the rate at which the effluent seeps into the ground. MR. KANEALI`I KLEINFELDER: Okay. MS. BECK: Because it's not just treatment. It's also—then the treated water needs to be disposed of. MR. KANEALI`I KLEINFELDER: And where would that end up if itsorry, wouldn't go into the ground, or it would go into the ground and diffuse (inaudible). MS. BECK: Well, what you would do, you would convert—you would probably create injection wells, and that's where your effluent would be deposited into. MR. KANEALI`I KLEINFELDER: And what was the problem? MS. BECK: It wouldn't infiltrate or move through the ground fast enough. MR. KANEALI`I KLEINFELDER: So it would build up and overflow? MS. BECK: Yeah. Correct. MR. KANEALI`I KLEINFELDER: Yeah. Yeah, I yield. I yield. CHR. DAVID: Thank you, Mr. Kaneali`i-Kleinfelder. Ms. Kierkiewicz, go ahead. MS. KIERKIEWICZ: Thank you, Chair. Hi, Dora, thanks for being here. I just have two questions for you. How come it took more than a decade for us to finally address this? You're saying that decision was made in the early 2000s. That was, I think, Mr. Kim's first go -around as Mayor. Nothing happened in the following administration, and now we're finally addressing it. Is the site the issue? MS. BECK: The site was primarily the issue; trying to find a site that was suitable, from a technical standpoint and also from a public standpoint. Page 6 FC -12 June 3, 2019 MS. KIERKIEWICZ: Ten years to decide on the site that is being proposed now. MS. BECK: That took the bulls of the time, yes. MS. KIERKIEWICZ: Any Federal monies coming in to help us pay for this project? MS. BECK: There's about a $1.8 million Federal grant, and that is directed at the Pahala project. MS. KIERKIEWICZ: And that came in the early 2000s and it's just been sitting in an account? MS. BECK: That's correct. The EPA has then MS. KIERKIEWICZ: Cracking the whip? MS. BECK: No, they've been extending it. I've been keeping in contact with them and letting them know what's been going on. So we would send in our justification for extension, and it was accepted each time. I believe there were probably, I thinkI want to say seven extensions. So EPA has been apprised of what's been going on. They understand the problems that we've been having; why the delays. They know we've been having a hard time with trying to move this project forward because of the siting issues. MS. KIERKIEWICZ: Okay, thank you. I yield. CHR. DAVID: Thank you, Ms. Kierkiewicz. Anyone else? Ms. Lee Loy, go ahead. MS. LEE LOY: Thank you, Chair. Thank you, Ms. Beck. Attached to this bill is an exhibit, where you showed a proposed wastewater treatment plant site. Who are the adjacent property owners to this proposed site? MS. BECK: You're looking at the Na`alehu? MS. LEE LOY: Yes. MS. BECK: Yeah, I guess it is Na`alehu? We're still talking about Bill 75. Adjacent—well, we've got Na`alehu Hongwanji. The site itself is part of the 2,000 -acre Ka`u Mahi site. I can't remember what this other property, just up to northwest is. I forget the owner of that property. Yeah, I'm sorry. I don't remember the name of that adjacent site, the property owner. Page 7 FC -12 June 3, 2019 MS. LEE LOY: Ms. Sako, so really what we have before us is the request to float this bond, to go through the design disposal system, which would then, I guess, trigger the Environmental Impact Statement (EIS) and Notice to Surrounding Property Owners when we draw it down? MS. SAKO: Typically, this allows us to enter the agreement with the State to pass down the funding, then that allows us to start doing the work because we know we'll get reimbursed for it. But right, we don't start paying back until we actually draw down the funds. So this particular one, yes; it's for like the design and to do all of those pieces, including the environmental, I believe. MS. LEE LOY: And then through the iteration. And maybe, Ms. Beck, you can help us with this, when we go through the environmental assessment process, we'll begin to better understand the impacts and mitigated measures of the proposed site or any future proposed site that's being planned. Correct? MS. BECK: Yes. I'm going to be working on the draft EA (Environmental Assessment), which is expected, or anticipated, in October of this month, I mean, of this year. MS. LEE LOY: And, Deanna, this SRF (State Revolving Fund) covers the cost of the preparation of the draft Environmental Assessment, and possible prep notice for an EIS? MS. SAKO: I believe it does. MS. BECK: Yes. MS. LEE LOY: Thank you, Chair. I yield. CHR. DAVID: Thank you, Ms. Lee Loy. Mr. Chung, go ahead. MR. CHUNG: Yeah, and I just wanted to follow up a little bit more on what Ms. Lee Loy was talking about. Because, you know, I guess what Ms. Demoruelle brought up stands for the proposition. You know, the EA is supposed to be done as early as practicable, right? But this is just the first step, right? We have to be able to tap into the State Revolving Fund to be able to move forward. MS. SAKO: Right. That's what they want the money for, it's to be able to do the design and EA. MR. CHUNG: So what is the process thereafter? Is this at some point going to come back to the County Council, either in the form of an appropriation or some kind of approval? Or is it all going to be done administratively already? Page 8 FC -12 June 3, 2019 MS. SAKO: One second. MR. CHUNG: Because I think these monies have to be appropriated at some point, right? MS. SAKO: They have some appropriations already. This project's been, you know, kind of going through the system for awhile now. But it probably would have to come back to amend their appropriations or something like that. The EA, obviously, would have public notice and input, as well. But I don't think this is enough to do the construction either. Specifically for this this project, they would have to come back to do the whole rest of the loan, and construction plans, and appropriations. MR. CHUNG: Yeah, okay. But although sites have been identified, this authorization is not site-specific, right? MS. SAKO: No, it's not. MR. CHUNG: Okay, so it could be moved. MS. SAKO: Right. We're still at the phase where we're just trying to get the money. They've looked at multiple sites, I think, for both systems, and they continue to look at it until they find the right one. But, you know, we have not gone through the EA process yet. MR. CHUNG: So after this is done, then the EA process will begin shortly thereafter. MS. SAKO: I think I heard Dora say by October we would have the draft. MR. CHUNG: Right. Okay, thank you. CHR. DAVID: Thank you, Mr. Chung. Anyone else? Seeing none, thank you ladies. All those in favor please say "aye." Vote on Bill 75: The motion to recommend passage of Bill 75 on first (Approved) reading was carried by the following voice vote: Ayes: Committee Members Chung, Eoff, Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy, Poindexter, Richards, Villegas, and Chair David — 9. Noes: None. Absent: None. Excused: None. Page 9 FC -12 June 3, 2019 Bill 76: 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 OF $37,000,000 OF GENERAL OBLIGATION BONDS OF THE COUNTY OF HAWAII FOR THE PURPOSE OF FINANCING QUALIFIED WASTEWATER PUBLIC IMPROVEMENTS OF THE COUNTY OF HAWAII Funds would be used for the following projects: Pahala Wastewater Collection System ($15 million) and Pahala Large Capacity Cesspool Conversion ($22 million). Reference: Comm. 303 Intr. by: Ms. David (B/R) Vote on Bill 76: Mr. Kaneali`i-Kleinfelder moved to recommend passage of (Approved) Bill 76 on first reading. Seconded by Ms. Poindexter and carried by the following voice vote: Ayes: Committee Members Chung, Eoff, Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy, Poindexter, Richards, Villegas, and Chair David — 9. Noes: None. Absent: None. Excused: None. CHR. DAVID: I believe, Mr. Clerk, that concludes our agenda for Finance. Thank you. ADJOURN- There being no further business, at 2:56 p.m., Ms. Poindexter moved to adjourn MENT: the meeting. Seconded by Mr. Richards and carried by the following voice vote: Ayes: Committee Members Chung, Eoff, Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy, Poindexter, Richards, Villegas, and Chair David — 9. Noes: None. Absent: None. Excused: None. Page 10 FC -11 CHR. DAVID I hank you. Council Members Approved Ms. Maile Medelros David, Chair Finance Committee IMD,na June 3,'_019 /S- WP7- ( Date) Page I I