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HomeMy WebLinkAbout2005-08-05 TMALASEK01 PLANNING COMMISSION COUNTY OF HAWAI€I HEARING TRANSCRIPT AUGUST 5, 2005 A regularly advertised hearing on the application of JAN MALASEK (GEOTHERMAL ASSET FUND CLAIM)was called to order at 4:12 p.m. in the County Building, Councilroom - Room 201, 25 Aupuni Street, Hilo, Hawai€i, with Second Vice-Chairman C. Kimo Alameda presiding. PRESENT:C. Kimo AlamedaABSENT & EXCUSED: Hannah Springer Bill GrahamFred Galdones Andrew Iwashita Jeffrey McCall Allen Salavea Rene Siracusa RodneyWatanabe IvanTorigoe,DeputyCorporationCounsel Christopher J. Yuen, Planning Director Norman Hayashi, Planning Program Manager Phyllis Fujimoto, Staff Planner Jeff Darrow, Staff Planner And one person from the public in attendance. CLAIMANT: JAN MALASEK Geothermal Asset Fund Claim in the amount of $27,494.00 to compensate for a loss of income from a orchard and nursery operation due to geothermal activity in the area. The property is located at 13-683 Leilani Avenue, approximately 1600 feet south of the Leilani Avenue „ Pohoiki Road intersection, Leilani Estates Subdivision, Keahialaka, Puna, Hawai€i, TMK: 1-3-28:18. ALAMEDA:Moving right along, our final agenda item for today, Agenda Item No. 8, staff? HAYASHI:Thank you, Mr. Chair. The subject property is located, this is, at this red dot. It is part of the Leilani Estates Subdivision in Puna. This would be the Pohoiki Road leading towards Pohoiki, and this would be in the Kapoho direction. This particular road is the Kapoho-Pahoa Road. The Puna Geothermal Venture Power Plant site is located here in this orange-shaded area. It is approximately 4,000 plus square feet excuse me, 4,000 feet from the property that was previously owned by Mr. Malasek. 1EXHIBIT C I think the background report is fairly clear and comprehensive. It provides you with a chronology as to what has happened regarding this particular property. Mr. Malasek had filed his claim on June 4, 2004 in the amount of $27,494 for loss of income. There was some confusion as to whether this was a loss of income between 1994 and 2003. However, when Mr. John Wood of Wood and Tate, the claims adjuster, investigated he found that Mr. Malasek was basically asking for claim for future loss of income from this property. As the background report reflects, the property was sold to the County under the Geothermal Relocation Program on October 7, 2003. Mr. Malasek no longer owns this property. The County has since sold that property to another party. So both the County and Mr. Malasek no longer owns this property. The Claims Adjuster, John Wood, again, recommends compensation of $19,000 to $26,000basedonfuturelossofincomefromtheorchardandnurserythatwasonthe property. The Planning Director, however, is recommending denial of the compensation request by Mr. Malasek. The Director does not concur with the Claims Adjusters assessment that the claimant should be compensated for future loss even if he no longer owns the property. And, basically, the reasons are the Planning Commissions Geothermal Asset Fund Rule does not state anticipated future loss of income from property already sold as an eligible claim. And its highly unusual for the claimant to file a claim on property he no longer owns. There also is no evidence submitted that the Puna Geothermal Venture activity contributed to the anticipated future loss of income, and I emphasize future. The claimant voluntarily sold the property to the County under the Geothermal Relocation Program back in 2003. Because he sold the property he no longer has income from his orchard nursery. If claimant wanted to continue earning income from the fruit trees, etc., he should not have sold the property to the County. The claimant also filed numerous claims over the years when he owned the property. If he wanted to be compensated for the loss of income at that time, he should have done it prior to the selling of the property. Therefore, there is a lack of evidence or documentation to support the claim and that the Planning Director feels that this is not a compensable claim under the Planning Commissions Geothermal Asset fund claim. Are there any questions? ALAMEDA:Commissioner Siracusa? SIRACUSA:Yes. In the background report, previous claims filed by claimant No. 4, theres a typo there, massage, looks like $60,000 and we know it cant be that. It has to be 60, so theres a comma where it should be decimal point. I just wanted to clarify that. HAYASHI:Oh, yes, Im sorry about that. I typed it myself so -. SIRACUSA:No. 6, claim of $500 for white powder analysis. As I remember there was a question as to whether there was caustic soda, if that was it. And it had to be 2EXHIBIT C analyzed because that was being used to mitigate the hydrogen sulfide from the blowout; and a lot of white powder ended up on a lot of roofs in Puna. And since those people are all on water catchment there was some concern as to whether caustic soda was getting into the water catchment. And so it had been recommended that people take samples and submit them for analysis. Theres a statement somewhere that it takes about 7 years for fruit trees, you know, to become productive; and it certainly is true of avocado trees; and thats one of the crops that he was talking about. The, what I would like to ask Mr. Torigoe is, I think I might have to recuse myself here. I dont have a financial interest or anything like that, but I was very active in the anti-geothermal movement at the time. And I know Mr. Malasek very well and I know a lot of the things that he went through, emotionally and all of that stuff. So Im not sure if I should be voting on this issue or not. TORIGOE:Well,youdonthaveanyfinancialinterestin-. SIRACUSA:No,Idonthaveanyfinancialinterest,butthereareintereststhat affect -. TORIGOE:You feel that it may affect your ability to make a non- or pre- judgmental decision on this? SIRACUSA:Yes. TORIGOE:Well, I mean, if you feel in your heart that you really would have difficult being impartial then youre free to recuse yourself. SIRACUSA:I would have trouble with that, yeah. Okay, Im going to recuse myself and just sit back. ALAMEDA:Ill ask our fellow commissioner is she could take a seat in the audience for a little while. Thank you, Commissioner Siracusa. Commissioner Iwashita. IWASHITA:Thank you. I have a question about the May 7, 2003 claim filed by the claimant here in which he asked for, I guess, the funds, the Geothermal Asset Funds be used to purchase his property, which was consummated after that. Was there a hearing like this where that request was considered and the determinations required under the rules made that, so that the Asset Funds could be used to purchase his property at that time? HAYASHI:Let me just correct that. The property was not purchased through the Asset Fund, Geothermal Asset Fund. It was purchased by the Geothermal Relocation Program, which is a separate fund; and that particular procedure or process does not come before the Planning Commission. So, basically, it was done all administratively. 3EXHIBIT C YUEN:Just to follow-up on what Norman was saying, there are two separate funds and two separate programs. Theres a Relocation Program and the house was purchased under the relocation program. Theres a Geothermal Asset Fund which has a potential for, where you can file claims for losses. After his house was purchased under the relocation program, he made a claim that youre looking at now under the Asset Fund. Under the relocation program, its a voluntary program. People living in the vicinity of the PGV Plant can apply and the County is authorized to pay up to 130 percent of the tax assessed valuation of the property, which was what Mr. Malasek was paid for his property; and then the County resells the property. IWASHITA:So I was just looking at the rules. That relocation program is now in the rules here? WATANABE:It is under the Planning Departments rules. IWASHITA:Oh, Planning? WATANABE:Yeah, Planning Departments Rule 10. HAYASHI:That would be a separate rule, not the Planning Commissions RulebutthePlanningDepartmentsrule.Soitsanadministrativerule. ALAMEDA:Commissioner Iwashita, I can explain the rule and the section here if you might find it helpful. IWASHITA:I understand, Ive gone through the Geothermal Rule 14, so I see that. And thats what were operating under, right? Okay. So I just had a question because I couldnt quite figure out, you know, where this, the purchase went through. And then Rule 14-6 had a brief reference to compensation for relocation but thats just those temporary, its if they have to go stay in a hotel because there was a blowout or something like that? YUEN:Thats correct. IWASHITA:Okay. YUEN:The permanent relocation comes under the Departments Rule 13, I believe it is, no its not 13. Anyway, the permanent relocation comes under this other program, under this other rule. ALAMEDA:Commissioner Graham? GRAHAM:Let me try to put in my own words what I think is what is being asked for here as far as the structure of the situation. So because of the geothermal activities he has the opportunity to get the County to purchase his land because it wasnt feasible for him to live there for some reason related to that. So the County did purchase 4EXHIBIT C the land at the 130 percent plus. And when I read the County of Hawai€i Finance Department memo from Stan Iwamoto it indicates that sources of income and fruit trees were not considered in determining the final assessed value of the property. So now hes coming back and saying I got compensated for the property but I didnt get compensated for what I had growing on the property. So if I want to continue to live my lifestyle, I can use the money I got for the property to buy a new piece of property, but its still going to take me some time to get the fruit trees back up to where they were before. And he wants to be compensated for the loss of income that he would have had had the fruit trees were mature and producing? Is that correct? HAYASHI:Thats correct. If you read on Mr. Iwamotos memorandum it does state that when they did do the purchase of the property and when they did go on site that the fruit trees were abandoned or not kept. GRAHAM:Okay,thankyou. ALAMEDA:Otherquestionsforourstaff,Commissioners?Ifnot,Iwouldlike to call our claimant. OLSON:Im representing him. ALAMEDA:Okay, thank you. Please come forward. Can you please raise your right hand. Do you swear or affirm to tell the truth now before the Hawai€i County Planning Commission? OLSON:I do. ALAMEDA:Can you please state your name and address. OLSON:Yes. My name is Jon Olson; and I live at 13-631 Leilani Boulevard. ALAMEDA:Okay, you may proceed. OLSON:Well, lets see, to start with Jan could not be here today because hed already booked tickets, he has an elderly mother in Europe and he had things to do there. I volunteered to do this. Probably his filing of the claim is in some part my doing because we had a conversation about how life was going since he left his property and his economic situation. So I suggested that he follow through with this for the very reasons stated by Mr. Graham. I suppose to start with, I object to the notion that he voluntarily left the property that he had put 25 years or 23 years of work into. You know, he left because he was being severely impacted by the geothermal because of the geographic, geography of where he was. The hydrogen sulfide would settle in the place where he built his home; and he was 5EXHIBIT C unduly impacted by the noise; and we measured that with a noise metering device. So beyond that, Id be happy to take questions. ALAMEDA:Okay. Thank you. Questions, Commissioners, for claimants representative? Commissioner Graham. GRAHAM:I appreciate your candor in saying you kind of brought this forward because of his current situation and how hes dealing with things; and I think maybe thats relevant to what would seem like a concern for us, would be sort of timeliness. Like, you know, at the time when his property was purchased by the County I would assume that would be the time that he would make a claim saying youre not purchasing the value that these trees have for me or something, rather than two years later. OLSON:I dont think, you have to understand, Jans a really good farmer buthesnotacomplexfella.And,youknow,its,thewaytheAssetFundandthe Relocation Fund were separated over the communitys objections, you know, it was a very difficult process to follow. And only after-the-fact you sit down, talk with the guy, you know, hes a long-time neighbor, and, you know, you find out that he didnt really think about that. I mean, he was only anxious to get away at that point. GRAHAM:I can understand that. OLSON:Yeah. ALAMEDA:Other Commissioners, any more questions for our claimant? IWASHITA:Actually, my question is, well, when I went over all of this, my main concern, and because of my lack of information, I guess, my main concern was the provision in 14-6(f) which basically what lawyers would call a res judicata language that there was a prior proceeding. Thats why I asked my questions earlier, was there a prior proceeding where all of these facts were heard before by, in this case would have to be the Commission, and any of this claim wasnt presented at that time? But it seems clear to me on the record, and Im going to ask you to clarify if Im wrong, but it seems clear on the record now that there was no such proceeding, that the relocation monies paid for his house was on this completely separate program, completely separate criteria. So that the issue being presented to the Commission today is one of first impression, this is the first time he has presented that claim. And the concern I guess right now is that the sale was back in 2003 and now were in the middle of 2005 and the claim wasnt made until June 2004. So he made the claim about six months, seven months, after he sold his house, or got the money for his house. Okay, I got the chronology. Thank you. Is that correct? HAYASHI:Thats correct. IWASHITA:Thank you. 6EXHIBIT C ALAMEDA:Thank you, Commissioner Iwashita for sharing. Commissioner Salavea? SALAVEA:Can you inform us on how you arrived at the amount Jan is asking for? Do you have that information? OLSON:Yeah, I mean, basically, I believe that he submitted some statements from the local Natural Food Store and other places that he sold produce, citrus. I think he also sold some palm trees that he had been growing to Rosettes and some other contractors. And, basically, its just kind of a compilation of about five years worth of sales and taxes that he, you know, taxes that he paid on the sales of that product. SALAVEA:So its only the products that he sold; and that amount that he is claiming doesnt factor in personal usage that he was -? OLSON:No; and, frankly, you know, I didnt want to get into it with him. ButIthinkhewayundervalued.Imean,hesnottaking,didnttakeintoinflationwhat he would have actually from the sales, based on inflated dollars down the road. Were looking back five years, not ahead five years. So, I mean, it would be reasonable to assume that he actually would have received more income as the trees and the other things continue to mature and produce more. You know, obviously, after a period of time they, you know, they start to decline but its -. SALAVEA:Thank you. ALAMEDA:I have a question. Im just wondering if, do you know if the claimant, has he started an orchard now? OLSON:Yes. ALAMEDA:Okay. Is it already in? How long has it been in operation, the orchard, now? OLSON:Oh, just, well, he started it. He got access to another piece of property that he was eventually able to purchase about the time the County accepted the fact that they would, you know, they said that they would take the property. So how long has that been, year and a half? When did he file the relocation claim? Well, when did the County accept that they were, told him, gave him the letter, sent him a letter that said that they were going to -? ALAMEDA:From that time? OLSON:Yeah. ALAMEDA:Okay. 7EXHIBIT C OLSON:Yeah, so then he went and started over. ALAMEDA:Okay. Commissioner Iwashita? IWASHITA:Thank you. Do you have any authority to represent on behalf of Mr. Malasek a number that, well, do you know if he had a chance to review the Adjusters report? OLSON:Yeah, he saw it. IWASHITA:Okay. And do you know that he in doing so became aware that the Adjuster is recommending $19,000 to $26,000 as the amount of compensation? OLSON:I know that he knew that and he didnt raise any objection to me aboutthat. IWASHITA:Okay.Doyouhaveanyauthoritytorepresenttothisbodyastoa particular number that Mr. Malasek would accept or that he said, no, this would be an amount I would accept? OLSON:We didnt have that discussion. IWASHITA:Thank you. ALAMEDA:Commissioner Salavea? SALAVEA:Either Mr. Hayashi or Director Yuen, for my purposes, can you tell me in the way the different funds were that the, I guess, the basic question is would the fruit bearing part of the property be factored into the 130 percent of the land value? YUEN:It wasnt because, and theres a statement from the Assessor as to the reasons for that. ALAMEDA:Okay, Commissioner Graham. GRAHAM:I feel very not knowledgeable on this particular issue and Im only asking questions because Im trying to get my feet on the ground. The Planning Director is recommending against this payment, against this request. And when Im reading on the second page of the recommendation in the top paragraph, and it says ‚The claimant voluntarily sold his homeƒ and in the next sentence ‚Because he sold the property he no longer has income from the plantings. If the claimant wanted to continue to earn income from his fruit trees he should have not sold the property. But my general sense is that the place was a place he really didnt want to live or maybe couldnt effectively live because of the geothermal issue. So it wasnt like totally a voluntarily selling his property, you know, he felt that wasnt a place that he could be because of the geothermal activity. So 8EXHIBIT C Im sure you know a lot more about this than I do so Im just trying to kind of push a little more out of you if I can. YUEN:Well, there are many people who manage to live in Leilani Estates in, near where Mr. Malasek lives. Mr. Malasek made, he had a number of choices. He can, he could and did make claims against the Geothermal Compensation Fund for things like noise and other direct impacts of the geothermal plant while he was there. And at that time the Planning Commission can consider those claims and decide whether or not to compensate him for those direct effects. He also had the option, which we made available, of selling his property through the Geothermal Relocation. He also had the option of selling his property on the open market if he did not like the figure that was available under the Geothermal Relocation Program, like any other property owner. He did have a, I can tell you that in the initial discussions with him there was a rather low assessment on his home because there were uncompleted elements to the house. After he didsomeworkandtheycompletedtheworkonthebuildingpermit,wehada reassessment done of the house to raise the assessment. WATANABE:And then you went to 130 of that, the raised -? YUEN:And then we went to 130 percent of the assessment. Now then he, and the reason I say voluntarily is that he did not have to sell. From the standpoint of the County he did not have to sell the property. I dont know what else to call it. From his standpoint, he didnt want to stay there. But from the standpoint of taking the money from the Geothermal Relocation Program instead of selling the property on the open market for the most that he could sell it for, he made that decision. All right. To give an idea of the kinds of things that would be compensable under the geothermal, on the Geothermal Compensation Fund, if he sold the property, if he stayed on the property and the geothermal fumes killed his fruit trees and he could prove that, he will be eligible to make a claim against the Compensation Fund. But from our way of looking at the way this is supposed to work if he makes a decision to sell his property, whether, even -. And the same thing would be true if he sold his property on the open market and came and made this same claim. He could come here and say, well, if I stayed there I would have kept earning money from my fruit trees; but I sold it, so Im not earning money from the fruit trees any more. He has been paid for his property and he can no longer enjoy earning income from it. So he doesnt qualify from the Geothermal Compensation Fund or, lets put it this way, we dont regard this as a valid claim from the Geothermal Compensation fund. GRAHAM:Thank you. OLSON:If I may, I think that we need to address the issue of his selling the property on the open market; and, of course, he looked into that. He was also told by a realtor that if he sold the property to anyone other than the County under the Geothermal 9EXHIBIT C Program, it was his understanding that he could still be liable for impacts from the geothermal. They could come back to get him. So he really didnt have that option. By selling it to the County basically the County took the liability off of him. Because it was up to them whether or not they would resell it to someone and take the potential liability for having someone move into it. Because as you know you cant give away your rights. So if someone is impacted living there, anyway -. That was that story on that. IWASHITA:Mr. Chair? OLSON:Let me, Im going to Commissioner Salavea and then I can jump to you, cause he had his hand up. Go ahead, Commissioner Salavea. SALAVEA:I guess a little follow-up to what you were saying about him being told about, you know, reselling. How much did he, do you know how much investigation didhedointermsofseeingwhathewouldgetontheopenmarket,investigatingwhat would his compensation be or what would his property sell for on the open market at the time? OLSON:I know that he talked to the two realtors in Puna there. He talked to Wally Patch, Patch Works Realty; and he talked to, oh, Pahoa Realty. And they both gave him figures about what they thought they could get for this. SALAVEA:Do you have any knowledge of what -? OLSON:No, I dont. I mean, and they both told him the same thing as far as the liability issue is concerned. They both recommended that, you know, if he was going to sell it -. We also looked into the possibility of simply selling the house and allowing him to keep the property, just being compensated just for the house; and he was told that the fund would not do that. They would take, it was an all or nothing proposition because he very much wanted to keep the land. ALAMEDA:Okay. Commissioner Salavea, any follow-up to that? SALAVEA:No, thank you. ALAMEDA:Okay. Commissioner Iwashita. IWASHITA:Okay, Im going to do a Butch Rodrigues thing here. The way I look at this is the issue of whether or not theres -. Well, under Rule 14 were supposed to determine or we have a report that tell us basically that there was an adverse impact to Mr. Malasek and that the economic, under 14-6(c) is my interpretation, the economic loss suffered by Mr. Malasek by the adverse impact was that $19,000 to $26,000 range. The question I had in my mind is how does the adverse impact language and, you know -. Sorry, as a lawyer you read this stuff, there are holes all over this. This is not a clearly written rule. But if you look at, one of the rules of law is that you look at related rules or statutes and you make them work together, right? Youre not supposed to make one 10EXHIBIT C superfluous by reading one to basically override the effect of the other. And in my mind when you look at Rule 10 under the Planning Department Rules, in order for Mr. Malasek to get his 130 percent, you know, for the appraised value of his property,the determination had to be made that,under 10-3, right, that he resided within the mile of the facility, that he purchased his dwelling, so forth, and he expressed a desire to relocate. So thats where the choice thing comes in, right? But, you know, its a separate program, right, designed to allow people to make that choice and be compensated for the value, appraised value of the property based on Real Property Tax assessment. And its clear on the record that that appraised value did not include, basically, an income approach as to what was being produced by these trees. Right? He was not compensated for that. You know, all the other market factors, whatever were put in, thats what he was compensated for. So, to me, then thats that. Thats separate. And that should really be the end of that consideration. The question presented by this application to me is was there an adverse impact to Mr. Malasek that resulted in economic loss as specified in 14-6(c)? The report fromWoodandTaitisthattherewasontheinvestigation.Youknow,sothisisalotlike what we send something out for -. What do we call it when we assign a case out to be heard by a -? WATANABE:Contested case hearing officer. IWASHITA:Yeah, by a hearings officer and so forth. Right? The rules anticipate that the Adjuster in an insurance paradigm goes out, gets all the facts, makes a determination, and then were here to take additional facts to see if its plus or minus and make our determination. So, you know, theres this long history of Mr. Malasek making, you know, having had claims made, paid or not, you know, over a long period of time. But in this case I dont see, again, the record. I go back to the record in my considering this, and the record is developed by the Wood and Tait Report. And the Wood and Tait Report establishes that, you know, theres economic loss, the loss of the benefit of the income from his trees over this period of time when he does not have the use of it because he sold it under -. And to me it doesnt matter if its sold on the open market or through the program. You know, his, the question is was his sale as a result of an adverse impact from the geothermal facility. And theres no question in the report, to me, that it was; and so this economic loss, in my mind, should be compensated. I, weve got to decide, or I need to decide how much. ALAMEDA:Okay, okay. So along those discussion lines -. Commissioner Watanabe. WATANABE:Can I comment? ALAMEDA:Sure. WATANABE:So if Mr. Malasek had decided to sell his lot on the open market, two years later he decided that, gee, I sold it to this guy for less than what I should have sold it for because I didnt consider my orchards then the Geothermal Fund is liable? 11EXHIBIT C ALAMEDA:Question directed to whom, Commissioner Watanabe? Oh, Commissioner Iwashita. WATANABE:Commissioner Iwashita. IWASHITA:Two years later as opposed to six months later? Youre asking when he makes the claim? WATANABE:Well, even six months. You know, but he, I think the difference being if he had sold it on the open market and then after the consummation of that sale then decided that he didnt get enough for the property because he didnt consider the fruit trees, does he then have a valid claim? IWASHITA:Well, we can speculate about a lot of different scenarios. If he sold itontheopenmarketandhesolditasanon-goingfarmingoperationandthatwasthe basis upon which the value was placed, right, to me thats a different story. Right? Because the on-going income from the trees are being, you know, orchard, is being considered, right, in the sale, his sale and the purchase. WATANABE:Well, no -. IWASHITA:No, because thats what -. Were talking about economic loss. So how do you determine whether or not he suffered an economic loss? His claim is that I was not compensated for this stream of income, right? And the report says, yeah, he was not. You know, even the Tax Department report says he was not, he was not compensated for this stream of income. So thats the record that we have that I see, unless theres something Im missing. If he was not compensated for it, then I think that, you know, the only issue is whether or not that loss is caused by an adverse impact from geothermal activity, and as the fund requires and Wood and Taits report tells us that it is. So thats the record that we have to go on. And, you know, Im just figuring out like you, right, applying Rule 14-6(c); and thats how I see it. So -. ALAMEDA:Okay. Can I just interject real quickly so we can get kind of back on track. Before, I wanted to officially go to the discussion and -. But I just wanted to ask again, is there any testifiers in the audience? Commissioner Siracusa? I dont see any other testifiers, so what well do is well hear testimony from Commissioner Siracusa and then well ask, well see if there are any questions. And I want to close that part up and then move into discussion so we can go into more what you guys were already on. So could you raise your hand. SIRACUSA:Dont call me Commissioner, Im sitting on this side of the table right now. ALAMEDA:Oh, yeah. Okay, Im going to swear you in. Do you swear or affirm to tell the truth now before the Hawai€i County Planning Commission? 12EXHIBIT C SIRACUSA:I do. ALAMEDA:Will you please state your name and address for the record. SIRACUSA:Rene Siracusa, PO Box 1520, Pahoa, Hawai€i. ALAMEDA:You may proceed. SIRACUSA:Thank you. I recused myself because I felt that I could not be totally neutral on this one because I have known Mr. Malasek for a long time. His property is in an, the property were talking about that he sold is not only within a mile, within the 1500 feet, actually, of the geothermal plant, but it is in a low-lying area. And hydrogen sulfide is a heavy gas which settles in low spots. So whereas other people on higher ground may have lived a little bit closer, the effect of living in a hole, so to speak, mademoreofanimpactonhishealth.HydrogenstudiesthatDr.Legatorfrom University of Texas, Medical Branch, did indicate that hydrogen sulfide does have major neurological effects on people. And Mr. Malasek did suffer, if you look at the list of claims he had made, there are a lot of medical claims there. He was, his health was severely impacted. He tended to be a rather, he tends to be a rather high, nervous sort of personality anyway, but the chemical impacts on him really exacerbated that. And he loved his orchard. I dont think he would have given it up except that he just, his health was really, he felt his health to be at risk. And because of the neurological effects, I dont think he was capable of thinking through the whole thing at the time because he was so anxious and upset all the time that his mind wasnt working logically, oh, what can I get out of this, what can I get out of that. There had been some occasions where he was known to make phone calls to the Planning Department and elsewhere and get really volatile on the phone, and sometimes abusive even; and a lot of that was a result of the impact of the hydrogen sulfide. So I dont think that it was entirely thought through, number one, you know, looking at why he applied later on after he was no longer being impacted. And lets face it, the other people now in Leilani, there havent been releases of gas in the long time. So things have cleared up in the air and politically as well. But at that time there were a lot of leaks and a lot of it ended up down in his little low-lying spot. So I just wanted to address the point of why two years later and the fact that a man in his condition was not capable neurologically or physically of thinking the whole thing through from a, okay, I can sue for this, I can sue for that, I can get compensation for this, that, and the other thing. ALAMEDA:Thank you, Ms. Siracusa. Any questions for the testifier? Question, not discussion now. WATANABE:Yeah. ALAMEDA:Okay, thank you. Commissioner Watanabe. WATANABE:For how long was Mr. Malasek still there, I mean, you know, while the geothermal opened up, you know, when it first -? 13EXHIBIT C SIRACUSA:He was there from before it started, yes. WATANABE:So how many years was that? SIRACUSA:How many years before geothermal? OLSON:He purchased property in €80. WATANABE: No, no. He purchased in €80 but for how long was he there while the geothermal bit was going on, quite a few years? OLSON:Well, I mean, he purchased the property and started planting things there in 80, and I think he actually pulled the permit for the house in 87. I dont really know,butthats-.Iknowhe,ofcourse,theydidntstartdrillinguntil89or90.They had the blowout, the big blowout in 91. SIRACUSA:Yeah, but before that it was a UH test site and -. WATANABE:Well, in 91 was he living there? SIRACUSA:It has gone through so many different phases. It started out not being a commercial operation. It started out being a University project -. WATANABE:Yeah, but in 91 he was living there? SIRACUSA:And it was only after they hit a resource that they decided to go commercial with it; and things changed dramatically. And there were some minor leaks, but there was never much until the big blowout of 90, 91. OLSON:I think it was 91. WATANABE:I was asking cause the report said the fruit trees had been neglected for years, for several years. So -. OLSON:I mean, thats, of course, now youre -. We had a discussion about that. And I asked Jan about that, that portion of the project. And first the way Jan, the way he farmed, he doesnt manicure around his stuff; and he goes in there and he weedwacks. He would weedwack till its maybe a foot or two feet tall; and his explanation of that was that composting, obviously, and it also helps retain the moisture. And he had -. Im not a farmer. I do aquaculture. But he had a whole explanation about his process. So, yeah, the place always looked like it was about half abandoned. All I can tell you is that when he took his stuff to the store, which is where it counts, people bought it. And the trees produced, I bought it and I ate it, I liked it. And they bought it. And he has receipts, youve seen the receipts, I think, to prove that thats the case. 14EXHIBIT C ALAMEDA:Other questions? SIRACUSA:May I add to that -? ALAMEDA:Ms. Siracusa. SIRACUSA:As someone whos a farmer. There was a book by a Japanese organic farmer, I forget his name. But he wrote this book called ‚The One Straw Revolutionƒ and he talked about minimal disturbance of soil in planting. He would just dig a hole, leteverything go wild all around it. And it had to do with leaving land as natural as possible. And it became quite a cult book among organic farmers, actually, ‚The One Straw Revolution.ƒ And Jan farmed that way. ALAMEDA:Any other questions for Ms. Siracusa? Okay. I would like to, do youhaveaquestionforMs.Siracusa?Okay.Canwenow,Imgoingtocloseatthis time the testimonies and were going to move to a discussion. Discussion item? Go ahead, Commissioner Graham. GRAHAM:Id like to put the question to our Corporation Counsel. From what weve heard before, I feel like from the legal foundation here the Planning Director in response to my earlier question gave the sense that whats being asked for is a compensation for loss of anticipated future income, and the Planning Director didnt really see a legal basis for that, I dont believe. On the other hand, Commissioner Iwashita whos also an attorney indicated that it was kind of a, you know, that part of the process had already been kind of conformed to and it was put out to this third party to determine the amount of the compensation, so thats maybe where our focus should be. So my question to you is, you know, which of those two conflicting points of view do I subscribe to, being that I dont feel particularly capable myself of determining? SALAVEA:Yeah, please help out. TORIGOE:Commissioner Iwashita was referring to 14-6, subsection (c) of your rules which basically says adverse impacts shall include physical injury, medical and health conditions, business or economic loss, nuisance, or any other claim of adverse impact which is able to be substantiated by evidence. So its true that it does not specifically identify future economic loss or projected economic loss as a compensable item, but it also has this ‚any other claim of adverse impact which is able to be substantiated by evidence,ƒ in there. So maybe it ultimately comes down to what you judge on the record, whether there is substantial, say sufficient evidence to substantiate the claims of a future economic loss. And so basically as you see on this record, the claim is that if not for the impact of the geothermal activity he would have stayed on this property and continued to farm at more or less the same average level as he had for the previous years. So I guess it becomes a judgment call on your part as to whether the evidence that has been presented is solid enough for you to come to the conclusion that, yes, this is a fairly compensable adverse impact, economic loss for projected farming that he would have done had he not had to move based on the geothermal impacts. 15EXHIBIT C ALAMEDA:Follow-up question to that. So, counsel, how do we take into account these supporting documents, whether the one from the Department or the one from the Wood report? TORIGOE:When you say how do we -? ALAMEDA:How do we use it? TORIGOE:Well, Im assuming at this point that youre receiving all of these documents as part of the contested case record. ALAMEDA:Okay. TORIGOE:Andsoitsuptoyoutoweightherelative,youknow,strengthof the documents, try to harmonize them or not, see if there are conflicts. ALAMEDA:Okay. Also, follow-up question since weve got you holding the mike. How does, what happens with the, how do we make a decision and when we make a decision what happens then? Does it automatically mean that if its for that, this person will get this amount, or does it go to another body, does it go to the County Council, or what happens? TORIGOE:Lets check the rule here. Well, looking at your Rule 14-10(a) it says ‚The Planning Commission shall review the findings and recommendation prior to announcing the decisionƒ And then 14-11, ‚Upon voting to award compensationthe Planning Commission shall prepare a written, brief statement of the factsand a statement of the amount of compensation.ƒ If you vote to deny under 14-12, again, you prepare a brief written statement of the facts. And, the decision is appealable. Your rules are somewhat outdated in that it says that the decision goes to the Board of Appeals; but I believe under the last set of charter amendments that that is no longer the case. IWASHITA:Lets refer that to our lawyer to fix. TORIGOE:Basically, you make the decision. ALAMEDA:So whats the update then? Where does it go from here if its outdated? TORIGOE:I think it just goes straight to Circuit Court from here, if theres an appeal. YUEN:Yes. I believe that it, but it says that the claimant can appeal. Ordinarily the County could appeal if were opposed to the recommendation. Most likely 16EXHIBIT C this does not authorize an appeal by the County as the keeper of the fund. You think, Mr. Torigoe? TORIGOE:You know, again, the rules may be a little bit outdated and I think Chapter 91 was amended to allow for government parties to also appeal. So Imnot sure off the topofmy head, you know, whether that would apply; but it might. ALAMEDA:Commissioner Iwashita? IWASHITA:Im prepared to make a motion. MCCALL:Id like to speak first. ALAMEDA:More discussion? MCCALL:Yes. ALAMEDA:Okay, go ahead, Commissioner McCall. MCCALL:Thank you. In my opinion this, well, as a farmer, Ill put it that way,whenafarmersellshisproperty,yousellyourproperty;andtomethefactthatthe assessor did not see value in the crops is, to me, somewhat telling of what the value of the crops are. I dont think its quite fair to say that if he, say, had potential income of $4,000 a year, according to his tax statements, assuming thats all correct, that does not mean that for 7 years he is entitled to $4,000 in income. Ill give you an example. On my farm at any one time if I have, I probably have $100,000 worth of income on my farm. If I stop doing anything except for harvesting what I have on my farm, I could derive another $100,000 in income. That doesnt mean that if I sell my farm I want an extra $100,000 for that. Cause that $100,000 is going to require me to put in $10,000 worth of fertilizer, $50,000 worth of labor. Mr. Malasek in his statements does not put anything in for labor. He may get $4,000 worth of income a year or have gotten $4,000 worth of income a year. But I would venture to say, I mean, he did put in money for fertilizer and a few other things, but I would basically say that his $4,000 in income is compensating him for his $4,000 worth of labor that he put into it. I do not see a particular value, I mean, there is an intrinsic value to having a crop. You have, you know, you have mac nuts of your property, they have a value. They do not have a value if you dont hire the people to pick them, if you dont put fertilizer on them or they have a much reduced value I should say. So at the very least I think his claim should be cut down by 50 or 75 percent because of the fact that there wouldnt be anything without the labor to put it in. And in my general opinion I feel that the purchase of the property puts the, you know, he had the right to sell the property for what its value was, including the crops, and to me thats what, you know, he chose to sell the property to the County and, you know, he should have looked at what the price was. So -. ALAMEDA:Okay. Thank you, Commissioner McCall. Other final discussion, comments? Commissioner Watanabe. 17EXHIBIT C WATANABE:Ive got a question for the Director. Cause earlier you had mentioned that actually the tax assessed value of the property was quite low and he was allowed to do some, I think it was rather minor things. I dont see him doing anything elaborate since hes going to sell it to the County anyway. So that the value could be increased, and that base was what we went off of to determine the final 130 percent. Am I right on that? YUEN:Thats correct. WATANABE:How significant a difference was it say from the initial value, you know, property tax valuation versus, you know, the final concluded value? YUEN:Im going from memory now but I think that his assessment was in themid-thirties.Thenhedidsomeworktocloseouthisbuildingpermits,andthenitwas reassessed at $69,000. Im really going by memory now, but it was something like that. And then it was -. WATANABE:But given that, then so were saying, you know, he had, shall we say, at a minimum of 40 percent adjustment? From what you described its almost double. YUEN:It was a big, the reassessment was done in the mid-year to accommodate a higher sales price, because normally one would not reassess property in the middle of the year, in the tax year, once, at a higher level. Once at a higher level -. There was a very substantial upward reassessment of his valuation in order -. WATANABE:And then we gave him 130 percent of that? YUEN:Yes. WATANABE:In my mind, I think, indirectly he was compensated for the orchards. ALAMEDA:Okay. Any other final discussion before we turn it over to Mr. Iwashita? Commissioner Iwashita. IWASHITA:I have a discussion. ALAMEDA:Oh, you have a discussion now. Okay, Commissioner Iwashita. IWASHITA:I think, I, what Im hearing is that, and correct me if Im wrong fellow Commissioners, what Im hearing is that there is this sense or feeling that Mr. Malasek has been compensated. The records show somehow that he has been compensated for the claim that hes making before us today. What Id like to point out is that to me the record is clear. And if were looking at, if we deny this and its appealled, 18EXHIBIT C what the Court is going to look at, and what is going to be pointed out to the court, is whats in the record; and its what is in the record that counts, in any case. The Finance Departments letter makes it clear that the trees were not given any, no value was considered at all for his orchard. And apparentlythe reason given is, well, it looks pretty bad. All right? Well, actually I dont want to paraphrase it. It says ‚During inspection of the property the fruit trees were neglected, in poor condition due to lack of maintenance for several years.ƒ Thats the observation. And then the conclusion is ‚No sources of income and food,ƒ ‚No sources of income,ƒ well, anyway this must be written wrong. But no sources of income from fruit trees were considered in determining the final assessed value of the property. The income is documented in the record by his Schedule F in his tax return. So whats clear on the record is that there was income, it was reported to the Internal Revenue Service, an institution I think we all have to give some credence to; and that in doing the appraisal of the property, youre already in 2003, no value, no consideration was given to add that value to the appraisal. That, to me, I dontseehow,youknow,Icannotreadtherecordanyotherway.Sothatitseemspretty much well substantiated Mr. Malasek was not compensated for his trees. It would not consider that he should be compensated in that other -. Because, and it makes sense to me because that is a real clear process, 130 percent of the appraised value, right, very clear process. Thats all you get, okay? So this issue about, you know, income that hes losing from not having the use of his trees by selling his property is one that wasnt considered, hasnt been addressed. So thats why were dealing with it today. And so thats the, you know, its, what, lychee and bananas or something like that. Youve got to, to me, the money he received, you know, from the Relocation Fund, thats, you know, the lychee and now were talking about the bananas. And, you know, but we cant mix it cause its two different issues. Its not mixed together, right? You want to make a fruit salad, but, you know, you really cant on the record. ALAMDEA:Director? YUEN:The process of relocation, you dont have to prove adverse effects from geothermal. All you have to do is you qualify, you were there, youre in the radius, you want out, youre paid 130 percent. So that is supposed to, lets say that accommodates the fact that a tax assessment may not reflect the full value of your property. On the other hand, if your property isnt really worth more than the County is going to offer you on the relocation program, you can sell it for what its worth. You can sell it on the open market. I cant answer to this heresy about what the real estate, you know, there are a number of things that are said in testimony that Id like to respond to in my role as, administrative role of the fund and making a recommendation. The sellers obligation is to make a disclosure. The seller makes a disclosure, thats it. They make a full disclosure and thats it. If he can sell the property for more than the $90,000 the County wanted, the County offered him, were more than happy to see that happen. He, thats one thing on the question of was he compensated; and heres -. Then theres testimony about hes affected by hydrogen sulfide. He has made a number of claims for various problems 19EXHIBIT C through 1998. If he had a claim, say, for injury from hydrogen sulfide in, say, 2001, 2002, 2003, he can make a claim against this fund for that. Theres no claim of that; and theres absolutely no proof of him having any of these adverse effects. His decision, what he is claiming is additional compensation for his decision to move out. Theres a way to compensate him for moving out. If he wants to move out, as the Geothermal Relocation Program, he was paid the 130 percent, he was paid that; and thats the compensation. Now the final thing Id like to say, I dont like to argue, excessively argue, lets put it that way. When I, and I generally try not to, I try not to have the last word on this. But I do note in the sense of the, on this question of the recommendation from the Wood and Tate and the question of deferring to their recommendation, the Claims Adjuster is supposed to recommend -. Looking at 14-9, ‚The claims adjuster shall recommend to the Planning Commission its recommendation based on the following determinations: (a) Basis for the DeterminationthatAdverseImpactshaveoccurred.Adverseimpactswillbeassumedif any of the following are shown to be trueThe geothermal development activities have had unreasonable adverse health, environmental, or socio-economic effects on a resident(s) or surrounding property(ies).ƒ The Claims Adjuster never did that. ALAMEDA:Commissioner Graham. GRAHAM:I dont want to keep belaboring; but I must say Im not really clear myself on what action I want to take on this. So I bring forth for the discussion the things that come to my mind. The Planning Director and perhaps others have indicated that this applicant had the chance to sell on the open market where he presumably could have gotten fair value for his fruit trees. But somehow I feel like thats a faulty strawman. If were going to be fair, we should have given him a chance to sell on the open market, prior to the geothermal well going in. So once the geothermal well goes in, it hurts his property a lot as far as its value. And then we say, well, he didnt sell it for his value on the open market now. That doesnt feel like a very fair bone to throw to the dog. So that concerns me. ALAMEDA:Okay, thank you, Commissioner Graham. Commissioner Iwashita. IWASHITA:Theres a reference to a November 29, 2004 report; and I guess, I dont know if I missed it. Im thinking I didnt get it. And if you can point out to me where it is in the papers that I have, I would greatly appreciate it. DARROW:Could you point that out to me, Commissioner Iwashita, as far as where youre seeing that? IWASHITA:The Wood and Tate document that Im looking at is dated December 30, 2004; and the first line in that document it says, ‚Since our last report of November 29, 2004.ƒ But I dont have a November 29, 2004 report. And the reason Im asking for it is, well, I guess I, the point made by the Director about what the Adjuster is supposed to do is well taken. And, I guess, if the Adjuster hasnt done his 20EXHIBIT C job, then it seems it should go back to the Adjuster to go do the job. And that, you know, unless, thats why Im asking for the November, if inthe November 29, 2004 report theres an addressing of the issue. But I do concur with the Directors point that in the report that we do have there is no real discussion about adverse impact. You know, its just an analysis of the damage claim and a recommendation of the range and a brief, I guess, sort of sporadic references to the history of this claim. But 14-9 to me is pretty clear that the Adjuster should, not should, shall make recommendations, including the one the Director pointedout; and if it hasnt been addressed by anything that Wood and Tait has done up to this point, then it should be put back to them to address 14-9 and make sure all thepoints are covered. Because thats all we really have to go on, or thats what were supposed to have to go on. ALAMEDA:Commissioners, while our staff is looking for that reference document, Im wondering if I could take a brief five-minute break. Is that okay? IWASHITA:Okay. ALAMEDA:Reconvene in five minutes. RECESSEDThe Chair called a short recess at 4:23 p.m. RECONVENEDThe meeting reconvened at 4:30 p.m. ALAMEDA:The Hawai€i County Planning Commission is now back in session. Discussion? Commissioner Watanabe. WATANABE:Okay, earlier Commissioner Iwashita voiced great concern over the record and so, you know, I suppose his lawyer training came into effect there. So lets take a look at the record then. The County purchased the property for $189,830. I mean, what am I talking about, you see, its getting late. The County purchased the property for $89, 830. We have also introduced onto the record through discussion today that Mr. Yuen indicated that we increased significantly his original tax assessed value so thathewouldbeabletoobtainthis$89,000.SubsequenttothattheCountythensoldthis property on the open market for $75,000. In the process the County then suffered a $14,830loss.Thatisclearontherecord.Soinmymindtherecordindicatesveryclearly that we paid more for his property than the open market was willing to pay, even though I wouldhavetoassumewhoeversubsequentlypurchasedthelotdidtakeintoaccountany value for the orchard that was already on the property. And so, therefore, I think he has beencompensated. ALAMEDA:Thankyou,CommissionerWatanabe.CommissionerSalavea? SALAVEA:Well, Im ready to entertain a motion, or whatever proper procedure, or move if discussion is over, if not -. ALAMEDA:Commissioner Iwashita. 21EXHIBIT C IWASHITA:I need to on the record address the presence or lack thereof of the November 29, 2004 report from Wood and Tait. ALAMEDA:So noted. DARROW:If I could address that. In the file in reference on the December 30, 2004 letter theres a reference to the Wood and Taits last report dated November 29, 2004. In the file there is a letter dated November 29, 2004 from Wood and Tait. It has exhibits. One is a letter from Patrick Tomlinson, a copy of a letter from the Hawaii Island Exotics to claimant regarding growing conditions, copy of sales slip to Hawaiian Gardens for $114, copy of sales slip to Kainaliu Gardens for $217.50, a copy of a sales slip to Kainaliu Gardens for $225 and a copy of a fax to the claimant.There isreference within the November 29, 2004 letter to a September 23, 2004 letter. Thatswithin the file.Andit,again,hasexhibitslistedwithinthere.Basically,itsarecordofthe investigation that Wood and Tait has submitted into the record. It says, in this September 23, 2004 letter, again, there are exhibits. Number one, copy of November 2, 2004 letter to Jan Malasek, information on the parcel, plat map for the parcel, information regarding parcels, it appears to be near the applicants property, and other items under the exhibits. In this letter again it refers to a September 2, 2004 letter which is also in the file. And it seems like thats the beginning of the record from Wood and Tait. Its a record to Jan Malasek indicating that Wood and Tait is the independent insurance claims adjuster that has been retained by the County; and they request specific information from Mr. Malasek. IWASHITA:My concern really is that if theres an appeal one way or another in this matter, I want to make sure we have a complete record. And is there any indication in any of Wood and Tait documentation that Wood and Tait has addressed the issue of adverse impact causing the economic loss or the financial loss claimed by Mr. Malasek? DARROW:It doesnt appear in the letters that were just referred to that theres any kind of information relative to the adverse impact. It basically appears to be submitting exhibits and referring to their record prior to that. ALAMEDA:Commissioner Iwashita? IWASHITA:Well, yeah. My concern, again, it is, for the record, in that we have a complete one, one way or another before we make a decision on this. So because Rule 14-9 requires that the Adjuster make recommendations, including whether or not there is a basis on whether or not there has been an adverse impact, for one, as a result of the geothermal activity that my preference is that we have a complete record, that we direct that Wood and Tait go back and address this issue and return a report that makes a recommendation as to whether or not there was an adverse impact. The suggestion by the Director is a plausible one and that, you know, there was all this period of time that elapsed before he actually decided to sell, right? And so an argument can be made that, well, you know, that was a personal choice. Theres no, as he points out, no requirement 22EXHIBIT C in the Relocation Fund that there be any showing of adverse impact, so that, you know, in order to collect. Right, under that? So I take that as a good point and that we appear to have an incomplete record. So we should send it back to the Adjuster to make a proper record. ALAMEDA:Commissioner Salavea? SALAVEA:Point of clarification. Is the purpose of finding out adverse impact on the reason why he sold his property, or the adverse impact on the business generating side of his property? IWASHITA:My understanding of the Rule, Rule 14, is that, oh, 14-b specifically says that the claims adjuster shall recommend that a claim be granted if it finds that: The claimant(s) has been adversely impacted by the activities. Rule 14-6 (c) saysthatadverseimpactsshallincludebusinessoreconomicloss,oranyotherclaimof adverse impact which is able to be substantiated by evidence. So those two should be read together as to what Wood and Tait is supposed to do in this case. And, you know, Directors point again is well taken that the reports from Wood and Tait do not address the adverse impact part of this analysis and determination as required. ALAMEDA:Commissioner Watanabe. WATANABE:Im sorry, I guess in my mind Im thinking we can assume there was some type of adverse impact, whether it be to his person or to his orchard. I guess in my mind what I thought I made clear, at least to myself, was that he was compensated for whatever adverse impact there might have been because we did pay more than market. ALAMEDA:Commissioner Iwashita. IWASHITA:My real estate appraisal friends tell me you have to be real careful about market values on different dates; and theres no way to -. You know, the real property appraisal that was done before October 7, 2003 when the $89,000 plus was paid was done for that time. You know, it was in September, or August, or whatever. That was a value at that time to determine for this claim, what the market forces were after that time. Right? And today we know that if you wait six months, youre going to make 50, 60, 70, 80, maybe 100 thousand dollars more, right? But who is to know then, right, that, you know, by May of 2004 when the County sells it for $75,000 that there are not other market forces that, you know, you cannot, that is really apples and oranges. You really cannot compare market value from one date to another, especially when its, you know, could be almost a year apart. Right? Cause the day it closed is May 2004, the appraisal could have been done June 2003, or July, whatever. Right? So, you know, thats really apples and oranges. No appraiser would tell you, oh, yeah, you know, we could compare it and thats really what it is. You know, I mean, thats, cant be done. So, but my main concern is the Directors point in that we dont have a complete record, Wood and Tait has not submitted a complete report as required under Rule 14-9. And I think, you know, 23EXHIBIT C I dont know if it requires a motion. I would make one to direct Wood and Tait to submit a report that complies with 14-9 so we can properly consider this. ALAMEDA:Commissioner Salavea. SALAVEA:And my question gets to if it is proven that there was adverse impact to the business side of what he did, how would that impact our decision here? IWASHITA:Well, if theres adverse impact then, you know, theadverse impact causing the loss of this income because he did not have the property over this period, or his newly acquired property he did not have the same productivity as his old property, thats basically his claim. And so, you know, there are a lot of different things in there; but thats why Wood and Tait is making their recommendation, I guess, this range that we somehow massage it and figure out whether it should be $19,000 or closer to $26,000. Butthats,youknow,theyvesortofpuntedonthatissuetous;but,youknow,thats fine. But, you know, to me the claim is within the general terms specified in 14-6(c) and Wood and Tait is supposed to under 14-9 make findings that relate, you know, to that; and it hasnt as the Director has pointed out. So -. SALAVEA:And the follow-up to that is if the adverse impact was identified at the time that he sold the property then the claimant would be losing income because the trees would have, in my mind, would have been deformed, not producing. But I dont think thats the case. The report doesnt specify that the trees all fell dead. So in my mind I dont see it as a, Im seeing it as the property was sold with the 130 percent, with the additional 30 percent as being to compensate any, you know, to cover anything uncoverable at the time unforeseen; and thats what the percentage was built in for. So getting back to identifying adverse impact on the business side, if it was at the time that he sold it, the -. Im having a hard time seeing where his claim is if at the time the trees were still, or now the trees are still viable. IWASHITA:I understand the confusion but that, to me, its the way the, you know, if this was all one rule, I agree with you probably. But we have two separate and distinct programs. And why they choose to do it that way, I mean, I dont know anything about it. But it was done, you know, in two separate, and the standards are completely different. Right? So theyre totally unrelated. So in my mind it cannot be argued that the compensation under the one somehow precludes or anticipates no compensation in the other, because that violates a rule that you are now using that one rule to negate the intent or effect of the other. And that is the way the system is set up. Because it has different standards, we cannot do that. To me that would be clearly, if thats the record that a denial results in this case, that would clearly be a basis upon which Mr. Malasek could go to the court and say, hey, the Commission screwed up, they used the relocation money that I got over here and they said therefore you cannot get that. That to me is an argument that, you know, almost as a matter of law it can be argued you cant do that because its two separate programs. And thats the problem I have, is that you cannot, thats pau. That $89,000 is pau, forget about it; and now were talking about this because 24EXHIBIT C that, he didnt have to prove any adverse impact over there. Thats just this insurance kind of were going to pay you money if thats what you really want kind of situation. And it only matters if you live within the physical area, thats all you have to show, and what the value is, and you get paid, and youre willing to sign over your property. But thats it. Whether theres any residual claims under Rule 14, thats a whole different issue. Its not addressed in Rule 10 under the Planning Departments rules. ALAMEDA:Excuse me. Let me try to, as the Chair,let me try to put some parameters on this discussion. In my mind, I think part of the purpose of discussion is to lay your thoughts, even opinions, on the table so that we can benefit from it as fellow Commissioners, and probably not move into like trying to conveyance or debate. So if we can just stick to, you know, so if you find yourself repeating your position more than once thats more kind of getting into, I think, trying to convince. So is there any other discussion items or thoughts that you want to put on the table that you did not put already?CommissionerGraham. GRAHAM:IdliketoputabriefthoughtwhichisthatIdontliketheideaof postponing it. I think we have gotten enough testimony today from the two testifiers that there was, in fact, some real adverse impact to this property. And Im not at all convinced that the Commission even acknowledging adverse impact is willing to grant relief, monetary relief, to this individual. So I would like to go forward with it today. And I dont know what the outcome of this will be, but I dont want to put it off. ALAMEDA:Okay. And along those lines I want to advise the Commissioners inability to make a decision today will, basically, we have 90 days to make a decision; and if we do not have a majority vote, meaning five ayes or nays either way, then it goes back to the -. TORIGOE:The rule says that if the Planning Commission does not make a decision on the Claims Adjusters recommendation within 90 days from the close of the hearing, the Claims Adjusters recommendation becomes final. WATANABE:Mr. Chair? IWASHITA:If, am I to understand -? ALAMEDA:Excuse me, Commissioner Watanabe? Any other questions? WATANABE:Sorry, I was ready to make a motion. ALAMEDA:Oh, okay. Commissioner -? IWASHITA:I just wanted to understand, the closing of the hearing, if we refer this matter back to the Adjuster and made it clear on the record that the hearing on this matter was not closed, the 90 days wouldnt start to run, right? 25EXHIBIT C TORIGOE:Yeah, I think at this point the Chairperson did close, so someone would have to move to reopen the hearing, I think, if you wanted to do that, just to remand it to the Adjuster again. IWASHITA:Oh, when he said the testimony has been concluded? ALAMEDA:Right. And I did ask the testifier and claimant to sit down in the audience again. So, Im sorry, I cannot take your testimony again unless we reopen. TORIGOE:Which you could. IWASHITA:Again, well, I mean, if the sense of the body is to vote, fine. But I really think that we ought to reopen and have, because theres a lot of questions. To me theres a lot of questions and we shouldnt, this is a $25,000 plus claim and we really shouldnttreatitlightly.Youknow,Imean,weshouldget,itshouldbeprocessed properly and that to me in my mind that means Wood and Tait should prepare a report that complies with the obligation under 14-9, the rule that says this is what you have to do; and Wood and Tait hasnt done it. ALAMEDA:Fellow Commissioners, in hearing what Commissioner Iwashita has stated about potentially an incomplete record, are there any thoughts about that? IWASHITA:Can I add a final -? ALAMEDA:Further comment? IWASHITA:Especially if were going to end up denying this claim, and there may very well be an appeal, and if theres an incomplete record thats almost, you know, its going to come straight back at us. So, just procedurally it makes a whole lot more sense to make sure all the ‚isƒ are dotted and the ‚tsƒ are crossed and the bananas all are peeled. ALAMEDA:It seems like basically if we cannot come to a decision either way it will go back to the Adjusters recommendation already, as the final decision. So -. TORIGOE:Although the recommendation is just give you a range. ALAMEDA:Oh, yeah, so were still at the ranges sake. Any other comments on Commissioner Iwashitas thoughts about incomplete record? MCCALL:Well, maybe, I -. ALAMEDA:Go ahead. 26EXHIBIT C MCCALL:Just to echo that I agree with Alan that I think theres an implied idea of damage and that, you know -. And while it might not have been stated by the Adjusters, I think it -. ALAMEDA:Okay. So inyour mind, Commissioner McCall, in light of -? MCCALL:In my mind things are complete enough to make a decision. ALAMEDA:Okay. Other thoughts? IWASHITA:So are we going to say that the Commission accepts that there was an adverse impact on this record and the only question is whether or not this economic damage claim to future, through unrealized profits or income from his orchard, whether or not thats a compensable adverse impact? Thats the only issue were going to address?Isthat,oristhattoolawyerlike? SALAVEA:Well-. ALAMEDA:CommissionerSalavea. SALAVEA:Imean,Imgoingbacktotherootofthe,inmymindiswhenhe sold, thats when the adverse impact was -. IWASHITA:Yeah. SALAVEA:And so I dont, Im not taking it into the next step in terms of in my mind I see it as thats where it validates his claim. ALAMEDA:Okay, thank you, Commissioner Salavea. IWASHITA:If thats the sense of the body that there is, you know, no issue that, in fact, in May of 2003 there was an adverse impact at the time of that sale, so were just looking at this as to whether its compensable under 14-6(c), right, then thats fine. As long as thats going to be clear on the record, thats fine with me. ALAMEDA:Okay, any other thoughts or comments from the Commissioners? Do I hear a motion? SALAVEA:I dont think, Im -. IWASHITA:Im prepared to make a motion. SALAVEA:Go ahead, go ahead. 27EXHIBIT C IWASHITA:I move that the Planning Commission award Mr. Malasek $25,361, which is the $3,623 times seven, pursuant to his June 4, 2004 request for payment from the Geothermal Asset Fund. ALAMEDA:Okay, it was moved by Commissioner Iwashita. Is there a second? GRAHAM:I second. ALAMEDA:Theres a second by Commissioner Graham. Discussion? IWASHITA:Again, because, just for the record, the basis for my motion is that its 14-6(c), based on our discussion before theres no dispute on the record that the sale of Mr. Malaseks property of 2003 was based on adverse impact that he suffered from the geothermal activity. And the issue is determining whether or not hes entitled to be compensatedforthelossofincomefromhisorchard.AndIviewthatasbeingabusiness or economic loss or any other claim of adverse impact which is able to be substantiated by evidence under 14-6(c) for which he has not been compensated for on the record. And, therefore, I think that would be a fair amount to award him, and that includes this inflation and all these other variables. That I think is the average, is the best way to go about that. ALAMEDA:Commissioner Graham, you are the seconder, so are you okay with that? GRAHAM:Yeah, Im okay with that. ALAMEDA:Okay. Discussion? Commissioner Salavea. SALAVEA:Well, I just want to, I guess, for the record, Im not comfortable with supporting that it was the adverse impact and, basically, what Commissioner Iwashita proposes. So I, and I guess its through the vote that will bear out what we, how we go. So I just wanted to get that on the record though. ALAMEDA:Okay. Any further discussion? IWASHITA:Just a clarification. Are you saying now there wasnt an adverse impact or that the loss is not caused by the adverse impact? SALAVEA:The motive is, you know, there was some adverse impact but the motives for the sale, I mean, thats beyond what I feel comfortable as a Commissioner saying Mr. Malasek, what motivated him to sell. I mean, I can see his side of it but to put it in such defined terms makes me uncomfortable, only because now were talking about how much of the adverse impact, the impact motivated him to sell the property, how much of that adverse impact, you know, drove the sales of his fruit, of his farm where -. You know, I think it gets convoluted at that point. And so I just wanted to state on record that to define it in that way, Im not comfortable as part of the Planning Commission. 28EXHIBIT C ALAMEDA:Okay, thank you. Commissioner Salavea. Commissioner McCall. MCCALL:Yeah, maybe just to echo Alans points. You know, I agree thathe at least perceived that there was damage, thats why he sold the property. Im not convinced, Im not convinced about the second part of Mr. Iwashitas argument that therefore were just deciding on howmuch to compensate him. Im not convinced that he wasnt already compensated for it in the sale of his property. So I just want to make that clear. Thats where I am. So Im not, if I vote no its not because Im saying that I dont agree with the dollar value. Im not to the point where I agree that he wasnt already compensated. ALAMEDA:Okay, point well taken. Thank you, Commissioner McCall. Theres no other discussion? Id like to turn it over to staff. DARROW:Thank you, Mr. Chairman. Just for clarification, the approval recommendationistoawardtheclaimantcompensationtotalingtheamountof$25,361, is that correct? IWASHITA:Yes. DARROW:Okay. Commissioner Iwashita? IWASHITA:Aye. DARROW:Commissioner Graham? GRAHAM:Aye. DARROW:Commissioner McCall? MCCALL:No. DARROW:Commissioner Salavea? SALAVEA:No. DARROW:Commissioner Watanabe? WATANABE:Nay. DARROW:Im sorry? WATANABE:Nay. DARROW:And Mr. Chair? 29EXHIBIT C ALAMEDA:Nay. DARROW:The motion does not pass, four to two. WATANABE:Mr. Chair? ALAMEDA:Yes. WATANABE:Based on that vote and the requirement that we have to have five votes, I dont think -. ALAMEDA:It sounds like this will beon our agenda again. TORIGOE:Unlesssomebodyelsehassomeothermotionthattheywouldlike to try. ALAMEDA:Is there another motion that youd like to put on the table? Commissioner Salavea? SALAVEA:No. ALAMEDA:Most likely, if not, then it will be on our next Hilo meeting? WATANABE:Yeah. IWASHITA:I concur. ALAMEDA:Well, the applicant is gone so who do I call? YUEN:Well send a letter to the applicant informing him about the next meeting date and of the action today. ALAMEDA:Okay, as noted by the Director we will send the letter to the applicant informing him of the decision madetoday and when this item will on the agenda again. The discussion ended at 5:59 p.m. Respectfully submitted, Sharon M. Nomura, East Hawai€i Secretary 30EXHIBIT C