2026-09-15 - Policy Committee on Environmental and Natural Resource Management

01:14Aloha, ladies and gentlemen.

01:18Today is Tuesday, September 15th. Time

01:22is 1:27 p.m. Uh we are here in the Hilo

01:26chambers and joined by one of our

01:28council members in Konich. Sorry. Point

01:31of information, we're getting started.

01:32If everyone can quiet down. Thank you.

01:38>> Thank you. Um we are beginning the ninth

01:41session of the policy committee on

01:43environmental management and natural

01:45resource management. Here today in Hilo

01:49Chambers we have Council Member

01:51Kirkowitz, Council Member Onishi,

01:54Council Member Inaba,

01:56Council Member Kimell,

02:01and um shortly to join us again will be

02:05Council Member Kagiada and Council

02:07Member Kane E. Kleinfelder as well as

02:10Council Member Galima. Joining us from

02:13our Kona Chambers, Council Member

02:15Hustus. I myself am Rebecca Viegas and I

02:18am chair of this committee today. With

02:22that, we call this meeting to order and

02:25I will hand it over to our clerk to read

02:28in the first item of business.

02:32>> So, check with Mr. Urseli. I believe we

02:34do have some testimony for this.

02:35>> Oh, my apologies. Yes, testimony.

02:37>> Thank you so much, Madam Chair.

02:40Uh knowing that we do have one testifier

02:42here in the Hilo chamber, we do have a

02:43couple via Zoom. What we'll do is we'll

02:45start with our testifier in Hilo and

02:47then transition to our Zoom testifiers.

02:51With that, Dell Otsuka is our first

02:53testifier on bill 183 to be followed by

02:56KOA Mlen.

02:59Dell, when you're ready to begin, please

03:01introduce yourself and you'll have three

03:02minutes.

03:11Good afternoon. Um, good to see you

03:14again. My name is Deutsuka and I'm here

03:17this afternoon to oppose Bill 183 which

03:20is fundamentally flawed because it

03:22functions as an archaic flat rate tax

03:25mechanism masquerading as infrastructure

03:28utility management. It reverses the

03:31economic polluter pays principle.

03:33Standard municipal infrastructure

03:35policies are built on volutric metering

03:38where entire where entities that create

03:40the most physical waste pay the highest

03:42share. Bill 183 detaches cost from

03:46volume entirely. It treats a high volume

03:49resourceheavy commercial mega laundry

03:51facility identically to a low flow

03:54waterrestricted eco room. It penalizes

03:57capital efficiency when local businesses

04:00invest capital into green infrastructure

04:02such as lowflow graywater filtration,

04:05high efficiency plumbing, and strict

04:07water conservation systems as demanded

04:10by bill 66. They reduce the physical

04:13strain on the county system. Bill 183

04:16locks in a static unyielding penalty per

04:19unit, meaning the returns on investment

04:21for eco upgrades drops to zero. So much

04:24for zero waste mission statement. Bill

04:2766 legally mandated the Hawaii County

04:30must design business toolkits, offer

04:33infrastructure priority, and create

04:35economic incentives for businesses

04:37practicing regener regenerative tourism

04:40and strict water conservation. Our own

04:43SCP hotel is the living blueprint of

04:46what your general plan demands. And way

04:48before this mandate was made, following

04:51natural disasters, they committed 100%

04:53of their restoration funding to local

04:55Big Island contractors, suppliers, and

04:57artisans. They have multi-deade

04:59employees. Why? Because they invest.

05:01They look at them as long-term

05:03stakeholders because they are. So I

05:05asked the county many times to please

05:07hire.

05:09SCP Hotel was recognized as the first

05:11property in the entire state of Hawaii

05:14to achieve silver benchmark status from

05:16Earth Check and top tier curator elite

05:19certification from the Hawaii Tourism

05:20Authority. We should be very proud and

05:23we should be asking them, can you help

05:25us? In 2019, the Hawaii County Council

05:28voted to pass a separate sewer rate hike

05:30that was explicitly supposed to make the

05:32Department of Environmental Management

05:34self-sufficient because DEM continued to

05:37mismanage operations and required a

05:40massive $6.8 million

05:43>> 30 seconds

05:44>> bailout from the general fund in 2025.

05:46Anyway, council members were hesitant to

05:49vote yes, vote no today. And because I

05:52don't have much time, uh, I wish you

05:54read my written testimony, too, because

05:59and those who voted yes, I mean, hey,

06:01don't this is sloppy bill. It's not

06:04ready for your final vote. So, I'm just

06:07saying what you're doing to the people

06:09that you represent, you're squeezing the

06:12local families from both sides,

06:15justifying tripling utility rates under

06:17bill 183 while simultaneously choking

06:20out the supplemental short-term rental.

06:22>> I'm sorry, but the three minutes are

06:23>> under 147.

06:26>> Thank you, chair. Your next testifier is

06:28via Zoom, Ko McLillen, to be followed by

06:30Jerry Gibson. Ko, whenever you're ready

06:32to begin, please introduce yourself and

06:33you'll have three minutes.

06:35>> Thank you very much. Aloha Awin a

06:37committee chair Viegas council chair and

06:40honorable members of the havi county

06:41council ko mlullen here on behalf of

06:44outrigger hospitality group and the

06:47dedicated ohana at the outrigger kona

06:49resort and spa in Koho. We want to be

06:52super clear at the outset that hotel

06:55operators across Havaii County like

06:57Outrigger are navigating the exact same

07:00severe cost escalations, inflationary

07:03pressures, supply chain spikes that our

07:06county departments face every day. And

07:09because we share these economic

07:11realities, we understand that wastewater

07:13rates must increase over time and we do

07:17not expect an exemption from paying our

07:19fair share. Our contention is solely

07:22with the creation of an isolated hotel

07:25rate class and we have provided written

07:27testimony for your reference on this

07:30based on a rate case that is

07:32fundamentally in congruent with the

07:34facts on the ground and vulnerable under

07:37the state law. We believe that there is

07:39statutory in congruence with transient

07:41parody. And while I'm no attorney, I

07:43have personally worked on shaping state

07:46and county laws relating to transient

07:48accommodations for over a decade. And we

07:51know that under Hawaii Revised Statute

07:53237D-1,

07:56state law explicitly defines transient

07:59accommodation with no distinction

08:01between a hotel room, an apartment, a

08:03suite, a condominium, single family

08:05home, dwelling furnished for under 180

08:08days.

08:10And in 2024, the legislature reinforced

08:13this principle in Act 17, clarifying

08:16that under HRS 46-4, and I'm quoting

08:19now, the furnishing or offering of a

08:22transient accommodations shall not be

08:24considered residential or agricultural

08:26uses. End quote. So the law is

08:29unequivocal. A transient use is a

08:32transient use. So why does that matter

08:33to us at the council today? applying a

08:36punitive standard to a minority group of

08:39lodging providers while allowing the

08:42vast majority of the island's transient

08:44accommodations, the massive short-term

08:47rental pool to remain shielded under

08:50lower residential tiers is more than

08:53unfair. It violates the clear spirit of

08:55the law.

08:57You know, going a little further, hotels

09:00functions within integrated mixeduse

09:02commercial centers alongside

09:04restaurants, retail, and offices, right?

09:08>> 30 seconds, please.

09:09>> SCP hotel has lots of restaurants all

09:11around them, and carving out hotel

09:13properties to absorb these targeted

09:15increases is inongruent. Happy to answer

09:18any questions that you have, but what we

09:21ask for is that you folks remove this

09:24hotel rate. that at best it is

09:27incomplete and at worst it is legally

09:30actionable. We thank you so much for

09:32your time, your leadership and your

09:33consideration and urge you to remove the

09:35isolated hotel classification placing

09:37hotels back within the uniform

09:39non-residential schedule. Mahalo. Happy

09:42to answer any questions you may have.

09:44>> Thank you so much for your testimony.

09:46Cherry, your next testifier is Jerry

09:47Gibson, also testifying on Bill 183.

09:50Jerry, when you're ready to begin,

09:51please introduce yourself and you'll

09:52have three minutes. Mahalo. Aloha, Chair

09:56Viegas, and committee members. My name

09:59is Jerry Gibson, president of the Hawaii

10:01Hotel Alliance, the voice of Hawaii's

10:04hotels. I come before you today with the

10:07deepest respect and full appreciation

10:09for the very hard work this committee

10:11and county leadership undertake every

10:14single day. We want to stay state

10:18clearly and unequivocally from the

10:20start. We fully understand and support

10:23the county's need to raise rates.

10:27Maintaining, modernizing, and funding

10:29our island's wastewater infrastructure

10:32is a critical public imperative, and our

10:36industry is ready and willing to pay its

10:39fair share. Our request today is very

10:43simple. Please remove the separate

10:45isolated hotel rate classification from

10:49bill 183 and treat hotels under the

10:52uniform nonresidential class.

10:55Imposing compounding rate increases

10:58approaching 300% on a newly isolated

11:02hotel category is simply infeasible.

11:06While large resort names often dominate

11:09headlines, the real acute impact of this

11:12rate

11:13falls hardest on our smaller local

11:16income properties. For these smaller

11:19hotels, an oversight tripling of sewer

11:22charges is not something that can simply

11:25be absorbed. It forces harsh choices

11:28that directly threaten local jobs,

11:31workforce benefits, and our ability to

11:34offer accessible commoner rate to local

11:37families for stations and gatherings.

11:40[snorts] Creating an isolated hotel

11:42class creates an unfair disparity across

11:46our island. Legal and unpermitted

11:49short-term rentals operate as transient

11:52lodging with high turnover. Yet they

11:55remain shielded under lower residential

11:58tiers while traditional hotels are

12:00singled out. Our hotels operate inside

12:04dense commercial areas

12:08alongside restaurants and retail.

12:11Ratemaking should be based fairly on

12:14meed volume and true cost of service,

12:18not by singling out one specific

12:20commercial door. Hotels already provide

12:23substantial funding to county coffers

12:26via real property taxes and county tat

12:30even while our major kahala coast

12:32resource properties privately fund and

12:35operate their own sewer plants off-grid.

12:39We did not ask to be exempt from rate

12:42increases. We only ask for fairness,

12:44parity, and a uniform non-residential

12:47rate structure that will keep our local

12:49properties viable and our local workers

12:52employed. Mahalo Newuila for your time,

12:55your leadership, and for hearing our

12:57heartfelt plea today. Thank you so much.

13:00>> Thank you so much for your testimony.

13:01And with that, chair, those are all the

13:03testifiers you have at the beginning of

13:04your meeting.

13:05>> Thank you so much, Reley. Uh with that,

13:08Mr. Clark, can we go ahead and go to

13:09bill 191?

13:11Is there any testimony for bill 191?

13:16Hearing none. Bill 191 amends chapter

13:1810, article 1, section 10-8 of the

13:20Hawaii County Code, 1983, 2016 edition

13:23as amended, relating to erosion and

13:24sedimentation control established

13:26administrative enforcement provisions

13:28for violations of chapter 10, including

13:30increased fines of up to $1,000 per day.

13:32Introduced by Council Bava.

13:34>> Move to forward bill 191 to council with

13:37a favorable recommendation. It's been

13:40moved by council member Inava and

13:42seconded by council member Kane Lee

13:44Eleinfelder. Council member Inamba.

13:46>> Thank you. This this bill is hopefully

13:50very straightforward. Currently

13:52uh if folks are violating uh the code

13:56when it comes to grading and grubbing.

13:59Um we can punish them by fine not to

14:02exceed $500

14:05only after um they've been convicted. So

14:09what this bill does is allow

14:11administrative enforcement powers um for

14:14the director of public works. Uh it

14:18requires that the director upon finding

14:20that a violation has occurred does serve

14:24uh the person responsible for the

14:26violation with written notice of

14:28violation. Uh, and that notice of

14:30violation would at minimum include the

14:33date of the notice, the name and address

14:35of the recipient, the section or chapter

14:39or permit that has been violated, and

14:41then a date for correcting the

14:43violation. Uh, if they don't correct

14:46that violation within the time frame

14:49provided by the director, uh, they need

14:51to pay a fine of $1,000 per day until

14:54the violation is corrected. Uh and there

14:58has been some

15:00greater discussion around this specific

15:03to culturally significant sites. Uh that

15:06might be some another bill that we'll

15:08see later, but this is just a general

15:10blanket giving enforcement to uh the

15:13director of public works to conduct

15:16enforcement um administratively via

15:19fines. So I ask that director Sagawa

15:23uh and deputy corporation council come

15:26forward just to give your man and this

15:28is something that we did review with

15:30them prior. So yeah, director.

15:43>> Good afternoon,

15:45Chairman Inaba and council members. Um

15:49is speaking about this bill 191. Uh

15:52department is in full support of your

15:55bill. Yeah, we see it as giving us the

15:58efficiency and the tools we need to

16:00better enforce the u chapter 10 of the

16:05uh

16:07uh erosion and settlement control uh

16:11code. Thank you.

16:12>> Thank you, director. Deputy Corporation

16:13council, if you could just provide your

16:15legal uh review. I we do have the

16:17pending amendment as well that we'll

16:19take up.

16:20>> Um yeah, I think it's a good it's a good

16:22amendment. It gives um you know as it's

16:25written right now [clears throat]

16:27the county could prosecute violators

16:30with a petty mis with a misdemeanor

16:32which you know it have to go through um

16:35be sent to the prosecutor and as far as

16:37I know that's never happened. Um so this

16:40just gives public works a realistic tool

16:43to enforce violations of chapter 10

16:47which um mainly are people doing grading

16:50and grubbing without permits. So this

16:53allows the director to give them notice

16:55uh if they don't comply he can issue an

16:57order and then um start issuing fines

17:00which um are real teeth to uh the

17:02director's um notice and order. So I

17:05think it's a good um amendment. Uh,

17:08thank you, Deputy Corporation Council.

17:10And I just have one simple amendment

17:12which was requested by the office of the

17:15corporation council. If I'll jump into

17:17that real quick. So, I move to amend

17:19bill 191 with the contents of

17:20communication 1058.1.

17:25>> It's been moved by council member and

17:27seconded by council member Onishi.

17:30>> Uh, thank you. And this just removes

17:32language regarding the posting of a copy

17:34of the notice of the violation.

17:37um or having it done via publication

17:41through a newspaper. Um deputy

17:44corporation council if you would please.

17:46Yeah. So what our litigation division

17:48has found um they've done a lot of

17:50research on service um and what

17:53satisfies the constitutional requirement

17:56of due process. And um the two things

17:59that they recommend, the two ways to

18:00serve people notice of these violations

18:02is by handing them the violation and

18:04somebody testifying that you know I gave

18:06it to them. But the courts also

18:08recognize that um can't always do that.

18:11So the courts say that um the county or

18:16state can satisfy constitutional due

18:19process by mailing the notice of

18:22violation by certified mail to the

18:24person. and the act of mailing it is

18:27service. Um even if it gets returned

18:30sender or whatever um legally we could

18:32proceed with that case. So that's why I

18:34was recommending that um amendment.

18:36Thank you. Um that's it on this

18:38amendment. Ask for your support.

18:44>> All those in favor of amending the

18:47contents of bill 191 with the contents

18:51of communication

18:551058.1

18:56please say I.

18:58>> We have nine eyes's.

19:03>> Oh no, we don't. We have

19:07>> Is there any Is there anybody opposed?

19:13Yep, we have nine eyes.

19:16Sorry that James's empty seat keeps

19:19throwing me.

19:23and we'll back to the main motion.

19:24>> Uh thank you. And uh just so you folks

19:27know the the reason for this bill,

19:29there's been two occurrences just within

19:32my own council district of uh illegal

19:35grading and grubbing. Um and we've found

19:40although the department has issued

19:42notice of violations that there is no

19:44fine or enforcement capability just

19:47within the department without having to

19:49go through the court system. So that's

19:51the reason for the bill. Happy to take

19:53any questions and ask for your support.

19:55Mahalo.

19:56>> Great. Council member Galima.

19:59>> Thank you. This is a little bit off the

20:02subject of the bill actually, but in the

20:05general area and I'm just wondering

20:08since we've had disaster in my district

20:11and there's a lot of grading and

20:13grubbing that's going on both by state,

20:16county, and private individuals just to

20:20get things back to normal. um are

20:24especially those private individual sort

20:27of good Samaritan type um folks that are

20:30just like clearing debris to get a road

20:33going. There was a rumor that DPW was

20:36going to sue them and then I told them

20:38no no they will not get sued because the

20:41county is too busy getting sued so don't

20:43worry about it. Um but this now kind of

20:48makes me wonder like um are they what

20:52would they be that the position of such

20:55private good Samaritan type individuals

20:59um would they be covered by some kind of

21:02emergency declaration the county for LA

21:07for instance? Councilwoman Kima, I wish

21:11I could answer your question. Right now,

21:14we are so busy trying to open up access

21:17on all our county roads, clear up uh and

21:21put our bridges and covers back into

21:23service. Um, as far as what rumors

21:27you've heard, I haven't heard of any.

21:30Um, I'll check with our deputy who's out

21:32there every day. uh he overseen uh uh

21:36you know just getting things back in

21:38order for us. Um but if you don't mind I

21:40can get back to you.

21:41>> Well, I checked with him right away

21:42because I wanted to quash that rumor

21:44very quickly, but I'm just wondering

21:47maybe the legal council can help me with

21:51that. Is there are they are they covered

21:55or exempted from

21:57>> um you know I don't know

21:58>> rubbing and grubbing. I there's

22:00exclusions certain exclusions apply that

22:03don't require a permit um

22:05[clears throat]

22:05without knowing the facts of you know

22:07what exactly is happening I wouldn't be

22:09able to um speak to that um the counties

22:13work there's a lot of there there's an

22:15emergency proclamation which allows them

22:17to bypass certain uh rules and

22:19regulations but for a person I I don't

22:22know um I would have to see what the

22:25situation is and get get the information

22:28to provide an anal analysis. Sorry.

22:31>> Yeah, no problem. Maybe we can talk

22:32about this some more offline because

22:35that is it is so important to not

22:40discourage folks from helping out in

22:42these kind of situations. You know, even

22:45just opening up other people's

22:48driveways. I mean obviously that

22:49wouldn't trigger grubbing and grading

22:52but um just even folks getting that

22:55impression that you know that they are

22:57going to be in trouble is not a good

22:59thing. So maybe we can talk about it.

23:01>> You know um deputy um division chief of

23:04the engineering division Melanie Nelo

23:06just told me that you know if somebody

23:07has a question about whether or not what

23:09they're doing is legal or not they can

23:11call the engineering division to get

23:12clarification on that.

23:14>> Thank you. Thanks.

23:17Thank you, Council Member Gumba. Council

23:19member Connealy E. Kleinfelder.

23:20>> Thank you. Thank you, Mr. Nava. I see

23:22this a lot actually. Uh, what is the

23:24definition for a grading graving? When

23:26when is a permit? Sorry, not definition

23:28of when is a permit required.

23:38>> Good afternoon, council. Melanie Dlo,

23:40deputy chief engineering division. Um

23:42the grading code chapter 10 code

23:44requires a grading permit when um you

23:46exceed 100 cubic yards of cutter field

23:49or if the cutter field exceeds 5 ft in

23:51height or if the general drainage

23:53pattern is altered. Um for grubbing it's

23:56if the work if the if the grubbing work

23:59exceeds one acre.

24:01>> Okay. And grubbing is just clearing off

24:03vegetation.

24:04>> Yeah. Generally we consider that just

24:06just surface surface clearing of

24:09vegetation, not any kind of change in

24:11the grade.

24:12>> Okay.

24:14>> Okay. Yeah. I I like the bill because

24:18this happens a lot. It's happening

24:20actually near my house too. And someone

24:22I think someone actually fought a

24:23complaint on that property, but I'd like

24:25to see more teeth in that to protect

24:27community. And the drainage, the runoff,

24:29the loss of vegetation, all of it starts

24:32to build when you look at it across

24:35entire swats of land or large parcels or

24:38multiple parcels at a time. And if no

24:41one's able to do anything on behalf of

24:43the county, then we run into issues uh

24:45with what happens after it's done. So,

24:48love the bill. Second.

24:51>> Thank you, Council Member Onishi.

24:53>> Thank you, Madam Chair. On that regards

24:55to grubbing, so you said 20 acres,

25:00>> what? One acre

25:01>> one acre

25:02>> for requirement for

25:03>> you know, with the storm that was

25:05mentioned by Miss Kimba like I've heard

25:08stories people were kind of grubbing or

25:10cutting, you know, their vegetation of

25:13the trees, dumping them in the gulch

25:16area and so forth. Right. And I know

25:18it's hard to prove that those trees that

25:21came down that blocked the drainage was

25:24theirs, right? But the work was done and

25:28we don't know like if they took them

25:31down to the landfill or or not. So, how

25:34will this amendment

25:37help with those situations?

25:41or do we need to add more into this into

25:44this bill this or this amendment to help

25:48public works to determine that

25:50situations?

25:53I I think I think if you're asking um

25:57how Yeah, it is it I agree it is

25:59difficult sometimes to determine who you

26:02know who who is responsible for certain

26:05things if we weren't out there to see it

26:07at the time, right? It's it's up it's up

26:10to the inspector to kind of make their

26:11best determination. Um, I guess I would

26:14say this this bill is more about the the

26:16enforcement procedures. Um, giving us a

26:19way to enforce when a violation is is

26:22found to the best of our ability and

26:24knowledge, but it it wouldn't I don't

26:26think it would directly speak to um what

26:28you're talking about. In that case, I

26:30think, you know, we have to go within

26:31the the availability and resources we

26:34have um to go out and inspect being that

26:37we're not able to be out there all the

26:38time.

26:39>> No, I understand. I mean, cuz there was

26:42one in my district that I reported to

26:44you folks and then you f you sent out

26:46someone to there then like the next day

26:49the neighbor told me that that that

26:51bulldozer got taken away. Right. But the

26:53grubbing or the grub I guess it was

26:55grubbing was already done right now. But

26:58what if that grubbing they had pushed it

27:01into it like a flood area or or like a

27:05stream, right? And then with the storm

27:08it washed it down, right? And then it

27:11clogged some kind of drainage. So

27:14>> what how can we protect the neighbors,

27:17right? Because of this one property

27:20owner that did illegal activities.

27:25Um,

27:27I guess what I would say in in in that

27:29particular case, it sounds like we I I

27:32would assume it would still be fairly

27:34obvious if someone, you know, luckily if

27:36someone grubs their property, I mean,

27:39eventually, of course, it will grow

27:40over, but as long as we're out there in

27:42a fairly timely manner, I think it will

27:43be

27:44>> fairly evident that some work is done.

27:46As far as where it got pushed, that

27:48might be sometimes a little bit harder

27:50to determine, but

27:52you know, we would still be able to site

27:54them, assuming those triggers are met.

27:56Um, as far as citing a owner who

28:00happened to grab their property, we'd be

28:01able to clarify whether they obtained a

28:03permit or not. So, at least in that

28:05scenario, I would think we'd still be

28:07able to issue a a violation.

28:09>> Okay, good. So, I guess for the public

28:13knowledge, if you do see your neighbor

28:16doing something like grubbing, you know,

28:19it might be good to call the county's

28:22engineering division to make sure that

28:25that neighbor had the proper permits,

28:28right? Because then if they don't and

28:31something did happen, that at least

28:33there's something on record, right?

28:36>> Yeah. I I would say, you know, we we

28:38definitely um encourage people to call

28:40our office or we do have the our online

28:43complaint system if they want to file

28:44something. That is that is the best way

28:47to make sure we're notified and can send

28:49an inspector out in a timely manner.

28:50>> Are you able to give the phone number?

28:53>> Um I can give our our main line. Um the

28:56DPW engineering division mainline is

28:589618327.

29:01>> Okay. Thank you. I'll yield at this

29:02time.

29:03>> Thank you, Council Member Onishi.

29:06Seeing no more comments, council member

29:09Nava, anything else? Okay. All those in

29:12favor of passing bill 191, please say I.

29:16>> Any opposed? We have eight members in

29:20support of Bill 91.

29:23Nine. God.

29:26[laughter]

29:30>> Yeah.

29:32>> Yeah. All right. Is there any additional

29:35testimony for bill 183?

29:41>> Hearing none, bill 183 amends chapter

29:4321, articles 1 and four of the Hawaii

29:45County Code 1983, 2016 edition as

29:47amended relating to sewer service

29:49charges, increases wastewater service

29:50rates, and establishes a new service

29:52class with new service rates for hotels

29:55introduced by council member Vasquest.

29:57This matter is postponed September 1,

29:592026. There's a motion on the floor made

30:01by Council Member Houston, seconded by

30:03Council Member Galima to recommend

30:04passage of Bill 183.

30:08>> Thank you, Mr. Clerk. With that, we will

30:11go ahead and um it's off it's on the

30:15floor now, right? Or it's on the table.

30:16Okay, perfect. So, with that, um I'll go

30:19ahead and open it up to you folks to

30:21share with us the information that

30:23you've brought forward.

30:27>> Well, uh good afternoon. uh Dan Gerin,

30:30director of DM and Kelly Hartman from

30:33our office. I think uh when we were

30:36talking two weeks ago, we were doing

30:38questions and answers and uh it was the

30:41discussion was tabled at that point. So

30:43we are prepared to to pick back up at

30:47that point.

30:50>> Thank you. Um would you like to bring

30:52forward the communication with your um

30:55Hawaii wastewater

30:57uh

31:00the rate study report.

31:04>> Sure, I can handle that one. Um, I'm

31:05Kelly Hartman. I'm the regulatory

31:07administrator for the department.

31:09>> I just need to get a motion to bring

31:11forward the communication.

31:13>> Oh, no need. Okay, never mind. I don't.

31:16It's all you, Kelly.

31:18>> Sounds good. Um, sorry. I wasn't able to

31:21pull up the communication as it was

31:23transmitted to council. Um, so if I'm

31:26out of order, just I'll try to um help

31:30you follow me along. Um, so I believe

31:32the first so first we submitted the

31:35transmitt letter. We referenced that

31:37this sewer rate increas

31:41um to fulfill the legal mandate under

31:43the AOC that was brought before the

31:45council March 2024

31:48um where the county agreed to implement

31:50a financial plan and to generate

31:53sufficient revenues for our operation

31:54and maintenance. Um therefore, bill 183

31:59proposes to raise sewer revenue to cover

32:01the operational deficit and become self-

32:04sustaining by 2031.

32:07So the supplemental information that was

32:09provided in the communication was in

32:12response to some of the questions that

32:13came up in the September 1st meeting. I

32:16believe the first um supplement was the

32:19sewer rate study itself. Um so council

32:22can review how that analysis were done

32:26and the costs were calculated. Um

32:28additionally we have Art Griffith and

32:32Debbie Foron our consultants on the

32:35study um virtually um so if we have

32:38specific technical questions about how

32:41the numbers were crunched um they'll be

32:43able to help us um when those questions

32:45come. Um second the draft.

32:49Thank you.

32:50the draft um wastewater rate model that

32:54is appendix A from the study and that

32:57was a response to council me council

32:59member Connie Lee Kleinfelder's question

33:02in regards to you know the number of

33:06billing units uh per customer class that

33:10we had. So that table three in there

33:12will help answer those questions.

33:15Third, we have the proposed wastewater

33:19service charge table. Um, the bill the

33:23way it was drafted

33:26is a is somewhat misleading. I wouldn't

33:29call it an error um because the

33:31increases are not shown over linear

33:34time. The so you'll see that I think

33:36it's 2019 is crossed off and that's

33:39where we start. So this is to help

33:42clarify how the increases are going to

33:45change over time.

33:49Um, and then we also have the EPA

33:51summary and legal framework. Um, I would

33:55have liked the legal framework to be

33:57provided first. That's a table of all of

34:01the state, county, federal mandates that

34:05support this bill. And they're numbered

34:08um where excerpts of those statutes are

34:11provided for your com your convenience.

34:15Um going through the table, if you

34:19review uh the legal framework, it shows

34:22that according to state, federal and

34:24county law, sewer rates must first be

34:26designed to produce adequate revenue

34:29required for operational maintenance

34:31operations and maintenance. Second, the

34:33bill we must bill the customers based on

34:35their proportionate share of operation

34:38and maintenance costs. And third, we

34:41must charge users discharging pollutants

34:45an increased cost to cover the increased

34:47costs of the operations that's required

34:50to treat their wastewater of unusual

34:53strength. Um we in the table we also

34:56reference the clean water act.

34:59um the state and federal mandates to

35:01generate sufficient revenue. Again, the

35:04administrative order on consent and the

35:06paragraphs that explain that the county

35:09needs to generate revenue and p

35:11implement a financial plan.

35:14Um it outlines penalties for

35:16non-compliance and also risks to

35:20potential future federal funding if we

35:23do not follow the the federal code. um

35:27including grants and lowinterest loans.

35:31And then finally, it references our own

35:33county code, section 21 through35, which

35:37mandates compliance with the federal

35:39code of regulations, which explains how

35:42the users must be charged um

35:45proportionate adequate revenue and based

35:48on the cost of their pollution.

35:53Thank you, Kelly. Anything else at this

35:57time? If not, I'm going to go ahead and

35:59open it up to members of the council for

36:01questions.

36:04>> Oh, please go ahead, director.

36:06>> Uh, there is one point. Uh, I've heard a

36:09couple times now in the last few days

36:12that um there are some people that feel

36:15that we are increasing the hotel rates

36:18by a disproportionate amount up to 300%.

36:23Um, I've got a copy of the structure

36:26right here. And uh the single family

36:30residents

36:32over the next five years,

36:36not accounting for the, you know,

36:39depreciation value of a dollar

36:42is approximately a 100% increase over

36:45the next five years. In real spending

36:48terms, it's something less than that

36:50depending on how you depreciate the

36:52dollar.

36:53uh the non-residential charge a similar

36:58amount about a 100% increase

37:01and um

37:04when we go to the uh even the gang cess

37:06pools about a 100% increase also still

37:11not accounting for the depreciation the

37:13value of the dollar [clears throat]

37:16we do have a new rate structure for

37:18hotels

37:20but when I look at the rate uh today and

37:24the rate out five years from now. The

37:26fixed monthly charge goes from $96 per

37:30month to $1899

37:33per month which is approximately a 100%

37:37increase just like the residential and n

37:40residential

37:42customers.

37:43And the per,000 gallons rate uh if we

37:48pick the 30,000 gallon and above

37:51category goes from 1085

37:56uh per thousand to 2140 per thousand.

38:01Still approximately a 100% increase. So

38:06as best I can tell from our rate

38:09structure virtually everybody's is

38:12increased not accing for deprecation of

38:15the dollar about 100%.

38:18I don't believe we in fact have a 300%

38:22increase in the rate for hotels here. I

38:25think that the rate increase is

38:28exactly in proportional to all the other

38:30rate structures as far as the increase

38:32goes. Uh, in addition to that, just some

38:36simple math.

38:37>> Director, [clears throat] can you speak

38:38right into the microphone, please?

38:40>> Say again, please.

38:41>> Could you speak into the microphone?

38:44>> Closer to the mic.

38:46>> Okay, please.

38:47>> Uh, just doing some simple math. the um

38:52the accepted norm uh nationally for the

38:56amount of water that a single room at a

39:00luxury resort uses is approximately 300

39:04gallons per day. Now that takes into

39:07account laundry, kitchen, swimming pool,

39:11toilet, bathtub, shower, you know, all

39:14the water that's used, even irrigation,

39:18all the water that's used and applied to

39:20that one room for one day. That's where

39:23that number comes from. today at our

39:27current rates for a hotel

39:31[cough and clears throat]

39:32their co our charge to them for treating

39:35that 300 gallons of water would be about

39:39$3.

39:40So out of their receipts for the room

39:43for that day, their cost to us is $3 to

39:48treat that waste water. In five years

39:52from now, in 2031

39:55under the new hotel rate structure, that

39:58cost will be $642.

40:02Now, that means that that price will

40:04have gone up $342

40:07approximately over a five-year period.

40:11Uh, I would contend that one, that is

40:14not a 300% increase. and two, an

40:19increase in cost of $342

40:22for a room. Uh, which they're charging

40:27$300 to $500 a night for. Uh, you know,

40:32that should shouldn't be an unreasonable

40:34increase in charge. And that's um, you

40:38know, then that increase in charge is

40:40supported by the numbers. Uh this FG

40:43does a lot of work to collect our

40:45historical financial information, get a

40:49very good estimate of what it costs us

40:51to treat wastewater and then that price

40:54is distributed distributed equitably

40:57over our users. We have no reason or

41:00advantage to

41:03apply any more of that to any single

41:05user. So we feel that it's been applied

41:08equally and fairly.

41:12Can I have corporation council come up?

41:27>> Can you introduce yourself?

41:29>> Uh deputy corporation council Diana

41:31Milan Lacy.

41:32>> Okay. So you heard testimony that was

41:34presented earlier, right? Yes, I do.

41:36>> Okay. So, they mention about this

41:38creating this new hotel category.

41:41>> Yes.

41:42>> Is it legal? Can the county do that?

41:45>> Well, I I believe so. Other counties

41:48have classifications.

41:50>> Does Aahu have that?

41:51>> Uh Aahu does not to my knowledge, but I

41:54believe that Maui and Kauaii both do.

41:56>> Has this hotel category for

41:59>> a hotel class? Yes.

42:00>> Okay. Okay. Um but you say you think so.

42:05I've I'm according to what I've

42:06reviewed, they they do have it.

42:08>> No, I know. But it like I'm saying, but

42:11is it

42:12>> is it legal?

42:13>> Yes. Are we able to do this by creating

42:16this category?

42:19>> Yes, I believe that it's legal.

42:22>> I I you know, I say that because things

42:25can always be challenged.

42:27>> I know. But then but then if we're doing

42:29it correctly, then we don't have to

42:30worry. But then you know if if you're

42:33saying I believe I think so then kind of

42:36makes me worried.

42:38>> Well

42:40I'm sorry. I mean things are always

42:43relative in law. So you know it's a

42:46specific situation in this situation as

42:49I see it. It appears to be legal because

42:53we're using the same kind of standard to

42:57allocate

42:58um usage and the same rate increases.

43:03>> Okay. Okay. Good. Okay. And then um what

43:06well then maybe it's the department now.

43:09>> Okay.

43:09>> You can come because I just want to

43:11clarify that first.

43:15So my question is before you created

43:18this hotel category, what was the

43:22hotel's pain?

43:23>> Uh as a non-residential.

43:25>> Yes. So it would be

43:30>> So was it $34?

43:33>> Uh currently um

43:38>> well it'll be 155 out five years from

43:41now, but

43:42$79.

43:43>> Yeah. Okay. That's the proposal, right?

43:46Yes. For for 20. No. So, what are they

43:48paying now?

43:52>> 54.

43:53>> $54.

43:54>> $54.

43:55>> And then with the new category, then

43:57it's going to be raised to 96

44:00>> the fixed portion of the bill. Yes.

44:02>> Yeah. And then in the old in the like

44:05what they um being assessed now do they

44:08pay that extra

44:10monthly charge?

44:12>> Yes. Non non-residential currently pays

44:16a fixed charge and a usage charge.

44:19>> Okay.

44:22And could you give me those numbers?

44:25Well, uh, currently under

44:27non-residential,

44:29the

44:32usage charge for 30,000 gallons and over

44:35would be $9.50.

44:38>> That's a new proposal.

44:40>> That's the current what we're currently

44:42charging.

44:46>> So the chart that we have here,

44:49>> so we have difficult to read. So you

44:53have like 40119

44:56and it's crossed out and then like say

44:58single unit residential it's 35 that's

45:01crossed out and the proposed January 1st

45:042027 going to be $63. Is that correct

45:07how I read it?

45:13>> If I can just interject really quickly.

45:16Um council member Onishi I agree it was

45:19confusing. If you go to the last column

45:22where it says4123

45:25and the amount's $52,

45:27that is the most recent fee that we're

45:30paying as of or that's being paid.

45:32>> I got to go back to the

45:33>> then you go over to the 2027.

45:35>> I'm sorry.

45:37>> Yeah.

45:41>> Okay. So, basically, if you're looking

45:44at the 30 30,000 gallons plus

45:50Now they're being charged 950 and then

45:52it's going to be raised to 1085.

45:54Correct. Oh, okay. So, it's not really

45:57that big jump.

45:59>> It is certainly is not a 300% jump.

46:01>> Yeah. Okay. Okay. So, I just wanted to

46:03kind of clarify that to make sure. And

46:05then also clarifying about if creating

46:08this category was legal, not le or

46:12illegal, right? And then knowing that

46:14Maui and Kauaii has this category,

46:18right? But Wahoo doesn't

46:22get FG to weigh in on that.

46:27>> Uh with your permission, sir. Sure.

46:29>> If we may ask our consultants at FG,

46:31they have experience throughout the

46:33islands.

46:33>> Okay. Sure. That would be great.

46:38>> Uh Art, are you available, sir?

46:41>> Yes. Uh, can you speak to um do the

46:45other islands have a discrete motel fee

46:49and is there any problem with it being

46:51legal?

46:53So, I think the question of who has a

46:57hotel fee has been already answered.

47:00Kawaii definitely does. Maui does.

47:03That's posted on their website. And um I

47:08haven't reviewed City and County

47:10Honolulu's, but I can search and see

47:12what I can find.

47:15>> Okay, sounds great. Thank you. I

47:18>> Thank you, Council Member.

47:19>> Yeah. Thank you, Art.

47:21>> All right. Thank you, Art. Council

47:23member Kagiada.

47:24>> Thank you, Chair. Um so, you mentioned

47:27you ran some numbers about the what

47:30luxury hotels um are consuming. Um, did

47:34you run any numbers on what a small

47:36hotel like the uh SCP hotel here in Hilo

47:40consumes?

47:43Uh, no, I did not. Uh, I don't have a a

47:47universally accepted amount for a small

47:51hotel operation. Um, it was relatively

47:55easy to find the information for large

47:57hotels. I think the record keeping is

47:59better. Okay.

48:00>> Um I suspect that there's a much wider

48:03variability from small private hotel to

48:07small private hotel.

48:09>> Right. Um I'm just wondering is there

48:11any uh possibility of looking at a

48:15distinction in charges for these luxury

48:20hotels that you're talking about versus

48:22some of our small kind of mom and pop,

48:24you know, entities here? Um, is there a

48:28way to look at a a distinction? Can we

48:30find some examples from other places?

48:33Maybe your consultant knows. Um, or is

48:36there another way to help so that we're

48:39not necessarily painting, you know,

48:42everybody with the same brush even

48:43though they they don't operate in the

48:45same way?

48:53>> I agree that that would be interesting.

48:54We'd be happy to look into it. and

48:57research that further.

48:58>> Okay.

48:59>> Whether we can find something or have

49:00our consultants find something.

49:02>> I would appreciate that. I mean, just in

49:04general, you know, these fees are very

49:06regressive. They hurt low-income people,

49:09small businesses, um, much harder than

49:13they do somebody that has has wealth or,

49:16you know, a much larger company. So just

49:20overall I think looking at ways we can

49:23potentially support our you know

49:26lowincome

49:29households as well as maybe our small

49:32businesses around some of this I think

49:34would be really um a good thing to

49:38consider whether that's maybe it's not

49:40even changing the fees but maybe it's

49:42having a pot of money that can be

49:45accessed you know accessible to people

49:47who who need the support. Um, I'm also

49:52wondering about the ext the increased

49:54fees for the portable toilets because I

49:57know a lot of our nonprofits are um they

50:00have to use the portable toilets for

50:02some of the events that they use and I'm

50:04just wondering um have you done any

50:07looking about how they may be affected

50:10and um what that's going to look like?

50:14Well, through our consultant, we have

50:16looked at what the treatment cost is for

50:18receiving that material.

50:21>> Um, that's a pretty straightforward

50:23number as to what impact that might have

50:26on the people paying the bill. No, we

50:29have not looked at that.

50:30>> Okay. So, in general, you're not really

50:32tasked with that um task. You don't you

50:35you don't you're not asked how people

50:38will pay for this. you're just trying to

50:40figure out what is that number that pays

50:43for the services basically.

50:45>> That is correct.

50:46>> Okay. So, I think it's I guess more

50:47incumbent upon us um and all of us as a

50:51county to consider these other questions

50:53and and how we go about it. Um yeah. So,

50:56I mean that's just my overall statement

50:58is I feel like you know for for many

51:00people this this is totally doable and

51:02it's not and it makes sense and it's

51:05needed to support um the work that you

51:07you need done. But for some families,

51:10especially right now when affordability

51:13is is at such a taunt and and and you

51:17know challenging point for so many

51:19people, I think even what some people

51:23might consider relatively small amount

51:25of increases is really going to hurt

51:27some of those small businesses and um

51:30and households that can't afford it. So,

51:33I I hope we can figure out ways and I

51:35I'm happy to work with you on figuring

51:37out ways to help those those people.

51:40Okay. Thank you. I yield.

51:43>> Thank you, Council Member Kagi. Council

51:45member Kane Lee Kleinfelder.

51:47>> Thank you. Do you have a representative

51:49from FG on?

51:52>> Ask that question again, please.

51:54>> Do you have do you have a representative

51:56from FG online?

51:58>> Yes, we do.

52:01I have a couple questions for you, sir.

52:02What is What is your name again? Sorry.

52:05>> Uh my name is Art Griffith and with me

52:07is Debbie Foron.

52:08>> Okay. Thank you. I was looking over the

52:12the wastewater rate model

52:16uh dated August 10th, 2026. It's in the

52:18communication that was provided to us.

52:22I'm looking at the budget. So that the

52:24budget that I see you had actual

52:25expenses from 2425

52:29>> and then it jumps to 26 27 for the

52:32fiscal years.

52:34>> That is correct.

52:35>> And this was August 10th. So by August

52:3710th I would I would assume you would

52:39have had a closed out budget for 2526 or

52:42at least something representative of the

52:44the year for 2526.

52:48So that information in final form, the

52:52um the fiscal year ends June 30th, but

52:55final budgeted numbers or excuse me,

52:58final actual numbers after uh um

53:01revenues and expenses being acrewed into

53:04the prior fiscal year that are realized

53:08after July 1st um were not completed by

53:11the time this study um was done.

53:15>> Okay. So [clears throat] we don't have

53:16that in this rate study.

53:18>> Okay. Looking in in some of these

53:21different accounts, I mean actuals for

53:222425

53:25versus projected for let's just say 26

53:2727. I mean let's take one one glaring

53:30one. Total OCE repairs to facilities

53:33actual expenses in 2425 was $18,900.

53:38Projected expenses for 2627 is $920,000.

53:43But in reviewing all of them is the

53:44number of counts where the projected for

53:462627 versus the actual is 2425 is

53:50substantially more. And if if I'm going

53:53to take this study then and say you

53:55projecting out the expenses by the

53:58department

54:01and your projected expenses

54:05I mean if I'm looking at some of these

54:07is very inflated versus what the actual

54:09costs were last fiscal year. I can't see

54:13last year's data right now presented in

54:15this table or I'm just just wrapping my

54:19head around what projected expenses you

54:22were going by what the department

54:24submitted and then the rate to follow

54:28based on your projections.

54:32Can you can you help? I don't know if I

54:34should ask you or the department to

54:35explain just just this one. Total OCE

54:37repairs to facilities projected 920,000

54:42for fiscal year 2627 when your actuals

54:45in 2425 were 18,900.

54:48That's a let's just call it a $900,000

54:52increase between two fiscal years. And I

54:55I haven't even touched on debt servicing

54:58which is projected at zero from what I

55:00can see in the rate study analysis.

55:04Um but if you guys want to if you want

55:06to help me understand how you projected

55:11I can um this is page 18 of 26.

55:15I can come up with some answer to that.

55:17But the person that can really answer

55:19that question unfortunately is on

55:22vacation with her family this week. That

55:24would be Robin Bowman.

55:25>> Bowman. Yeah.

55:26>> Um I suspect what happened there and

55:30it's just a suspicion is u

55:34under the earlier number the county was

55:37operating in the same manner that it had

55:40been operating in for the last decade.

55:44uh with the later number is a is a

55:48number that represents what we realize

55:50where we should be after we' had all the

55:54activity with the AOC with the EPA.

56:01Okay.

56:03Now, you know, I can't document that

56:04without Robin's help, but I suspect

56:07that's what we're looking at.

56:08>> Okay. Um is debt service built into your

56:12rate studies?

56:15No.

56:16>> Okay.

56:20Okay. That those are two that stood out

56:22to me. I Well, at this point, I almost

56:26want to bring in our finance director

56:29and just

56:33wrap my head around your budget because

56:34if the budget if you're budgeted, sorry,

56:38say this correctly. If the budget you

56:40presented to FG

56:43is inflated more than it should be to

56:46become the basis of the rates that we're

56:50looking to pass to our rate payers.

56:54Then I really want to review the budget

56:56to make sure the budget is in alignment

56:58with the rate that we're asking for. And

57:00if we're not even including debt service

57:02in

57:05this rate increase, is it getting the

57:07department where it needs to be to

57:10really be

57:13breaking even between the rate payers

57:15paying their fees and the projected

57:19increase of your rates and your actual

57:22budget. And is the budget real?

57:25>> Well, debt service

57:28is tied to

57:31capital investment

57:33and nothing in these numbers addresses

57:36capital investment.

57:38capital investment is

57:41is essentially paid for by the taxpayer.

57:46All the numbers in this rate structure

57:50are numbers that relate to the user

57:54and they are numbers which go up and

57:56down as the use goes up and down where

57:58the capital investment is once you spent

58:01the money is a fixed amount and

58:03therefore the debt service on that is

58:05also calculated straight from that

58:07amount. So I don't believe that the debt

58:10service should show up in this study at

58:11all. Okay. But as far as the big big

58:15change in numbers, uh I

58:19I suspect there are people in this room

58:21that know even better than I that we

58:24underspent

58:25prior to 25 and we're we're spending

58:29catchup doing ketchup spending after 26.

58:33And I suspect that has a lot to do with

58:35the numbers you're questioning.

58:37>> Okay, that was that was just two that

58:39stood out. So, thank you. Thank you for

58:41that.

58:42Uh, I'm gonna I'm gonna yield for now.

58:45Mr. Houston,

58:47>> thank you. Yep. Mr. Hustus in Kona

58:51Chambers, the floor is yours.

58:53>> Thank you, Chair. Appreciate the time

58:55here. Um, there's a question that

58:58council asked more about the um the

59:01legality side of it, but excuse me.

59:08Um but it's more of a question about um

59:11justifiability

59:13from my my stance here in terms of

59:16director you know the the difference in

59:18rates here specifically speaking about

59:21hotels. So

59:24non-residential

59:25going [clears throat] from 54 to 79 47%

59:28increase but hotels are going from 54 to

59:3296 about a 77% increase. So hotels

59:36themselves are about 22% over the

59:39non-residential then correct.

59:46Um,

59:49single residences are going from 52

59:54to

59:56125

1:00:00over the five-year period, which is

1:00:03>> right. But if we just look at if we just

1:00:05look at one like one year perspective

1:00:07where we're rolling from these dated

1:00:09rates which we haven't changed since 23

1:00:13and you kind of roll them up to that

1:00:152027

1:00:16>> line. The non-residential ones are going

1:00:19from 54 to 79 and the hotels themselves

1:00:23are going from 54 to 96.

1:00:33Um

1:00:33>> so

1:00:35>> yes but that's that's the fixed portion

1:00:39of the bill

1:00:41>> and in reality

1:00:43uh when you calculate the total bill

1:00:47um the fixed portion of it is a very

1:00:51small portion of the total bill.

1:00:55>> Sure. And I, you know, I recognize that,

1:00:57but what I'm trying to get at here is

1:01:00just for the sake of it here, the hotels

1:01:05being in their own class, they're

1:01:07effectively 22% above what they would

1:01:10have been if they were in stayed in the

1:01:12non-residential tier. Now,

1:01:17does that justify that 22% justify them

1:01:20being in their own class altogether?

1:01:22>> Okay. Well, uh, an indirect answer to

1:01:26your question would be if it's a

1:01:29nonresidential,

1:01:31uh, maybe instead of a 3/4 inch meter,

1:01:34they have a 1 inch meter at the most an

1:01:36inch and a quarter meter and there's a

1:01:39certain fixed cost associated, you know,

1:01:41for the county to have that meter, to

1:01:44buy it, to install it, keep it in place.

1:01:47Uh if you're at a hotel,

1:01:50um you're probably not going to service

1:01:52that hotel with a 1 inch or an inch and

1:01:54a quarter meter. It's probably two or

1:01:56two and a half or a 3 inch meter. So the

1:01:59fixed cost to have a meter located at

1:02:03that at that building uh is higher for

1:02:07the county.

1:02:09And and you're saying that that that

1:02:11equates to a 22%

1:02:14being higher is justifiable then that

1:02:17that the strength of their affluent, the

1:02:18strength of their wastewater and the

1:02:20treatment of hotel wastewater

1:02:23can justifiably

1:02:25you know enforce the 22% increase over

1:02:29non-residential.

1:02:32You know, considering the oxygen,

1:02:35biochemical oxygen demand, the solids,

1:02:37everything, the strength, the of the

1:02:39waste water, does it justify a 22%

1:02:44above the non-residential?

1:02:52I guess my answer would be is

1:02:55does good bookkeeping justify the

1:02:59difference? If we don't split hotels off

1:03:04then the question well could be well

1:03:07they they are doing something different

1:03:09and they must be either m more money or

1:03:11less money than we are. Uh if we do the

1:03:15bookkeeping correctly

1:03:18separate them and actually put real

1:03:20numbers to their service then

1:03:23>> but but it's but it's not just a

1:03:24bookkeeping thing. It's you're you're

1:03:26you're saying that the 22%

1:03:30above for hotels above non-residential

1:03:33means that their effluent is 22%

1:03:36stronger. That's what I'm I'm trying to

1:03:37get at. Is there is there a

1:03:38justification for them being

1:03:41>> that much higher? Are are they producing

1:03:43the waste with with is it stronger? Is

1:03:46it you know I'm trying to understand how

1:03:48you got to those numbers rather than

1:03:49just a bookkeeping number.

1:03:51>> Is there I understand the question.

1:03:53>> Ronishi asks about the legality. I'm

1:03:54just asking about can we justify

1:03:58them being that much higher based upon

1:04:00what they're putting into the system.

1:04:02>> And I I believe I'm sorry I think I

1:04:05understand your question better now. And

1:04:06I believe the answer to that is yes, but

1:04:09I'm going to ask Art to step in because

1:04:10he can give you real numbers.

1:04:14>> The answer from a cost of service

1:04:16perspective, the answer is yes.

1:04:17Wastewater from hotels typically is

1:04:20stronger than wastewater from commercial

1:04:22uh or other non-residential

1:04:25accounts. And in our cost to service

1:04:28analysis, we considered the wastewater

1:04:31from every customer class that you have,

1:04:33the residences, the non-residential, the

1:04:36hotels, and the private haulers

1:04:39separated into three customer classes.

1:04:41And the differences in rates are based

1:04:43on the differences in customer

1:04:45characteristics. So for

1:04:50hotels versus non-residential the

1:04:52difference in rates is the difference in

1:04:53the wastewater strength. Same for the

1:04:56private haulers. The reason why those

1:04:59are also increasing is because we

1:05:03sampled wastewater at um at the uh uh

1:05:08headworks or the the the county's

1:05:10engineering consultant uh arranged for

1:05:12that. And so the the rates that you see

1:05:16are cost of service based rates where

1:05:17the differences in rates among customer

1:05:19classes are based on the characteristics

1:05:21of waste water from that customer class.

1:05:24>> So we we're able to we have sampled and

1:05:27tested the waste water from each of

1:05:29those accounts to kind of give a

1:05:30perspective of the strength of their

1:05:32effluent.

1:05:33>> We used estimated accounts. We did not

1:05:35we were not able to obtain a wastewater

1:05:39samples from hotels for this rate study.

1:05:41We use published estimates from other

1:05:44utilities. Similarly for residential

1:05:45customers, we use publish estimates of

1:05:49um per capita BOD and TSS loadings.

1:05:53>> Okay. So we're looking at estimates from

1:05:55similar accounts.

1:05:57>> Yeah, similar accounts. And for the

1:05:58hotels, we used estimates that were

1:06:00produced on Kawaii.

1:06:03And we can justifiably say that the 22%

1:06:06increase for them above non-residential

1:06:09can account for the strength of their

1:06:11effluent.

1:06:15Um yeah and and I I want to echo one of

1:06:18the points that uh director Gervin made

1:06:21and that is the for the hotel the

1:06:24proposed hotel customer classes customer

1:06:27class um the vast majority of revenue

1:06:32comes in the usage charge specifically

1:06:35the tier that is 30,000 gallons per

1:06:39month or over. And so if you compare

1:06:42that with the hotel, if you compare that

1:06:46charge with the non-residential class,

1:06:48it's about 15% higher.

1:06:51>> Okay.

1:06:52>> And the the hotel data that we got from

1:06:57Kauaii

1:06:59um was for a they have a c they have a

1:07:02split customer class, hotels with

1:07:04restaurants and hotels without

1:07:06restaurants. and we use the BOD data um

1:07:10from their from their work for the

1:07:13hotels without restaurants. So that's

1:07:16even a conservative estimate of uh the

1:07:18wastewater strength.

1:07:20>> Okay. Thank you. I appreciate those

1:07:21details and thanks for letting me kind

1:07:23of dig into that a little bit. Um,

1:07:26director, I is there you had any

1:07:29thoughts about phasing in the hotel

1:07:31rates rather than just jumping right

1:07:32into it and then so that we can have

1:07:35more local testing to get a kind of

1:07:36better understanding of the strength of

1:07:39what's coming into the system.

1:07:42>> Well, we had not considered that. I

1:07:44don't I'm not saying we couldn't

1:07:46consider it but at least as far as this

1:07:49presentation as far as this bill is

1:07:51concerned we we did not consider that.

1:07:54No.

1:07:55>> Okay. Thank you. And then um

1:07:59just just uh for an estimate here, if if

1:08:02we did not have

1:08:05the hotel class,

1:08:08what would what would the county kind of

1:08:09be forgoing in those

1:08:12in those revenue opportunity?

1:08:16>> Well, we just heard Art say that for the

1:08:19majority of the hotels that the

1:08:21difference is actually about 15%.

1:08:24that the larger users.

1:08:26So, uh I suppose it would be 15%

1:08:31>> Debbie

1:08:32>> of

1:08:33whatever our

1:08:36total fees are for the hotel class.

1:08:45>> Uh just Okay, going back to going back

1:08:48to the bill,

1:08:51[clears throat] we have gang cesspools

1:08:52on here. I I thought gang cesspools were

1:08:56were no longer allowed.

1:08:59>> Well, um they they are, but the county

1:09:01is a proud owner of a couple of them.

1:09:05>> Um we are working very hard to close

1:09:08those, but until such time as they're

1:09:10closed, they're still they're still in

1:09:11the rate structure.

1:09:13>> So that's a that's a rate we pay

1:09:15ourselves as a county then.

1:09:17>> No, that's a rate we charge people in

1:09:19Pahala and Nleu.

1:09:21>> Okay.

1:09:23But is it is it worth having that rate

1:09:26structure set? I mean, we're we're

1:09:27trying to phase them out. I mean, I know

1:09:29we have some years, but um

1:09:33just just a just a food for thought for

1:09:35that one for sure.

1:09:36>> Okay.

1:09:37>> Um

1:09:42>> yeah, I think I think that's all I have

1:09:43for now. Thanks, Chair.

1:09:46Thank you, Council Member Hustus.

1:09:49Council member Kimble.

1:09:51>> Yes, thank you. Um, I kind of want to

1:09:53build up off of um, Council Member

1:09:55Hustus' line of questioning

1:09:58um, from the standpoint of one of the

1:10:01testifiers raised that hotels are not

1:10:04the only form of transient vacation

1:10:07rentals. Sorry guys, maybe too soon. Um,

1:10:13I I would presume that other forms of

1:10:17vacation rentals such as time shares,

1:10:19short-term vacation rentals, those are

1:10:22all currently falling under the

1:10:24residential usage.

1:10:27>> Uh, that's actually an excellent

1:10:29question and Kelly and I just had this

1:10:31conversation so I would ask her to

1:10:34answer that question.

1:10:37>> Kelly Hartman, regulatory administrator.

1:10:39So, yes, currently, um, short-term

1:10:43vacation rentals are often zoned in

1:10:45residential communities, and that is how

1:10:48our accountants pull that information to

1:10:51to determine who's in the customer

1:10:54class. Um, with the planning

1:10:56department's recent go live registry for

1:11:00short-term vacation rentals and BMBBS,

1:11:03uh, it's an excellent opportunity for

1:11:05the county to have a data set that we

1:11:07can pull from, um, to charge these

1:11:11businesses the non-residential rate.

1:11:15We don't believe we have an accurate

1:11:18cost of service analysis for the

1:11:20short-term rentals because they don't

1:11:22provide the kinds of services the hotels

1:11:24do to throw them in the same class. They

1:11:26don't have the large commercial laundry

1:11:28mats, you know, the maybe they don't

1:11:30have the giant pools and the commercial

1:11:33kitchens. So, we don't think we have

1:11:35enough information to throw them into

1:11:36the same class, but we definitely have

1:11:38enough information to throw them into a

1:11:40commercial class.

1:11:42>> Thank you. Um yeah, I was going to ask

1:11:44your consultant

1:11:46um if they had any sort of information

1:11:51from other jurisdictions either in the

1:11:53state or more, you know, nationally. Is

1:11:57there a difference in usage between a

1:12:00typical homeowner residential unit and

1:12:03something that is used as a vacation

1:12:05rental? I know it's not part of our

1:12:06study, but do you have any experience or

1:12:10information on that?

1:12:13I do not. This is Art Griffith.

1:12:15>> Okay. Thank you. Um yeah, something I

1:12:18think um you know the

1:12:22the idea of treating the hotel class

1:12:24differently I think begs to question

1:12:27what was raised by the the testifier is

1:12:30shouldn't some of these other activities

1:12:31that are in fact commercial and could

1:12:34influence the amount of wastewater

1:12:38also be factored in? And like you said,

1:12:41since we now have this tool to more

1:12:43accurately identify those properties, um

1:12:47you perhaps this is something to

1:12:49consider rolling in or anticipating

1:12:53um with further discussion about that.

1:12:56Um my other question was

1:13:00with respect to

1:13:05are you familiar with any other

1:13:07jurisdictions?

1:13:09I'm I'm thinking about some of the

1:13:10comments Council Member Kagiwada made

1:13:13about the fact that this is sort of a

1:13:16regressive

1:13:18uh fee structure, right? And um you know

1:13:22the way we deal with that in the real

1:13:26property tax world is to provide an

1:13:29exemption below a certain value amount,

1:13:31right? Are you are you aware of any

1:13:33structures in the state that use a

1:13:36similar type model to provide a little

1:13:38bit of benefit or relief to lower income

1:13:41families? Is that something worthy of

1:13:44discussion or does that just get too far

1:13:46outside of the realm of what what is

1:13:49typically done?

1:13:52Well, um

1:13:54that for us that gets to be a

1:13:56complicated question because on one side

1:13:59we have county, state, and federal laws

1:14:04requiring us to charge

1:14:08strictly according to the cost of

1:14:11service.

1:14:13So as soon as we create a different cost

1:14:19structure for a specific category of

1:14:22user,

1:14:24we were at risk of violating

1:14:28that rule.

1:14:29>> Right. Okay.

1:14:30>> At the same time, we do recognize that

1:14:33this for some families is an expensive

1:14:36service.

1:14:38We all benefit from having

1:14:41clean waste water.

1:14:44So

1:14:46you know those two thoughts kind of

1:14:49conflict with each other. Our current

1:14:51thinking is

1:14:54that we would like to put some programs

1:14:57in place which one are

1:15:02based on existing lowincome program

1:15:06structures. meaning that our customers

1:15:08would be prevetted.

1:15:11We don't have the skill or the manpower

1:15:14to do that vetting ourselves. So, we

1:15:17would need to rely on other agencies

1:15:19that have a lot more experience doing

1:15:21that than we do to vet our customers and

1:15:24say, "Yes, this is a family unit that

1:15:27deserves some consideration."

1:15:30And then we have to say okay how do we

1:15:34provide that consideration and our

1:15:36current thinking is we find a way that

1:15:42additional money comes into the system.

1:15:45Um quite frankly, one of the answers on

1:15:48the table was that the council could

1:15:51provide a fund

1:15:53for subsidizing these uh you know uh

1:15:57wastewater accounts that are that are

1:15:59being helped. Now I don't mean to be

1:16:03flippant with that. You know, it's

1:16:04certainly a possibility, but uh we will

1:16:08in order to stay above the law, we have

1:16:10to find a way to provide that

1:16:14without providing a different cost

1:16:16structure for that class of customer.

1:16:20>> I I see that your corporation council

1:16:23wants to weigh in on that.

1:16:29>> Deputy Corporation Council Diana Melan

1:16:31Lacy. Um There is in the clean water

1:16:35revolving fund um act and it's in the

1:16:39packet that you have as number three a

1:16:42section on additional subsid I can't say

1:16:45that today subsidization

1:16:48which uh allows the possibility of

1:16:52getting funding to help offset uh people

1:16:55who are having difficulty and one of the

1:16:58criteria is that you do have a rate

1:17:02system set up that you know pays for the

1:17:05system. Uh so within that structure it I

1:17:10don't know if this has been done I

1:17:11haven't like checked with the state or

1:17:13seen when it's been given but it's

1:17:16something that we could certainly look

1:17:17into because it exists within the

1:17:20revolving fund but you have to have good

1:17:22documentation. Got it. You know to show

1:17:24Thank you. Thank you for that. And it

1:17:26sounds like we also have to have rates

1:17:27that are in parody with what we're

1:17:30actually paying, which is what we're

1:17:31trying to accomplish here. Chicken and

1:17:33egg sort of thing. Okay, great. Um, one

1:17:36final question, sorry, going back to the

1:17:38hotel. Um, would either of you know, I

1:17:41know some of our hotels are on their own

1:17:43individual waste war systems. Do you

1:17:44know how many properties we have in that

1:17:46that would meet the criteria and be part

1:17:50of the this rate?

1:17:53Uh, no I do not. Art, do you have any

1:17:56idea?

1:18:01>> So, for the purposes of we we don't have

1:18:04an exact count. Um, for the purposes of

1:18:07doing the rate calculations, we looked

1:18:08at uh all of your non-residential

1:18:11customers and uh worked to identify as

1:18:15many of those which were hotels as we

1:18:16could using things like tax M key

1:18:18numbers and addresses. And we've

1:18:20identified at least 21

1:18:23But there may be more.

1:18:25>> Okay. Thank you.

1:18:27>> Thank you, Art.

1:18:28>> Um,

1:18:30you know, I I'll just conclude by by

1:18:32saying um, you know, I think obviously

1:18:36we've had some conversations offline

1:18:38prior um, about the importance of making

1:18:41the rates cover our general operating

1:18:43costs. Um, I still continue to have this

1:18:46greater concern about, you know, how few

1:18:48people we actually have connected to our

1:18:50systems and how many how few people are

1:18:53like bearing the burden of all of these

1:18:55operating costs and want to ensure that

1:18:58we as a county, and this is editorial,

1:19:00um, are doing more to make sure we we

1:19:03broaden the usage of our existing water

1:19:05wastewater system so that we actually

1:19:07have more people feeding into these um,

1:19:10operating cost systems. um spreading, if

1:19:13you will, the the duty and

1:19:15responsibility. Um with that, I'll I'll

1:19:17yield at this time. Just wanting to

1:19:19remind everyone that we do send this to

1:19:21the um Environmental Management

1:19:23Commission today rather than moving it

1:19:25forward. So,

1:19:27>> in terms of timing,

1:19:32>> could I respond to your comment? Um so,

1:19:34under the AOC, the the department is

1:19:37required to put together a connection

1:19:39compliance plan. Um, and I believe

1:19:41that's due this December. So, we've been

1:19:44meeting and talking about how to enforce

1:19:47connections and we're going to put

1:19:49together a brief plan and how we issue

1:19:52letters and and that type of thing. So,

1:19:54that'll be forthcoming.

1:19:57>> Thank you, Council Member Inava.

1:20:00>> Thank you. Uh, in our last meeting, I

1:20:02had requested some a calculator, very

1:20:05basic for us to be able to see. I mean I

1:20:07know you have the consultants and you

1:20:09provided explanation of how you folks

1:20:12have come but did you folks get a chance

1:20:14to put that together so members of the

1:20:17council are able to see and just play

1:20:20with rates to see what happens because

1:20:22we know we need to send it but unlike

1:20:24other planning bills where we send it to

1:20:28the commissions for recommendation and

1:20:30we can do what we want after if we make

1:20:32substantial changes we would need to

1:20:34send it back again. I we need to make

1:20:36sure we

1:20:38are not tinkering with it too much after

1:20:40it comes back. We need to tinker before.

1:20:43>> Kelly Hartman, regulatory administrator.

1:20:44Can I make sure I understand what the

1:20:46the request is? You'd like a calculator

1:20:49breakdown from the class structure so

1:20:53you can plug in numbers to see the

1:20:55increases. Yep, we can provide that.

1:20:57>> Okay. Because yeah, right now I mean we

1:21:00I think on page

1:21:02ES2 if that's how this numbering works

1:21:05that there's an attempt at explanations

1:21:07perhaps, but yeah, we don't necessarily

1:21:11have just a simple calculator kind of

1:21:13like how we do when we do our real

1:21:15property tax rates um to show you know

1:21:18what the value is in this case, how many

1:21:20users and what the base rate is plus any

1:21:24additional use fee on top of that. So, I

1:21:27think that might be

1:21:29it is going to be helpful and I asked

1:21:31for it last time and we still need it.

1:21:33Thank you.

1:21:36>> Thank you, Council Member Nava. Council

1:21:37member Kirkowitz.

1:21:39>> Thank you, chair. Um, thank you for all

1:21:42the information. Um, I think yesterday

1:21:44you guys had submitted a couple of other

1:21:46plans. Wastewater facilities plan 229

1:21:49pages and cespool conversion evaluation

1:21:52report about 219 pages. That's a lot to

1:21:55drop on us the day before we meet. Um,

1:21:59and the reason I bring this up is

1:22:00because last time I wanted to better

1:22:02understand how this particular

1:22:04ordinance, right, the funding piece fits

1:22:07into the longer range strategy for what

1:22:10we need to do to get our wastewater

1:22:13treatment facilities in functioning

1:22:15order. And so just kind of highle review

1:22:18of these reports revealed about $2.3

1:22:22billion

1:22:23for existing wastewater treatment

1:22:26facilities and then on top of that $5

1:22:29billion for cesspool conversion.

1:22:33That that's a lot that's a lot of money

1:22:35that we do not have and that is one very

1:22:39large and important area of of our

1:22:41economy and the essential services we

1:22:43need to provide as a county. But it's

1:22:45not the only thing that we can be

1:22:47thinking of. Um I I bring this up

1:22:50because it it kind of springboards off

1:22:52of what council member Inaba is asking

1:22:54about this calculator. I'm trying to

1:22:57understand with the changes that are

1:22:59being proposed here,

1:23:01how much more additional funding is

1:23:03being generated to

1:23:05essentially meet the gap, fill the gap,

1:23:08meet the goal that's intended for, you

1:23:11know, financing what needs to be done

1:23:14through the facilities plan. Do you have

1:23:16a sense of what these next projected

1:23:19five years will mean for for your

1:23:22department and getting what you need to

1:23:24have done through like the AOC, what all

1:23:27those mandates are

1:23:29that because that's that's still unclear

1:23:31to me. I I don't know what the longer

1:23:33range financial plan is. And I'm taking

1:23:36a look at one of the reports. I think

1:23:38it's part of um the docket where it's

1:23:42noted that we do not have a

1:23:44comprehensive CIP plan for

1:23:48infrastructure or anticipated failures

1:23:51and we do not have an adequate financial

1:23:53plan with the sustainable funding

1:23:55mechanism to plan costs and financing

1:23:58for necessary CIP

1:24:01um projects and repairs. So that's not

1:24:04lost on me and I again just trying to

1:24:06understand how will this feed into that

1:24:09larger financial planning strategy.

1:24:11>> Well, I can answer part of that

1:24:13question.

1:24:15Most of the numbers you were referring

1:24:16to will have

1:24:20will be um paid through capital

1:24:23investment.

1:24:25uh the the county out into the future

1:24:27has some very large investments to make

1:24:30whether they be on behalf of the county

1:24:32or just residents of the island. Uh with

1:24:36a lot of these cesspool closures, uh

1:24:39individual residents are going to wind

1:24:41up bearing that cost. It won't be a

1:24:44county cost, but somebody will be

1:24:46spending new money to achieve a lot of

1:24:49the goals that are in those reports.

1:24:52The money that we're talking about today

1:24:55here in this bill

1:24:57uh is not capital money. It is operating

1:25:01money. So this is money which we will

1:25:05spend daytoday yeartoyear

1:25:08to pay wages, buy electricity, buy spare

1:25:12parts, buy chemicals

1:25:15etc. So it's the cost, it's the ongoing

1:25:19cost

1:25:21of operating this system, but the system

1:25:26itself

1:25:27is created through capital investment.

1:25:31>> Okay, that's helpful. director, can you

1:25:32then provide us a report that will let

1:25:36us know how much

1:25:40um

1:25:42less general funds your department will

1:25:45be relying on with these proposed

1:25:47changes if it's for operations?

1:25:50>> Oh, our goal um

1:25:51>> does that make sense?

1:25:52>> Yeah, it certainly does and it's part of

1:25:54our our very important goal.

1:25:57Uh our goal and our instructions to FG

1:26:02was that in five years we want to be at

1:26:06zero general funds

1:26:09that with these with these increases in

1:26:12rates we should be self- sustaining and

1:26:16we will not need any additional general

1:26:19fund money to um maintain our our

1:26:22operations.

1:26:25Okay, that's very helpful to have on the

1:26:27record. Thank you. I yield.

1:26:29>> Thank you, Council Member Kirkowitz. Uh,

1:26:32Council Member Bish, have you spoken

1:26:34yet? Okay, I'm going to go to um, Mr.

1:26:36Con E. Kleinfelder.

1:26:38>> Thank you,

1:26:46>> Council Member Hustus, I'll check in

1:26:47with you in just a minute. Yeah, you

1:26:50know, I liked Council Member Kimell's

1:26:53point. If you have

1:26:56a bed and breakfast functioning on a

1:26:58residential lot,

1:27:00they're paying for water. They're paying

1:27:03as a unit, just one unit, $52, right?

1:27:07But there's not a per unit charge like

1:27:09uh

1:27:11there's not a per thousand gallons

1:27:13charge coming with that cost. But they

1:27:16are housing more people. They have a

1:27:18higher water bill, but their sewage is

1:27:20actually more than would be a normal

1:27:22residence. That's an interesting That

1:27:25was a very interesting component of how

1:27:27to get more money into the apartment.

1:27:32>> Verification.

1:27:33>> Yep.

1:27:34>> So, if you have a short-term vacation

1:27:36rental that is multiple dwelling units,

1:27:38it's be it's being charged the

1:27:40multi-dwell dwelling unit rate per unit.

1:27:44If it's a single home, it's being

1:27:47charged as one unit.

1:27:50>> Okay. Okay. Thinking down the line, we

1:27:52we have a lot many discussions, but

1:27:54ADUs, ohas, additional farm dwellings,

1:27:59all these different pieces out there

1:28:01floating in county cold land

1:28:04may not be recognized by the system that

1:28:07we have in place. So, just a good place

1:28:09to double check to make sure that you

1:28:10are getting the funds you should be for

1:28:13folks connected to the sewer system.

1:28:16Um, I got I I got to keep hammering on

1:28:18this. the the number of

1:28:21accounts

1:28:26that we have historically and then

1:28:28projected

1:28:30if I I looked at Hilo single unit

1:28:32residences 1830

1:28:35number of accounts

1:28:37November 30th 2023

1:28:40projected

1:28:41for FY3031

1:28:441961 so that is 130 accounts were

1:28:48projected to grow by for just Hilo

1:28:51single unit residences. That number

1:28:55points to a problem that we have

1:28:58internally which is we're not growing

1:29:00our systems like we should be.

1:29:02>> But I did the math. It actually it is

1:29:04hard to pencil it out. If you put

1:29:09what I had a thousand new customers

1:29:12times $52

1:29:15doesn't equal out that much money. So

1:29:16the the I mean, it's hard to pence it

1:29:20out, but it's like a 20-year return on

1:29:21investment to put people on the sewer

1:29:24system depending on for a million

1:29:27dollars. So, I get it. But we have to

1:29:30move in that direction. On the other

1:29:32side of this is looking at your cost,

1:29:35bringing down your cost. Electricity is

1:29:36huge for you folks. Bringing down your

1:29:39cost for electricity decreases your

1:29:42cost. I'm looking at kind of

1:29:43holistically as your as your at your

1:29:46department

1:29:47If we're projecting our cost to get

1:29:49higher to run wastewater,

1:29:53if we can bring that number down while

1:29:55you increase your rates, you're you're

1:29:57trying to meet those two lines in the

1:29:59middle, save money for the department,

1:30:01and lessen your needed rate increases

1:30:04for the public taxpayers while trying to

1:30:06meet all demands.

1:30:09That that in itself should just be part

1:30:11of that push. I think what you about

1:30:13Miss

1:30:15Hartman

1:30:17on pushing that. What' you say?

1:30:19December. You have something coming in

1:30:20December for this

1:30:22>> the connection compliance plan.

1:30:25>> Okay. Connection compliance, but also to

1:30:27the EMC on directionality for the

1:30:30department

1:30:32to begin decreasing costs for providing

1:30:34a service versus just projecting

1:30:37upwards. And then we're going to keep

1:30:39that rate upwards. It's not it's not a

1:30:41sustainable approach. It's just uh keep

1:30:44it status quo and was do what we do.

1:30:47Does that make sense, director?

1:30:49>> Uh yes, it does. And we've taken a look

1:30:51at,

1:30:53you know, uh if you when you go looking

1:30:57for how you can save money, you look at

1:30:59the big cost items first because you can

1:31:01if you can save 5% of a big item, it's

1:31:04more dollars than 5% of a small item.

1:31:07[snorts] Um and a for instance uh at our

1:31:12plant in in Kona, we have a a motor that

1:31:17drives a blower and that motor is a

1:31:20variable speed motor but it can be

1:31:22between three and 500 horsepower

1:31:25and the electric bill for that motor is

1:31:28very significant.

1:31:30And we are doing an engineering study of

1:31:34that motor and the aerration system that

1:31:36it operates right now. Uh working with

1:31:40HECO and some other contractors to see

1:31:42if we can um reduce the operating cost

1:31:46of that motor and still get enough

1:31:48oxygen in our water to get adequate

1:31:50treatment. So we are already looking at

1:31:54some of that. There are some things like

1:31:56wages,

1:31:58um, equipment costs, chemical costs we

1:32:01have less control over, but right now

1:32:04we're uh, investigating our electrical

1:32:06costs and what we can do about it. Our

1:32:08electric bill is approaching $3.5

1:32:10million per year.

1:32:13So,

1:32:15>> it's a good place to try and find some

1:32:17savings.

1:32:17>> Yeah. When you when you think sewage,

1:32:21it's you look at the waste water, the

1:32:22sorry, the water usage going to the

1:32:24building and then that's how you get

1:32:25your sewer charge.

1:32:27>> Ask me that question again.

1:32:28>> Water water in is your sewage rate out,

1:32:32right? I mean,

1:32:33>> water in mean the treatment plant.

1:32:35>> Portable water no portable water to the

1:32:37residents or to the the non-commercial

1:32:39or whatever whatever you want to call.

1:32:40>> Not completely true. In a perfect world,

1:32:43yes. Uh, virtually all gravity flow

1:32:47sewer systems have a certain amount of

1:32:49infiltration.

1:32:50>> No, no, sorry. To the residents, you

1:32:52deliver 5,000.

1:32:53>> Oh, yes. Yes. I'm sorry. Yes.

1:32:56>> But humans, I mean, we add to the water

1:32:59on the way back out, right?

1:33:08>> What are you saying? Add to volume.

1:33:11>> Yeah, in a nice way.

1:33:13I I suppose that's mathematically true.

1:33:16Is it a significant number? I would

1:33:18question that.

1:33:20>> I was I was thinking about that. Um and

1:33:22then interesting just pointing this out.

1:33:24Interesting in that the dollar amount

1:33:27and the units almost everything is equal

1:33:30between Hilo and Kona. Even your your

1:33:33hotels looks like it's equal for Hilo

1:33:37and Kona, which I did not expect to see

1:33:40in your report. which tells me that a

1:33:42lot of our Kona facilities are actually

1:33:44not on our county systems.

1:33:47>> Well, our hotels

1:33:49like Kaloa,

1:33:50>> it shouldn't be that surprising because

1:33:52the plants are equal size. They're both

1:33:54designed as 5 million gallon per day

1:33:56plants.

1:33:57>> But Waloa is serviced by

1:34:00private.

1:34:02>> Yes.

1:34:02>> So, they don't even show up on our

1:34:03books.

1:34:04>> Yes.

1:34:04>> Yeah. I was trying to figure out there's

1:34:06a It just seemed unbalanced until I

1:34:08realized that. Okay. Okay.

1:34:12Thank you.

1:34:14>> Thank you, Council Member Con Einfelder.

1:34:16Council member Onishi.

1:34:17>> Thank you, Madam Chair. So, on

1:34:18[clears throat] that note, for the

1:34:20hotels, how many hotels on the island is

1:34:25participating

1:34:26in this um using our systems? Well,

1:34:31going back to Arts Answer from a little

1:34:33while ago, they did a preliminary search

1:34:36and they their best estimate at this

1:34:39time is that we have 21 hotels. Okay,

1:34:42that's on the system because I think in

1:34:44Hilo in in in Benny Drive there might be

1:34:47like three

1:34:49hotels that are on the system.

1:34:53>> Archer, are you still on, sir?

1:34:56>> And there's a couple condos.

1:34:59>> Yes. So would you know are how many

1:35:03hotels in Hilo on Banyan Drive are

1:35:06hooked up to the sewer system?

1:35:09>> I I don't have that specific number off

1:35:11the top of my head. Um I'm sorry.

1:35:16>> Okay. And and then so your determination

1:35:20on the cost

1:35:24was deep because like as s Mr. Kanye

1:35:28Kleinfelder mentioned Hilo East Hawaii

1:35:31and West Hawaii there's like a

1:35:33difference. So how did you come up with

1:35:36just one rate

1:35:39across the board?

1:35:40>> So the the cost of service analysis

1:35:43considered

1:35:45the county's

1:35:48sewer systems all of them in aggregate.

1:35:51We did not separate and calculate

1:35:54separately if there was any difference

1:35:56in cost between a Hilo customer and a

1:35:59Kona customer or a um you know uh for

1:36:04any of your other uh smaller treatment

1:36:06plants. That's the way the the the

1:36:09county budgets are not fully

1:36:12disagregated. Some costs are, some costs

1:36:14aren't. And so

1:36:18the rate schedule that was developed is

1:36:21applies countywide to all of the

1:36:24county's wastewater customers.

1:36:26>> Okay. Because my to my understanding

1:36:30like for example Hilawy I think they

1:36:32charge like $175 a night

1:36:36and not three or $400 a night. So now

1:36:40they're going to have to increase their

1:36:43room rates.

1:36:45Was that considered or was that looked

1:36:48at?

1:36:51>> We did not factor in any

1:36:54um effect of these wastewater rates on

1:36:57retail

1:36:59uh prices for hotels. What we did is we

1:37:02looked at the wastewater characteristics

1:37:05of the customer class of each customer

1:37:07class

1:37:09and used that to determine the rates

1:37:12based on the systemwide amount of

1:37:16revenue that needs to be collected.

1:37:19>> Okay.

1:37:19>> To operate, maintain and replace the

1:37:21system.

1:37:22>> Okay. And so then also you didn't look

1:37:24at factoring in like B&Bs, TVRS,

1:37:30correct?

1:37:32the

1:37:34any BMBBS or TDRs

1:37:37that are within the existing customer

1:37:41classes

1:37:43um are we assume that they were they

1:37:47would stay within the customer classes

1:37:50they are currently assigned to.

1:37:52>> Okay.

1:37:54>> Go ahead.

1:37:55>> Kelly Hartman, regulatory administrator.

1:37:57So this is a conversation outside the

1:38:00rate study. The rate study is developed

1:38:02in such a way that we have residential

1:38:04rates, we have non-residential rates,

1:38:07which is where our commercial customers

1:38:10get lumped into. And so what the county

1:38:12is saying is we have an opportunity with

1:38:15now that the planning department is

1:38:17having collecting data on registering

1:38:20these facilities. We have the ability

1:38:23our accountants, our billing clerks can

1:38:26pull that information and identify,

1:38:29okay, what residentially zoned units are

1:38:33actually permitted

1:38:35and they can charge as commercial. that

1:38:38once you folks finding out that there's

1:38:41more of this commercial use, then

1:38:46they're going to switch classes. So now

1:38:48you guys going to be making more money,

1:38:50right? More income going to be coming in

1:38:52because you they're going to be paying a

1:38:54higher rate. Correct.

1:38:57>> If we moved short-term vacation rentals

1:39:01to the non-residential rate, it would be

1:39:03an increased rate. No. So then does that

1:39:07>> then does that reduce the residential

1:39:10rates?

1:39:12>> No, the rates are based on the customer

1:39:16classes and the customer classes are

1:39:18based on an a cost of service analysis.

1:39:22>> This all this what you folks basing

1:39:24everything on is the use like so for the

1:39:26next five years, right? starting from

1:39:29next year

1:39:31hopefully at the fifth year

1:39:34operating costs going to be covered by

1:39:36all this expense by this increases

1:39:38correct that's what director said right

1:39:41so now if this classification where

1:39:45these bed and breakfast TVRs are now

1:39:49moving to the non-residential you're

1:39:51going to get an increase in revenue in

1:39:54that category

1:39:57correct

1:40:02Um

1:40:05theoretically you could project it that

1:40:07way. I think uh I'd have to take a wait

1:40:10and see attitude

1:40:12but um you know the idea that if we were

1:40:15able to collect more money from a

1:40:17specific justify collecting more money

1:40:19from a specific class that it would

1:40:21impact

1:40:23uh what portion the remaining classes

1:40:25pay. I think that's a a fair

1:40:28expectation.

1:40:30Um I'm a little less sure that we would

1:40:34actually be able to recognize how that's

1:40:37happening, that the numbers would be big

1:40:40enough and significant enough for us to

1:40:42actually take action on them. Um you

1:40:45know, I'd be hesitant to promise it

1:40:47would work that way, but it could. Yes.

1:40:49>> Well, I mean, if you just do the math,

1:40:51it kind of calculates going to be more.

1:40:53It's like for example like and I

1:40:55mentioned this to you folks before that

1:40:58I cannot see banking

1:41:02this cost just among what we have

1:41:05servicing now and not looking at the

1:41:08future growth because within the next

1:41:10five years we could be adding another

1:41:13thousand users right and we're not going

1:41:17to be see any reductions in those that

1:41:20were already paying this exist that

1:41:22increases Right. So now that's going to

1:41:24be added income towards the department.

1:41:28Why?

1:41:30>> It's going to be an added volume of

1:41:32water that we have to pay to treat. And

1:41:34so understand

1:41:37operating cost is including everything

1:41:39like you said equipment, electricity and

1:41:42all these kind of other things, right?

1:41:44But as you moving on in the five years,

1:41:46you might reduce your electricity

1:41:48because you might be looking at other

1:41:49alternatives, but you're still going to

1:41:51be collecting this funds. You're not

1:41:53reducing the amount of revenue you're

1:41:55bringing in, right? But you can reduce

1:41:58your costs, right?

1:42:01So that's

1:42:04I think theoretically what you're

1:42:05proposing is correct.

1:42:09My only concern is how would we

1:42:12recognize it and act upon it in reality?

1:42:16We're going from a fixed fee of $52 a

1:42:18month under the current rate structure

1:42:21to a fixed fee of $54 a month. That's

1:42:25only a 4% increase,

1:42:26>> right? No, but

1:42:28>> it would be hard to recognize it and

1:42:29change the rate structure based on that.

1:42:31But like it's just like how you base

1:42:35this rate increases right on the five

1:42:37years to get to that zero um general

1:42:40funds right being using general funds.

1:42:44There should also be a plan or a goal

1:42:47set on how many more users we can have

1:42:50within that five years.

1:42:52Right?

1:42:54I mean that would be ideal to for the

1:42:56council to know.

1:42:59Well, the

1:43:02end answer to your question is

1:43:05five years from now, we're going to need

1:43:07to review this rate structure again.

1:43:10Okay? And we'll have to go back through

1:43:12all the analytical steps that we've done

1:43:15this time and see how it works out five

1:43:18years from now

1:43:21as to who contributes how much and what

1:43:23their true cost is. So you folks right

1:43:27now don't have a plan of increasing

1:43:31users in the next five years

1:43:39in order to increase users

1:43:42in a significant way. Now the number was

1:43:46put on the table of a thousand users a

1:43:48year. I could see how we could do that.

1:43:52But in order to increase users in a

1:43:55significant way, we would need to expand

1:43:58our collection system. It would need to

1:44:02get bigger, more branches, go out

1:44:05through more of the community.

1:44:07There's nothing I would like more than

1:44:10to

1:44:12branch out our collection system and

1:44:14bring more ces pools in. I know and I

1:44:19understand this but so like I'm trying

1:44:21to say that there's so many different

1:44:23moving parts. Yes. Right.

1:44:25>> But you cannot just focus just on one.

1:44:27Right. Your your department needs to

1:44:29focus on all the different moving parts

1:44:32to see how we can get to these certain

1:44:34goals.

1:44:35>> And I have a whole department full of

1:44:37people that would like to expand our

1:44:39system. And as soon as somebody finds

1:44:42the money for us to do it, we will go to

1:44:44work doing that.

1:44:45>> Okay. Thank you. I'll at this time.

1:44:47>> Thank you, Council Member Anishi. At

1:44:49this time, we'll go back to Council

1:44:50Member Hustus. I just also want to

1:44:53humbly remind the body that we are it's

1:44:5510 after three and um we have another

1:44:59two committees to get through today. So,

1:45:01thank you, Mr. Hustus.

1:45:03>> Thanks, Chair. I'll be brief. The

1:45:06director, the last conversation we had,

1:45:08one of the requests I made [snorts] was

1:45:10around

1:45:12number of comparables in the study. So

1:45:15the the study has four comparables,

1:45:18right? And I I think it's a little

1:45:21narrow. There are there are other PUC

1:45:24rates that were set on different spaces

1:45:27and different times and you know along

1:45:30with the calculator that was been

1:45:32requested by council member Nava. I I

1:45:35think it would be good to include some

1:45:37of these other figures that are out

1:45:38there so we get a a better picture of

1:45:41what some of these comparables are. It's

1:45:44just it's just too narrow right now. So

1:45:47to really understand

1:45:49what residential is in different

1:45:50communities, I mean, some are higher,

1:45:51some are lower. I mean, it's it's all

1:45:53over the map. So, I just wanted to see

1:45:56if if there are those figures out there,

1:45:57if you and your office can gather those

1:45:59figures, so at least we have some

1:46:00baseline figures to kind of put into

1:46:03that calculator. Otherwise, it could be

1:46:06all over the place.

1:46:08So really looking for

1:46:11a real clear snapshot

1:46:14here on Hawaii Island.

1:46:17Thank you.

1:46:19>> Okay, I understand.

1:46:24>> Okay. Thank you, Council Member Hustus.

1:46:26Um just I'll do Council Member Con.

1:46:30Klein filter

1:46:32>> just just briefly just just as a

1:46:34reminder

1:46:36why I touched on the

1:46:39debt servicing is it this is brought up

1:46:41in the last meeting but I cannot make

1:46:43this clearer for everyone to remember

1:46:47the people who are paying rates are

1:46:49connected to the sewer system but the

1:46:53$500 million of debt servicing the

1:46:55county is about to go into to improve

1:46:56our wastewater systems is being paid by

1:46:59every taxpayer on the island. So if we

1:47:02look at fairness,

1:47:05people who live and have a septic system

1:47:07in Puna or Volcano or Kohala who aren't

1:47:10connected to the sewer system that we

1:47:13are talking about rates covering just

1:47:16the cost of the department to carry,

1:47:21we're all paying for it. So,

1:47:25in fairness, we have to make that

1:47:27adamantly clear to everybody.

1:47:30If we don't like it, I understand if

1:47:32hotels don't like having a class of

1:47:34their own. I understand that. But I'm

1:47:37not connected to the sewer system, but

1:47:39I'm paying to improve the sewer system

1:47:41that's collecting the wastewater from

1:47:44the hotels in Kona that I pay $800 a

1:47:48night for to go right now because their

1:47:49prices are crazy. um or the hotels here

1:47:53in EVO. So, we all are paying for it.

1:47:57The rates are being paid by our rate

1:47:58payers, but we're all paying for the

1:48:00wastewater treating itself. So, just

1:48:03keep hammering on that. So, we

1:48:05understand the fairness that's being

1:48:06addressed right now. Thank you,

1:48:10>> Council Member Nava.

1:48:11>> Yeah. Uh I asked last time to get the

1:48:14information to us quickly. I will make

1:48:16myself available to meet with you folks

1:48:18this Thursday or Friday to make sure we

1:48:21get the information in a timely manner

1:48:23because these 200 pages were timestamped

1:48:26on Friday and that's just it's not okay.

1:48:30We need to get information in early

1:48:33so everyone has time to digest and look

1:48:36at it. If not, we're going through this

1:48:38exercise right now and it it's not

1:48:40efficient use of our county's resources.

1:48:43So let me know what time Thursday or

1:48:45Friday. Thank you.

1:48:47>> Thank you, Council Member Gimba.

1:48:50>> Kimble.

1:48:51>> Kimble. [laughter] Kimble.

1:48:53>> Kimble. That works. Two small questions.

1:48:55Um just wanted to clarify uh regarding a

1:48:57comment. Um I understand that, you know,

1:49:00multif family dwellings that were CPRed

1:49:02have different ownerships. Condominiums

1:49:04for example, apartments would be charged

1:49:06as individual units. Is that also the

1:49:09case for a property that has for an

1:49:12example an ohana or a second dwelling?

1:49:14Are they those charged as individual

1:49:17units although the property is under the

1:49:19same ownership? And how do you folks

1:49:21know that they're individual units?

1:49:25>> Kelly Hartman, regulatory administrator.

1:49:27So yes, if it's a ohana with a kitchen

1:49:32and wastewater fixtures, our right now

1:49:37our wastewater division folks go out and

1:49:40do an inspection and report back to our

1:49:42accountants to verify whether it's

1:49:44considered a um individual unit. And so

1:49:48they are charged based on the unit cost

1:49:51as long as we can get out there and and

1:49:53identify that it should be. And the

1:49:55dwelling unit definition is in line with

1:49:58um I believe the planning department or

1:50:01definition of dwelling unit.

1:50:04>> So um when when folks come in to get a

1:50:07building permit to build a second

1:50:08dwelling, are you guys notified that

1:50:10they're putting an additional dwelling

1:50:11on a property at that stage or it is

1:50:14only through inspection that you know

1:50:16that there are multiple dwellings on a

1:50:18property?

1:50:21>> I don't have the answer to that

1:50:22question. I

1:50:25it's possible that we are not involved

1:50:27in that part of the process.

1:50:29>> Okay. I'm starting to get like with all

1:50:31the different conversations we have

1:50:32today, there's various points where

1:50:34we're needing to know things about

1:50:35what's going on on properties and

1:50:36different people know different parts

1:50:38and we need to actually have them all

1:50:40talking to each other and maybe only do

1:50:41one inspection on any given property

1:50:43rather than send planning out and you

1:50:45guys out and real property decks out and

1:50:47you know that gets a little much. Um and

1:50:49then just I know you were going to just

1:50:51jump into this Dan. Um there was comment

1:50:54was made about energy usage, efficiency,

1:50:56all of that. And you were about to say

1:50:59um something about infiltration and you

1:51:01know when we talk about potential

1:51:03opportunities for savings down the line

1:51:07with repair and maintenance of existing

1:51:09wastewater lines. Could you just give us

1:51:12a percentage of the energy usage by the

1:51:15department that is being used to push

1:51:20rainwater and ocean water that has

1:51:21infiltrated our wastewater systems

1:51:23around and as we do that maintenance

1:51:26that these funds will go towards that we

1:51:28will no longer be pumping around

1:51:30presumably.

1:51:32>> I can't give you hard numbers but I can

1:51:35give you enough information you will at

1:51:36least understand the process. Um,

1:51:41when the tide is out and the weather is

1:51:44reasonably dry,

1:51:46most of the water coming to our

1:51:48treatment plant is waste water.

1:51:52[clears throat]

1:51:53When the tide comes in, a little bit

1:51:55more of it is ocean water.

1:51:58When we have a con low,

1:52:01the flow rates go way up. For instance,

1:52:05uh normal flow here at Hilo is 3.5

1:52:08million gallons per day on a reasonably

1:52:12dry day. When we had the conal lows, we

1:52:16had short periods of time when the flow

1:52:18was 11 million gallons per day when the

1:52:22rain was raining really hard. So

1:52:26infiltration into the system certainly

1:52:30can be significant.

1:52:33But you have to temper that with

1:52:36the conal low was x many hours out of

1:52:38the month.

1:52:40Other hours during the month were

1:52:42perfectly dry.

1:52:45So what portion of the month do we

1:52:47experience these excessive flows because

1:52:50of excessively wet weather?

1:52:53>> And that's obviously going to change

1:52:55dayto day, month to month, year to year.

1:52:58We we have enough information to know

1:53:01that there is real savings available if

1:53:04we can reduce infiltration

1:53:07towards that. We have two crews, a

1:53:10westside crew and an eastside crew that

1:53:13are out scoping our collection systems

1:53:16trying to find these leaks and then

1:53:19scheduling them for the repair. And we

1:53:22are making some very nice progress in

1:53:26developing our GIS system. That's our

1:53:29electronic map of our sewer system. And

1:53:33that information now as we're collecting

1:53:35it is going on that map. [clears throat]

1:53:38And as we go forward, we'll be able to

1:53:40use that map to schedule these repairs.

1:53:44Now, that's not only a good thing, it's

1:53:46also required by our AOC's.

1:53:49Sorry, Director Keyhot. Excuse me. D,

1:53:52you gotta make them D. D,

1:53:57you gota make them quiet down.

1:54:00>> Thank you.

1:54:02>> I I I don't want to go too far into this

1:54:04and I because we got to get into the

1:54:05next meeting, but you know, some of the

1:54:07the basic number that I've seen heard

1:54:09reported is about onethird of our energy

1:54:11usage in wastewater is moving water

1:54:13around is infiltrating the system. And

1:54:16so spending repair maintenance money

1:54:18will actually potentially bring down

1:54:20those costs. Um with that, I will make

1:54:23the motion to post.

1:54:24>> Actually, I'd like to say a few things.

1:54:26Thank you. Um sorry, didn't get to you

1:54:29last time. Just a couple of things. You

1:54:31know, we had this opportunity to sit in

1:54:33um a forum uh in Maui at HSAC and talk

1:54:38about energy saving performance

1:54:40contracts. And I'm hoping after eight

1:54:43years that's something maybe our county

1:54:45could return to because that is a huge

1:54:48expense is the energy to process all

1:54:50this water. Uh second thing I want to

1:54:52say is I feel like these increases in

1:54:55rates is in a c it's it's reflective of

1:54:58a catchup.

1:54:59So is the um the agreement with the EPA

1:55:04to move forward in updating all of our

1:55:07wastewater infrastructure. So, we're

1:55:10having to pay and catch up for what

1:55:14should have been done decades ago. I

1:55:17honestly think that hotels should have

1:55:19had their own rate decades ago. Um, I

1:55:23think that there is some opportunity for

1:55:25time shares to be looked at because time

1:55:27shares very often do have their own. Uh,

1:55:31I know that Kingsland does their own um

1:55:35laundry and has full kitchens and all

1:55:38that kind of stuff. So, I think um

1:55:40that's something to take into

1:55:42consideration when it comes to Airbnbs

1:55:44and vacation rentals and homes in

1:55:46general. I don't know how far down the

1:55:49rabbit hole of minutia we want to go. Um

1:55:53but these are just a couple of the

1:55:54things I also um just want to

1:55:57commiserate with those from the hotels

1:56:00who were concerned about a 300%

1:56:02increase. This graph was really

1:56:03challenging to take a look at just

1:56:06because but I do understand that's the

1:56:08way it's presented in code. So that's

1:56:10the way it came forward. Um lots of

1:56:12conversation here today. Uh sticky

1:56:15subject. Um nothing's going to get

1:56:19cheaper. It's only going to cost more

1:56:22moving forward. And as we navigate

1:56:24climate change, sea level rise, um who

1:56:27knows what'll happen with the feds and

1:56:28the EPA recently, but um we know we have

1:56:32an obligation and a responsibility to

1:56:35future generations to provide safe and

1:56:37healthy drinking water and an ocean to

1:56:40swim in. So, thank you for leaning in at

1:56:44a time when this is not fun to try to

1:56:47navigate. Nobody wants to pay more. um

1:56:52when we're already getting pinched all

1:56:54over the place. The one thing I did want

1:56:55to mention and I'm not sure if it

1:56:57assuagases your concern uh council

1:56:59member Kagiwada but with a smaller hotel

1:57:04they are less apt to have um

1:57:09the you know monthly usage they there's

1:57:12a charge per thousand gallons and I'm

1:57:14assuming they would have a lower amount

1:57:17of discharge so there is a bit of a a

1:57:20difference that would be provided to

1:57:21them and with that I'll come back to you

1:57:23council member Kimell, if you wanted to

1:57:26make the motion.

1:57:27>> Uh, yes. Motion to postpone bill 183 to

1:57:32the October 6 committee hearing.

1:57:37>> It's been moved by council member Kimble

1:57:39and seconded by council member Galima to

1:57:41postpone

1:57:43bill 183 to the October 16th.

1:57:48>> Six. October 6th.

1:57:56committee meeting. All those in favor?

1:58:00>> We have nine eyes and no nos.

1:58:04And seeing no further business on the

1:58:06policy committee on environmental and

1:58:09natural resource management, I am

1:58:12closing this committee.

1:58:19>> Committee on finance will start in a few

1:58:20minutes. Thank you.

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