LIHU‘E — A resolution to establish a committee to investigate management and implementation of the transient vacation rental law stalled at the Kaua‘i County Council Wednesday, after stumbling upon potential legal issues.
Resolution 2013-55 was eventually deferred to June 12, after hours of deliberation and several public testimony.
“What I am concerned about is that I wish we would have had the opportunity to review the proposal or the proposed resolution first for its legality,” County Attorney Al Castillo said well into the meeting.
“I’m just finding out now, this wasn’t sent to the County Attorney’s Office for review?” said Council Chair Jay Furfaro after hearing from Castillo the resolution had not passed through his hands prior to introduction.
In July 2010, the council passed Ordinance 904, allowing owners of TVRs that were operating on agriculture lands prior to March 7, 2008, to apply for a non-conforming use permit, provided they met certain criteria. Going forward, no additional TVRs on ag lands would be allowed.
Nearly three years later, tales of abuse and fraud, laced with millions of dollars in profits, prompted council members Mel Rapozo and Gary Hooser to co-introduce Resolution 2013-55.
The resolution lists 18 TVRs recently awarded a certificate. The majority of them have been scrutinized in journalist Joan Conrow’s Kaua‘i Eclectic blog. In the ongoing Abuse Chronicles series, Conrow has conducted an investigation on 16 TVRs so far.
Castillo said the council is not vested with the authority to adjudicate the status of contested property rights. The council has the right to investigate, but to make findings regarding compliance would be outside of its jurisdiction, he said, and the reason for that is that TVR owners have rights to due process.
Other concern involved cost. Castillo said the resolution says the committee can hold hearings, and this will entail a certified court-appointed reporter, whose services run at $1,000 a day.
Additionally, the resolution states the committee will be able to make findings regarding misconduct, “and that, in and of itself, is problematic,” Castillo said.
To Rapozo, however, the resolution states the committee will make findings whether there was compliance with the TVR application process, rather than compliance with state or county laws.
“I think it’s a big difference,” Rapozo said. “We’re not here to adjudicate any of the cases.”
Earlier in the day, Gerald Ako, Kaua‘i Division Chief of the Hawai‘i Government Employees Association, said the resolution could expose county employees to liability. The collective bargaining agreement protects employees, but the outcome of the investigation may circumvent the agreement, and once it happens, that protection is not there anymore.
“To me it’s just a red flag,” Castillo said of Ako’s testimony. “He is here and he is concerned. And it will bring in all of the attorneys that we need to go through this process.”
Ako, however, told Hooser on the floor that he had not read the resolution.
Rapozo apologized to Furfaro for not sending the resolution to Castillo prior to introduction, but said he did work with the council’s legal analysts to make sure it was in compliance with the County Charter.
“I’m not comfortable with some of what I’m hearing from the county attorney,” Rapozo said. “Like Mr. Hooser said, can we get an attorney that can actually help us get this done and not telling everything that we are doing is not right?”
Furfaro looked at other council members and said he hoped they understand his point.
“I want to reiterate, our legal analysts at the end of the day would not have a leg to stand on … because they are not the assigned county attorneys,” Furfaro said.
Conrow, with the help of North Shore residents Caren Diamond and Barbara Robeson, has been gathering a substantial amount of information, including public documents, photographs and commercial advertisement. All of it she has been publishing in her blog, which got the attention of the council and of the administration.
“It’s going to be a little bit of tough medicine to clean it up, but it needs to be done, and I hope we just don’t keep pushing it off to the side for many more years,” Conrow said.
Diamond said many of these TVRs are in flood zones, which may expose the county to “incredible liability, especially that one morning when a tsunami comes up.”
“You and Joan and Barbara, you guys are heroes,” Councilman Ross Kagawa told Diamond.
Hooser agreed with Kagawa that the trio are heroes.
“But only heroes if the county takes action to rectify the issues that have been raised by you,” Hooser said. “So I think that half of it perhaps has been done, and it’s up to us to do the other half.”
Hooser said county Managing Director Gary Heu has been on the job for many years, and probably knows more than anyone else, from an administrative perspective, why things have or have not happened.
The fundamental question, Hooser said, is why the administration has not investigated it.
The allegations in Conrow’s blog — which Heu said he read — include fraud, applicants lying, misstating, the department not catching irregularities, ignoring flood zones, and millions of dollars in profits being made because people got windfall permits they should not have gotten, Hooser said.
From a legal standpoint, it’s a “convoluted and complex” issue, and it’s the administration’s job to attempt to reduce legal exposure for the county, Heu said.
Furfaro said the council offered in 2010 to fund another position to help enforce TVRs, but Heu said that to him it’s not a resource problem.
“Without thoroughly understanding all of the processes and all of the moving parts, it wouldn’t be the responsible thing to do to just throw bodies at the challenge,” Heu said. “I think we need to clearly understand the big picture, the various moving parts and the entire process before we start allocating resources to help address this thing.”
Heu said the administration is not afraid of supporting the resolution, only that “there is more than one way to get the same outcome.”
The administration wants to start a long-term process re-engineering study that does many of the things an investigation does, but goes a number of steps further, he said.
Meanwhile, Mayor Bernard Carvalho Jr. has formed an oversight committee, whose intent, “broadly speaking,” is the effective enforcement of TVR issues, but it would not happen two weeks from now, Heu said.
So the administration has also formed within the Planning Department a “more near-term” four-person task force, which is separate from the mayor’s oversight committee, and would look at violations, he said.
When asked by Councilwoman JoAnn Yukimura if this task force would be able to bring at least one case to court in the next three months, Heu said the administration would like to move “as quickly as possible.”
“So the answer to my question is ‘yes,’ because when you say ‘as soon as possible,’ it has no meaning to us, because ‘as soon as possible’ has meant, one, two, three years,” Yukimura said to Heu.
Years ago, the council pulled back on an internal audit of the Public Works Department because Heu said the administration would do a performance audit on the department, which never happened, according to Rapozo.
“I understand what you are saying and I really want to believe, but I don’t have the confidence anymore that, in fact, anything will be done,” Rapozo said.
• Léo Azambuja, staff writer, can be reached at 245-0452 or lazambuja@ thegardenisland.com.