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HomeMy WebLinkAbout2015-3-24PlanningCommissionMinuteswebKAUAI PLANNING COMMISSION REGULAR MEETING Tuesday, March 24, 2015 The regular meeting of the Planning Commission of the County of Kauai was called to order by Chair at 9:18 a.m., at the Lihue Civic Center, Moikeha Building, in Meeting Room 2A /2B. The following Commissioners were present: Chair Angela Anderson Vice Chair Sean Mahoney Mr. Louis Abrams Mr. Wayne Katayama Ms. Amy Mendonca Absent and Excused: Mr. Hartwell Blake (1 Vacancy) The following staff members were present: Planning Department — Michael Dahilig, Leslie Takasaki, Dale Cua, Jody Galinato, Duke Nakamatsu; County Attorney Mauna Kea Trask, Deputy County Attorney Ian Jung; Deputy County Attorney Jodi Higuchi- Sayegusa. CALL TO ORDER Chair Anderson called the meeting to order at 9:18 a.m. ROLL CALL Mr. Dahilig noted there were five members present and there was quorum. APPROVAL OF AGENDA Mr. Dahilig recommended moving item I.1. related to general business matters immediately after the public hearings and moving the executive session regarding the Planning Director and unfinished business related to Kauai Springs to the end of the agenda. On the motion by Sean Mahoney and seconded by Amy Mendonca to approve the agenda as amended, the motion carried by unanimous voice vote. MINUTES of the meeting(s) of the Planning Commission (None) 1 V:A2015 Master Files \Commissions\Planning \Minutes \2015 -3/24 Planning Commission Minutes RECEIPT OF ITEMS FOR THE RECORD On the motion by Sean Mahoney and seconded by Wayne Katayama to receive the items for the record, the motion carried by unanimous voice vote. HEARINGS AND PUBLIC COMMENT Continued Agency Hearing (None) New Agency Hearing (None) Continued Public Hearing (None) New Public Hearing (None) All public testimony_ pursuant to HRS 92 (Sunshine Law) The Commission received testimony from Barbara Bennett, representing herself as a small business owner and the Kauai representative of Small Business Regulatory Review Board. She has been a Kauai Springs customer for ten years. She relies on the spring water because she believes in healthy living. She was dismayed when there was a halt by the County on this service. She supports Kauai Springs, what they have done, and how they have done it, and she challenges the statement that the applicant lacks willingness to pursue the application. Small business owners have many challenges, especially on Kauai. She is in support of encouraging the Commission to get this settled. The costs to this small business is astronomical in the court process. She is in support of this business continuing as a viable representative of small businesses on Kauai. The Commission received testimony from Janice Bond, testifying in favor of Kauai Springs Water to continue operations. She lived in Michigan for five years and experienced cool spring waters from roadside pumps. When she returned home she was glad to hear of Kauai Springs Water. She bought her own dispensing crock and two, five- gallon bottles a month for her own spring water. Mr. Satterfield was most generous with his water at the Read To Me International Kauai Keiki Story Festivals and also brought water to many fund raisers and political functions. This local family supports our community and has been seen at the Farm Fair donating his water. When the Japan Tsunami happened he called to see if there was a way to send his bottled water to Japan. She asked the Commission to please allow them to continue to serve the community. The Commission received testimony from Jonathan Chun on behalf of his applicant Kirby Guyer and two applicants pending and accepted by the Department for homestay. They have all stated their position that they are home businesses, but they are also applying for use permits based upon the direction of the Department. His concern is that by accepting the declaratory ruling the Commission is in essence saying that they are going to pre -rule on the N V:A2015 Master Files \Commissions\Planning \Minutes \2015 -3/24 Planning Commission Minutes applications without any notice to his clients, without any notice to him, and without any facts in regards to the applications. He thinks it is improper to get involved in an application before the application is even heard. The rules state that an application for declaratory ruling can be denied by the Commission if it will involve the Commission in litigation or in litigation that is reasonably expected to occur. He believes that will definitely happen and he urged the Commission not to put themselves into that position. He understands the position of the Department and is not arguing on the relative merits of the position because he has raised that in the applications. Procedurally it is improper for the Commission to involve itself in the application without proper notice. Mr. Abrams asked if Mr. Chun would not be able to provide any input to the Court on this declaratory ruling to which Mr. Chun replied that because they were not noticed, he just got a call yesterday from another applicant's attorney, so he couldn't intervene on this matter. The time period for intervention has passed. If he does not intervene, he is not a party and cannot present evidence. If the Commission is willing to say that he has good cause to intervene because he was not notified, then he would be able to file a formal request for intervention, he can ask for a hearing, and he can proceed. He asked the Commission why they would want to have two hearings; one on an application, and a hearing for this. If the issue is specifically in front of them regarding a specific application, he asked why the Commission would want to pre - decide it without hearing the facts behind it. Mr. Katayama asked for clarification that Mr. Chun's position is that the Director does not have the ability to make the decision on use permits to which Mr. Chun replied that the Commission makes the decision on use permits. The Director can take a position, but it's the Commission that decides whether it will accept the position of the Director or the applicant. The Department is asking the Commission to step in on an issue in front of an application and make the decision now so it doesn't have to present a position in the application. He believes it is improper because they haven't given notice to the applicant and they haven't given the applicant a chance to present his side. Mr. Katayama stated that there are two issues; one the use process, and then the disposition on whatever the Director's ruling is on the application to which Mr. Chun replied that they are not here to decide that. Mr. Katayama stated that he would like to understand why Mr. Chun feels the Director and the Department does not have the ability to rule on use permits to which Mr. Chun replied that the Director does not rule on State special permits or use permits. The Director makes recommendations to the Commission. The Commission decides ultimately whether to grant a use permit or State special permit based upon recommendations from the Department and facts and positions presented from the applicant and also from the public. That is the process already in front of the Commission with regards to one application that is pending and two that are going to be before the Commission soon. There is another application that Mr. Meyers is representing that already raised that issue. Mr. Dahilig questioned if Mr. Chun has read the brief filed by counsel to which Mr. Chun stated that he was not provided with anything. K V: \2015 Master Files\ Commissions \Planning \Minutes \2015 -3/24 Planning Commission Minutes Mr. Dahilig noted that is it available for public record. He questioned if there is anything in the brief that specifically identifies any applicant pending before the Planning Commission as a means of disposing of a particular issue within those applications to which Mr. Chun replied that if the Department's position is they want the Commission to rule that homestays are not included as a home business, it directly impacts all the applications; Kirby Guyer's and those accepted for hearing by the Commission. Mr. Dahilig asked for clarification that Mr. Chun has not read the brief to which Mr. Chun replied that he was notified yesterday afternoon, it was not online, and he could not come by yesterday afternoon because the office was already closed. He could not get access to it. Chair Anderson noted there will be more opportunity for further dialog when the applicant speaks on the agenda item. The Commission received testimony from Alii Nui Alekai Polam of the Polynesian Kingdom of Atooi, Hawaiian Kingdom. He would like to keep Kauai Springs going. He has been drinking Kauai Springs Water for over a year. It has been making his family healthy. They live in Kekaha and don't like the water in Kekaha because of all the poison. He stands by customary, traditional rights of claims. Under Federal Law, State Law does not apply to this issue, The Commission received testimony from Paul Lucas from Lawai who has been drinking Kauai Springs Water. He has been studying water for the last year and noted that water has incredible properties including memory. It is a life force for all of us and he hopes Kauai Springs continues. There are more things about water than most people know. The more he studies it, the more he realizes how important it is to have clean water. He believes a lot of cancer are caused by the waters they drink. The Commission received testimony from Calvin Suarez a lifelong resident of Kauai. He has a lot of medical problems and the water is certainly helping him. He uses IV and hasn't eaten in over two years. He gets sick when he eats. The water is truly helpful to him. When he goes to the infusion center he sees them delivering the water there. After Iniki they were forced to bathe in the springs above Kahili because they had no water in Kalaheo. He had psoriatic arthritis and had scales all over his body. Three months of bathing in that water, where no medication could take care of his problem, the water did. They are making an honest attempt to live here and he hopes they are not deprived of their attempt to continue. The Commission received testimony from Gregory Meyers. He echoed the sentiments of Mr. Chun regarding the petition for declaratory order. It would be unfair and unjust for the Commission to take action on the petition given what is pending. He referenced the 12 hour hearing less than a month ago directly related to the contested case hearing that he represents, the Ben -Dors, and there is the issue of whether a homestay is a home business and whether a homestay can be issued in residential neighborhoods. He thinks the petition strikes him as some kind of end around and they can't do that in the middle of a hearing. The briefs are due next week on the hearing and they will come back for the decision and final arguments in May. This M V: \2015 Master Files\ Commissions \Planning \Minutes \2015 -3/24 Planning Commission Minutes petition directly affects what happens in the contested case hearing where the Commission has already heard all of the evidence. This essentially would change all of the evidence after the hearing has already occurred. He discussed the matter with Mr. Trask this morning, but he has not had a chance to review the petition that was filed. He saw it on the agenda and rearranged his schedule to be here to let the Commission know they don't feel it's a fair approach to the issues. He understands the Department's position that the issue will be coming before them again and again and they want to get a ruling on it, but he did not think it was appropriate to make that ruling or take any action while there is a pending case where the evidence has already been closed. The Commission received further testimony from Annette Leftheriotis testifying on behalf of Kauai Springs. She has been working with Jim for the past ten years and he has been a business client at KONG Radio. They enjoy his water and they would like to have the choice to be able to purchase his water. They find that his water tastes better than any other water they have had and they would like to continue to have the choice to be his customer. CONSENT CALENDAR Status Reports (None) Director's Report(s) for Project(s) Scheduled for Agency Hearing on 4/14/15. Class IV Zoning Permit Z -IV- 2015 -13, Use Permit U- 2015 -12, Special Permit SP- 2015 -3 to operate a resource recover,. fly for green waste, construction & bulky materials, on a parcel situated along the mauka side of Kaumualii Highway in Kekaha, approx. 0.85 mile inland and 1 mile west of Kekaha Gardens Subdivision, further identified as Tax Map Key (4) 1 -2 -002: 008, and containing a land area of 12.34 acres = Shredco, LLC. On the motion by Louis Abrams and seconded by Sean Mahoney to accept the consent calendar, the motion carried by unanimous voice vote. COMMITTEE REPORTS Subdivision committee vice chair Sean Mahoney read the report into the record. Subdivision The following tentative subdivision actions were approved, 2 -0: S- 2015 -09, George Tsukamoto, et.al. Proposed 2 -lot Subdivision S- 2015 -10, Kenneth C. Medeiros & Timothy M. Medeiros, Proposed 2 -lot Subdivision 5 V:A2015 Master Files \Commissions\Planning \Minutes \2015 -3/24 Planning Commission Minutes The following final subdivision action was approved, 2 -0: S- 2011 -21, Kukuiula Development Co. (Hawaii) LLC., Proposed 33 -lot Subdivision On the motion by Wayne Katayama and seconded by Amy Mendonca to approve, the motion carried by unanimous voice vote. GENERAL BUSINESS MATTERS Michael A. Dahilig, in his official capacity, Planning Director of the County of Kauai's Petition for a Declaratory Order from the Planning Commission of the County of Kauai clarifying that "homestays" as defined by KCC section 8 -1.5 cannot be considered as "home businesses" also defined by KCC 8 -8.1.5 and furthermore that " homestays" are not a eg nerally permitted use within the residential zoning districts R -1 through R -6 and /or R -10 through _ pursuant to KCC 8 -240 and that "homestays" quire a use permit under KCC 8- 2.4(F)(19). Mauna Kea Trask, County Attorney, representing the Planning Director stated that the petition was filed on behalf of the Planning Director in order to remove uncertainty as to the applicability of the statutory provisions that are discussed in the petition which generally pose a question whether or not homestays as defined by County Code can be considered as a home business and furthermore whether or not homestays are generally permitted use within the residential zoning districts or whether homestays require a use permit under Kauai County Code. His client's concern is that the County is moving forward with regulating transient vacation rentals. The Kauai General Plan recognizes in general that it provides an accommodation, it is part of our economy, that's why the County has taken its stance of regulation rather than prohibition. He did not know whether that is philosophically good or not, but that's the status of the law; it should be regulated. The County is taking enforcement action against those who do not comply with the law who are otherwise trying to advocate various arguments pertaining to TVRs. The Department is now faced with answering this question over a broad array of different cases. His client wants to address that uncertainty now in one organized petition that is within the Department's authority to make and is within this Commission's authority to rule upon. The Planning Director is charged with interpreting and dealing with the administrative processes relating to land use. The Commission makes ultimately the rules in certain circumstances. In this case, there is an uncertainty, specifically a home business. Home businesses are allowed in residentially zoned property. Home use means any use customarily conducted entirely within a dwelling and carried out solely by the inhabitants thereof in connection with which there are no display from the outside of the building, no mechanical equipment used except as is normally used for domestic household purpose, no selling of any commodity on the premises, which use is clearly incidental and secondary to the use of the dwelling for dwelling purposes and does not change the character thereof. The office, studio or occupational room of an architect, artist, engineer, lawyer or other similar professional person, a family childcare home, business conducted entirely by phone or by mail (not involving frequent bulk shipments) and an office for homework of a person in business elsewhere all shall be permitted as home business except that no activity involving, encouraging, or depending upon frequent visits by the public and no clinic of any time shall be deemed a home business. It is essentially a business that you carry on in your home, but there are limitations. Philosophically whether that's right or wrong, that's what the law says. A homestay is an owner occupied dwelling unit in which overnight accommodations are provided to transient guests for compensation for 180 days or less within the same dwelling unit in which the owner or lessee resides in the guest house. A homestay is a business that you conduct in your home that you live in and so is a home business, but the argument being made by the Director, which is under his m V:A2015 Master Files \Commissions\Planning \Minutes \2015 -3/24 Planning Commission Minutes authority to interpret, is that a homestay cannot qualify as a home business for certain pertinent points; one, homestays are essentially used as defacto TVRs, they're visitor accommodation units. The owners and proprietors will admit that. It's kind of a back door. It is conducted in their homes, but they are for vacation rentals as advertised, whether internet, flier, trade magazines, and they display from the outside of the building the fact that you can stay there as transient guests. They all advertise. Furthermore the use is not clearly incidental and secondary for the use of the dwelling for dwelling purposes and it does change the character thereof Hawaii is getting very expensive. It's a product limitation. What people are forced to do is part supplement their income by allowing people to stay in their houses as transient guests and /or investing in what otherwise should be a dwelling unit for a single family residential multi- family and using the investment property to make money off of. They're calling it a homestay. They're staying in it and they're going to supplement their income while doing it. That does change the character of the house. You no longer have a residential unit that someone works in. They are now living in a hotel room. Most importantly, the activity of a homestay involves and encourages and ultimately does depend upon frequent visits by the public. That's the whole point. A homestay is an owner - occupied dwelling which provides overnight accommodations to guests for compensations. The more transient guests you get the more money you make. You're allowing someone to stay in your house for 179 days. They're not saying it's a prohibition. The Kauai General Plan foresees increasing interest in small scale ulterior forms of lodging. Arguments can be made that a one unit is better than a hundred unit hotel. Some would say no some would say yes, it's an argument to be made. The General Plan contemplates vacation rentals, inns, and bed and breakfasts provide alternative visitor accommodations. They are licensed and monitored by professional associations which promote cooperative relationships with neighbors. He noted that is not necessarily a true statement. Neighborhoods are not happy, real property taxes are rising, people are actually getting pushed out of their own neighborhoods just trying to survive. It can be permitted as long as it's regulated. You don't want to have a total back door to every single TVR and other transient vacation rental regulation by just putting somebody in your house and calling it a homestay. His client is not trying to be unfair, he is not trying to forego anything. He is just trying to address the one argument which is in his purview. Without this ruling there will be piecemeal interpretation and they're going to raise philosophical questions. The argument would be to let all the cases come through, have the Commission make a ruling, and the Courts review it. There would be years of grey area. The Department believes the issue can and should be addressed now and under the Code, Mr. Dahilig has the authority and the duty to interpret it. The way the Charter is set up, the Planning Department is comprised of the Department, the Commission, and necessary staff. To say there is malfeasance or to question the integrity of the system, the conflict lines have been drawn. He has not talked about the case with Ms. Sayegusa, Mr. Jung has been screened from this proceeding. He has taken this case to address it on a separate path. They believe the Klattenhoff issues have been addressed. Mr. Dahilig as Director is the designated secretary of the Commission. That's not created, that's just what it is. Under the petition, it is obvious that a homestay does not qualify as a home business, not only because of the advertising, the change of character of the neighborhood. You have beach front property that now has become a multi - million dollar single wall construction two bedroom houses. Mr. Abrams noted that Chapter 10 allows for the Planning Director to petition the Commission directly. He noted that Section 1 -10 -5 notes that the Commission may for good cause refuse to issue it. There are four actions they could use; the question is speculative, the petitioner's interest is not of the type that would give him standing to maintain it, the issuance of declaratory ruling may affect the interests of the Commission in a litigation, and the matter is not within the jurisdiction of the Commission. He understands that they are going to have to deal with the difference between a home business and a homestay. A homestay does have more activity than just somebody who is at home. He questioned how the Director would look at it if it were in a VDA and questioned if they are going to differentiate between geographical areas. Transient vacation rentals in the visitor destination area are outright permitted. They got in the situation back in 1982 when they decided to define transient vacation rentals. That created 7 V:A2015 Master Files \Commissions\Planning \Minutes \2015 -3/24 Planning Commission Minutes where they are now, and he did not want that to happen again. He gets the connection between the home business and homestay as something that really needs to be clarified. If the Commission were to deny the petition, they would still be faced with having a whole bunch of cases coming in and in effect may confuse the whole issue with the first group coming in before a decision that's made. It concerns him and thinks this may be appropriate. Attorney Trask stated that the standards for denying the petition are clearly stated. That is the Commission's purview. Regarding the VDA issue, the petition does not address that. The Director appreciates the fact that the Commission would like to avoid hard questions and hard issues but they are going to come and eventually need to be addressed. This is one way to do it. They believe it is a good way because you take out nuance facts and circumstances. In a question of law without a family that is dependent upon the issue, without a daughter coming home from college, the Commission can make the policy call legally appropriately without having to worry about someone testifying in an emotional capacity. They believe it is appropriate because land use, public health, safety, welfare should be administered fairly across the board. The VDA is not specifically mentioned because it is different. You can have residentially zoned properties outside the visitor destination area and it is appropriate under the law to treat them differently than those within the visitor destination area. Maybe that point should be clarified in whatever order they make should they chose to accept the application for petition. These are tough questions but they need to be answered not only for the Department but for the public and to have a clear declaratory ruling by the Commission which would be a policy statement by the Department, the public would be more well informed, they would understand it better, and they won't feel like it is an arbitrary decision by the sitting Planning Director. Ms. Mendonca questioned if the petition is supposed to clarify the confusion between home business and homestay to which Attorney Trask replied in effect yes. He stated that the petitioner is submitting the petition in order to remove uncertainty as to the applicability of the statutory provisions discussed. Ms. Mendonca stated that she understands there are certain provisions they have gone through to show the separation and requirements between a home business and a homestay. She questioned if by accepting the petition, the others still have the right to do what they need to do to which Attorney Trask replied that the petitioner would argue as such. He believed that the Department has made the same arguments in the proceedings. They are not new arguments. The fact remains that it's never been clearly addressed so arguments can still be raised by the applicants. Mr. Katayama questioned if it has been historically interpreted this way and now they are just articulating the Department's position on this judgment to which Attorney Trask replied that the Department's approach to these issues has always been homestay regulations be the use permit process, however there was never a big push to clarify it. With the maturity of the issues noticed by Commissioner Abrams and the most recent ordinance changes regarding non- conforming use certificates and TVR regulations, sending out notice of violations, the cases in front of the Commission, the arguments have reached the point where they should be addressed clearly whether through ad hoc litigation and piecemeal decisions over a broad base of actions or through declaratory order proceeding. It is his understanding that is how the Department has historically dealt with it. Mr. Katayama questioned if the rules were to be applied to the existing use permits that have been issued under homestay how they would be impacted to which Attorney Trask replied that they would be codifying the practice of permitting the uses through the use permit process which is in line with the Kauai General Plan which allows public input, public participation and review. The Kauai General Plan in addressing it back in 2000 contemplated a regulatory structure, self - regulation of the industry. Time has shown that is not the case. To codify it, allow N V:A2015 Master Files \Commissions\Planning \Minutes \2015 -3/24 Planning Commission Minutes public participation, affirm this body's ability to interpret and prosecute zoning ordinances, in this way they can address things. Mr. Katayama asked for clarification that the position of the Department with any use permits that have been issued for homestays would be grandfathered to which Attorney Trask replied that it is a narrow issue. They are not prohibiting the use. They are codifying the use permit process. It wouldn't affect any use permits. They are neither encouraging more use permits nor are they discouraging more use permits. It's just to recognize that as the law states, this is the appropriate interpretation to address that argument. He did not think it would affect any current use permits, because the use permits are in line with what the Department is saying. It is those who are saying it's a general use, I need no permit. Charging to rent the upstairs of the house the Department would argue affects the character of the neighborhood and should go through a permit process. Otherwise there would be uncontrolled development and would go against all the other provisions regulating TVRs. Essentially it produces unfairness and disparity. Mr. Katayama asked if the process would be that any permits would come before the Commission so that public input can be addressed to which Attorney Trask replied that use permits come before the Commission for approval. It's the same process that's always been done, it's just clarifying an argument. Mr. Abrams stated that if someone with a home business is required to come in for a permit to which Attorney Trask replied that home businesses are generally a permitted use. Mr. Abrams clarified that it only becomes an issue if they step over the boundary lines having a lot of the public coming in to which Attorney Trask replied that's according to how it is defined and presented under 8 -1.5; displays outside the building. You can bake cakes in your house, but if you make it a bakery for people to come in and out, it's not a home business. You would need to go into an appropriately zoned area. That is how the Code reads. Mr. Abrams noted that it's not that they can't do it, but they would need to apply for a use permit which would then have a public hearing with regards to a business being run there that isn't a home business and the community could then provide their input to which Attorney Trask replied in the affirmative. The petitioner is approaching it from closing loopholes perspective versus anything else. Mr. Katayama questioned the impacts to the pending petitions before the Commission. It was noted by earlier testimony that the cases before the Commission would be heavily tainted to which Ms. Higuchi - Sayegusa replied that she is only aware of a couple of evidentiary hearings that started. No decision has been issued by the Commission. The Department has presented three issues for the Commission to affirm its position; whether the homestay is a home business, whether the homestay is thereby outright permitted under the use chart table, and whether a use permit is required. Ultimately those issues are also raised in the pending contested case issues. If the Commission decides to issue an order it would be something that the Commission can refer to as being already decided and then consider each of the contested case matters according to the facts and other specific issues that are raised. This matter is just to affirm the Department's interpretation of the CZO. Chair Anderson questioned the role in comparing declaratory order versus piecemeal decision making if the Commission were to go forward and not rule on the declaratory order but wait to have the first of the particular petitions regarding homestay go through. If the Commission rules under conclusion of law that homestays are not home businesses, she questioned the difference in terms of precedence and whether or not they would work in the same way to which Ms. Higuchi - Sayegusa stated the Commission has several ways to deal with this petition today; they can deny in writing based on 1 -10.5 for good cause, they may refuse to 9 V:A2015 Master Files \Commissions\Planning \Minutes \2015 -3/24 Planning Commission Minutes issue the declaratory order for the four reasons, they can also issue the declaratory order today, or they can set the matter for hearing which would kick it into full contested case hearing then seven days prior to the agency hearing is the deadline for interveners to come in and present their point of view. In either instance there may be opportunity for third parties to come and weigh in on the issue through the declaratory order or through piecemeal through each of the separate contested cases that eventually come before the Commission. Each action could potentially lead to some sort of appeal. Ms. Mendonca clarified that the question before the Commission is whether they are clear in the definition as put forth and whether they agree that homestays are not interpreted as a home business to which Ms. Higuchi - Sayegusa replied in the affirmative. Ms. Mendonca asked for clarification that all of the other things that come up regarding the applications and contested cases can be heard later, but initially the Commission needs to take a position on whether they are clear and in agreement based on the language that is put forth to which Ms. Higuchi - Sayegusa replied in the affirmative. Chair Anderson asked for a description of the notice that this petition went through to the public to which Attorney Trask replied it was filed with the agenda through the normal sunshine law process. There were no other parties to this declaratory petition. He noted that the Department is not endeavoring to be unfair, they are endeavoring to remove uncertainty. Attorney Trask addressed Mr. Abrams' concern that under 1- 10 -5.3 the order can be refused if it may affect the interest of the Commission in a litigation that is pending or may reasonably be expected to arise. He stated it is a messy issue. The Commission has the authority to deny or address it. It is in their jurisdiction. He clarified that they are endeavoring to make it a fair process. It raises regulatory problems for the Department. There is no ability to issue moratoriums for this use until the issue is resolved. People are operating without permits. The old way of doing things is no longer working so it has to be addressed. If the Commission finds fit to deal with it within a findings of facts, conclusions of law in another case, that's within their purview and that will take its own course which will also be messy. Mr. Abrams asked that if they affirm the request, whether someone from the public would be able to appeal it to the Fifth Circuit Court to which Ms. Higuchi - Sayegusa replied that once the Commission sets a hearing, Chapter 6 of the Rules apply which allows for interveners, further arguments and evidentiary hearings, issuance of findings of fact, conclusions of law which could be appealed. Chair Anderson allowed for three additional minutes for anyone who has already testified. Mr. Meyers stated that he sees two issues; one the timing for request for petition is not good, it directly impacts a case that is pending before the Commission and Mr. Abrams correctly referenced 1- 10 -5.3 in that there is pending litigation that deals with these exact issues. Part of the response is that a homestay is a home business. To go the shortcut route and grant the petition without them having the opportunity to argue is not fair. The process the Department took is they filed their petition and it got noticed, but there are other parties. Both he and Mr. Chun have cases before the Commission that address the three issues of whether the homestay is a home business, if they need a use permit for a homestay, and the other issue that they want that says homestays are not generally permitted uses in residential districts. They had a 12 hour contested case hearing about these very issues. To try to take a shortcut and do it through the petition without the public input, without the opportunity for agency hearing is not fair. He thinks the timing and process is off. If the Department wants this perhaps they should proceed by ordinance or should allow public input or should have a hearing so the issue can be brought before the Commission. He noted that the General Plan is a direct issue in the pending case 10 V:A2015 Master Files \Commissions\Planning \Minutes \2015 -3/24 Planning Commission Minutes before the Commission. 4.2.6 says single unit uses could be permitted in the fashion similar to the current permitting of a home business. It is an open issue. It has never been decided. There are only nine homestay permits in the history of this ordinance. He noted that family child care is a home business and there are a lot more cars at a child care than there would be at a homestay when you have one family or two families. Mr. Chun stated that on one hand the Department says they want to clarify for the whole public, but at the same time they are sending out letters to the public saying they are going to fine them $1,000 because they didn't abide by the rule of a homestay requiring a use permit. He questioned why they are fining people while at the same time saying that it is not clear. It impacts not only the people in front of the Commission now, but everybody they are sending out letters to. Everything they are saying today to justify the petition is based upon their interpretation of facts. The statements made by Mr. Trask is that it is a TVR, it is not a TVR, it's a defacto TVR, it changes the character of the neighborhood, the bottom line is if they listen carefully to the Department's presentation, they are saying they want the Commission to step into the middle of the fight because it changes the character of the neighborhood. It's a factual determination but they are not giving any facts, they are just making a statement. They are not giving anyone else the chance to presents facts. He noted that six days' notice was given, but under the rules they have seven days to intervene, so that is not fair. He stated that he is not disagreeing with their theory in wanting to make things easier for the Department and the Commission, but not to run over the rights of applicants and the members of the public who have a right to be heard and a right to say they always thought it was a home business. There are home business that have been operating from 20 to 30 years without a problem, complaints, and the Department coming in and saying they have to have a use permit. Now they have been sending out letters to those who have been operating for 20 to 30 years saying they have always been illegal even though it has been unclear. He suggested the Commission set this matter for hearing and give people the right to file an intervention to have a full hearing and do it the fair way. The Commission received testimony from Caren Diamond speaking on behalf of Barbara Robeson and herself. They support the Director's petition and urged the Commission to support the petition. Their neighborhood has had the most negative impact from vacation rentals. It is so bad it is a health, public, safety, fire, police issue with no evacuation routes. They are major issues for the north shore, compromising the safety of the residents. The visitors have no evacuation in times of tsunami. When the vacation rental ordinance passed the north shore ended up having the most. One of the saving graces is that it is still only permitted single family vacation rentals so that multi family vacation rentals were illegal. What they found is that those who were operating multi family vacation rentals didn't get approved or didn't come in for permits. A lot of those over time ended up in the real property tax disclosures listing them as vacation rentals. That is where a lot of them ended up getting notices. Because vacation rentals are not permitted they can now call it a B &B, or a homestay, or a home business, or a vacation rental. Whatever you call it, the impact of having more in the neighborhood is detrimental. It's more than the character of the neighborhood being gone, it's the neighborhood being turned into a resort and its zoning being ignored. She urged the Commission to go forward so they don't end up in the same position. The Director testified that there are over 300 parcels that call themselves vacation rentals that were not permitted in last year's tax disclosures. They are almost the size of the initial problem that was identified with the transient vacation rentals. Their neighborhoods, the communities, and the rest of the island cannot afford to have more resort use in neighborhoods without the proper zoning, proper amenities, safety and all the things that resorts depend on. She suggested that until they have a decision, not taking new applications so they don't have Mr. Chun and Mr. Meyers saying they cannot make decisions because one person or two people are out there. She urged a temporary moratorium while it is being figured out so they don't have 300 people coming in to figure out whether or not a home business is okay. 11 V:A2015 Master Files \Commissions\Planning \Minutes \2015 -3/24 Planning Commission Minutes Attorney Trask stated that the Department is not taking an inconsistent position as far as what is clear and what is not. They believe it is clear. They are being no less inconsistent with their argument than Mr. Chun and Mr. Meyers being inconsistent with theirs whereby they have an application for a use permit yet alternatively arguing that they don't need a use permit because it's automatically allowed. It's called an alternative argument and it's permissible under Hawaii Rules of Civil procedure and therefore should be permissible under this body. The point of this declaration is to take the emotion out of it. The definitions are clear. A bed and breakfast is defined as in reference to a homestay, transient vacation rental, single family vacation rental or multi - family transient vacation rental. The Kauai General Plan 4.2.8.2.0 suggests that County development standards and permit processes shall be scaled to size and potential impact of use. Single unit bed and breakfasts and vacation rentals, and petitioner defines by analogy homestays, should be allowed with development standards and the use permit requiring administrative review and opportunity for public input. Without a use permit process, there is no administrative review and there is no opportunity for public input. To make it clear for the public, it's necessary to address the arguments of the lawyers. His client's position is that this is a better vehicle to address it. The Department's position is that there is no formal hearing necessary and would oppose any such request. The point of the position is to address the general interpretation of the law, not with regard to specific facts and circumstances. Mr. Abrams stated that the home business they are looking at is clearly in his opinion as compared to a homestay different because of the issue that a home business would involve and encourage and depend upon frequent visits by the public. It makes sense to him to define that. That is the crux between the difference of a homestay and a home business. Ms. Mendonca stated that if there is so much unclear interpretations where the use of homestays are like a home business, by supporting the declaratory order it gives them the chance to move forward instead of constantly dwelling in the same area. She thinks there are other means by which the applicants have the right to state their opinions about it. She thinks it's time to move forward. Mr. Katayama thinks the arguments made by counsel in pointing out the impacts were clear. In his mind vetting through a use permit is important for homestay. He feels better in that in the event that the petition is adopted, the vetting of it by any of the people appealing the Director's decision can be addressed by the Commission. He finds that definitions are helpful and they should have had it earlier rather than later. He expressed concern that it was not available to interested parties earlier where they could develop their arguments. On two of the three issues he is clear on where he stands. Chair Anderson asked counsel to clarify the right to appeal to which Attorney Higuchi- Sayegusa replied that if the Commission goes forward with the petition today, there are still pending contested case matters where the third parties could make relevant arguments. The Commission is affirming, and narrowing, and trying to move forward on those types of arguments, but she thinks those types of arguments could still be touched upon in whatever pending cases, but at least the Commission would have consensus in affirming the Director's interpretations with regards to those three issues. Chair Anderson stated that in terms of timing, she did not believe there is ever a perfect time when things come before the Commission; many times it is in reaction to other events occurring. Given the opposition, she is generally inclined to provide more opportunities for the public to respond. There isn't a formal request for intervention based on good cause, but she believed that if they allowed time to defer the matter it could allow for further testimony to hash out any issues. She would not vote in the affirmative at this time. She suggested deferring them matter to allow for intervention, but it is up to the Commission. On the motion by Louis Abrams and seconded by Amy Mendonca to approve the 12 V:A2015 Master Files \Commissions\Planning \Minutes \2015 -3/24 Planning Commission Minutes declaratory order acknowledging that homestays are not included within nor should they be interpreted as home businesses under the Kauai County Code and /or Kauai General Plan, the motion carried by the following roll call vote: 4 ayes, 1 no — Angela Anderson. Mr. Chun asked for clarification that people who testified today can or cannot appeal to which Attorney Higuchi - Sayegusa replied no. She noted that she cannot advise on the procedures available to interveners that want to make additional arguments. UNFINISHED BUSINESS (For Action) Consideration to withdraw Class W Zoning Permit Z -IV- 2007 -1, Use Permit U- 2007 -1 and Special Permit SP- 2007 -1 due to lack of information to complete the application and applicant's lack of willingness to pursue the application = Kauai Sprin s Mr. Dahilig requested that the Commission deem the reference permits withdrawn for inaction, not at the request of the applicant. He clarified that this is a remand from the Hawaii Supreme Court. It is unusual to have a situation where the Supreme Court of the State will remand a case directly to an administrative body. Upon the applicant's desire to want to reapply, they discovered that the situation created by the remand means that the applications submitted in 2007 are still technically open. Per the procedures there can't be two open applications at the same time for the same use for the same parcel. The applicant was informed via letter in October that he needs to help implement the Supreme Court ruling. There needs to be a request to supplement the record and ask the Commission to make a determination that the information is consistent with the Supreme Court ruling and therefore approve the permits. They received from the applicant hydrological studies, correspondence letters, and a map. There was no submittal consistent with the directions by the Supreme Court. He did not want to make it seem that the applicant has not been responsive, but in terms of submitting something actionable, that has not been submitted. In March a second letter was sent to the applicant informing him that he has not submitted anything actionable and therefore can only ask the Commission to deem this application withdrawn. They then received a second folder with the same hydrological study, correspondences not directed to the Commission, and a map, lacking any kind of request to address the matters set forth by the Supreme Court and asking the Commission to approve the permits. The Department's opinion is that the Supreme Court ruled in the case as it relates to the public trust doctrine specifically relating to water rights. Uses consistent with water as the public trust relate to domestic water use, native Hawaiian use, and agricultural use. His interpretation is that the Supreme Court decision found that the use of well water by this commercial entity has not been shown to be consistent with the public trust doctrine. Water is meant for those three purposes first and primary. Anything outside of that has to be subject to a very high bar of justification. Given the submittals by the applicant, there is nothing in those submittals that by request before the Commission asks for a certain type of relief. It's a fine line between the Department's ability to engage in customer service versus actually doing the work for an applicant. From the final email attached to the submittal he explained that the applicant needed to submit something formal, something that explains what they are asking for and he has not received anything that triggers a formal request, therefore he stands by his request to have it withdrawn by default. Jim Satterfield representing Kauai Springs stated that he has not withdrawn his application neither affirmatively or by any actions. He is still absolutely interested in having the Planning Commission issue the zoning permits if they are necessary. Since the Supreme Court remanded the case back to the Commission he has been actively pursuing the history, the 120 page document from the Court which attorneys on both sides had a hard time rightly dividing what the Court was asking from the Commission and from Kauai Springs. He clarified that the Court sent it back to the Commission to clarify the findings of facts and conclusions of law not to shut 13 V:A2015 Master Files \Commissions\Planning \Minutes \2015 -3/24 Planning Commission Minutes Kauai Springs down. Attorneys had a lack of understanding what further evidence was required. He didn't know that he could request a rehearing. Supreme Court remanded them back to the Commission after being in business since 2003 operating for 12 years; 10 of which was consumed by litigation with the County. He never intended to withdraw the applications, but instead discuss the document as it forged new ground for the particular subject. He read from the list on whether Kauai Springs has justified the purpose of the use of the water. Regarding the maintenance of water in its natural state, he noted the water is just spilling over from a 100 year old system onto the ground and into the ocean at 300,000 gallons per day. He stated that the protection of domestic water use should qualify since it is a drinking water. He stated that he has no claims as to the protection of water in the excess of native Hawaiian traditional and customary rights. There is a whole list of things to address that he was under the assumption the Planning Department would discuss with Kauai Springs to be able to satisfy the requirements. He started the business during the Kusaka administrative and has served Kauai for the past 12 years. During the first Planning Commission meeting there were seven hearings at which time the planner had allowed the 210 day limit to expire forcing the Commission to deny the permits, forwarding the case to the Fifth Circuit Court where Judge Watanabe ruled in Kauai Spring's favor scolding the Department for having no findings of facts or conclusions of law. The County appealed to the Court of Appeals and Kauai Springs lost the subject of whether or not the original complaint was that they were doing an industrial activity on agricultural land which according to the CZO he did not believe they are. While the case was on its way to the Supreme Court he was offered a settlement of $850,000. Chair Anderson asked Mr. Satterfield to address the specific request from the Department to withdraw. There has been a statement from the Department regarding the lack of a specific request by Kauai Springs for a rehearing. She asked him to address that matter and what he would like to see occur. Mr. Satterfield stated that with the list of things the Supreme Court has required from both sides, he would like to see either a rehearing or some sort of discussion available without an iron curtain of litigation that they can continue to supply and serve the people of Kauai the water that they have been doing for 12 years. If he has to submit for a rehearing he can do so. The amount of water they are using from the spring results in no harm to the aquafer. Without going into the history of it, you really can't understand what got them to this point. He does not want to withdraw the application for permits if the permits are necessary. According to the CZO the packaging of small agricultural products on open ag land is permissible. They have stood on that but they will get the special use permits if they're deemed necessary. He was confused and still is as to exactly what is necessary for them to stay in business. He referenced the list from the Supreme Court that he believes is what both sides need to address. He thinks they can be addressed in a rehearing and show they are not harming the environment. He asked for the opportunity to request a rehearing. Chair Anderson stated that she would like the Commission to meet with legal counsel to address the procedural matters and whether or not the request for a rehearing is sufficient. Mr. Satterfield added that while they have been in litigation for 10 years over the sale of water, there is another company drawing water from Kawaihau Road, and they use pumps to suck the water from the aquafer that barely produces a positive flow. He felt that has all kinds of ramifications. He hopes that Kauai Springs is not the only company in the State that is required to prove public trust in order to bottle water. He had all their requirements in order and feels all companies should be held to the same standards. Koloa Rum was approved directly across from their location with an 18 acre parcel on ag land with multiple buildings. They have contacted Grove Farm to tap into the Kauai Springs Kahili Mountain line and is planning to use 100 times the water for rum. Kauai Springs' current usage is 1,000 gallons a day and the spring puts out 350,000 gallons per day. Kahili Mountain Adventist School is no longer on the system so there is more available now than when the business was first started. Soon 11 houses will be taken off 14 V:A2015 Master Files \Commissions\Planning \Minutes \2015 -3/24 Planning Commission Minutes the system leaving another 15,000 gallons available to the system. Chair Anderson reminded Mr. Satterfield that the Commission is not going into the substantive matters today. They are addressing the question on whether or not there was lack of information in the past and failure to submit a request for rehearing. Mr. Satterfield noted that there was a lack of information. He was confused on what to apply for, whether a special use permit or if it's a water rights issue. It's a resource issue according to the Supreme Court and they need to address the use of the resource and how their use would damage the resource in relation to public trust. Chair Anderson questioned if Mr. Satterfield would be retaining counsel should there be a rehearing to which Mr. Satterfield replied that he plans on retaining counsel. To get a hydrologist report will be even more costly. They are just trying to stay in business and provide a service to the people of Kauai who he believes deserve to drink their own water. Ms. Mendonca stated that the Director has written several notices and none were responded to by letter except by boxes of information that was brought forward. She questioned why he has not taken the time to at least contact them if he was so confused to which Mr. Satterfield replied that he went to the Department explaining his purpose which was to be remanded back to the Commission. He had no idea that he was supposed to request something that was already in place, the application that he had already filed. He talked to the Deputy Director and wanted to speak with the Director to find out what was required to come in front of the Commission. He was told that the Director would call him and he was waiting on the phone call when he got the letter saying there was a lack of interest. Mr. Dahilig stated that the difficulty is that the Department was sued by Kauai Springs. They try to put customer service first, but when they are put in an adversarial situation, it becomes difficult to tell them how to fight the Department. Process is a two way street. To hold Mr. Satterfield's hand based off of the outcome of a lawsuit, it becomes difficult to extend generously the spirit of customer service in an adversarial position. Ms. Mendonca noted that understanding there is a lawsuit, the applicant should have the proper legal advice on what he should be doing in following the requirements to which Mr. Dahilig stated that the Department is not opposed to a rehearing. He noted they tried to give as much leeway as they could to have the applicant initiate the process without avail. A lot of the oral arguments are things that really should have been submitted upon request. The government should be protected by process as well. If it is the Commission's will to go through rehearing, the Department will oblige but they prefer the Commission look at the fact, the letters that went out, what was said in the letters and determine whether or not enough process was provided to the applicant to respond in kind before what he believes what is a procrastinated response before the Commission. Mr. Satterfield apologized and stated that he just received the list from his attorney who had been trying to rightly figure out what the Supreme Court had listed and what they think were the concerns of the Supreme Court for public trust. If he had them, he would have been able to attach them to the application for a rehearing. He humbly asked the Commission to rehear the matter. Chair Anderson stated that she would like to set forth questions for counsel regarding procedural matters and to address the effect of the remand on the Commission and its options with respect to the motion to withdraw. Attorney Jung stated that the Commission may go into executive session on an agenda item for one of the permitted purposes listed in section 92 -5(a) of the Hawaii Revised Statutes without 15 V:A2015 Master Files \Commissions\Planning \Minutes \2015 -3/24 Planning Commission Minutes noticing the executive session on the agenda where the executive session was not anticipated in advance. The executive session may only be held however upon affirmative vote of two thirds of the members present which must also be the majority of the members to which the board is entitled. The reason for holding the executive session shall be publically announced. On the motion by Sean Mahoney and seconded by Amy Mendonca to move into executive session, the motion carried by unanimous voice vote. Chair Anderson stated that there is another executive session on the agenda and she would like to address both sessions. EXECUTIVE SESSION Pursuant to Hawaii Revised Statutes Sections 92 -5(a and 4), the purpose of this Ili session pertains to the Planning Director's evaluation where consideration of matters affecting privacy will be involved. Further, to consult with legal counsel regarding powers, duties, privileges and/or liabilities of the Planning Commission as it relates to the evaluation of the On the motion by Amy Mendonca and seconded by Sean Mahoney to move into executive session, the motion carried by unanimous voice vote. Chair Anderson stated that they will be moving into executive session on Kauai Springs as well as the evaluation of the Planning Director. She stated they will continue the hearing in one and a half hours. Consideration to withdraw Class W Zoning Permit Z -IV- 2007 -1. Use Permit U- 2007 -1 and Special Permit SP- 2007 -1 due to lack of information to complete the application and applicant's lack of willingness to pursue the application = Kauai Springs, Inc. (Continued) Attorney Jung stated that the issue before the Commission is whether or not there is a willingness to pursue the application. The Supreme Court case indicated it is an open case being remanded back to the Commission to further clarify their findings of fact and conclusions of law. One of the issues in clarifying findings of fact and conclusions of law is a hearing. If the Director is not objectionable to a rehearing it would have to be set forth as an agency hearing moving forward. The options are: Did the applicant show a willingness to pursue it and if so they can reschedule the hearing. If he did not show a willingness to pursue it, then they could deem the applicant as not wanting to pursue it and have the applications withdrawn. If they move forward with the contested case hearing it would have to be set up as the agency hearing and the way the Court ruled is in clarifying the public trust obligation, it indicates that the burden has shifted to the applicant to prove the public trust obligations to the Commission. Mr. Dahilig did not have any comments on what was proposed. Mr. Satterfield stated that the clarification of what the Supreme Court has mandated to them to be remanded back is going to take a rehearing for all of them to decide what the Court 16 V:A2015 Master Files \Commissions\Planning \Minutes \2015 -3/24 Planning Commission Minutes really wants and what is good for the public trust. He humbly asked for a rehearing to shed some new light as to the resource itself in regards to public trust. Mr. Dahilig asked for a clarification that it is a rehearing to supplement the record and then to review the record as submitted back in 2007 to be evaluated with the new information or a rehearing on everything. The Department's preference would be on the limited questions as raised by the Supreme Court opinion to which Chair Anderson stated that her understanding is that the rehearing is based on the remand and instructions from the Supreme Court in terms of the applicant providing the further information to supplement and prove that their actions are not taken against the public trust. It was moved by Amy Mendonca and seconded by Sean Mahoney to have a rehearing based on the Supreme Court's remand. (no action taken) Mr. Katayama questioned if the Department and the applicant would meet in a preconference to determine the scope of the rehearing to which Mr. Dahilig replied that if the scope is limited to the remand questions, they would operate off of that. Based off of his reading of the opinion it is clear who has the burden of proof, what needs to be added to the record to support an argument to approve the permits, and that would come back to the Department for a reply. It wouldn't be something done jointly. But, in terms of scheduling, submitting of evidence, prehearing statements, they can work it out ahead of time with the applicant. Mr. Abrams asked for clarification that the Commission would be following Chapter 6 in terms of agency hearing to which Attorney Jung replied that it would be correct. It would be limited in scope given to the public trust issue. The next step would be that there is an option for a hearings officer. If not, then the full Commission would do it. Mr. Jung noted that he didn't see any interventions. He questioned Mr. Satterfield if he was aware of any interveners to which Mr. Satterfield replied no. Mr. Satterfield requested that the commissioners visit the site to see what they do. Mr. Dahilig questioned whether any requests for interventions will be heard by the Commission or if they would be considered not to be accepted. He questioned if it is a continuation of the hearing from 2007 or a new hearing to which Attorney Jung stated this is an unusual situation where there is a direct remand to the agency versus the Court. He will further research and address it when the time comes for the prehearing conferences. Mr. Abrams stated that he always thought a rehearing was the continuation of what the Planning Commission had decided which was appealed all the way up to the Supreme Court and they're opining on that decision. They would be sticking with the issues that came down from the Supreme Court. He did not know whether or not Chapter 6 is the appropriate vehicle. Attorney Jung stated that if the Commission would like to defer, he can research the issue and try to get clarification. 17 V:A2015 Master Files \Commissions\Planning \Minutes \2015 -3/24 Planning Commission Minutes On the motion by Louis Abrams and seconded by Wayne Katayama to defer until the next meeting, the motion carried by unanimous voice vote. Chair Anderson clarified there is a matter regarding whether or not this will be treated as a new hearing or a continuation of the original hearing that will be addressed at the next meeting once counsel reviews it. ANNOUNCEMENTS The following scheduled Planning Commission meeting will be held at 9:00 a.m., or shortly thereafter at the Lihue Civic Center, Moikeha Building, Meeting Room 2A -2B, 4444 Rice Street, Lihue, HI 96766 on Tuesday, April 14, 2015. ADJOURNMENT Chair Anderson adjourned the meeting at 1:29 p.m. Respectfully submitted by: Duke Nakamatsu, Commission Support Clerk ( ) Approved as circulated (add date of meeting approval) ( ) Approved as amended. See minutes of meeting. IN V: \2015 Master Files\ Commissions \Planning \Minutes \2015 -3/24 Planning Commission Minutes