Honolulu committee hears plan to use $625,000 and HGIA loan program to accelerate cesspool conversions

Dr. Kealoha Fox, executive director of the Office of Climate Change, Resiliency and Sustainability, told the City & County of Honolulu Committee on Energy, Environment and Sustainability that the city is prepared to deploy $625,000 in seed money to help Oʻahu households convert or connect on‑site cesspools.

"Hawaii has approximately 88,000 residential cesspools that collectively discharge estimated 50 million gallons of untreated sewage into groundwater and surface water every single day," Dr. Fox said during the June briefing, noting about 8,000 of those cesspools are on Oʻahu. She cited Act 125 (2017), which requires statewide conversion of cesspools by 2050, as the statutory backdrop.

The office recommended and presented a memorandum of agreement (MOA) with the Hawaii Green Infrastructure Authority (HGIA) to administer a new revolving loan program and related financial assistance. Dr. Fox said the MOA had been "fully signed and executed as of yesterday" and that funds had been encumbered to allow implementation before the end of the fiscal year on June 30.

Gwen Yamamoto, executive director of Hawaii Green Growth (representing partnership coordination with HGIA in the briefing), described program design goals that emphasize flexible financing and prioritizing low‑ and moderate‑income (LMI) households. The proposed structure would align HGIA financing mechanisms, including low‑interest and potentially forgivable loan features, with the city’s $625,000 CRF allocation.

City staff and HGIA representatives said the state has also provided seed money for a statewide program: $2 million in green fee funds for HGIA. Staff emphasized statutory limits in the city’s ordinance (Bill 15) that the committee provided for: grants from the CRF may not exceed $50,000 and are limited to households with total income below $100,000. Staff said the statewide program uses HUD area median income metrics for LMI determinations and that the City & County can set its own priorities for city‑provided funds.

Committee members asked detailed questions about how the city would target households and avoid duplicative work where sewer projects are planned. Councilmember Tupola asked whether the previously proposed Ewa sewer improvement district was removed from the city’s 8,000 cesspool count; staff said Ewa’s roughly 976 homes are included in the 8,000 and noted that a June 9 community meeting produced strong public opposition to the sewer district plan, so the city is not currently pursuing council approval for that district.

On program timing, staff said HB1618 — a state bill to establish a cesspool conversion revolving loan program administered by HGIA — was awaiting the governor’s action at the time of the briefing. Staff said they will convene a multi‑county design working group in July, solicit feedback through September, and aim to launch the HGIA‑administered loan program in October or November.

Staff and council members also discussed potential incentives to encourage early participation, such as temporarily reduced interest rates, and the possibility of a FY27 supplemental request to add $950,000 to the local effort after lessons learned from the initial deployment.

A public commenter, Melody Young (identified in the meeting as Miss Hawaii), urged the committee to pursue cross‑sector partnerships and additional funding sources including federal grants and nonprofit partners.

The committee took no formal vote at the briefing. Staff said the MOA is executed and the funds are encumbered; the committee and staff identified outreach to priority‑one cesspool areas and coordination with councilmembers as near‑term next steps. The committee closed public testimony and adjourned.

The committee did not take any votes on new legislation during the meeting; staff said they would return with design group outcomes and recommended program details later in the budget and appropriation processes.