Committee delays decision on creating standalone Department of Building after finance analysis shows multi‑million cost

The committee on Oct. 7 postponed Bill 68 (Draft 3), a proposed charter amendment to establish a standalone Department of Building and a Building Codes Commission, to the committee’s Oct. 21 meeting after finance provided preliminary cost estimates and members requested additional data from the building division.

Finance Director Diane Nakagawa told the committee the estimated ongoing annual cost of a separate building department would be about $1,900,000 and the first‑year cost would be at least $6,400,000. Her summary cited 11 new positions (including a director and deputy director), salary and fringe increases of about $1.34 million, one‑time equipment costs (computers, vehicles, printers) and lease‑space estimates (an average of 10–12,000 square feet in Hilo and about half that in West Hawaii) that drove a $540,000 lease‑cost estimate. Nakagawa also noted a prior 2022 build‑out estimate of $4,300,000 and that public‑works staff suggested increasing that estimate by about 30 percent to roughly $5.6 million.

Acting Public Works Director Neil Azarito told the committee the building division is “doing a hell of a job” and said most positions were filled; he recommended maintaining the current structure and continuing interagency coordination rather than immediately creating a new department. Azarito agreed to provide the committee with a recent snapshot of permitting numbers and timelines; councilmembers asked for that data within about two weeks.

Councilmember Eustace, who moved postponement, said the finance estimate and hiring challenges warranted more analysis; several councilmembers said they supported the idea of a Building Codes Commission while expressing reservations about the full charter amendment to create a new department. Corporation Counsel noted a building codes commission could be created by ordinance (code amendment) rather than by a charter change.

Committee discussion addressed permitting timelines, staffing shortages, and special considerations for older “plantation‑era” housing stock. Councilmembers and staff discussed exploring code adjustments to accommodate older homes and protect affordability while ensuring safety.

The committee voted to postpone Bill 68 to its Oct. 21 meeting; the postponement passed 8‑0 (one absent). The postponement will allow the committee to review permit processing statistics from the building division, refine fiscal estimates and consider creating a building codes commission by code amendment if members decide to separate that element from the charter amendment.

Key fiscal details presented to the committee: • Ongoing estimated cost: approximately $1,900,000 annually (salaries/fringe for 11 positions and operating costs). • First‑year estimated cost: at least $6,400,000 (equipment, lease build‑out, and start‑up costs); build‑out earlier estimated at $4,300,000 (2022) and updated by staff to ~$5,600,000 (30% increase). • One‑time equipment estimate: $245,000 for computers and furnishings. • Lease/space estimate (Hilo and West Hawaii): $540,000 (based on market rates and square footage assumptions).

What’s next: The committee will receive permitting‑timeline data from the building division and further fiscal detail ahead of the Oct. 21 meeting; members indicated interest in separating the Building Codes Commission proposal from the full charter amendment so the commission could be considered as an ordinance if desired.