Catalyzing Cesspool Conversions with Responsible Management Entities 

Executive Summary

With a state mandate to convert all 83,000 cesspools by 2050, the homeowners of Hawai‘i are facing several challenges, including a lack of funding, guidance, and governance. Because many homeowners are unable to afford individual conversions, communities need more options for decentralized wastewater treatment solutions. Affordability and governance are central challenges for cesspool conversions in Hawai‘i. Responsible management entities (RMEs) can play an important role, by providing vital local organization, connecting communities and homeowners with state and municipal resources, and aggregating projects to reduce costs and expand affordability at scale. State law and policy, however, will affect RME capacity to fulfill these functions.  

This whitepaper finds that Hawai‘i state law generally enables RMEs to own, operate, and maintain decentralized wastewater treatment systems. These are the types of systems that will often replace cesspools and can help RMEs facilitate community management. However, state policy renders most RMEs ineligible for the Clean Water State Revolving Fund (CWSRF), leaving public funds on the table that otherwise could support conversions. This paper suggests that Hawai‘i Department of Health (DOH), can remove this barrier by using its policy and rulemaking authority to significantly expand eligibility to the CWSRF, without a change in state law. 

This conclusion is based on a review of federal law, Hawai‘i state law, and Hawai‘i regulations and clean water infrastructure policy. First, the whitepaper identifies that the federal Clean Water Act (CWA) supports RME formation and operation. It permits CWSRF programs to support many decentralized wastewater activities and allows public and private organizations and individuals to receive assistance. Next, the whitepaper reviews the state laws and regulations governing Hawai‘i CWSRF and finds that state statute and regulations allow both public and private RMEs to receive CWSRF support; however, the Hawai‘i DOH’s policies make private RMEs ineligible for direct support. Beyond funding and financing, the whitepaper identifies that Hawai‘i decentralized wastewater regulations generally allow RMEs to own systems, make state-required certifications, and obtain DOH authorizations. Some RMEs will need to ensure their service charges comply with Hawai‘i utility rate procedures and regulations, but these regulations will not apply to member- owned or controlled RMEs, allowing them more administrative flexibility and decreasing compliance costs. Finally, the whitepaper identifies that DOH has the ability to change its policies to expand CWSRF eligibility to include most RMEs, and it can create programs to support households and RMEs through policy or administrative rules.