County of Hawaii 1996 - 1997 Annual Report: Department of Research and Development

Diane S. Quitiquit, Director, attended the University of Pittsburgh and began her career in Hawaii 20 years ago with AMFAC Hotels and Resorts starting with their management training program, and in 1985 was named General Manager of King Kamehameha and the Keauhou Beach hotels. In 1989, she left the hotel and became the Big Island representative for Outrigger Hotels, Hawaii. In 1991, she and a business partner opened a small business in Kailua-Kona. Mrs. Quitiquit has been active in many community organizations including a term as a member of the Kailua Village Design Commission; past chair of HVB Big Island Chapter; past president of Hawaii Hotel Association, Big Island chapter; Vice President, Hualalai Academy Board of Directors; member, Onizuka Memorial Committee; and others. In January 1993, Mrs. Quitiquit joined the present administration as Director of Research and development. She has been the Mayor's representative on the board of directors of the Big Island Group and the Natural Energy laboratories of Hawaii, serving as Chairman of the NELHA Strategic Planning Committee and now serving as chairman of the Board of directors, Mrs. Quitiquit has been serving on numerous committees such as the Hawaii Visitors & Convention bureau-Big Island Chapter Board of Directors, HVCB Big Island Chapter Marketing Committee, the state HVCB Marketing Committee, University of Hawaii Strategic Planning Committee, Five Mountain Medical Community committee and serves as an advisor to the Hawaii Ecotourism Association. On behalf of the Healthcare Forum Foundation, Mrs. Quitiquit is one of two from Hawaii participating in the 1997-98 "Creating Healthier Communities Fellowship."

The Department of Research and Development is charged with the responsibility of promoting economic development in Hawaii County and collecting and developing data for decision-making, program development and policy-making. The department's focus encompasses numerous programs which include tourism, agriculture, new industry and industry development and research and statistics. The state-funded energy coordination program as well as the emerging film industry also fall within the department's responsibilities.

Headed by Margarita L. Hopkins, who has an undergraduate degree in accounting and a M.S. degree in agricultural economics. Prior to joining the department, Hopkins had taught and conducted research in agricultural economics and marketing at several universities and research institutions both in the U.S. and abroad. She has been with the department since 1989 as an Economic Development Specialist III and provides vital coordinative and clearinghouse services for the many agricultural communities and individuals on this island.

Headed by Howard I. Nakamura, a graduate of Hilo High School and the University of Hawaii, receiving his undergraduate degree in agriculture and MBA degree. Nakamura began his service to the County of Hawaii in 1971 with the Legislative Auditor's Office. In 1975 he joined the R&D staff and has since been the economist.

Headed by Colette Rapozo-Yamamoto, who has a B.A. in Sociology from the University of Hawaii at Hilo and a M.S. in Library and Information Science from Simmons College in Boston. Prior to joining the department, Colette worked in academic, health science, law and public libraries in Hawaii and Boston. She has been with the department since 1994 as our Resource Materials Specialist and provides vital knowledge management services by actively gathering, selecting, organizing and communicating information to numerous agencies and the general public.

Headed by Raymond G. Carr, Ph.D., who joined department as an Economic Development Specialist III in June 1993 and serves as our Energy Coordinator. Carr received his doctorate in metallurgical engineering from London University, England. Besides a 20 year career in the engineering field, Raymond has also worked private business, teaching and financial services. He has been a resident of the Big Island for the last 10 years.

This has been a remarkable year in visitor growth on Hawaii's Big Island. Since June 1996 when Japan Airlines began flying three times a week to Kona International Airport and when United Airlines added a second direct flight (this one from Los Angeles), the Big Island has led the State in visitor growth. The growth in this industry has continued for 16 consecutive months. We now have direct flights from San Francisco, Los Angeles, Tokyo and from December through April, from Vancouver. There was also much excitement three times this past year in welcoming the Concorde flights.

Availability of air transportation is vital to the growth of most segments of our economy, the increased flights to Kona International Airport have also provided additional cargo space for our agricultural products. The success of this initiative is due to a strong cooperative effort between the State of Hawaii, County of Hawaii, Big Island Chapter of the Hawaii Visitors & Convention Bureau, the airlines mentioned, the visitor industry on the island and most of all, the people of the Big Island who have given their full support to this project.

The County of Hawaii statistics for December 1996 as compared to December 1995 reflect the impact of these additional flights:

As additional visitors come to the Big Island, we must be diligent in being able to offer new activities and attractions to enhance and lengthen their stay. Over the past year, some of the projects the department has supported include:

Restoration of the Punaluu Petroglyph: Petroglyphs had been discovered in Punaluu that were formerly being used as part of a parking lot. School students had discovered this situation and funding was provided to install a protective wall and signage to honor this site.

Heritage Corridor Project: As communities around the island begin to identify significant landmarks, history, activities and attractions, the R&D department has partnered funding with these communities to help develop their product. Some of the communities moving forward with their projects include Hakalau, restoration of a site for community gatherings; Hamakua, supplies for Hamakua Heritage Visitor Center; Honokaa, Hamakua Heritage Cultural Center Project; Laupahoehoe, Train Station Visitor Center; Na'alehu, theatre restoration project, etc.

With the addition of the innovative North Hawaii Community Hospital, a vision has emerged to establish Hawaii's Big Island as the health and wellness center for the world. We have been working with the Five Mountain Medical Community Committee to help move this initiative forward. To accomplish this goal, fundamental changes in the economic and social conditions of the islands must be made. Work will continue on this effort to make the Big Island a Healing Island, representing a new paradigm in health and health care.

We continue to support the IRONMAN TRIATHLON WORLD CHAMPIONSHIP, THE INTERNATIONAL BILLFISH TOURNAMENT, THE SENIOR SKINS GOLF TOURNAMENT and many others. This year we welcome the MasterCard Senior PGA Tournament of Champions. We have also assisted the HILO INTERNATIONAL MARATHON which will be held in October 1997 and support the NICK ROTT BIKEFEST, a mountain biking event growing by leaps and bounds. These types of events are good for the community in offering healthy alternatives and provides wonderful publicity for our island.

With increased competition from abroad, it is vital to our community that we continue to provide a quality experience for our visitor. One manner in which we do this is to partner with Destination Hilo and Kona in providing pier and airport greetings for our visitors. This continues to be appreciated by the airlines and ships which may be seen in the increased arrivals of both on the island.

The major challenge facing Hawaii County is how to stimulate the economy. As agriculture is one of our major resources, we must find an effective mechanism to stimulate agriculture on the island. Former sugarcane lands throughout the island are slowly being replaced with new crops which have not been traditionally grown by our farmers. The utilization of these non-traditional crops is greatly impaired by two factors: 1) unavailability of adequate and efficient air and surface cargo transportation and 2) the existence of fruitflies on the island. The lack of direct air cargo to the U.S. mainland which is our major market, forces our farmers to incur transhipment expenses which is often greater than the shipping cost from Honolulu to the U.S. mainland. Because of fruitflies, our fresh products cannot be marketed outside the state without fruitfly quarantine treatment.

It is hoped that the proposed irradiation facility to be built on the Big Island will be able to address the fruitfly quarantine requirements for a wide variety of products and at the same time be able to partially solve our transportation problem. It is anticipated that with the irradiation facility on the Big Island, being the only place in the state to have the facility, neighboring counties who wish to market fresh products outside the state will take advantage of the availability of our irradiation facility. With our anticipated increase in production coupled with the volume of products coming from the neighboring islands, we should be able to build enough volume which will entice air cargo companies to provide direct services to our target markets in the U.S. mainland and abroad. R&D is actively involved in coordinating this project.

Hawaii County has ample agricultural lands which could also support uses other than diversified crops. Mayor Yamashiro also supports the development of forestry on the Big Island and has entered into a non-binding letter of intent with Oji Paper Company for a forestry project on the island.

Although R&D is not directly involved in the building of infrastructure, we are actively coordinating the Ka'u Agricultural Water System project which received funding from the state. To initiate the production of diversified crops in Ka'u, R&D funded a temporary water system for the farm lots in Keaiwa which were provided to the displaced sugar workers by Ka'u Agribusiness. The project was unveiled on September 20, 1996. Currently 15 farmers are placed on the land of which 10 farmers are producing and a contract for further expansion of the agricultural water system is under negotiation.

R&D has continued to work with the Finance Director and the Real Property Tax Office in proposing comprehensive revision of the County Tax Code and in drafting administrative rules for the implementation of the native forest ordinance. Some of the major purposes of these revisions are to simplify the code and to insure that only commercial farmers receive the reduced agricultural rate. R&D was also involved in the state's effort to eradicate the banana bunchy top disease in the Kona area.

R&D's approach in providing "seed money" for preliminary research that address our farmers' problems has encouraged university scientists to devote some of their time to reach out and respond to the needs of our farmers as well as obtain research funds from other sources.

R&D is aware of the importance of supporting innovative research to improve existing production technologies if our farmers are to be competitive. During the Fiscal Year 1996-97, R&D awarded five new research projects with a total cost of $18,575. The County Council provided continued funding for the Miconia eradication program on the Big Island by allocating an additional $100,000:

The cattle industry is constantly struggling to stay in business due to the volatile nature of the cattle market. To insure survival of the industry, alternative markets were explored. R&D provided funding to develop a local market for forage raised beef. Forage raised beef is produced by raising animals in pasture not in feed lots. Because the meat is relatively lean, it is considered to be healthier for consumers. Forage raised beef can now be purchased at KTA Super Stores. To encourage the local chefs to utilize our local meat, R&D also provides funding to co-sponsor the forage raised meat food show. At this show, resort and restaurant chefs are challenged to utilize various cuts of beef, lamb and goat meat in creating delicious food. Twenty-two chefs participated in the show. Currently, forage raised meat is being served at resort hotels in Waikoloa.

The foliage industry is the most progressive of all the agriculture industries on the island. Its success is attributed to its trade show held every year which attracts foreign and mainland buyers. This annual event is co-sponsored by R&D. At this year's trade show 40 buyers from Japan and Okinawa participated. As a result, foliage farmers are expanding their production in anticipation of Japan's increasing market.

Consumer awareness campaign for the County of Hawaii's 100% Kona coffee logo program was boosted to counteract the negative publicity from the arrest of a large coffee processor selling "fake" Kona coffee. The program assures buyers that the coffee bought is high quality State certified 100% Kona coffee.

As production of wide variety of new products are starting to increase, existing markets will have to be expanded and new markets will have to be developed. A $90,000 contract is being negotiated to promote all Big Island products including products processed with irradiation, vapor heat, cold treatment and other post-harvest methods.

During the Fiscal Year 1996-97, R&D awarded nine market development and promotion grants with a total cost of $141,000:

Discovery of the Papaya Ringspot Virus (PRV) in Hamakua has prompted an aggressive campaign to rid the infected areas of PRV. R&D funded the educational flyers used for this campaign.

R&D is actively involved in educating the public about the role of the proposed irradiation facility in stimulating the diversified agriculture industry. R&D was invited to make presentations on this issue by many community groups. Informational materials were also distributed at these meeting.

Interest in vegetable crops is increasing, especially among first-time farmers. However, a lack of experience in growing these crops can result in crop failure. In an effort to avoid this, R&D funded a vegetable production video to provide farmers with easy step-by-step instruction on how to successfully grow these crops. This video was produced by the Vegetable Extension Agent. Because of a reduction in the budget of the Extension Service, their services for both commercial and non-commercial farmers were greatly reduced. R&D assisted by providing partial funding to the Extension Service to enable them to provide the needed levels of help to both commercial and non-commercial farmers. Volunteer community organizations involved with rural development programs on the Big Island were also found to be in need for community resource workroom with access to computer equipment and software and technical support. R&D provided funding to R&D to support the setting up of a community resource workroom for these organizations.

In fiscal year 1996-97, R&D awarded 10 agriculture information and education grants with a total cost of $32,695:

In addition to providing supplemental grants, in-kind support was extended to various agriculture events. R&D continued to provide vital coordination and clearinghouse services for the many agricultural communities and individuals on this island.

Following completion of the Hilo Foreign-Trade Zone (HFTZ), the County of Hawaii began negotiating through Foreign-Trade Zone 9 (FTZ 9) for a tenant to occupy the premises. The most promising prospect was NIC Americas, Inc., which produced tabletop incinerators for the disposal of hypodermic needles. NIC projected the eventual employment of l25 individuals at peak production. After months of negotiations between the State of Hawaii and NIC failed, FTZ 9 leased the HFTZ facility to the Gemini Telescope which will be assembling components for its telescope on Mauna Kea. Gemini has 20 employees working in the zone with another 25 to be hired over the next two years.

The County has relinquished jurisdiction of the HFTZ to FTZ 9 for future administration. FTZ 9 will maintain the facility and seek development of the remaining acreage for FTZ use. Although the remaining 25 acres of the Hilo airport site may be utilized for FTZ use, infrastructural needs have to be addressed before significant development can proceed.

Since the passage of enterprise zone legislation, the County of Hawaii has established five zones on the Big Island. Present zones include the Northern Kona Enterprise Zone, the Southern Kona Enterprise Zone, the Hilo-Puna Enterprise Zone, the Ka'u Enterprise Zone, and the Hamakua Enterprise Zone. If qualified, businesses located in these areas may qualify for real property and income tax benefits. Since the designation of the first zone, twenty businesses have participated in the program.

Because of the potential benefits to agricultural producers and processors, the County of Hawaii took aggressive action to establish zones on the Big Island. To date five companies involved in agriculture have applied for and are participating in the program.

The Department of Research and Development (R&D) administers this program at the county level and coordinates with the Department of Business, Economic Development and Tourism (DBEDT) at the state level.

Because of the strong interest in preserving cultural and historical aspects of the Big Island's past, R&D has embarked on this program to work with various organizations involved with such work. Recent closings of sugar plantations have focused attention on the possible preservation of plantation artifacts. Because sugar companies no longer operate on the Big Island, this facet of preserving the plantation aspects has become an important priority.

Also of interest to R&D is the revival of different aspects of the Hawaiian culture. R&D has worked with groups in Hilo and Kona on projects reflecting Hawaiian history, and presently is working with Ka'u community groups to establish a program there.

Besides preserving the past for present and future generations, the heritage program has the potential for developing economic opportunities. R&D's primary mission in this regard is to provide seed monies for community groups with eventual economic self-sustenance of the projects over the long term.

Following years of modification, the astronomy center originally conceptualized by Hilo Main Street and R&D has become reality. Under the new leadership of the Lyman Museum, an exhibit with real time connections to the various telescopes on Mauna Kea has been completed for viewing at the museum. The exhibit features scale models of the observatories and computers linked to the observatories via web pages on the internet. Web pages will contain current information about current projects astronomers are working on.

Because of the weakening economy in the Ka'u district, R&D continues to focus attention on possible opportunities for the area. Assisting several community-based organizations, R&D seeks to establish several programs to encourage economic development. Inherent to these programs are training and educational opportunities as well as assistance with necessary equipment for executing the programs.

Thus far R&D has assisted with agricultural, computer, and organizational training. The preservation of key landmarks in Ka'u is also a major concern of the department. In this case, R&D seeks to assist with preservation of landmark structures which would contribute to economic development and other community needs.

R&D's involvement with organizations in Ka'u is unique in that all projects are community-based initiatives with a minimum involvement of the County. Non-profit groups wishing County support for their programs must submit proposals detailing expected results with budgets and timetables.

The Big Island Film Office (BIFO) has functioned this fiscal year under the auspices of the Department of Research and Development through a contract with Ms. Marilyn Killeri. BIFO has continued in its objectives of promoting the Big Island as a viable destination for filmmakers and to provide resource services to all filmmakers, locally, nationally and internationally.

To that end, BIFO has positioned itself for immediate accessibility to filmmakers around the world with a web site on the internet and has effectively increased efficiency in daily global communication through e-mail. Crews from England, France, Germany, China, Canada, Japan, Korea, Singapore, Taiwan, New Zealand, Australia and the United States completed over 100 productions in print, video and film, contributing over $5 million to the Big Island economy during this fiscal year. BIFO provided 24-hour access to filmmakers and responded to over 400 inquiries with phone calls, photo files, and promotional materials.

In the continuing effort to develop a comprehensive resource office, BIFO established data bases for crew and production support, which included a wide selection of businesses and individuals in the community. The photo library was extended beyond the County, State and National Park lands, by documenting numerous private lands that opened up for filmmaking. There was evidence of growth in the local film industry with an increased crew base, rental equipment availability doubling from the previous year and local production houses upgrading equipment to remain competitive with new technology.

BIFO's long range commitment to familiarizing industry personnel to the diversity of the Big Island saw an increase in scouting with representatives from Tri/Star Sony Pictures, 20th Century Fox, Disney/Touchstone Pictures and Hollywood Pictures, Universal and Victoria Film Production surveying the Island.

Throughout the year, BIFO participated in various marketing efforts, trade shows, festivals and conferences, including the Film Hawaii USA/Tokyo trade show, the Locations '97 international trade show, the Association of Film Commissioners International Cineposium, and other functions relevant to the industry. Promotions provided further exposure by placing advertisements in the Locations Magazine and the Hawaii Production Index with additional listings in industry directories: The Hollywood Reporter Blue-Book Film and TV Production Directory, the Pacific Coast Studio Directory and the Motion Picture TV and Theatre Directory. The Film Coordinator contributed articles to the film industry publications Location Update, Media Inc. and the Hawaii International Film Festival Guide and represented the industry on the Na Leo Board.

The Big Island Film Office continues to explore opportunities that will heighten recognition of the Big Island to filmmakers around the world.

Implementation of Phase II of the Big Island Film Office web site will begin, featuring several hundred location photos, crew listings and permitting information. The address is http://filmbigisland.com

TOP 20 FILM INDUSTRY PRODUCTIONS (partial list of numerous completed productions):

The Municipal Reference Center (MRC) is a service agency of the County of Hawaii currently charged with a twofold responsibility. As the library, its original and continuing function is to meet the information needs of the Department of Research and Development. The Library provides a full range of information services in support of the promotion and economic development of the Big Island. As the MRC it centralizes the holdings of 12 County departmental collections, currently with 9,220 titles on file.

The MRC is responsible for classifying and cataloging all resource materials and for adding and deleting entries in the Library Information System (LIS) database. The LIS is an online library catalog that centralizes the holdings of the 12 County departmental collections. Access to the LIS database is available to all County personnel via the County's WANG VS 100 system.

Each department is responsible for sending new acquisitions to the Municipal Reference Center to be cataloged, processed and entered into the LIS database. Once entered into the LIS database all printed resource materials and publications housed by the County becomes accessible to all County departments and personnel. Besides centralizing access and allowing for the sharing of resources, this system may effectively prevent funds from being used to purchase multiple copies of resource materials.

The MRC is a depository for some U.S. Bureau of the Census publications, and state as well as county statistical sources. The MRC promotes economic development through continuous data collection and documentation for public use.

Tracking of building permits, tourism counts, labor force, gasoline consumption and tax collections are updated (and distributed upon request) on a monthly basis as the "County of Hawaii Statistics." A newspaper clipping file and index of articles of interest to, and in support of, departmental activities and of the County in general, is also maintained and updated on a daily basis.

The MRC provides reference service to County departments, other governmental agencies, businesses, students and the general public. During the 1996-97 fiscal year, information requests averaged over 50 per week.

Publication: County of Hawaii Data Book 1996 (the most comprehensive source of demographic and economic information about the Big Island)

The main achievement this year was the $0.5 million energy efficiency retrofit of the Hawaii County Building by performance contract. This contract was executed with Honeywell Inc. on October 29, 1996, and the installation of the energy conservation measures was completed in March 1997. This is the first performance contract ever executed at the state or county government level in Hawaii.

In this contract, Honeywell provided all design, procurement and installation services, and the County entered into a ten-year, tax exempt, lease to finance the project. Honeywell has guaranteed that the electricity cost savings resulting from the conservation measures will be enough to cover the lease payments; should there be a shortfall in savings, Honeywell will make up the difference. Besides getting a complete package of services, the County has not had to provide any capital or incurred any on-going finance costs over and above what it

would have been paid for electricity costs had the project never been carried out at all. After the ten-year lease period, all the improvements revert to the County free and clear.

This is truly a win-win situation for the County that has resulted in an upgrade of the entire lighting system of the building as well as replacement of the failing 30-year-old a/c chillers that operated on CFC refrigerant--the type that is largely responsible for thinning of the atmosphere's ozone layer and enhanced risks of skin cancer. Figure 1 shows the decrease in electricity usage as a result of this project for the months of March, April, May and June 1997.

The positive experience with this demonstration project has encouraged us in our efforts to make the County more efficient in its use of energy, and we are presently working to develop new performance contracts for retrofits to the remaining inventory of County-owned buildings as well as the various facilities of the Wastewater Division.

It has been more than two years since Hawaii County adopted the provisions of the Hawaii Model Energy Code, a section of the County Building Code that set new standard of performance for the design of energy-related features of new and renovated commercial buildings. While experience in implementing this code has been positive, amendments were introduced to make the code more user friendly without compromising the energy efficiency standards of the code. These amendments were approved by the County Council and passed into law on April 1, 1997.

In March 1997, a report was issued by the Hawaii Taro Growers Association on the technical and economic aspects of drying pineapple, banana and papaya using two different types of solar dryers in Kapoho, district of Puna. This work, funded by a $10,000 County grant awarded in 1996, showed the potential of effectively adding value by this means to off-grade agricultural products that otherwise have minimal commercial value.

Two grants were awarded this year. One provided $4,500 to support a community energy initiative in North Kohala that would develop a plan for a 'soft energy' path of conservation and renewable energy supply into the 21st century, a concept expressed in the June 1996 County Resolution No. 317-96. A second grant for $16,300 was awarded to the 'Aina Institute to develop a strategic plan for an integrated resource management authority in West Hawaii. The aim is to identify potentially viable business opportunities based on the reuse of components of community solid and liquid waste streams.