2011-09-27 Water Board Minutes - Laserfiche WebLink

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Staff has reviewed the Third Amendment of Water Facilities Agreement and finds it acceptable. The Manager-Chief Engineer recommended that the Water Board approve the Third Amendment of Water Facilities Agreement, subject to review as to form and legality by Corporation Counsel. MOTION: Mr. Kaneshiro moved to approve; seconded by Mr. Perry. The Manager-Chief Engineer noted that even if Seascape had not asked for this extension, DWS is not ready to do its portion of the project anyway. DWS has no problems with granting the extension because DWS does not have money for the tank anyway. Mr. Bill Brooks, representing Seascape, explained that in the current economic straits, nobody can afford to put forward the things in the agreement. Once Seascape’s work is finished, then it will be DWS’s responsibility to proceed with the development of the well. That would have benefit to Seascape because it would give the developer access to the water that would be stored in the 1-million gallon reservoir. DWS has purchased the reservoir site, and the bulk of the engineering work, the environmental assessment (EA), etc., have been done already. However, in the current economic circumstances, the market is not viable for a developer to market his units. The Manager-Chief Engineer said that the good thing about the agreement is that it gives DWS a much- needed well site in Kona. Mr. Brooks said the reservoir site is in Kalaoa, near the existing Kalaoa well. The 1-million gallon reservoir, once completed, will facilitate the increase in production from the well. Ms. Garson noted that in the original agreement, one of DWS’s obligations was to purchase this site, which it did, for $500,000.00 in 2009. DWS is now waiting for Seascape to do their portion of the agreement, which is the design work. Mr. Taniguchi said the timing might not be good right now, but when Seascape fulfills its portion of the agreement, then things can proceed. He said that the Board seems to be just waiting and waiting year to year; if he himself was out $500,000.00, he would not be too happy. Mr. Brooks said that was understandable. However, it does not serve any of the parties to move forward until DWS is ready to move forward with the development of the well and the transmission lines, etc. He said his understanding is that this will not happen anytime soon. The number of things that Seascape needs to do will not take that long to complete. The tasks include finishing up the engineering of the transmission lines; the engineering of the reservoir site has already been done, he said. The only thing that needs to be done is the completion of the engineering of the transmission lines connecting the two reservoirs. Once that is done, the capacity will increase and there will be a place to store the water. Mr. Taniguchi asked, if the remaining engineering work will not take that long, why the work would take a year. Mr. Brooks said it was not a matter of the engineering work taking a year. It is just a matter of money. Without the water, the developer cannot do anything with the parcels that this whole project was designed to facilitate. DWS cannot provide the water for those parcels without the improvements that DWS itself would have to do, Mr. Brooks said. Chairperson Mukai asked how long it would take to get everything in place to provide water to the parcels. The Manager-Chief Engineer asked whether this was assuming that both Seascape and DWS have the money. Page 6 of 29 9-27-11 ~ Water Board Minutes js