HomeMy WebLinkAbout2019-05-28 Water Board Meeting Minutes
MINUTES
DEPARTMENT OF WATER SUPPLY
WATER BOARD MEETING
May 28, 2019
-5044 Ane Keohokalole Highway, Kailua-
MEMBERS PRESENT: Mr. William Boswell, Jr., Chairperson
Mr. Bryant Balog
Mr. David De Luz, Jr.
Mr. Nestorio Domingo
Mr. Leningrad Elarionoff
Ms. Julie Hugo
Mr. Zendo Kern
Mr. Kenneth Sugai
Mr. Keith K. Okamoto, Manager-Chief Engineer, Department of Water
Supply (ex-officio member)
ABSENT: Mr. Eric Scicchitano, Vice-Chairperson
Director, Planning Department (ex-officio member)
Director, Department of Public Works (ex-officio member)
OTHERS PRESENT: Ms. Diana Mellon-Lacey, Deputy Corporation Counsel
Patricia Champagne, Principal, Konawaena Elementary School
Cheryl Tam, Konawaena Elementary School
Christian Sawyer Zavodny (Kindergarten, Konawaena Elementary School)
and family
Leicy Acia (Kindergarten, Konawaena Elementary School) and family
Kanoa Shinn (Fifth Grade, Konawaena Elementary School) and family
Abigail Cantor (First grade, Kahakai Elementary School) and family
Ryder Pedro (Fourth Grade, Kahakai Elementary School)
Colleen Wallace, Art Director, Kahakai Elementary School
-
Public Charter School) and Father, Blair Boyd
Kualii Rice (Teacher, representing Jayce Walters, Holualoa School)
Department of Water Supply Staff
Mr. Kawika Uyehara, Deputy
Mr. Warren Ching, Energy Management Analyst
Mr. Kurt Inaba, Engineering Division Head
Mr. Richard Sumada, Waterworks Controller
Mr. Clyde Young, Operations Division
Mr. Eric Takamoto, Operations Division
1) CALL TO ORDER Chairperson Boswell called the meeting to order at 10:00 a.m.
Page 1 of 24 May 28, 2019, Water Board Minutes
2) STATEMENTS FROM THE PUBLIC - None
3) APPROVAL OF MINUTES
ACTION: Mr. Elarionoff moved for approval of the Minutes of the April 23, 2019, Water Board
Meeting; seconded by Mr. Domingo and carried unanimously by voice vote.
4) APPROVAL OF ADDENDUM AND/OR SUPPLEMENTAL AGENDA - none
ACTION TO TAKE AGENDA ITEM UP EARLY
Chairperson Boswell entertained a Motion to move Agenda Item 8) Miscellaneous, (H) Manager-Chief
, up on the agenda.
ACTION: Mr. Sugai so moved; seconded by Mr. Kern and carried unanimously by voice vote.
Item 8) MISCELLANEOUS, (H) Manager-# 3 - 2019 Water Conservation
Poster Contest
Before turning it over to the Deputy, the Manager-Chief Engineer acknowledged the students, their
parents, and the teachers for their participation in this inaugural poster contest. He thanked them for
putting this into their curriculum and recognizing that it is important enough for their students and their
parents to know about.
The Deputy announced that this was the first poster contest and is in line with one of
focus areas on water resource sustainability. One of the strategies in that focus is to educate and provide
outreach in water conservation. The concept is if we all can conserve water and use it efficiently,
hopefully it will help conserve our resource and make it more sustainable into the future. He thanked the
teachers, the schools, and the parents for helping encourage the kindergarteners to fifth graders to enter the
contest. There were about 200 entries island-wide. There were three judges, Richard Mortimer, local
artist in Hilo; Michael Marshall, Professor of Art at UH Hilo; and Shari Uyeno, one of the
-
The concept of that was taken by the students and put into art. After this presentation, the posters will be
Names were announced and presentations made:
st
Kindergarten 1 Place Winner - Christian Sawyer Zavodny from Konawaena Elementary School
nd
Kindergarten 2 Place Winner - Leicy Acia from Konawaena Elementary School
st
First Grade 1 Place Winner - Abigail Cantor from Kahakai Elementary School
nd
First Grade 2 Place Winner - Cedar Terpening from Waimea Country School (unable to attend)
st
Second Grade 1 Place Winner - ina New Century Public Charter School
(unable to attend)
nd
Second Grade 2 Place Winner - Aaliyah Lagaret,
(unable to attend)
st
Third Grade 1 Place Winner - Jace Walters from Hlualoa Elementary School (unable to attend)
nd
Third Grade 2 Place Winner -
st
Fourth Grade 1 Place Winner - -Boyd
nd
Fourth Grade 2 Place Winner - Rider Pedro from Kahakai Elementary School (Teacher: Ms. Colleen
Wallace accepting)
Page 2 of 24 May 28, 2019, Water Board Minutes
st
Fifth Grade 1 Place Winner - Kanoa Shinn from Konawaena Elementary School
nd
Fifth Grade 2 Place Winner - Karlie Kahalioumi from Konawaena Elementary School (Principal,
Patricia Champagne accepted on her behalf.)
The Deputy thanked the students for entering, the parents and teachers for supporting the effort, and the
omote conservation. He asked for a short recess for photos to be taken.
ACTION: Mr. Kern moved to recess; seconded by Ms. Hugo and carried unanimously by voice vote.
RECESS: 10:08 a.m. to 10:18 a.m.
5) POWER COST CHARGE:
Departmental power costs from all power sources increased since the last Power Cost Charge rate was
determined. The Department proposes to increase the Power Cost Charge from $1.89 to $1.96 per
thousand gallons as a result of this increase. Power cost charges over the past two years were as follows:
Effective PCC
February 1, 2019 $1.89
August 1, 2018 $1.94
April 1, 2018 $1.88
December 1, 2017 $1.62
August 1, 2017 $1.73
A Public Hearing will have been held prior to this Board meeting to accept public testimony on this
change.
The Manager-Chief Engineer recommended that the Board approve the increase of the Power Cost Charge
from $1.89 to $1.96, effective June 1, 2019.
ACTION: Mr. Sugai moved for approval of the recommendation; seconded by Mr. Kern. There being no
discussion, Motion was carried unanimously by voice vote.
6) SOUTH HILO:
A. MAINTENANCE BID NO. 2019-06, REPAIR AND MAINTENANCE OF AIR
WATER SUPPLY:
Bids were opened on May 16, 2019, at 2:30 p.m., and the following are the bid results:
Bidder Monthly Maintenance Total w/estimated repair
Amount cost
Oahu Air Conditioning Service, Inc. $1,102.21 $4,216.21
Maintenance Cost will be to June 30, 2020, with an option to extend for three additional 12-month
periods, until June 2023:
Oahu Air Conditioning Service, Inc. $4,216.21/mo. = $50,594.52
Page 3 of 24 May 28, 2019, Water Board Minutes
Hourly Labor Rates for repair:
Regular Journeyman $108.00/hr.
Regular Helper $65.00/hr.
Emergency Journeyman $108.00/hr.
Emergency Helper $65.00/hr.
Emergency O.T. Journeyman $162.00/hr.
Emergency O.T. Helper $97.50/hr.
Option Contract Year Monthly Maintenance Cost
July 1, 2020 June 30, 2021: $1,157.32/mo.
July 1, 2021 June 30, 2022: $1,215.19/mo.
July 1, 2022 June 30, 2023: $1,265.95/mo.
The Manager-Chief Engineer recommended that the Water Board award the contract for
MAINTENANCE BID NO. 2019-06, REPAIR AND MAINTENANCE OF AIR CONDITIONING
responsible bidder, Oahu Air Conditioning Service, Inc., for $50,594.52 and the associated labor costs
for repairs as necessary during the maintenance period. It is further recommended that either the
Chairperson or Vice-Chairperson be authorized to sign the contract subject to review as to form and
legality by Corporation Counsel.
MOTION: Mr. Sugai moved for approval of the recommendation; seconded by Mr. De Luz.
Manager-Chief Engineer stated that this is for the main office air conditioning system. The total
amount is comprised of two amounts--the monthly maintenance, which is a set amount, and the
estimated repair cost. It does not necessarily mean that is what the cost will be throughout the year. It
was something needed to base the award on if there was more than one bidder; but in this case, there
was only one bidder. The hourly labor rates will be carried for the subsequent years, but the monthly
maintenance cost will escalate. He noted that Mr. Inaba could answer questions regarding this agenda
item.
Mr. Elarionoff asked if it would be cheaper for the Department to have its own air conditioning
personnel.
Mr. Inaba replied that the Department does as much as it can. There is monthly maintenance done on
the equipment, and for a lot of the components that the $1,102.
engineers tries to troubleshoot before calling them for the repair. For the maintenance portion, there is
some expertise involved.
Mr. Kern asked if it was common to only receive one bid.
Mr. Inaba replied that the last time the bid was put out, it had to go through alternative procurement
because there were no bidders. This bid was evaluated and is comparable to a previous contract,
although it is a different vendor.
Chairperson Boswell commented that the costs seem in line with monthly maintenance, and it would
not be known what will break along the way, thus the reason for the repair amount.
Mr. De Luz asked for clarification if the $4,216.21 monthly includes the maintenance cost or if it
meant another $13,000.00 would be added to the total monthly maintenance, the $50,594.52 amount.
Page 4 of 24 May 28, 2019, Water Board Minutes
Mr. Inaba replied that it is included. Annually, both the Department and the Contractor would have to
agree to extending the contract. If the Department is not happy with their service, it has the right to
opt out, and the Contractor also has that option.
ACTION: Motion was carried unanimously by voice vote.
7) SOUTH KOHALA:
A. REQUEST FOR RIGHT-OF-ENTRY FOR ENVIRONMENTAL ASSESSMENT AND
RESPONSE OF FORMERLY USED DEFENSE SITE (FUDS) WAIKOLOA MANEUVER
AREA, TAX MAP KEYS (3) 6-2-001:090 AND (3) 6-2-013:020
The Department of the Army has requested a right-of-
serving the Mauna Kea Uplands Subdivision to investigate and clear unexploded ordnance (UXO) that
may remain on the subject properties. To reduce the risk of exposure, the Corps is in an ongoing
effort to investigate and dispose of remaining UXO. Coordination of the entry to our sites will be
with the District Supervisor.
The Manager-Chief Engineer recommended that the Water Board approve the Right-of-Entry request
and authorize the Board Chairperson or Vice-Chairperson to execute the document.
MOTION: Mr. De Luz moved for approval of the recommendation; seconded by Mr. Kern.
Mr. De Luz asked if there may be
Mr. Inaba replied they will need to walk the site, hand in hand, combing the area, to check for
unexploded ordinances.
Mr. De Luz suggested that it be verified if an environmental assessment was needed and all necessary
permits are in hand just as a precaution because it is incumbent on the land owner.
Ms. Mellon-Lacey stated that her understanding of this was that the Department had a previous
agreement and this is actually extending the time because they need more time. Her understanding
was that everything was in place, but she would double check.
Mr. Elarionoff stated that what they are doing is a good thing.
ACTION: Motion was carried unanimously by voice vote.
B. JOB NO. 2017-1075, PARKER #2 DEEPWELL REPAIR REQUEST FOR TIME
EXTENSION:
Services, LLC, is requesting a contract time
extension of 119 working days. The contractor experienced delays caused by the pump manufacturer
and issues securing a test facility. These delays were beyond the control of the contractor.
Note: There are no additional costs associated with this time extension.
st
1 time extension 119 working days (177 calendar days)
The Manager-Chief Engineer recommended that the Board approve a contract time extension of 119
Services, LLC, for JOB NO. 2017-1075, PARKER
Page 5 of 24 May 28, 2019, Water Board Minutes
#2 DEEPWELL REPAIR. If approved, the contract completion date will be revised from July 3,
2018, to December 26, 2018.
MOTION: Mr. Sugai moved for approval of the recommendation; seconded by Mr. Balog.
The Manager-Chief Engineer noted that just last month, it was promised that this would not become a
habit; but with this project, there were numerous factors, and there may be one other project with a
similar outcome. The Department does not like to come to the Board after the fact and well after the
completion date in this case. The contractor apparently had challenges with this project in trying to do
the string test which is where they match the pump and motor together and pump it at the design head.
For the Kona wells, the Department may be encountering that challenge on each one, so that
requirement may be removed from future bids. During this bid, the question could be asked, why did
they not say during the bid process that it could not be done. Apparently, during the bid process, the
contractor thought it could be done; but when it came down to it, they contacted five testing facilities
and all five could not do the work that was requested. This occurred for several months. The other
delays happened to be a result of the first submittal from the supplier not meeting the efficiency
requirements. That submittal was rejected. As discussed in the past, the local contractors find it
challenging in having the suppliers meet the contracted schedule. Staff also questioned some gaps in
the first time extension that needed to be worked out with the contractor. The Department did not
want to assess the contractor liquidated damages based on that insufficient time extension request and
then come back and have to refund liquidated damages. Staff worked with the contractor to get all of
their documentation lined up during the past year.
Mr. De Luz asked if the Department could do some kind of exception report to help the Board better
understand the projects that are not going along per contract. He noted that probably 90% of the
a handful of projects that may have delays or
other issues and need to be followed more closely. It is just a suggestion, but it may help make it
easier for the Board. Example, there may be an issue at hand that comes between Board meetings and
may necessitate an administrative decision, but the Board can catch up with it the following month.
Staff would have a storyline at the time it is happening.
The Manager-Chief Engineer stated that this was part of an internal discussion on how projects could
be managed differently. As Mr. De Luz mentioned, most things are done administratively; but when
there is an impact to one of the three elements of a contract (time, cost, or scope) that cannot be
covered in the contingency that is initially approved by the Board, it needs to come back for Board
approval.
Mr. Domingo asked why there was a need for the string test.
Mr. Young explained that a string test is where we test the motor lead, the motor, and the pump
together. Historically, only the pump was tested. The reason for the string test is to find out the
capabilities of the existing equipment because that is how it will be assembled. The string test is
ideal; but unfortunately, it seems like the larger horsepower pumps and motors, as in this case
(500 horsepower, 15 feet long, total dynamic head - 1,250 psi (pounds per square inch), to get a
manufacturer to test it, they have to test at a high pressure and high electrical load. It has been
difficult, at best. The Department has been moving away from it and may only do the pump test and
test it in the field.
once everything arrives on island.
Page 6 of 24 May 28, 2019, Water Board Minutes
d sometimes they ship it
out to a testing facility, depending on the manufacturer.
Mr. Kern thought it was odd that they could not test it when they are the ones that make it.
Mr. Young stated that it is odd that they committed to doing it, and then afterwards say they cannot.
The Manager-Chief Engineer added that there are no test facilities in this State.
Mr. Kern asked if they had committed to doing it, as the manufacturer, should they not provide an
extended warranty or some type of liability on their side if they cannot do it after all.
Mr. Young replied they basically said they could not do the string test, and they only gave the
standard one-year warranty.
The Manager-Chief Engineer added that there are challenges,
local and it appears sometimes that these major pump and motor manufacturers seem to have no
consequence if they choose to do business with local contractors or not. It seems that this posture has
impacted the local contractors to the point where they really have no recourse. They get the brush off,
which is unfortunate. The Department has tried using different manufacturers, but the capacities and
quality of the equipment make it a narrow playing field. Hopefully with lowering the horsepower and
GPM (gallons per minute) requirements, it will help broaden that field and invite more competition.
Mr. Elarionoff suggested that the Department do some type of public relations program to help with
of the Department of Water Supply, which is often criticized for being
incompetent, along with a negative County-wide perception.
The Manager-Chief Engineer stated it is the nature of government. The Department instills in its staff
to be proud of the job they do, because if you look at what this Department provides for the cost it is
provided for, it is the best deal in town compared to gas prices, electrical, cable, and cell phone bills.
Mr. Elarionoff stated that was true, but this information does not get put across to the public.
The Manager-Chief Engineer agreed. He noted that the Department is working on hiring an
Information and Education Specialist.
Mr. De Luz mentioned that the Fire Department also has similar issues with procurement of its
specialty equipment. There are only two approved vendors in the State for some of their larger pieces
of equipment, which generally cost twenty to thirty percent more, but they have no choice but to go
through the procurement process. What they have done, to some extent, is certain vendors have
established a type of preferred pricing. He wondered if it might be worthwhile sitting down with the
other water utilities in the State and having an informal exchange on what manufacturers are being
used and collectively see if procurement could have some kind of establishment as far as a level
playing field. His suggestion was for more of the large items like pumps and motors.
The Manager-Chief Engineer stated that could definitely be worked on with the other water
departments here.
ACTION: Motion was carried unanimously by voice vote.
Page 7 of 24 May 28, 2019, Water Board Minutes
8) MISCELLANEOUS:
A. DEDICATION OF WATER SYSTEM:
The Department received the following document for action by the Water Board. The water system
dedication.
1. BILL OF SALE
Seller: Hu Honua Bioenergy, LLC (dba Honua Ola Bioenergy)
Tax Map Key: (3) 2-8-007: 100
Facilities Charge: $5,500.00; Date Paid: 5/8/2019
Final Inspection Date: 4/26/2019
Water System Cost: To be announced
The Manager-Chief Engineer recommended that the Water Board accept this document subject to the
approval of the Corporation Counsel and that either the Chairperson or the Vice-Chairperson be
authorized to sign the document.
MOTION: Mr. Sugai moved for approval of the recommendation; seconded by Mr. De Luz.
The Manager-Chief Engineer noted that the water system cost is $15,250.00. This is for 75 feet of
6-inch line and a service lateral. The reason for the Bill of Sale is the extension of the waterline.
Mr. Inaba added that they had to cross an intersection with the 6-inch line for a service lateral for their
substation.
ACTION: Motion carried unanimously by voice vote.
B. MATERIAL BID NO. 2019-01, FURNISHING AND DELIVERING PIPES, FITTINGS,
WATER METERS, FIRE HYDRANTS, BRASS GOODS, VALVES, ELECTRICAL
SUPPLIES, ELECTRICAL EQUIPMENT, SCADA, WATER QUALITY EQUIPMENT,
CHLORINATORS, MOTORS, AND MISCELLANEOUS ITEMS FOR THE DEPARTMENT
OF WATER SUPPLY STOCK:
Bids were opened on May 9, 2019, at 1:30 p.m., and following are the bid results:
The contract period for all Parts is one year, from July 1, 2019, to June 30, 2020. All Parts are
-
The Manager-Chief Engineer recommended that the Board award the contract to the following bidders
for MATERIAL BID NO. 2019-01, FURNISHING AND DELIVERING PIPES, FITTINGS,
WATER METERS, FIRE HYDRANTS, BRASS GOODS, VALVES, ELECTRICAL SUPPLIES,
ELECTRICAL EQUIPMENT, SCADA, WATER QUALITY EQUIPMENT, CHLORINATORS,
MOTORS AND MISCELLANEOUS ITEMS FOR THE DEPARTMENT OF WATER SUPPLY
STOCK, on an as-needed basis, as listed below, and that either the Chairperson of the Vice-
Chairperson be authorized to sign the contract(s), subject to review as to form and legality of the
contract(s) by Corporation Counsel. The contract period shall be from July 1, 2019, to June 30, 2020.
Page 8 of 24 May 28, 2019, Water Board Minutes
PART
DESCRIPTION BIDDER AMOUNT
NO.
DUCTILE IRON PIPE, PUSH-ON TYPE
1
Pacific Pipe Co., Inc. $54,790.00
JOINT
2 DUCTILE IRON FITTINGS
Pacific Pipe Co., Inc. $67,958.85
DUCTILE IRON SOLID BODY
3
Pacific Pipe Co., Inc. $57,467.70
SLEEVES
4 FLANGE GASKETS
Pacific Pipe Co., Inc. $19,204.56
NUTS, BOLTS, AND THREADED
5
Fastenal Company $39,360.08
RODS
6 COPPER TUBING
Pacific Pipe Co., Inc. $78,888.55
GALVANIZED PIPES T&C
7
Ferguson Enterprises, Inc. $21,581.65
(THREADED & COUPLED)
9 METER BOXES
Ferguson Enterprises, Inc. $48,388.00
10 METER COVERS
Pacific Pipe Co., Inc. $22,520.00
11 AUTOMATIC METER READING UNIT
Ferguson Enterprises, Inc. $91,680.00
Badger Meter, Inc. dba
12
National Meter & $46,800.00
Automation
13 NEPTUNE T-10 SERIES METER PARTS
Ferguson Enterprises, Inc. $91,830.00
Badger Meter, Inc. dba
BADGER RECORDALL SERIES
14
National Meter & $4,604.00
METER PARTS
Automation
Badger Meter, Inc. dba
15 -
National Meter & $8,964.50
Automation
16 COMPOUND WATER METERS
Ferguson Enterprises, Inc. $12,789.00
17 DETECTOR CHECK METERS
Pacific Pipe Co., Inc. $9,585.66
18 FIRE SERVICE METERS
Pacific Pipe Co., Inc. $33,321.72
A.P. Water Supply, Inc.
19 FIRE HYDRANTS
$103,446.00
dba HIW Hawaii
A.P. Water Supply, Inc.
20 MUELLER FIRE HYDRANT PARTS
$5,341.20
dba HIW Hawaii
A.P. Water Supply, Inc.
MUELLER FIRE HYDRANT
21
$5,351.00
EXTENSION KITS
dba HIW Hawaii
A.P. Water Supply, Inc.
22 BALL METER VALVES
$54,592.50
dba HIW Hawaii
BALL VALVE, PACK JOINT X METER
23
Ferguson Enterprises, Inc. $38,437.85
COUPLING / FIP (Female Iron Pipe)
24 COMPRESSION JOINT COUPLING
Pacific Pipe Co., Inc. $9,990.00
25 METER FLANGE COUPLING
Ferguson Enterprises, Inc. $4,231.75
26 PACK JOINT COUPLING
Ferguson Enterprises, Inc. $41,351.20
CORPORATION AND CURB STOPS
27
Ferguson Enterprises, Inc. $97,213.10
BALL TYPE
28 PRESSURE REGULATORS
Pacific Pipe Co., Inc. $1,515.00
Safety Systems & Signs
30 INVERTED MARKING PAINT
$9,000.00
Hawaii, Inc.
Page 9 of 24 May 28, 2019, Water Board Minutes
PART
DESCRIPTION BIDDER AMOUNT
NO.
31 AIR RELIEF VALVES
Pacific Pipe Co., Inc. $26,730.00
SLOW CLOSING AIR/VACUUM
32
Pacific Pipe Co., Inc. $124,568.10
VALVES
33 SILENT CHECK VALVES
Pacific Pipe Co., Inc. $107,936.70
34 DUCKBILL CHECK VALVES
Pacific Pipe Co., Inc. $87,612.46
GATE VALVES A.P. Water Supply, Inc.
35
$39,921.00
125# CLASS
dba HIW Hawaii
GATE VALVES A.P. Water Supply, Inc.
36
$70,476.00
250# CLASS
dba HIW Hawaii
A.P. Water Supply, Inc.
37 AUTOMATIC CONTROL VALVES
$1,448,980.41
dba HIW Hawaii
39 RESERVOIR LEVEL INDICATOR
TK Process Hawaii, LLC $5,833.32
40 HATCH FRAMES AND COVERS
Pacific Pipe Co., Inc. $28,766.00
Safety Systems & Signs
EMERGENCY EYEWASH/SHOWER
41
$132,705.10
STATIONS
Hawaii, Inc.
42 TOXIC GAS MONITORS
Fastenal Company $619,368.98
43 SIGNAL LIGHTING
Wesco Distribution, Inc. $83,647.00
44 ARC FLASH PPE DAILY WEAR
Fastenal Company $2,405.46
45 ARC FLASH PPE - SUPPLEMENTAL
Fastenal Company $17,695.91
Graybar Electric Company,
46 ELECTRICAL GLOVES
$1,190.00
Inc.
Graybar Electric Company,
47 DIGITAL MULTIMETER & TESTING
$4,170.00
Inc.
Graybar Electric Company,
48 ELECTRICAL SAFETY EQUIPMENT
$3,197.80
Inc.
ELECTRICAL EQUIPMENT TESTING
49
TK Process Hawaii, LLC $3,857.84
SERVICES
Graybar Electric Company,
50 ELECTRICAL TAPE
$11,631.00
Inc.
Graybar Electric Company,
ELECTRICAL SPLICING AND
51
$7,267.00
TERMINATION
Inc.
Graybar Electric Company,
ELECTRICAL CONNECTORS &
52
$6,674.60
TERMINATIONS
Inc.
Graybar Electric Company,
53 INDUSTRIAL MOTOR LEAD CABLE
$114,175.00
Inc.
Graybar Electric Company,
54 INDUSTRIAL CONTROL WIRING
$7,245.00
Inc.
56 HEAVY-DUTY SAFETY SWITCH
Wesco Distribution, Inc. $393,472.19
SOLID STATE REDUCED VOLTAGE
57
TK Process Hawaii, LLC $15,178.63
SOFT STARTER
58 MAGNETIC CONTACTORS
TK Process Hawaii, LLC $45,715.33
MEDIUM-VOLTAGE REDUCED
59
TK Process Hawaii, LLC $28,836.49
VOLTAGE SOFT STARTER
Page 10 of 24 May 28, 2019, Water Board Minutes
PART
DESCRIPTION BIDDER AMOUNT
NO.
60 VARIABLE FREQUENCY DRIVES
TK Process Hawaii, LLC $1,877,404.48
61 POWER QUALITY EQUIPMENT
TK Process Hawaii, LLC $319,073.35
PAD-MOUNTED STEP-UP
Wesco Distribution, Inc.
62
$436,708.09
TRANSFORMER
63 SURGE PROTECTION DEVICES
TK Process Hawaii, LLC $53,388.31
OneSource Distributors,
64 POWER MONITORING EQUIPMENT
$74,712.86
LLC
INDUSTRIAL ELECTRONIC OneSource Distributors,
65
$4,003.63
COMPONENTS
LLC
PRE-FABRICATED SCADA
66
Control Systems West, Inc. $1,645,377.37
SOLUTIONS
AUTOMATION AND CONTROL
67
Fluid Technologies, Inc. $48,364.00
COMPONENTS
68 AUTOMATION SOFTWARE
Fluid Technologies, Inc. $122,278.00
69 PROGRAMMING SERVICES
Sean Pierre Yarbenet $720.00
71 COMMUNICATION HARDWARE
TK Process Hawaii, LLC $15,055.85
72 LICENSED RADIO EQUIPMENT
TK Process Hawaii, LLC $19,145.16
73 UNLICENSED RADIO EQUIPMENT
TK Process Hawaii, LLC $3,272.84
74 WELL PRESSURE TRANSDUCER
TK Process Hawaii, LLC $33,079.24
HD Supply Facilities
PRESSURE TRANSDUCER
75
Maintenance dba $2,108.16
RESERVOIR LEVEL
USABlueBook
76 PRESSURE TRANSMITTER
TK Process Hawaii, LLC $2,191.75
77 FLOW SWITCH
TK Process Hawaii, LLC $1,369.70
ZERO-CLEARANCE
80
TK Process Hawaii, LLC $581,557.10
ELECTROMAGNETIC FLOW METERS
BATTERY ELECTROMAGNETIC
81
Pacific Pipe Co., Inc. $301,340.42
FLOW METERS
HD Supply Facilities
83 WATER QUALITY EQUIPMENT
Maintenance dba $71,733.90
USABlueBook
HD Supply Facilities
84 REAGENTS AND STANDARDS
Maintenance dba $6,060.19
USABlueBook
85 MULTISTAGE BOOSTER PUMPS
Engineered Systems, Inc. $408,557.49
HD Supply Facilities
86 CHEMICAL FEEDER PUMP
Maintenance dba $7,677.84
USABlueBook
OneSource Distributors,
88 CHLORINE GAS FEEDER
$20,921.21
LLC
90 MECHANICAL SEALS
Engineered Systems, Inc. $164,499.43
91 MOTORS
TK Process Hawaii, LLC $1,277,677.14
Page 11 of 24 May 28, 2019, Water Board Minutes
PART
DESCRIPTION BIDDER AMOUNT
NO.
93 LEAK NOISE DATA LOGGERS
TK Process Hawaii, LLC $37,354.34
A.P. Water Supply, Inc.
REMOTE PRESSURE MONITORING
94
$4,344.00
SYSTEM
dba HIW Hawaii
Graybar Electric Company,
LIGHT EMITTING DIODE
95
$3,604.65
LUMINARIES
Inc.
For the following Sections: Section 8 High Density Polyethylene (HDPE) Pipe; Section 29 Hose
Bibbs; Section 38 Rotary Pump Control Valves and Actuation; Section 55 Junction Boxes &
Enclosures; Section 70 Uninterruptible Power Supply (UPS); Section 78 Legacy Electromagnetic
Flow Meter Parts; Section 79 Universal Electromagnetic Flow Meters; Section 82 Reagentless
Chlorine Residual Analyzer; Section 87 Digital Chlorine Cylinder Scale; Section 89 Tablet
Chlorinator & Parts; Section 92 Legacy Leak Noise Data Logger Parts; and Section 96 Industrial
Lubricants, no bids were received.
For the Sections where no bids were received, staff shall obtain quotations in the best interests of the
Department.
MOTION: Mr. Balog moved for approval of the recommendation; seconded by Mr. Kern.
The Manager-Chief Engineer stated that every year, the Department puts out a material bid for the
components it will use throughout the year, although the exact quantity would not be known. This
allows the Department to purchase at a set price that was done competitively where we do not have to
do a three-quote process every time a particular item is needed. The Department tries to operate
within the procurement system but still maintain a higher level of efficiency. For each different
vendor being awarded a part or parts, it is a separate contract. Although there are 95 parts, the line
items were numerous.
In response to Mr. Domingothere are any warranties, especially for the million-
dollar equipment, the Manager-Chief Engineer replied they come with the standard material
warranties.
ACTION: Motion was carried unanimously by voice vote.
C. MATERIAL BID NO. 2019-03, FURNISH BASE COURSE, SAND, COLD MIX,
HOT MIX, AND NO. 3F ROCK TO THE DEPARTMENT OF WATER SUPPLY:
Bids were opened on May 16, 2019, at 1:30 p.m.; and following are the bid results:
WHC
Yamada LTD dba Jas. W. Puna Rock
Grace
& Sons, West Glover, Ltd. Company
Pacific LLC
Inc. Limited
Concrete
DISTRICT I:
3/4-Inch Base Course
1A. $21.65 No Bid No Bid $18.75 $16.20
(Cost per ton)
1½-Inch Base Course
1B. $21.00 No Bid No Bid $17.71 $15.15
(Cost per ton)
No. 3F Rock (Cost per
1C. $27.95 No Bid No Bid $30.21 $18.00
ton)
Page 12 of 24 May 28, 2019, Water Board Minutes
WHC
Yamada LTD dba Jas. W. Puna Rock
Grace
& Sons, West Glover, Ltd. Company
Pacific LLC
Inc. Limited
Concrete
1D. #4 Sand (Cost per ton) $53.80 No Bid No Bid $40.62 $39.40
Mortar Sand - ASTM
1E. No Bid No Bid No Bid $64.58 No Bid
C144 (Cost per ton)
Cold Mix- ASTM
1F. $165.25 No Bid No Bid $152.60 No Bid
D4215-87 (Cost per ton)
Blended Material 60% #4
1G. Sand and 40% No. 3F $57.45 No Bid No Bid $57.04 $22.45
Rock (Cost per ton)
Hot Mix County Mix
1H. $132.80 No Bid No Bid $142.00 No Bid
IV (Cost per ton)
DISTRICT II:
3/4-Inch Base Course
2A. No Bid $16.25 No Bid No Bid No Bid
(Cost per ton)
1½-Inch Base Course
2B. No Bid $14.72 No Bid No Bid No Bid
(Cost per ton)
No. 3F Rock (Cost per
2C. No Bid $25.13 No Bid No Bid No Bid
ton)
2D. #4 Sand (Cost per ton) No Bid $28.39 No Bid No Bid No Bid
Mortar Sand - ASTM
2E. No Bid $48.49 No Bid No Bid No Bid
C144 (Cost per ton)
Cold Mix- ASTM
2F. No Bid No Bid No Bid No Bid No Bid
D4215-87 (Cost per ton)
DISTRICT III:
3/4-Inch Base Course
3A. No Bid $23.24 No Bid No Bid No Bid
(Cost per ton)
1½-Inch Base Course
3B. No Bid $21.43 No Bid No Bid No Bid
(Cost per ton)
No. 3F Rock (Cost per
3C. No Bid $35.89 No Bid No Bid No Bid
ton)
3D. #4 Sand (Cost per ton) No Bid $40.72 No Bid No Bid No Bid
Mortar Sand - ASTM
3E. No Bid $64.50 No Bid No Bid No Bid
C144 (Cost per ton)
Cold MixASTM
3F. No Bid No Bid $153.30 No Bid No Bid
D4215-87 (Cost per ton)
Hot Mix - County Mix
3G. No Bid No Bid $159.10 No Bid No Bid
IV (Cost per ton)
The Manager-Chief Engineer recommended that the Board award the contract for MATERIAL BID
NO. 2019-03, FURNISH BASE COURSE, SAND, COLD MIX, HOT MIX, AND NO. 3F ROCK TO
THE DEPARTMENT OF WATER SUPPLY, by Parts to the following for the amounts shown above,
and that either the Chairperson or the Vice-Chairperson be authorized to sign the contracts, subject to
review as to form and legality of the contracts by Corporation Counsel. The contract period shall be
from July 1, 2019, to June 30, 2020.
District I - Parts 1A, 1B, 1C, 1D, and 1G to Puna Rock Company, Limited
Parts 1E and 1F to Jas. W. Glover, Ltd.
Part 1H to Yamada and Sons, Inc.
District II -
District III - Parts 3A, 3B, 3C, 3D, and
Parts 3F and 3G to Grace Pacific, LLC
Page 13 of 24 May 28, 2019, Water Board Minutes
For Part 2F, which did not receive any bids, staff shall obtain quotations in the best interests of the
Department.
MOTION: Mr. Sugai moved for approval of the recommendation; seconded by Mr. Domingo.
The Manager-
a, down to the Kawaihae; and District III is North and South Kona.
Mr. Sugai asked if the Department had dealt with Puna Rock Company before. They did not sound
familiar.
Chairperson Boswell recalled they had bid last year on the Sand, and they have the upset price for
District I.
Mr. De Luz spoke about the challenge of anything dealing with transportation costs and the
unpredictability of fuel and asked if the loads are picked up by the Department or if they are delivered
to the baseyards. There is such a divergence by districts that the Department may want to stockpile
the material if its vehicles are adequate to pick it up. He noted there was no bid on cold mix for
District II; and if there is no additional cost for the Department picking it up at West Hawaii
The Manager-Chief Engineer stated that, normally, if the contract includes delivery, it will be to the
baseyards; not to job sites.
Mr. De Luz suggested it may be worth taking a look at the difference between the low and high bids
to see if the material is picked up or if it is delivered and if that extra cost is in transportation. It may
be more pragmatic to have them deliver the material. He mentioned the County not having to pay the
fuel tax.
small fleet of dump trucks and, therefore, keeps a small amount of aggregates at its baseyards but not
large amounts of material waiting there for upcoming large projects.
Mr. Young replied that was the case, usually. There is no way to know what time of day or night the
material may be needed, but it needs to be on hand.
The Manager-Chief Engineer added that the jobs the Department does in house are typically small in
scale.
Chairperson Boswell
carry the material. To him, some of this pricing that he is familiar with seemed to be a delivered
price. (Mr. De Luz stated that was his gut feeling too.)
The Manager-Chief Engineer stated that it also depends on where the plant is versus the baseyard
location. For example, Part 3A versus Part 2A costs more because the District III baseyard is on
Keauhou side.
ACTION: Motion was carried unanimously by voice vote.
Page 14 of 24 May 28, 2019, Water Board Minutes
D. WATER HAULING BID NO. 2019-04, PRICE AGREEMENT TO PROVIDE
WATER HAULING SERVICES TO VARIOUS LOCATIONS ISLANDWIDE
(ON AN AS-NEEDED BASIS) FOR THE DEPARTMENT OF WATER SUPPLY:
Bids were opened on May 16, 2019, at 2:00 p.m., and following are the bid results:
1. Carnor Sumida dba ACR Water Hauling
4,000-, and 5,000-gallon water trucks (price for all districts):
Regular Hours $103.28/hr.
Overtime Hours $117.48/hr.
The Manager-Chief Engineer recommended that the Board approve the price agreement for WATER
HAULING BID NO. 2019-04, PRICE AGREEMENT TO PROVIDE WATER HAULING
SERVICES TO VARIOUS LOCATIONS ISLANDWIDE (ON AN AS-NEEDED BASIS) FOR THE
DEPARTMENT OF WATER SUPPLY to Carnor Sumida dba ACR Water Hauling, at the prices
listed above, and that either the Chairperson or the Vice-Chairperson be authorized to sign the
contract(s), subject to review as to form and legality of the contract(s) by Corporation Counsel. The
price agreement shall be from July 1, 2019, to June 30, 2021.
MOTION: Mr. Balog moved for approval of the recommendation; seconded by Mr. Sugai.
Chairperson Boswell noted only one competitor for this one.
The Manager-Chief Engineer stated that in the pa
put in a bid primarily for District I. He was not sure why they chose not to bid this particular one.
Mr. Young stated that Carnor Sumida has been very competitive and they have not increased their
price over the past year.
Mr. Sugai asked if the rate was only per hour and not miles travelled.
The Manager-Chief Engineer stated that it was per hour and includes not driving the truck. For
commitment to the community, it
stationed a tanker truck near Vacationland because the system was cut off. That was paid for 24 hours
a day because they could not leave their truck unattended. The driver stayed with the truck. Things
like that are rare, but it is on an hourly basis.
Chairperson Boswell asked if it is a motor vehicle and not a water wagon.
The Manager-Chief Engineer replied it is the actual 4,000- to 5,000-gallon tanker trucks.
Mr. De Luz asked if they have to follow the PUC (Public Utilities Commission) rate; they are
regulated by the PUC.
Mr. Balog stated that they do, technically speaking, on an hourly basis. They are regulated by the
PUC, as Mr. De Luz thought. He has seen, in other experiences, competitive bids that were not
specified by PUC rate where they say they are bidding per thousand gallons, but generally, on an
hourly rate, they would be regulated by the PUC.
Mr. De Luz stated that the reason he mentioned it was that if they are regulated by the PUC, even the
standby charges are regulated.
Page 15 of 24 May 28, 2019, Water Board Minutes
Mr. Balog agreed.
Mr. De Luz suggested that the Department make sure that whatever they do on their end is their
problem, as far as compliance with the PUC.
The Manager-Chief Engineer noted that will be check on. It should be in the in the contract
documents.
Mr. De Luz also mentioned that they would need to have their certificates of compliance in before the
contract is issued.
The Manager-Chief Engineer stated that was correct.
Mr. Domingo asked if there was no existing contractor for this bid. It is not a renewal like the air
conditioning contract was.
The Manager Chief Engineer stated that for this one, the choice was to advertise every year because
the bid is quite simple. For others like the air conditioning maintenance, the Department asks for a
fiscal year term, plus the option to extend on an annual basis.
Mr. Balog asked if the Department checked to see if the vendor is running certified potable water
tanks for their trucks.
The Deputy stated that he believed they have one dedicated water hauling truck; and each time they
personnel take a sample for water quality beforehand.
ACTION: Motion was carried unanimously by voice vote.
E. REQUEST FOR PROPOSALS NO. 2019-02, PROVIDE A DEBT COLLECTION
AGENCY FOR THE DEPARTMENT OF WATER SUPPLY, COUN
This item was deferred at the April 23, 2019, Water Board Meeting.
Request for Proposals (RFP) No. 2019-02 was issued in February 2019 to select a collection agency to
pursue collection of past due amounts owed the Department. Sealed proposals were due no later than
2:00 p.m. on March 22, 2019.
One proposal was received from Aargon Agency, Inc. (Aargon). Based on an evaluation of
background, methodology, qualifications, references, and terms, Aargon was determined to meet the
The Manager-Chief Engineer recommended that the Board award RFP No. 2019-02, PROVIDE A
DEBT COLLECTION AGE
Agency, Inc., and that either the Chairperson or the Vice-Chairperson be authorized to sign the
contract subject to review as to form and legality by Corporation Counsel.
MOTION: Mr. De Luz moved for approval of the recommendation; seconded by Mr. Domingo.
Page 16 of 24 May 28, 2019, Water Board Minutes
The Manager-Chief Engineer noted that this item was deferred last month due to an irregularity in the
bidding requirements. This contract is to supplement collections efforts. He added
that Mr. Sumada was available for questions.
Mr. Sugai asked if it was typical where they get half of the amount collected or whether the
percentage was different.
20% of what is collected.
Chairperson Boswell asked what the anticipated volume would be that needs this collection service.
Mr. Sumada replied that it is not that great a volume. The Department refers closed accounts to the
outside agency. Open accounts are worked by the Credit and Collection Clerk on staff.
In 2018, the Department sent 338 accounts out to collection that totaled about $129,000.00. In
d it was
about $15,000.00.
The Manager-Chief Engineer added that in the past, to try and lessen this burden, the credit deposit
was raised from $50.00 to $150.00 because a lot of times, a renter would skip out and not pay the last
bill. Since it was raised, it has helped.
Mr. Domingo asked if that was very common, or what the statistics were on these accounts.
The Manager-Chief Engineer stated that out of a total of about 42,000 accounts, 330 accounts is
relatively small--less than 1%.
Mr. Sumada stated that they are not the home owners, but more of the renters that leave town and do
not come back. It is a small percent of the customers.
ACTION: Motion carried unanimously by voice vote.
F. MONTHLY PROGRESS REPORT:
Mr. Inaba pointed out a correction. Under South Hilo, for
the end date should be 2019.
Also of note, under North Kohala, the Well Development, Phase 2, project, the Department
will be holding the community meeting in early July of this year.
The Deputy added that the Department is working on setting up the date with the Kamehameha Park
facility. Once it is finalized, the Board will be informed first and thereafter, normal communication to
the public will go out. It will probably be an evening meeting.
Mr. Balog asked about the Queen Kaahumanu Highway Widening Kealakehe to Keahole 16-Inch
Waterline Installation project. He noticed this report has not changed in a while, but he knew the
project is done.
Mr. Inaba explained that it is a State project where this Department participated with CIP funds,
which is why it is on this list. He was not sure as far as actual close-out of the project because it is a
State project.
Page 17 of 24 May 28, 2019, Water Board Minutes
Chairperson Boswell stated that it will close out in November of this year. It will be officially done
then. The contractor is carrying their warranty period through at this time. (Mr. Inaba noted that the
Department would be waiting for close out documents.)
Mr. Inaba mentioned Transmission project. The
Department received word from the contractor, Isemoto Contracting Co., Ltd., that they will begin
trenching probably in the first week of June. The schedule is good as school will be out for the
summer.
The Manager-Chief Engineer added that a community meeting was held prior to this project; however,
if the Board hears of any concerns, to please share them with the Department to take care of. He was
sure traffic will be at the forefront of the concerns. It does help that school will be out.
Chairperson Boswell asked about the North Kona Mid-Level Deep Well Development Phase 1
project.
Mr. Inaba stated that the owner has just returned from vacation and would be working with the
Department to arrange a meeting, hopefully sometime this week.
Mr. Balog asked if there was an update since last month regarding the Inclined Lift
Replacement.
Mr. Inaba replied there was nothing to report, other than that the contractor was instructed to make
sure the manufacturer is being held to their schedule. An update last week indicated they are on
schedule. When more information is received, it will be brought to the Board, showing the
components of the project.
Mr. Domingo asked when the Board might see results of the Arc Flash Study, Phase 1.
Mr. Inaba replied that the Department is waiting for
as the contractor was asked for their assistance to evaluate the performance of it after the
be completed in August or September, and the Board can expect a presentation from the contractor
thereafter. The Arc Flash study portion was to do all of the safety coordination with our Operations
Division for critical sites.
G. REVIEW OF MONTHLY FINANCIAL STATEMENTS:
Mr. De Luz noted that, technically, the Department has three self-fund liabilities
Retirement System (ERS), the and Workers Compensation.
The ERS and EUTF have their calculations coming from the State, but he wondered how the
Mr. Sumada replied that the obligatio
Mr. De Luz asked about where a deficit would come from, whether it be from a surplus balance on the
cash account, and if it was something that could be disclosed. When he sees a net change in position
on the Income Statement or the Balance Sheet, he wondered how it is handled in the cash account.
Technically, because of the ERS and the EUTF, which total about $2 million that the Department has
to contribute, it would have to come from surplus cash because there is not enough in the Operating
Budget. He understood that this particular way of representing it is not typical of a financial
Page 18 of 24 May 28, 2019, Water Board Minutes
statement, but it is giving the Board a snapshot of current year versus previous year and then a current
month versus previous month. In reality, when you anticipate managing the budget, you have to
manage your cash position and how it funds the CIP. His concern, or he would like to see, the
variance by way of a chart if it is easier, showing the cash position. He wanted to see what the
variance would be and at what level does the Department attempt to manage as a baseline. In other
words, if it dips below that, does the Department look at its two ways to get money--selling more
water or increasing the cost of that service. He had a strong intuition that the ERS and the EUTF are
going to start eating into that comfortable cash position, which is okay, but if there is a trend, perhaps
future projects may have to be looked at for funding, whether it be funds from the State or elsewhere.
He recalled the number on the audit report was $200 million in cash.
Mr. Sumada asked for clarification if Mr. De Luz wanted to see the change in cash.
Mr. De Luz replied that was correct; just like how it was done for the net position beginning and net
position ending on the net income. His main concern was what that level is, based on experience and
trend, that is needed to maintain operations. He felt that the way it is trending, it is going to eat into
that because on interest income, the problem is that on the other side, we pay more for our long-term
debt even though we are getting more interest on our insurance, that is going to catch up too. He
asked the Manager-Chief Engineer about the water sales increasing, even though there are wells out of
commission. Once they come back online, water sales should increase after the water restriction is
lifted.
The Manager-Chief Engineer replied that there is only a water conservation in place right now, and
people do not really cut back when that is in effect.
Mr. De Luz asked if that meant that when the wells come online, it would be giving more for
resiliency rather than what people consume having a direct correlation on consumption.
The Manager-Chief Engineer replied that was correct--capacity rather than actual use.
Chairperson Boswell added that they are not dependent on one well in a subdivision. They are
interconnected.
Mr. De Luz stated that it goes into the next issue of planning and hopefully adds capacity to add more
users down the line.
The Manager-Chief Engineer replied that was correct.
H. MANAGER-
The Manager-Chief Engineer provided updates on the following:
1. North Kona Wells - the Deputy reported that there are now five wells down and nine operational.
The staff in Kona have made adjustments to the system and service to customers is being
maintained. The fifth well that went down a little over a ago was Well, which is a
submersible well, about 1,200 feet deep. It is a basal source as opposed to one of the perched,
trapped high-level sources. A motor issue is suspected so it is going to have to be extracted and
repaired. The last time it was repaired was 2015. Bid opening is targeted for early July with
award at the July 23 Water Board meeting. The other four wells that are down are
For , the power cable was the long lead item.
Manufacturing is being done and it is expected by the end of June. Once it is on island, the
contractor can work on installation. For Palani, the completion is the end August 2019. For
Page 19 of 24 May 28, 2019, Water Board Minutes
not much can be said about the
repair of the well. For Makalei Well, this is the well that was developed by a private developer
and dedicated to the Department. Engineering staff is working with the developer looking at the
capacity (GPM) of the well; downsizing that capacity; and thereby downsizing the horsepower
requirement for the motor. It is a 700 gpm well, and at that pump rate, there were water quality
issues with higher chlorides. Part of the water agreement with the developer was once it started
affecting the water quality, the Department had the right to require them to downsize. The
Department is looking at downsizing the motor to half the capacity, so about 350 gpm. The
developer is working with their consultant to put in a VFD (variable frequency drive) which will
basically allow o adjust the speed of the motor to adjust the capacity.
Chairperson Boswell asked if that meant putting a smaller motor in and implementing all of the
methods discussed during the Permitted Interaction Group.
The Deputy replied that was correct. The Department will rush the developer as much as it can;
but right now, it is looking like the first quarter of 2020 for completion because they have to
redesign and go out for prices and then the manufacturing starts. Hopefully a smaller capacity
pump and motor will be more available.
The Manager-Chief Engineer mentioned that because it is a water agreement, it will affect the
contract between the Board/Department and the developer. Downsizing the well will result in
less water units for their development; therefore, the terms of the contract will be affected. It
will require an updated or supplemental agreement.
Chairperson Boswell mentioned that the original water agreement recognized the potential for
this and it is built into the water agreement.
Mr. Inaba stated that was correct, including the reduction of units.
Mr. Domingo stated that he was surprised about this fifth well being down, and it was the first
time hearing of it.
The Deputy stated that the Department wrestles with public communication and not wanting to
create a panic if there is no reason. If the field crew can manage the systems to provide service,
then we let the system and our guys take care of it. If there is a concern that people are not going
to have water, then we would definitely put a communication out. But the Board can be notified
for its own information.
Chairperson Boswell agreed with what the Deputy was saying. job to
provide water to all of its customers, and this well is not affecting their ability to do that.
2. Department of Water Supply Energy Report - Mr. Ching reviewed his energy report and
welcomed suggestions on what the Board would like to see on future reports. Starting with the
total power cost, it was broken it down by quarters. For the first quarter 2019, the total Power
Cost Charge (PCC) was up 3.7% from the same quarter last year. Compared to the previous
quarter, it was down 6%. On Page 2, he highlighted what
(HELCO) is doing and how it affects the Department. Right now, we have about 157 HELCO
accounts broken down into three different schedules. The average energy rate for the first
quarter over those three schedules was down 2.9% from the same quarter last year and down
th
10.5% from the previous quarter (4 quarter 2018). The demand rate, which makes up about
15% of our total power cost, is up about 20% from the same quarter last year; and that is
Page 20 of 24 May 28, 2019, Water Board Minutes
-approved base rate change which occurred in October 2018.
From the previous quarter, power did not change. This rate typically does not fluctuate as much
as the energy rate so he did not foresee this changing too much going forward. Page 3 shows the
history of the PCC. As of today, it is still $1.89; but starting June 1, it will go up to $1.96.
Mr. De Luz stated that although HELCO is about 90% of the total energy cost and the
Department is always striving for alternate energy resources, perhaps the report could include a
composite of what makes up the $1.96 power cost charge--HELCO, wind power, etc. It also
goes to public perception. One of the challenges with the Power Purchase Agreement (PPA) is,
to some degree, indexed, so it is not necessarily a 20-year flat rate. Most consumers thinking is
that is something they do on their house where, essentially, you have a fixed cost and that is
pretty much what your energy cost will be. But c
they have some kind of inflationary index or something to that effect. He added that his biggest
beef with HELCO is their demand charge. As much as you need to manage all the other aspects,
you get very little ability to manage the demand charge unless you actually start looking at your
energy hogs on some of the meters and doing some type of hybrid alternative energy to feed into
them. The context within our energy plan is when we do have the rate increase amount, there
should be a short explanation on what the Department is doing to minimize or mitigate spikes in
demand in energy cost in the future. The average consumer will only look at how much per
kilowatt hour it is. To him, one of the things he is very disappointed in is the PUC and their not
making it more mandatory for the utility to work with other utilities on the challenge of having
an antiquated distribution system which adds to their high cost of demand to provide the
resiliency side of the electricity. He realized that the DWS has
Energy, but the PUC should take more action to force the utility to evaluate their grid, either in a
substation, or some other measure. It is discouraging to him and he can see another hit on that
one coming up.
Mr. Ching stated that demand is a tough one because most of our wells either run at 100% or
zero, and we get hit for the 100%. In certain situations, when wells go down, HELCO does not
carry the demand charge through the repair of the well.
Mr. De Luz stated that the problem is that when the well is brought back online, they are going to
take the highest 30-day period.
The Manager-Chief Engineer stated that we try to work with them to find ways or programs to
take advantage of, such as the Rider M program.
Mr. De Luz stated that the other side to this is what the Department is studying, which is storage.
If the Department could show if the demand charge could be levelled out through having extra
storage capacity. And if the Department were to go into the bond market, that difference could
be pledged on the savings. It would not necessarily mean having to give a discount, but more of
bridging for the future. All of the decisions being made today are looking at 10 to 15 years out
for CIP projects, other than pipeline replacements. Storage is one of the things that needs to be
looked at.
The Manager-Chief Engineer mentioned that besides water consumption, the energy component
is being factored into those storage decisions.
Mr. De Luz mentioned it would also be for emergencies.
Page 21 of 24 May 28, 2019, Water Board Minutes
The Manager-Chief Engineer stated that in the past, the Department fell short on how to use
storage to improve its energy savings. If that extra storage could help with some increased
Rider M programs it would help alleviate some of that increase.
Mr. De Luz stated that what might need to be looked at is the rate structure, meaning do we need
to look at cost savings, reinvestment, so in other words, you would be getting your cost down to
24 cents per kilowatt hour, but your rate is 29 cents. Maybe that should be reinvested in energy
efficiency projects like some municipalities do.
Mr. Ching stated that if the Department does a large storage project, there will need to be some
communication with HELCO to come to an agreement on the Rider M contract. Rider M is
where HELCO says if you curtail your load, they will give a credit back of either 40% or 75%.
Right now, they have a time of use rate which is during the day. They want you to run during the
day to take advantage of the photovoltaic power from the grid because they are having trouble
finding somewhere to put that power during the day. But from 3:00 p.m. to the next morning, if
you operate during that time, you pay a greater rate. For example, a normal rate may be 30
cents; but if you operate in the time they want, they will give a 26-cent rate. If you operate
outside of that time, it may be more like 33 cents.
The Manager-Chief Engineer noted that this is where increased storage might give us that ability
to tap into some of those different rate schedules.
Mr. Ching provided an update on the the
solar photovoltaic (PV) project. The project was awarded at the last Water Board meeting and
entails PV panels on the roofs of the main office and the five baseyards. Negotiations are
ongoing with Greenpath for entering into a Power Purchase Agreement (PPA) which will be for
a 20-year period. The next milestone will be execution of a PPA.
Mr. De Luz shared his experience with Sun Edison and cautioned the
Department to ensure that Corporation Counsel has a close look at the assignment clause and the
performance clause in the contract between this Department and Greenpath. There should be
tight language in the performance contract, whether it is an operational issue, and it does not
matter if there is only one facility having issues. Essentially, it is under one contract. He
recommended that there be some type of performance bond in place.
The Manager-Chief Engineer noted that it will be worked on administratively with Corporation
Counsel, and the PPA for this project will ultimately come before the Board for approval.
Mr. Kern asked if these systems are grid or battery back-up.
Mr. Ching replied they will all be tied into the grid except for the main office because of its size.
The HELCO program in place is called
HELCO they will accept some energy at a reduced credit. We are going to try to do
that just as a back up but we are also going to have batteries at four of the locations: the Hilo
Baseyard, the Microlab, Waimea Baseyard, and Kona Baseyard. These systems will offset 80%
to 90% of the load. The main office will be around a 40% offset. There will be no batteries in
that system, but it will probably work out because all of the energy would be used up onsite
because of office hours.
Mr. Kern asked if it would not have made sense for the Department to own its own system
instead of having a PPA.
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Mr. Ching replied that the major benefit of doing a PPA is the provider, Greenpath, will be able
to take advantage of tax credits, Federal - 30% and State - 35%. DWS cannot take advantage of
those credits. Greenpath could pass on some of the savings to us through the rate.
Mr. Kern asked how the cost differential would look.
Mr. Ching replied that from some of the preliminary numbers for owning its own system, the
Department has to comply with Davis Bacon wages; therefore, the cost of owning it is not as
small as a private company. The initial estimate was about $2.5 million to own it outright and
the payback on that was not really there because it did not include batteries at the time. Under
the assumption that half of our bill was offset by the system, the payback on it was 20 years.
With a PPA, you start seeing some savings from day one since the PPA rate is less than the
HELCO rate; and how it was worded in the RFP was if they do recommend us doing an initial
investment, the payback on that initial investment needs to be less than eight years. With this
project, their design is based on that criteria as far as payback period.
Mr. Kern asked if investment meant a larger down payment.
Mr. Ching replied that was correct. It is, in essence, paying for a facility upgrade that is required
by the project. That way we are not paying for energy we have not used yet. In this case, they
will do the roofing upgrades which will pretty much be covered by our investment. That will
reduce our rate and stabilize it a little, not having to add that cost into the rate over the 20-year
period.
Mr. Kern asked if the roof repair was something that needed to be done anyway.
The Manager-Chief Engineer replied that was correct. The benefit is we are fronting that money,
but it is not like a down payment but more like an Operations and Maintenance improvement that
can be used even if the PV was not there.
Mr. Domingo mentioned the Office/Baseyard Lighting Renovation project and that Mr. Ching
ought to be commended for saving the Department that much money in the payback time of nine
months. He noted if you look at the graph, there are initial savings and it keeps going down after
that. That is wonderful. He asked about Figure 3 on Page 2. It seems like a statistically stable
rate from 2016 to third quarter 2018, and then you see a big bump on the demand rate history.
He asked what might be the cause of that.
Mr. Ching replied that it shows the demand rate history. That was going back to the HELCO
base rate change which was implemented in October 2018. They had not changed the base rate
for a while up to that point. The energy cost adjustment goes up and down, but the base rate
remains the same. It did change the demand charge rate.
Mr. Domingo asked if the rate increase had anything to do with Puna Geothermal going down.
Mr. Ching replied that from what he understood, it was not connected. They had not had a base
rate change since 2012, and the increase had been planned before Puna Geothermal went down.
Mr. De Luz asked if the Department had looked into any of its key facilities being emergency
facilities in the event of a power outage such as its baseyards. If so, it may need to do some
upgrades to the electrical system, such as dedicated circuits for emergency equipment or lighting.
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It may make sense to design for emergency power up front and upgrade because of battery
storage. It might be worth looking into.
Mr. Ching stated that Greenpath was asked about what their intentions were as far as using that
as back-up power. As it is designed now, if it does not sense HELCO power coming in, it is not
going to provide power from the panels to the building. He thought the Kona and Waimea
baseyards may have that capability, but you would have to physically enable it when there is an
outage. It is not like an automatic transfer.
3. 2019 Water Conservation Poster Contest - taken up earlier.
I.
Chairperson Boswell congratulated the Department on a good job with the water conservation
involvement with the children and the schools. It is good to see that.
The Manager-Chief Engineer stated that it is planned to be an annual thing.
Mr. De Luz mentioned possibly having the winning entries converted into a calendar.
The Deputy also mentioned that the winning entries will be posted online.
9) ANNOUNCEMENTS:
1. Next Regular Meeting:
The next meeting of the Water Board will be June 25, 2019, 10:00 a.m. at the Department of Water
Supply, Hilo Operations Center Conference Room; 889
2. Following Meeting:
The following meeting of the Water Board will be July 23, 2019, 10:00 a.m., at the Department of
The Manager-Chief Engineer mentioned that Mr. Zendo Kern is the recent addition to the Water
Board. That makes two former Council Members on the Board right now.
10) ADJOURNMENT
ACTION: Mr. Sugai moved to adjourn the meeting; seconded by Mr. Kern and carried unanimously by
voice vote. (Meeting adjourned at 12:05 p.m.)
______________________________
Recording Secretary (APPROVED BY WATER BOARD 6/25/19)
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