HomeMy WebLinkAbout2024-08-27 Water Board Meeting Minutes MINUTES
DEPARTMENT OF WATER SUPPLY
COUNTY OF HAWAI`I
WATER BOARD MEETING
August 27, 2024
West Hawaii Civic Center, Building G, 74-5044 Ane Keohokalole Highway, Kailua-Kona, Hawaii
MEMBERS PRESENT: Mr. Michael Pono Kekela,Vice-Chairperson, Dist. 4
Mr. Michael Bell, Water Board Member, Dist. 7
Mr. James Kimo Lee, Water Board Member,Dist. 2
Mr. Benjamin Ney,Water Board Member, Dist. 9
Mr. Keith Unger,Water Board Member, Dist. 6
Mr. Keith K. Okamoto,Manager-Chief Engineer,
Department of Water Supply(ex-officio member)
ABSENT: Mr. Stephen Kawena Lopez, Chairperson,Dist. 8
Mr. Thomas Brown,Water Board Member,Dist. 3
Ms. Kea Keolanui,Water Board Member, Dist. 1
Director,Planning Department(ex-officio member)
Director,Department of Public Works(ex-officio member)
OTHERS PRESENT: Ms. Keyra Wong, Deputy Corporation Counsel
Mr. Jeffrey Bray(Guest)
DEPARTMENT OF WATER SUPPLY STAFF:
Mr. Kawika Uyehara, Deputy
Mr. Kurt Inaba, Engineering Division Head
Ms. Candace Gray,Waterworks Controller
Mr. Gregory Goodale, Chief of Operations
Mr. Alvin Inouye,Water Operations Superintendent
Mr. Warren Ching, Energy Management Analyst
Ms.Nora Avenue,Recording Secretary
1) CALL TO ORDER—Vice-Chairperson called the meeting to order at 10:00 a.m. Five Board Members
were present: Messrs. Bell, Lee,Ney,Unger, and Vice-Chairperson Kekela).
2) STATEMENTS FROM THE PUBLIC—Pursuant to HRS §92-3, oral testimony may be provided entirely
at the beginning of the meeting, or immediately preceding the agenda item.
VICE-CHR. KEKELA: Is there any Statements from the Public?
MR. OKAMOTO: There is one written testimony submitted. Just for the record, I do want to say that that
testimony was actually for an incorrect topic that is actually not on the agenda,but we'll keep it and retain it
for the records.
VICE-CHR. KEKELA: Okay,mahalo. All right, moving on to Approval of Minutes.
3) APPROVAL OF MINUTES
ACTION: Mr. Bell moved for approval of the Minutes of the July 23, 2024 Water Board meeting;
seconded by Mr.Ney and carried unanimously by voice vote (Ayes: 5—Messrs. Bell, Lee,Ney,Unger,
and Vice-Chairperson Kekela).
4) APPROVAL OF ADDENDUM AND/OR SUPPLEMENTAL AGENDA—None.
5) POWER COST CHARGE:
Vice-Chairperson Kekela asked if there was any testimony for this item. There being none, he continued with
the agenda item.
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$2.77 to $3.04 per thousand
gallons as a result of this increase. Power cost charges over the past year were as follows:
Effective PCC
May 1,2024 $2.77
February 1,2024 $2.37
September 1,2023 $2.64
April 1, 2023 $2.70
A Public Hearing will be held prior to this Board meeting to accept public testimony on this change.
RECOMMENDATION: It is recommended that the Board approve the increase of the Power Cost Charge
from$2.77 to $3.04, effective September 1, 2024.
VICE-CHR. KEKELA: Can I get a motion for approval? Seeing none. Is there any opposition? (none)
All in favor say"aye."
ACTION: Mr. Unger moved for approval of the recommendation; seconded by Mr.Ney. Motion was
carried unanimously by voice vote (Ayes: 5—Messrs. Bell, Lee,Ney, Unger, and Vice-Chairperson
Kekela).
6) NORTH HILO:
A. JOB NO. 2021-1162 (REBID), LAUPAHOEHOE DEEPWELL B REPAIR—REQUEST FOR TIME
EXTENSION:
Vice-Chairperson Kekela asked if there was any testimony for this item. There being none, he continued
with the agenda item.
The Department of Water Supply(DWS)is requesting a contract time extension of 151 calendar days,
due to delays associated with receiving approval from Department of Health for water quality and the
troubleshooting and repair of MCC equipment required to start the well.
Note: There are no additional costs associated with this time extension.
Page 2 of 15 August 27,2024,Water Board Minutes
Ext.# From
To (Date) (CDays
e s Reason
Manufacturer delays in providing submittals
1 10/31/2022 3/31/2023 151 and receiving materials for pump
production.
2 3/31/2023 6/16/2023 77 Manufacturer delays in motor production.
3 6/16/2023 8/15/2023 60 Manufacturer requests motor substitution,
delaying shipment.
4 8/15/2023 9/30/2023 46 Vendor staffing challenges.
5 9/30/2023 10/14/2023 21 HECO power shutdown.
10/14/23 1/19/24 Project suspension.
6 1/19/24 6/19/24 151 DOH water quality approvals and repairs to
MCC.
Total Days(including this request) 506
RECOMMENDATION: It is recommended that the Board approve a contract time extension of 151
calendar days to Deffick's Well Drilling and Pump Services, LLC., for JOB NO. 2021-1162(REBID),
LAUPAHOEHOE DEEPWELL B REPAIR. If approved,the contract completion date will be revised
from January 19,2024,to August 27, 2024.
MOTION: Mr. Bell moved for approval of the recommendation; seconded by Mr. Unger.
VICE-CHR. KEKELA: Is there any discussion?
MR. OKAMOTO: Yes. We do want to make a correction to our recommendation,the date of
August 27,2024 is supposed to be June 19, 2024. I apologize for that. I also want to apologize that we
are kind of taking this a little bit late,we should have addressed this sooner because it's August now,but
this request was extended to June, so our apologies on that. But if there are any questions, I believe Greg
is available to respond.
Just for the Board's awareness,this was not a contractor requesting an extension,there's no—like you
see for other time extensions some of the background information in your packet,this one was actually
due to the situations on our side,the water quality testing primarily.
MR. GOODALE: Primarily,yes. This well had been off for a long period of time, so when a well is off
for that long,it takes longer because we have to submit a report to the State. The report was submitted in
January and we didn't get approval to put it back online until June, and that's for a lot of reasons on the
State side too,with all the things they had going on with their lab and with the Lahaina fire and
everything continuing.
MR. NEY: Historically,we had problems with the State responding back in a timely manner,or is this
just kind of(inaudible)?
Page 3 of 15 August 27,2024,Water Board Minutes
MR. GOODALE: I think it's just due to kind of circumstances with all the activity going on with the
State lab.
MR. OKAMOTO: I think we have a good working relationship with the State. They're very aware of
the importance of source testing, and I believe to re-activate the source with the water in the system.
MR. NEY: The reason I ask is because it seems like with things getting done,it's like one thing that's a
lag that's holding up the whole process. I just want to make sure that's not a recurring thing.
MR. UNGER: What well is backing up this well?
MR. GOODALE: There are two wells there. There's Well A and Well B.
MR. UNGER: Right.
MR. GOODALE: So Well A is online, well actually both of them are online now;but fortunately for us
while we're waiting for this,Well A was continuing to function, so we were in good shape.
VICE-CHR. KEKELA: Thank you. Any further discussion? Any opposition to the motion? (none) All
in favor say"aye."
ACTION: Motion was carried unanimously by voice vote(Ayes: 5—Messrs. Bell, Lee,Ney, Unger,
and Vice-Chairperson Kekela).
7) NORTH KONA:
A. JOB NO. 2016-1056,WAI`AHA DEEPWELL REPAIR—REQUEST FOR TIME EXTENSIONS:
Chair Lopez asked if there was any testimony for this item. There being none, he continued with the
agenda item.
The Contractor,Derrick's Well Drilling and Pump Services, LLC.,is requesting a contract time
extension of 95 calendar days, due to manufacturer material delays and delays with the pump and motor
testing. These delays were beyond the control of the Contractor.
Staff reviewed the request for the time extension and the accompanying supporting documentation and
found 95 calendar days to be justified.Note: There are no additional costs associated with this time
extension.
Ext. From(Date) To (Date) (CDays Reason
1 7/31/2017 9/15/2024 2603 Project completion date was revised as a part
of Change Order#2.
Manufacturer delays for submittals for surface
2 9/15/2024 12/19/2024 95 plate and motor shroud assemblies, and pump
and motor testing.
Total Days(including this request) 2698
Page 4 of 15 August 27,2024,Water Board Minutes
RECOMMENDATION: It is recommended that the Board approve a contract time extension of
95 calendar days to Derrick's Well Drilling and Pump Services,LLC.,for JOB NO. 2016-1056,
WAI`AHA DEEPWELL REPAIR. If approved,the contract completion date will be revised from
September 15,2024,to December 19,2024.
VICE-CHR. KEKELA: Can I get a motion to approve?
MOTION: Mr.Ney moved for approval of the recommendation; seconded by Mr. Bell.
MR. OKAMOTO: All right, so for this one,the contractor requested a time extension due to issues on
the manufacturer's side, so not really within his control. In your packet is the email documenting the
delay. If there are any further questions, Greg's available for this one also.
MR. UNGER: This original contract started in 2017?
MR. OKAMOTO: Yes.
MR. UNGER: So is this job ever going to get done?
MR. OKAMOTO: Yes.
MR. GOODALL Yeah, I don't know how far into—yeah,this job started, and then there was the
Settlement Agreement that was arrived at—so this is all still just a continuation of one job.
MR. UNGER: As understood.
MR. OKAMOTO: Good reminder,you know it's actually worth saying for the record, and maybe for
the newer Board members who weren't around when it started, and when it experienced the issues that it
did,basically there was an issue during repair. Things were dropped down the hole. We went through a
form of litigation, and mediation, and basically, the bottom line is we need to get this well back in
service, and we hoped to negotiate with the contractor a Settlement Agreement that allows us to move
forward. But during that time,that's where that first row on that table looks kind of egregious,is the
word I guess, stands out. But yeah, that's what we were going back and forth with the contractor during
that litigation period. We've moved past that and now we're actually getting—the contractor is also
trying to get that well operational.
MR. UNGER: How is backup wells performing? Is it working overtime?
MR. GOODALE: Well,we don't have a—there is no redundant well on that side.
MR. UNGER: No,not on that side but—
MR. GOODALE: But within the North Kona system,I mean even with some of the other wells that
we've had go out with Honok6hau,I mean we're still doing well. The shaft malces up a big percentage.
But with the remainder of the wells we have,we're holding our ground. We kept the 25 percent
restriction in effect, as a matter of fact I think that got put back into effect with the most recent one that
we had go down; but even with that, we're still doing all right.
MR. UNGER: Keep turning those valves.
Page 5 of 15 August 27,2024,Water Board Minutes
MR. NEY: Have you guys put more proactive actions in place that this doesn't happen again?
MR. OKAMOTO: Yes. Really,we're kind of getting off the agenda topic because this is for the
Wai`aha Well repair. Kawika will cover some of that during the Manager's Report. That's why every
month we have under there the update of the North Kona Wells.
MR. NEY: Okay,I guess that will be asked at that certain time.
MR. OKAMOTO: Yes,we can bring that up during that portion.
VICE-CHR. KEKELA: Is there any further discussion`? There being none. Any opposition to the
motion? All in favor say"aye."
ACTION: Motion was carried unanimously by voice vote(Ayes: 5—Messrs. Bell,Lee,Ney, Unger,
and Vice-Chairperson Kekela).
8) MISCELLANEOUS:
A. DEPARTMENT OF WATER SUPPLY COLLECTION AND DELINQUENCY POLICIES:
Vice Chairperson Kekela asked if there was any testimony for this item. There being none, he continued
with the agenda item.
Information will be provided to the Board on status updates on collection efforts due to delinquent
balances for water service charges with information on current policies and procedures in place for
collection and water shut offs. Discussion will follow along with any recommendations that should be
considered for future action.
VICE-CHR KEKELA: This isn't a report from the PIG though because I think they're requesting to
have that.
MR. NEY: Actually,just a comment but nothing to report. Actually,I'd like to probably finalize the
report for PIG so we can dissolve that, and I'd like to see progression to the next step and towards kind of
making a decision of what we're going to do in regards to that because we have (inaudible). I think it's
time to settle(inaudible). I'll commit to getting that report for the next agenda. So, if we could get it
agendized?
MR. OKAMOTO: Yes.
MR. UNGER: I guess any information will be provided to the Board on status updates on collection
efforts due to delinquent balances for water service charges with information on current policies and
procedures in place for collection and water shut offs. Discussion will follow along with any
recommendations that should be considered for future action.
MR. OKAMOTO: Yes. So for this particular Board meeting,we don't have anything more to offer than
what we shared at the last meeting.
Page 6 of 15 August 27,2024,Water Board Minutes
B. MONTHLY PROGRESS REPORT:
Vice-Chairperson Kekela asked if there was any testimony for this item. There being none, he continued
with the agenda item.
Submission of Progress Report of Projects by the Department. Department personnel will be available to
respond to questions by the Board regarding the status/progress of any project.
MR. INABA: I just want to report,kind of exciting, our Lalamilo 10 MG Reservoir Project is under
construction. The contractor is grading right now, so that's really good.
Puako,the waterline,basically we're complete and done with that project. The paving is—we are
participating, but it's going to be handled by the County. Public Works will be paving the entire
roadway.
Really briefly, we had the presentation last meeting on the Lead and Copper rule,but we are still on
track, so I just wanted to update you folks on that, we will be doing our initial—looking at South Hilo,
the individual systems will have to be submitted to the Department of Health. We're going to wrap up
South Hilo, hopefully this week, and submit that on the first system to be reviewed by the Department of
Health. Once that is all squared away,I think the rest will follow.
MR. OKAMOTO: I did get a chance to go up myself to check out what is happening at Lalamilo, and
it's pretty impressive, so if anybody wants to take a look, let us know. If they're still there, but they had a
couple of large dozers, getting it to subgrade, and a huge excavator loading it onto a dump truck that was
taking it off-site to some other project that is not ours,but good to see progress on that. It's going to be,
again,the biggest potable water tank in the State. So, it's quite impressive.
MR. LINGER: Who's the contractor?
MR. OKAMOTO: That one is Isemoto.
MR. NEY: They're having hard time getting the machines up the road was that doable?
MR. OKAMOTO: They got them to the site. I am not exactly sure how,but they're there.
MR. NEY: Because I remember that road, it was a little bit tight.
MR. INABA: Wind farms attached to a trailer I think to get the blades up.
MR. OKAMOTO: I'm not sure how they got them there, but these contractors figure out ways how to
mobilize.
MR. UNGER: Is there a completion date?
MR. INABA: Oh sorry, that has to be completed. We did suspend the project while we were acquiring
the property, so that was the initial delay, and then we just issued that,like a restart. We'll have it
corrected for the next meeting. I think we had the property acquisition.
MR. NEY: So the company that the engineers was DK Tanks or something like that, right?
MR. OKAMOTO: DN Tanks,the contractor.
Page 7 of 15 August 27,2024,Water Board Minutes
MR.NEY: All materials are like procured and(inaudible), snags or delays. We're getting for the kind
of equipment that might be needed for the tank.
MR. OKAMOTO: The biggest equipment is going to be the concrete and the reinforcement steel. I'm
guessing all that have been factored in.
MR.NEY: Okay.
MR. INABA: They're going to have another piece of equipment coming in that wraps the tank that
will attach to the tank.
MR. NEY: There's no other(inaudible), like stairs,things that—
MR. OKAMOTO: Yes,there will be.
VICE-CHR. KEKELA: Thank you, Kurt. Anything else?
MR. INABA: That's all, unless anyone has any questions.
VICE-CHR. KEKELA: Any more questions from the Board? (none) Okay, mahalo.
C. REVIEW OF MONTHLY FINANCIAL STATEMENTS:
Vice-Chairperson Kekela asked if there was any testimony for this item. There being none, he
continued with the agenda item.
MS. GRAY: So everyone should have received two sets of financial statements, and they were emailed
and which were handed out today. The first financial statement would be our June 2024 Final
Financial Statement for Fiscal Year 2024,which includes all of our End of Year closing adjustments.
So last month,we had our initial closing of June 2024,and this is the final report before we present our
statements to the auditor. Once our audit is complete,then the final report will include any adjustments
as a result of the audit,just to give them a reminder of the process. So for June 2024,we ended again
on a positive note. On page 4, for FY 2024 Financial Statement, our net income,we ended the year
with$5.2 million, and our net position is at$18.2 million.
Moving on to our Budget Status Report,page 5, our revenues exceeded our budget at a budget of
$65.5 million, and our revenues at June 30, 2024 was $69.7 million.
Our expenditures,we ended the year at 87% of our budget, with the budget of$65.5 million, and our
expenditures totaled$57 million.
MR. OKAMOTO: Spent. Which helps us continue to meet our financial goals of setting aside and
improving our reserves.
MS. GRAY: Regarding that point, on page 2, specific towards our financial objectives,I'll just refer to
the Cash section, the department's overall Cash &investments balance increased by$10.2 million or
17%to $70.9 million in comparison to the same month last fiscal year, and that's due to the rate
increases as well. I'll also reference the General Fund cash balance,the $18.6 million. In comparison
to our objectives,we're looking at having at least 60 days of reserves,let's say$18.6 million. We're
actually at that point, using those objectives.
Page 8 of 15 August 27,2024,Water Board Minutes
I do reference a slight decrease in the General Fund Cash Reserve, and that's due to the increase in our
encumbrances for our construction projects and transfers to our CIP reserves. As far as the CIP
reserves,we are let's say maybe about 50%of our target.
MR. OKAMOTO: Goals. Work in progress,but we are progressing towards that goal, yes. Very
good. Any questions? So that, again,that was the final factor,the audit. Basically that's what we're
going to do every year,is we'll give you guys that unaudited financial report for June,but once we get
the audit done and tidy up the numbers and things like that, we'll give you an updated report,hopefully
shortly thereafter, and this is pretty quick actually. We gave you June last month the unaudited
financial report, and now one month later Candace was able to put together a report with the adjusted
figures, so good job.
MS. GRAY: Actually, I would say at this point this year,we're probably two months ahead of where
we were last year, at this point in time, so we're trying our best. I guess the hard part is, is that we have
just a limited time in order to close the books and then get ready for the audit. We're trying to make
sure we cover all the reconciliations,the adjustments,trying to catch things as we go along in order to
include it with the closing year-end adjustments,which we do our best not to miss anything. That's the
challenge, but we're getting there.
MR. UNGER: Is that an annual audit?
MR. OKAMOTO: Yes,we have an annual audit. To me,it's typical, especially in government
organizations. We're trying to make it as clean and minimize the adjustments every fiscal year, so
that's what Candace is doing a good job of, you know,kind of tightening up things so our adjustments
are minimal. What we present in July should be fairly close. It's going to be a continued work-in-
progress. I want to give Candace a lot of credit because she had this vision to move us in that direction.
Thank you, Candace. We'll work on her projection.
VICE CHR. KEKELA: Her projections great.
MR. OKAMOTO: Yes,her projections—her number side is great.
MR.NEY: Oh no, I'd like to—looks really positive in terms of having kind of a buffer financially.
Now, are we going—like having cash on hand as an organization? Is there a restriction on how much?
I kind of thought Diana Mellon-Lacey said they look unfavorable when you have too much cash on
hand when you're increasing the rate. I mean I like being in this kind of position,but after you see the
reserves that you have,backup reserves I guess,would you use those funds to offset other expenses in
excess of that, I guess? I guess the lending rates coming back down,but could you keep the rate
increases good(inaudible)over the year, and then kind of use what's in excess of our reserves to knock
down some other expenses`?
MR. OKAMOTO: All of that goes into our rate study,you know that Ann Hajnosz went through her
presentation. So we're not there yet,I just want to make it very clear we're not there yet. Those rates
were established because we had certain financial goals in mind,which had a couple of reserves that
we want to build up: emergency, CIP.
MR.NEY: What was the debt servicing cost?
MR. UYEHARA: That was one of the financial goals. The last rate study that was done that kind of
established the Operating and Capital Reserves.
Page 9 of 15 August 27,2024,Water Board Minutes
MR.NEY: It looks great. I mean we're well ahead of—
MR. OKAMOTO: Even the debt ratio is a factor that goes into determining rates. But yes, for sure,if
it's ever a point where we have too much cash—what I want to make clear is there's a perception
sometimes out there that Water Supply, a semi-autonomous agency,they control their own revenues,
they get plenty cash, that's not true. I want to make it clear for the record right now,that is not true.
We may be in better financial health than the other departments just because we can control our
income, our revenues, and things like that,but we are not there yet. In the past, we could actually fund
our own CIP projects with cash and not have to borrow so much money. Those days have been 20
years gone, so we're nowhere close to that,but as was mentioned in the last presentation by our Rate
Study Consultant is that we do have goals regarding reserves, and debt ratios, and things like that,that
are factored in.
The next step beyond that too,I want to try and help with our community is, are there ways for us to
provide some I guess break to allow for workforce or affordable housing units with our facilities
charges. So that's another component that we're asking our Rate Consultant to look at in the upcoming
work that she's doing currently.
So anyway, again I don't want to get Keyra nervous, and we may be venturing off the topic of the
financial report. But if there are any other questions on the June Financial Statement, fire away; if not,
we can have Candace move on to the July Financial Statement.
MS. GRAY: Okay, for the July Financial Statements,I'm just going to I guess touch on the bold areas,
page 2 of the memo. So for July,we have our Accounts and Construction Contracts Payable including
retainages decreased($631,526) or-23%from the prior year, and that's due to pending payments that
we've accrued in June, and then we've made payments in July to clear those obligations. So this is
reflected in the Balance Sheet. The items that are listed on the cover memo,they met the criteria of the
accounts that changed$10,000 or 20%more from the prior fiscal year. The new items that appear on
this cover memo are bolded in each section.
On the Income Statement,the Total Operating Revenues increased just about$1.7 million or 34%, and
due to an increase in consumption and the 9.5%rate increase that became effective on 7/l/2024.
Also,I believe for closing this fiscal year,we've pretty much completed I'd say all of our closing
adjustments for June 2024, so that also rolls over into July, so that might be also another factor on why
it's noted as significant for this July 2024.
Our power and pumping operating expenses increased$210,325 or 61%in comparison to the same
month in the prior fiscal year primarily due to an increase in electricity expenses paid this month.
As far as our transmission and distribution operating expenses increased 144,214 or 37%in comparison
to the same month in the prior fiscal year primarily due to increases in expenses paid for salaries,
materials and supplies, and equipment.
Customers accounting operating expenses, which increased 58%in comparison to July 2023.
We also have other non-operating revenues, increased 93%in comparison to the same month in the
prior year due to an increase in installation income for new service connections and the$47,114
Hawaii Energy rebate payment.
Page 10 of 15 August 27,2024,Water Board Minutes
Another item,noted on page 3,those are other non-operating expenses,which increased$15,574 or
2532%due to an increase in our electricity expenses paid this month.
I'll just skip over to page 6, our Budget Status Report for July 2024. The first month of our
FY 2024-2025, our revenues,we're at$6.9 million, 10%in comparison to our target of 8%; and our
expenditures, looking at 3%. if there are any other questions?
MR. OKAMOTO: Thank you, Candace. Are there any questions?
MR. UNGER: Soto clarify the rate, we've just implemented a 9.5%rate increase for the standby
charges,the water consumption. So back to our rate change power cost charge, I think we just agreed
to today, so that will come into effect the first day of the month,following the established rate by the
Water Board, so are we talking September lit?
MR. OKAMOTO: Yes.
MR. UNGER: Okay, so that's good.
MR.NEY: Make sure you got all your leaks fixed, and in top shape.
MR. OKAMOTO: We are hopeful. From my understanding, I think Warren will cover this during his
Energy Report on relationship and the potential of Hawaiian Electric's rates and the history,their rates.
VICE-CHR. KEKELA: All right,mahalo, Candace.
MR. OKAMOTO: Thanks, Candace.
VICE-CHR. KEKELA: At this moment, I'd like to move to 8D.
D. EXECUTIVE SESSION REGARDING OPEN LITIGATION FOR CIVIL NO. 3CCV-20-0000007,
LALAMILO WIND COMPANY, LLC:
The Board anticipates convening an executive meeting for the purposes of discussing the legal
rights, duties and liabilities of the Board concerning open litigation against the Board, as authorized
by Hawaii County Charter Section 8-2 and Hawaii Revised Statutes("HRS"), Sections 92-4 and
92-5(a)(4). The Board wishes to have its attorney present, in order to consult with the Board's
attorney on its questions and issues pertaining to the Board's powers, duties,privileges, immunities,
and liabilities pursuant to HRS Section 92-5(a)(4). A two-thirds vote of the members present,
pursuant to HRS Section 92-4, is necessary to hold an executive meeting,provided the affirmative
vote constitutes a majority of the Board.
MS. WONG: Is there a motion to convene into Executive Session so that the Board members can
vote with the Board's attorney on its questions and issues pertaining to the Board's powers, duties,
privileges, immunities,and liabilities pursuant to HRS Section 92-5(a)(4)?
ACTION: Mr. Unger moved that the Board enter into Executive Session; seconded by Mr.Ney and
carried unanimously by the following voice vote: (Ayes: 5—Messrs. Bell, Lee,Ney,Unger,
and Vice-Chairperson Kekela).
(The Board entered into Executive Session at 10:43 a.m., and returned at 11:47 a.m.)
Page 1 I of 15 August 27,2024,Water Board Minutes
RECESS: At 11:47 a.m.,Vice-Chairperson Kekela called for a short recess.
RECONVENE: The meeting reconvened at 11:59 a.m.
E. MANAGER-CHIEF ENGINEER'S REPORT:
The Manager-Chief Engineer to provide an update on the following:
1. North Kona Wells
MR. UYEHARA: Thank you. So for this month, our North Kona Wells status updates we had 9 of our
14 wells in operation or be available to use; five are offline, so we do have the 25%water restriction.
The five wells that are offline: Kalaoa, Makalei, Honokohau,Wai`aha, and Holualoa.
So,the status for this month. Kalaoa is under repairs right now. Our staff are up there now. We're
completing that, and hopefully bringing that back online early September, so in a week or so.
Makalei Well,the contractor—the developer had installed the pump and the motor. Good progress.
Hopefully, we'll bring that one back online the end of September.
Honokohau is the one where the contractor still has to assemble another fishing tool to get whatever
shroud is in the well. That's ongoing,but I estimate right now to bring that back online in mid-
October.
Wai`aha,we went over that in this month's agenda, that the expected completion date is
December 19'.
Holualoa Well,that is offline. We are working on our bid specs, and once that's out to bid,we can
move forward.
MR. OKAMOTO: Questions?
MR.NEY: Are they confident they can(inaudible).
MR. UYEHARA: This is probably I believe the third attempt to get the shroud out. There are different
challenges and different sizes of the equipment, so we're hopeful that this time we get it out. That's
very important well(source?)to get back online.
MR.NEY: Are these costs put an end on us on this effort? Are these costs open-ended in terms of the
effort? Or is this like, "No,you've got to get it out for these costs."
MR. UYEHARA: So I believe each subsequent additional attempt, there's going to be additional costs.
MR. GOODALE: Yes, it's all costs we're going to bear. I mean it was unknown to them at the time of
removal, as to the status of the shroud or how it was attached. So through the video camming work
they've done,they were able to kind of see how the thing was attached. But bottom line,yeah, it's
something that has to get removed out of there in order for us to be able to replace the well.
MR.NEY: Kind of like a forced account basis. Is that the right term you guys were using earlier?
MR. GOODALE: I don't know if force—I guess technically it was—basically it's a Change Order.
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MR.NEY: Okay.
MR. GOODALE: But this is also done under emergency procurement; but even so with that,it's still
done as a Change Order. I mean we've got original scope of work that was implemented at the
beginning,but as these things occur and because they're unknown to us and the contractor.
Effectively, if you want to get the materials out of the well,you've got to keep trying. One of the
things,we did try to evaluate,was whether that was something that could remain in the well and not
have any effect,but it was determined that we had to get that shroud out.
MR.NEY: Yeah,just more like along the lines of the language of unknown and variable there. Like
not even specifically in this situation but in future situations, like when we negotiate these things out.
Is the language is correct and the contracts and stuff that we're explicitly allowing that`? (inaudible) of
costs, or is this like we're going to be a little flexible on this?
MR. OKAMOTO: They still got to justify when they request for additional funding,there still has to
be a basis. We're not just going to have a blank check, and our staff is out there monitoring the work to
make sure who's on-site,when and what days they're actually on site,they're actually working or not.
All of that factors into our evaluation, whether or not their proposed Change Order amount is
reasonable.
MR.NEY: Hopefully they're (inaudible).
MR. UYEHARA: Thank you.
MR. OKAMOTO: Thanks,Kawika.
VICE-CHR. KEKELA: All right,next is the Department of Water Supply Quarterly Energy Report.
(Note: At this time,Warren Ching, Energy Management Analyst, came forward to address the
members of the Water Board, and provided an overview of the Quarterly Energy Report.)
MR. CHING: Any questions in general? Thank you very much.
MR. OKAMOTO: Thanks,Warren. Basically, for everybody's awareness,we pay over$20 million a
year in power cost, so it is a significant O&M expense,which is why we actually have a position
dedicated to help us be better at that, a summary of what we are trying to do.
Item No. 3, as we should be doing,we've summarized—you know every once in a while we'll come in,
we'll put something out to bid,there might be for whatever reason no bidders, no responsible bidders,
so we get the Board's approval to do an Alternative Procurement. So this is a summary of the
Alternative Procurement that we've done and the results. Again, for transparency sake both for the
Board and the public. So if there are any questions, Greg's ready because it's all his projects basically.
As you can see, some vehicle bids, some material bids,the treatment plant chemicals.
MR.NEY: On the alternate procurement for the vehicles,when we put that out to bid, are these local
vendors not bidding on it and are just kind of waiting until it rolls over to Alternative Procurement?
MR. GOODALE: Yeah,we can't speculate as to how or why they're doing what they're doing. I
mean we do know that these bids have been sent out to many of our normal dealerships. Actually,
they're sent out to even ones in Oahu. Yeah,there's quite a broad target that we're trying to shoot
Page 13 of 15 August 27,2024,Water Board Minutes
these things out to. But yeah, as to why they go one way or the other, I mean that can work kind of
against the person because if they were to think they were going to do that and then somebody else bid
on the normal process,then you're out.
MR.NEY: It's bind of interesting.
MR. GOODALL It is interesting. We have seen over the past several years that this has been kind of
more of a trend,where we're not getting as many. I mean there have been procurements where we've
received bids,but yeah,it's just no rhyme or reason as to why they do or they don't participate in the
normal process.
VICE CHR. KEKELA: Do we have an update on the water treatment because this says results
pending.
MR. GOODALE: So there's one,yeah for the chlorine deliveries. Is that the one you're talking about?
MR.NEY: Yes.
MR. GOODALE: So that's been ongoing. We actually ended up having to because the contractor
wasn't able to meet their Hawaii Compliance Express, so we ended up having to do even a separate
one to get that ammonia we needed for the chloramination at the water treatment plant. So,we were
able to get the ammonia we needed to continue doing what we do.
MR. OKAMOTO: All right, if there are no further questions. Thanks, Greg. The last one,just a
reminder that there is a conference,the Hawaii Water Works Association,which is basically the
organization primarily of the four water utilities. This conference rotates location every year. We
hosted last year at Mauna Lani, and then it basically goes back to the west side of the island chain,
Kauai,then it will go Oahu, and then Maui, then back to us. Kauai is hosting it this year. It should
be another great conference. Registration is currently already open for Early Bird rates. We have I
think a budget that will allow for three Board members to attend; so if you want to attend,please
submit a request to Nora as soon as possible so we can take advantage of the Early Bird rate.
VICE CHR. KEKELA: What are the dates for the conference?
MR. OKAMOTO: Oh yeah, good question. The date is October 23rd through the 25t", and because it's
not that easy to get from the Big Island to Kauai, I think we're going on the assumption that we may
have to fly out on Tuesday, the 22nd, otherwise you might miss half the day on the 23'. So yeah,please
check your calendars and let us know if you'd like to go. Kawika, do we know when the Early Bird
rate changes?
MR. UYEHARA: I don't have that. I'll have to find that out.
MR. OKAMOTO: We'll find that out. The sooner you can get us that would be good. I think we kind
of blocked off some rooms already. All right,that's all I have for my report, Mr. Chair.
F. CHAIRPERSON'S REPORT
1) Chairperson to report on matters of interest to the Board.
VICE CHR.KEKELA: Mahalo. I just wanted to informed you and Board that Kawena has been
working to kind space for scheduling for next year, so just kind of heads-up that might be a topic
Page 14 of 15 August 27,2024,Water Board Minutes
for discussion in a future meeting, so I just wanted to report that. Trying to see the availability. So
right now they're not scheduling for the year until September, so they'll open for facilities,mainly
West Hawaii facilities. That's it for the Chair's report.
9) ANNOUNCEMENTS:
• Next Meeting—September 24,2024, 10:00 a.m.,Hilo Operations Baseyard, 889 Leilani Street, Hilo,
Hawai`i
10) ADJOURNMENT:
VICE CHR. KEKELA: That being said, I need a motion to adjourn.
ACTION: Mr.Ney moved to adjourn the meeting; seconded by Mr. Bell and carried unanimously by voice
vote: (Ayes: 5—Messrs. Bell, Lee,Ney,Unger, and Vice-Chairperson Kekela).
VICE CHR. KEKELA: The Water Board meeting is adjourned.
(Meeting adjourned at 12:08 p.m.)
Recording Secretary
APPROVED BY WATER BOARD
(SEPTEMBER 24, 2024)
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