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HomeMy WebLinkAbout2004-01-27 Water Board MinutesMINUTES DEPARTMENT OF WATER SUPPLY COUNTY OF HAWAII WATER BOARD MEETING January 27, 2004 HILO OPERATIONS CENTER CONFERENCE ROOM MEMBERS PRESENT: Mr. Earl T. Nakashima, Chairman Mr. Ivan Mochida, Vice - Chairman Mr. Loren Heck Ms. Pamela Hons Ms. Sandra Scarr Mr. Leonard Tanaka Mr. George Wilkins Mr. Milton D. Pavao, Manager (ex- officio member) ABSENT: Mr. Raymond Kawamata, Water Board Member Mr. Bruce McClure, Director, Department of Public Works (ex- officio member) OTHERS PRESENT: Mr. Darin Arai, representing Mr. Christopher Yuen, Director, Planning Department (ex- officio member) Ms. Katherine Garson, Deputy Corporation Counsel Mr. Sherman Hee Mr. Richard Cuthbert, R. W. Beck, Inc. Mr. Dave Jockim, R. W. Beck, Inc. Department of Water Supply Staff: Mr. Quirino Antonio, Deputy Manager Mr. Glenn Ahuna, Engineering Division Head Mr. Clyde Young, representing Mr. Dennis Lee, Chief of Operations Mr. Keith Okamoto, Engineering Division, 11:57 a.m. Mr. Richard Tsunoda, Waterworks Controller Mr. Richard Sumada, Assistant Waterworks Controller CALL TO ORDER: Chairman Nakashima called the meeting to order at 10:03 a.m. STATEMENTS FROM THE PUBLIC: None APPROVAL OF MINUTES ACTION: Ms. Scarr moved for approval of the Minutes of the December 16, 2003, Water Board Meeting; seconded by Ms. Hons and carried unanimously by voice vote. Page 1 of 15 Minutes January 27, 2004, Water Board Meeting.doc APPROVAL OF ADDENDUM: ACTION: Mr. Heck moved to add the item "Special Legal Counsel Contract" to the Agenda under Miscellaneous; seconded by Mr. Wilkins and carried by roll call (Ayes: 7 - Mss. Hons and Scarr; Messrs. Heck, Mochida, Tanaka, Wilkins, and Chairman Nakashima; Nays: 0; Absent: 1 - Mr. Kawamata). PUNA: A. JOB NO. 2001 -783, CONSTRUCTION OF THE KEONEPOKO NUI STANDPIPE FACILITY: Bids for this project were opened on January 15, 2004; and the results were enumerated in the Agenda. This project consists of retrofitting the existing Keonepoko Nui Standpipe facilities with two standpipes and six spigots, related paving, and site improvements. Funds are available from the Department's C.I.P. Budget. The contractor will have 180 calendar days to complete this proj ect. The Manager recommended that the Board award for JOB NO. 2001 -783, CONSTRUCTION OF THE KEONEPOKO NUI STANDPIPE FACILILTY, to the low bidder, Ludwig Construction, for the contract bid amount of $235,248.25 with a contingency of $23,500.00 for a total contract amount of $258,748.25. ACTION: Ms. Hons moved for approval of the Manager's recommendation; seconded by Mr. Wilkins and carried unanimously by voice vote. SOUTH HILO: A. 2003 TABLE OF ORGANIZATION CHANGES — FINANCE DIVISION: 1) Management Accounting Branch Move Account Clerk, HC No. 4185, from the "Payroll and Cost Distribution" section to the "Purchasing and Budgetary Control" section to work under the supervision of the Buyer - Purchasing Clerk. The table of organization for the Payroll and Cost Distribution section currently includes 2 account clerks in the section while the Purchasing and Budgetary Control section has none. In actual practice, each section utilizes the services of a single account clerk. This move would align the table of organization with the way each section actually operates. 2) Customer Service Branch Creation of a new position called the Credit and Collections Clerk, SR -13, for inclusion in the "Collections and Delinquent Accounts" section. Funding for this position was included in the FY04 operating budget. This position will centralize credit and collection efforts on delinquent accounts where we have neglected sufficient attention in the past as indicated by previous management letter comments by our auditors. Page 2 of 15 Minutes January 27, 2004, Water Board Meeting.doc The Manager recommended that the Water Board approve the changes to the 2003 Table of Organization for the Finance Division. MOTION: Mr. Tanaka moved for approval of the Manager's recommendation; seconded by Mr. Heck. With respect to Mr. Wilkins' questions of how it will impact operating expenses and if it will close the gaps in collections, the Manager replied that this position has been budgeted for and is in line with discussions with the Board on collection efforts. It will help prevent delinquencies getting to the point they are now. ACTION: A vote was taken on the Motion. Motion was carried unanimously by voice vote. B. PROJECT NO. DW105 -0001, DRINKING WATER TREATMENT REVOLVING LOAN FUND - HONOMU WELL "A" (REPLACE AKAKA FALLS SPRING): The Department intends to utilize the DWSRF loan program administered by the State Department of Health to fund this project. The Interim Loan Agreement outlines the conditions of the loan program specific to this project. The Manager recommended that the Board approve the Interim Loan Agreement and that either the Chairman or the Vice - Chairman be authorized to sign the Agreement. MOTION: Ms. Scarr moved for approval of the Manager's recommendation; seconded by Mr. Heck. Questions were asked about the interest rate, the 12% late fee, and why the Department is borrowing. The Manager explained that the interest rate of 0.41% per annum is worth the effort of the extra paperwork that Federal funds entail. The 12% is merely a late fee, but the Department has never had any problems - -if the project is a little late, the Department may apply for an extension. The State of Hawaii gets a certain amount of Federal funds to which the four different water utilities all compete for. They are restricted to projects for EPA compliance. The State makes its determination by priority of project. The Department is fortunate whenever it can secure these types of loans. ACTION: A vote was taken on the Motion. Motion was carried unanimously by voice vote. SOUTH KOHALA: A. JOB NO. 2003 -817, CONSTRUCTION OF THE IRONWOOD SUBDIVISION G.I. WATERLINE REPLACEMENT: Bids for this project were opened on January 15, 2004; and the results were enumerated in the Agenda. This project consists of replacing 810 feet of galvanized iron waterline with 6- and 8 -inch ductile iron pipe, together with fire hydrants, along Ironwood Lane in Waimea. Funds are Page 3 of 15 Minutes January 27, 2004, Water Board Meeting.doc available from the Department's C.I.P. Budget. The contractor has 60 calendar days to complete this project. The Manager recommended that the Board award the contract for JOB NO. 2003 -817, CONSTRUCTION OF THE IRONWOOD SUBDIVISION G.I. WATERLINE REPLACEMENT, to the low bidder, William C. Loeffler Construction, Inc., for the contract bid amount of $69,720.00 with a contingency of $5,500.00 for a total contract amount of $75,220.00. MOTION: Mr. Wilkins moved for approval of the Manager's recommendation; seconded by Ms. Scarr. Ms. Scarr questioned the wide spread in bid prices, noting that two were 2.5 times more than the lower bids. Mr. Ahuna explained that it has to do with economics. If a bidder is busy with other projects, they may not be interested, so they bid high. Another factor is this is a small job. Ms. Hons questioned why the contingency percentage was lower on this project than the other two. The Manager explained that staff evaluates contingency on the bid amount and also the complexity of the project. On a project such as a treatment plant, the contingency would be much higher. In response to Mr. Heck's question why this project is a priority, the Manager replied that staff in Waimea have been spending a lot of time on repairs. ACTION: A vote was taken on the Motion. Motion was carried unanimously by voice vote. KA`U: A. CONSTRUCTION OF THE PAHALA 0.5 MG CONCRETE RESERVOIR: Bids for this project were opened on January 8, 2004; and the results were enumerated in the Agenda. The project consists of paying for all labor, materials, tools and equipment necessary for constructing a 0.5 MG reinforced concrete reservoir and appurtenances and the subsequent removal and disposal of the existing 0.5 MG steel tank including the possibility of proper hazardous waste handling, storage, transport and disposal of lead based paint and /or petroleum contaminated soil to an EPA approved site. Funds are available from the Department's C.I.P. budget. The contractor will have 300 calendar days to complete this project. The Manager recommended that the Board award the contract for Job No. 2000 -765, CONSTRUCTION OF THE PAHALA 0.5 MG CONCRETE RESERVOIR, to the low bidder, Isemoto Contracting Company, Ltd., for the contract bid amount of $1,631,384.00 with a contingency of $125,000.00 for a total contract amount of $1,756,384.00. MOTION: Mr. Tanaka moved for approval of the Manager's recommendation; seconded by Ms. Scarr. Page 4 of 15 Minutes January 27, 2004, Water Board Meeting.doc In response to Mr. Tanaka's question if this is under the budgeted estimate, the Manager replied that in most cases, bids are under the estimate; however, this one was a little higher. Mr. Wilkins asked about disposal procedures for lead waste. The Manager replied that it is disposed of per EPA regulations and is provided for in the plans and specifications. Ms. Scarr asked why the Department is not increasing the size of this tank. She mentioned the selling of C. Brewer land in smaller parcels for farm lots and thought of future needs. The Manager replied that the Department does not anticipate any increase usage in the area. In fact, the tank is bigger than the actual need. Most of the C. Brewer lots are above the camp, itself, so they would not fall within this system anyway. ACTION: A vote was taken on the Motion. Motion was carried unanimously by voice vote. MISCELLANEOUS: A. DEDICATION OF WATER SYSTEMS: The Department received the following documents for action by the Water Board. The water systems have been constructed in accordance with the Department's standards and are in acceptable condition for dedication. 1) GRANT OF NON - EXCLUSIVE EASEMENT UNIVERSITY OF HAWAII AT HILO, UNIVERSITY PARK INFRASTRUCTURE IMPROVEMENTS, PHASE II -A E.W.O. NO: 97 -099 Grantor: State of Hawaii — by its Board of Land and Natural Resources TMK: (3) 2 -4- 001:007, 019 and 167; 2 -4- 056:017; and 2 -4- 057:025 and 026 Final Inspection Date: March 31, 2000 The Manager recommended that the Water Board accept this document subject to the approval of the Corporation Counsel and that either the Chairman or the Vice - Chairman be authorized to sign the document. MOTION: Ms. Scarr moved for approval of the Manager's recommendation for Item No. 1; seconded by Mr. Heck. Ms. Scarr questioned why the inspection date is so long ago. The Manager replied that State projects take a long time to get survey and easements. It is not uncommon to State projects. ACTION: A vote was taken on the Motion. Motion was carried unanimously by voice vote. 2) GRANT OF EASEMENT AND BILL OF SALE PUALANI ESTATES SUBDIVISION, PHASE 1 (Phased Construction Plans) E.W.O. NO.: 2003 -004 Page 5 of 15 Minutes January 27, 2004, Water Board Meeting.doc Grantor: D.R. Horton — Schuler Homes, LLC TMK: (3) 7- 5- 017:028 & 029 Lots: 127 Zoning: RS -7.5 Facilities Charge: $543,600.00 302 Units Final Inspection Date: December 8, 2003 Water System Cost: $231,083.00 ACTION TO DEFER: Ms. Scarr moved to defer Item #2, per Department's recommendation; seconded by Mr. Wilkins and carried unanimously by voice vote. A(i) CONTRACT FOR SPECIAL LEGAL COUNSEL (by addendum) The Water Board, at its meeting of June 24, 2003, awarded Mr. Sherman S. Hee, attorney at law, a contract for special legal services in the amount of $24,000.00, for the period July 1, 2003, to June 30, 2004. The contract, however, was not executed by the Board Chairman due to non - receipt of a required document from Mr. Hee. The document was received by the Department on January 15, 2004. Since half of the proposed contractual period has lapsed, our Corporation Counsel, Ms. Katherine Garson, contacted Mr. Hee for his comments. Mr. Hee has suggested that the contractual amount be reduced to $18,000.00 and the contract period be revised to begin on January 15, 2004, and end on June 30, 2004, with all other provisions remaining the same. ACTION FOR EXECUTIVE SESSION: Ms. Scarr moved that the Board move into Executive Session, per Corporation Counsel's advice, to discuss matters under Hawai'i Revised Statutes, Sections 92 -4 and 92 -5(2) to consider the hiring of an employee; seconded by Mr. Mochida and carried unanimously by voice vote. Executive Session began at 10:33 a.m. and ended at 10:57 a.m. (Board took a 10- minute recess thereafter.) ACTION: Mr. Wilkins moved that the Board accept a contract and amount as presented in the Addendum to the Agenda; seconded by Mr. Tanaka and carried unanimously by voice vote. B. R. W. BECK, INC., PRESENTATION ON WATER MASTER PLAN: An informational presentation was made by Messrs. Cuthbert and Jockim from R. W. Beck, Inc. Mr. Jockim stated that the Board's planning retreat held last November was very helpful to their study, in that a Mission Statement and a series of 16 goals were identified by the Board and Department and were incorporated in the study. A schedule of proposed Board workshops follows: April 27, 2004 - level of service and draft policy discussion July 27, 2004 - C.I.P. prioritization criteria October 26, 2004 - preliminary C.I.P. results and costs January 25, 2005 - financial plan and rate impacts March 22, 2005 - rate options review May 24, 2005 - adoption of new rates (if appropriate) Page 6 of 15 Minutes January 27, 2004, Water Board Meeting.doc The retreat also identified that G.I.S. needs to be accelerated; and because of that, a local firm was hired to assist staff. R. W. Beck, Inc., was with the Department for two weeks to develop a hydraulic model of options. They also met with the County Planning Department. Weekly progress reporting procedures were established. Ms. Scarr asked for an explanation on what type of model was developed. Mr. Jockim explained it is a computer model taking pipes, pumps, and tanks and creating a model that will allow them to do various "what if' scenarios, look at the hydraulics, see if the pipes are big enough, and what kind of storage is needed. Mr. Cuthbert added that it is a way of linking the level of service criteria you have, making sure there is enough pressure to maintain fire -flow, capacity, etc. In this case, there will be 27 separate systems put in the hydraulic model, in essence, to identify the shortages. That is taken into the future and factored in with additional customer growth to identify future shortages. The G.I.S. will work alongside this model. A year from now, when new information goes into the G.I. S. system, it will automatically go into the hydraulic model. Ms. Scarr strongly emphasized the County General Plan of 1989 is so out of date that it should not be considered at all in this study. The one that has been around for 4 years should be considered, even though it has not formally been adopted by County Council yet, it is very near. She asked that they please use the new plan. Discussion followed on their objective of working with the Planning Department to gather growth and zoning information, population projections and how it relates to the current County plan, but also what the Board is thinking about doing in the future. Mr. Heck suggested that the Planning Department be present at the proposed workshops from R. W. Beck, Inc. Mr. Arai was asked some questions about the General Plan. He stated that the basic information needed to develop their land use policies are intact. When they were developing the revision program, an economic study was prepared. That basic information is available for use now. What is not well defined is how that basic information is translated into a land use policy. That is dependent upon Council adopting the policy. He did not think anyone will go back and revisit the population data or types of raw data. Messrs. Heck and Arai discussed how the DWS' Water Master Plan and the County's General Plan may affect each other. Mr. Arai stated that the General Plan sets policy direction, and every County agency has to subscribe to it. There is a benefit to do the plans in tandem as much as possible. Mr. Heck reemphasized the need to coordinate the Board's workshops with the Planning Department. Mr. Wilkins noted that it seems like a "chicken and the egg" situation in that he has seen Planning Commission meetings where requests for subdivisions were denied because of unavailable water rights and Water Board meetings where the infrastructure was not added because there was no demand for it. The schedule set forth by R. W. Beck, Inc., is intended to be in line with the Water Board Meetings, and it was suggested by Mr. Cuthbert that their workshops may take about one hour Page 7 of 15 Minutes January 27, 2004, Water Board Meeting.doc each. The thought was to have them coincide with the Board's proposed quarterly meetings for planning purposes. C. MONTHLY PROGRESS REPORT: Questions were asked about the following: • Waiaha Production Well - plans to advertise within the next three months. • Page 4, Mamalahoa Highway Waterline Improvements - Ms. Scarr asked if that could be moved up. There are already serious complaints about lack of pressure and now in the Palisades area. The Manager replied that the Department has a project it plans to advertise soon from just north of Waiaha to catch up to the 16" line along Mamalahoa Highway. D. MONTHLY FINANCIAL REPORT: With regard to Ms. Scarr's question about the billing system, Mr. Sumada stated it is back online. Data had to be reconstructed, and it took some time. The corruption had to do with the system being shut off while jobs were still in progress. The suggestion by Harris Computer Systems was to reboot the system once a month to prevent further data corruption. Ms. Scarr thought the Department should be seeing a huge increase in revenue in December as the Department caught up its billing. She was surprised to hear from the Manager that the Department would be catching up slowly and not double billing people. The Manager felt it would be a burden on the customers to bill them all at once for two billing periods; but Ms. Scarr felt that they should be responsible enough, knowing that they are paying later than they would normally have paid. E. SETTING WATER BOARD MEETING SCHEDULE FOR 2004: Tentative schedule for the year reviewed by the Board (4 meetings in Kona /8 in Hilo). The Board stated that if a situation arises where a district, such as Ocean View, or the Puna area, Waimea are needed, the meeting place would need to be announced at the meeting prior. It was suggested that Hilo meetings be changed, if that becomes necessary, to balance the places for the year. Schedule as follows: January 26 Hilo (held) February 24 - King Kamehameha's Kona Beach Hotel March 23 - Hilo DWS Operations Center April 27 - Hilo Operations Center May 25 - Royal Kona Resort - Discovery Room June 22 - Hilo Operations July 27 - Hilo Operations August 24 - Royal Kona Resort - Discovery Room September 28 - Hilo Operations October 26 - Hilo Operations November 23 - Royal Kona Resort - Discovery Room December 21 - Hilo Operations Page 8 of 15 Minutes January 27, 2004, Water Board Meeting.doc ACTION: Ms. Scarr moved to accept current schedule subject to having two floating meetings; seconded by Mr. Wilkins and carried by 6 ayes: Mss. Hons and Scarr; Messrs. Mochida, Tanaka, Wilkins and Chairman Nakashima; 1 nay: Mr. Heck. F. RESOLUTION NO. 04 -01; RESOLUTION AUTHORIZING THE COUNTY OF HAWAII DEPARTMENT OF WATER SUPPLY TO STREAMLINE AND IMPROVE THE EFFICIENCY OF THE PROCEDURE FOR THE DEPARTMENT TO PROCURE AND AWARD FORMAL CONTRACTS FOR SERVICES, EQUIPMENT, MATERIALS, AND CONSTRUCTION WHILE MAINTAINING WATER BOARD OVERSIGHT: Because the Department of Water Supply is bound by the procurement rules in the procurement of services, materials, equipment, and construction, there is very little discretion that can be asserted by the Water Board in the award of the contract to a particular contractor. However, the Department understands that the Water Board would like to be kept informed of all contracts of major importance. As an alternative to Resolution No. 03 -04, which has been deferred on numerous occasions by the Water Board, the Manager of the Department of Water Supply provides the attached Resolution 04- This Resolution gives the Chairman or Vice - Chairman the authority to sign contracts where the contract is for services, equipment, materials and supplies, or construction and must be procured immediately because of an emergency. It also gives the Chairman or Vice - Chairman the authority to sign contracts where the contract is for services, equipment, materials and supplies, or construction and is for under $25,000.00. Lastly, this Resolution gives the Chairman or Vice - Chairman the authority to sign contracts where the contract is for services, equipment, materials and supplies and the project to which the contract pertains is specifically itemized in DWS' Annual Operating and Capital Improvements Projects Budget. Thus, all construction contracts over $25,000.00 will come to the Water Board for approval regardless if it is specifically itemized in DWS' Annual Operating and Capital Improvements Projects Budget. The Manager recommended that the Board adopt Resolution No. 04- and that it take effect upon adoption. MOTION: Mr. Mochida moved for approval of the Manager's recommendation; seconded by Mr. Wilkins. Mr. Wilkins asked that someone keep a log of contracts that would be done under this Resolution. Ms. Scarr offered a friendly amendment to delete the words in Item 1(a), "equipment, materials, and supplies," and number the Resolution "04 -01" and is being passed as an alternative to Resolution 03 -04; seconded by Mr. Mochida. ACTION: Vote taken on the Motion, as amended. Motion carried unanimously by voice vote. LUNCH RECESS: 12:32 p.m. to 1:23 p.m. Page 9 of 15 Minutes January 27, 2004, Water Board Meeting.doc G. STRATEGIC PLAN MEETING MEMORY NOTES It was discussed that the document be distributed to Council Members; the Honolulu, Kauai, and Maui water departments; and State Legislators from this island. Mr. Tanaka commented that the notes should be summarized and defined to go forward. There is so much information, but it does not appear to be in the final stage. R. W. Beck, Inc., has already started that process by categorizing some of these thoughts and made some procedures on how to accomplish them. Something along those lines would be good. Mr. Hee thought that Mr. Tanaka's point is well taken because if just thought processes are expressed, you may confuse the public. It seems if something comes from the Board, it ought to be a Board consensus rather than random thought processes. Ms. Garson stated that Minutes of the Special Meeting are in draft form and will be ready for approval by the Board at its February 24, 2004, meeting. The two documents may help the Board come to some consensus at the meeting following that. The Manager stated he will try to come up with a first draft and see what the Board thinks of it. Ms. Scarr referenced Page 9 of Mr. Tarnas' notes, in the middle -- embedded in this is a prioritization of the strategic issues, and that is the kind of key organizing principle that is a good place to start and the rest organized around that. H. CAPITAL FINANCING OPTIONS Following discussed: 1) Use of all capital resources - Ms. Scarr mentioned there were some financing options that were touched upon at the Strategic Planning Session - -one she noted on the Department's Financial Statements, under Customer's Deposits Payable from Restricted Assets. That is prepaid facility charges. The Department is sitting with roughly $10.5 million in that account. There were questions of what portion of that could be safely used to expand capital assets. 2) Debt -to- earnings ratio - staff explained that the mechanism of deciding how much of facility charge to spend, versus how much to float bonds, how much to borrow, was included with the rate study done four years ago. 3) Raise Additional capital for unserved areas a) Bond Issue - the Department has done General Obligation Bonds. The County floats the bond, and the Department of Water Supply pays it back. b) "Mello Roos " /Improvement District - Ms. Scarr recalled Mr. Jim Rath and Mr. Curtis Tyler speak of "Mello- Roos" financing and Tax Increment Financing - -two measures the County Council passed in 1992 to allow development in areas where financing is not coming from community - -but where the County could help finance improvements, including water, that would be repaid by incremental taxes that would be assessed on the improved value of those properties. The Manager stated he has never seen tax increment financing district yet - -only Improvement District. The Manager mentioned that it was this Department that came up with the idea of Page 10 of 15 Minutes January 27, 2004, Water Board Meeting.doc combining the Improvement District process with the Rural Development loan /grant program for the Kona Coastview/Wonderview subdivisions. So this will be a very good model for other areas. In fact, about three months ago, Representative Takamine called about a small subdivision in Pepeekeo, Andrade Camp, that was being served by the plantation. It is being worked out between the Department and their association. Ms. Scarr added that the tax increment financing seems perfect for West Hawai'i because of the value of property; but with no water, there is little value in it. The Manager stated that it is something that the Council Member has to feel comfortable with proposing because there may be opposition to it, but they have to propose it before the process starts. As with Coastview/Wonderview, the Department fronts the money and is reimbursed after the bond is floated. Ms. Scarr stated that she had attended a couple of meetings where Mr. Pavao spoke, along with Mr. Rory Flynn of the Legislative Auditor's Office. He is also a very good, persuasive speaker. It was a very good presentation of what was possible for these people. She envisioned that "team" going to places like Ocean View to advise them what they can do when they get their water source, as well as other areas like Hawaiian Paradise Park, Orchidland, etc. She did not think we are necessarily using all the resources we have to make life better in Hawaii County. She mentioned Kona Paradise, where someone was trucking water, as another project. The Manager replied there is no source in that area. Rural Development will not finance exploratory wells - -only production wells. c) Other Financing The Manager covered funding resources: ➢ Facility charge resource ➢ Safe Drinking Water Act State Revolving Fund ➢ Rural Development program - loan /grant; criteria is income levels that determines amount of loan and amount of grant. Can go as high as 75% grant/25% loan. This program is being used with Kona Coastview/Wonderview. ➢ EDA (Economic Development Agency) grants allowed the Panaewa well field. ➢ Charter allows ability to float revenue bonds - never done. ➢ General Obligation Bonds - have been done by this Department. County floats the bond, and this department pays back. ➢ The Department works with developers all the time because they contribute to the system. Mr. Tanaka mentioned the formula used for sources to give developers more incentive. The Manager replied that the schedule is in the Rules and Regulations. The percentages were developed long ago when the Department prepared a cost for a "dummy" water system with all the components. The total estimate was divided by the components to come up with the percentages. For each item of a water system, there is a percentage off their facility charge- - example: drill the well, outfit the well, put in storage, and transmission. Each one has a credit. Page 11 of 15 Minutes January 27, 2004, Water Board Meeting.doc Mr. Tanaka asked if the Manager ever got the sense from developers that they feel the schedule is unequitable. The Manager replied that he has never gotten that feeling from any developer, unless they feel that way and do not indicate it to staff. In reply to Mr. Wilkins' question if the developer would get additional facilities credit if the well had a much higher pumping capacity than anyone had planned, the Manager replied they get a facility credit for whatever they take from the well. Mr. Wilkins also asked if the Manager has the freedom to take excess water and send it elsewhere. The Manager replied that the amount of water the Department gets, versus the amount of water the developer has, is also set by formula, so there is no deviation from it. Discussion followed on ways to find available funding. Mr. Heck mentioned hiring a consultant to find grant money. There may be more out there that is going missing. Ms. Garson stated the County has someone who is always looking for funds, with the Department of Research and Development. Discussion followed on the Department's mission, identified in the Strategic Planning Retreat, to "facilitate and assist." The message does not seem to be getting to community groups, such as Ocean View, on their options, because they continue to come before the Board. Ms. Hons recalled the issue being around in her early days on the Board. That is why the idea of a public relations person to seek and send back information is good. On the subject of Ocean View, the General Plan, and growth in the area, Mr. Tanaka asked R. W. Beck, Inc., if it is a part of their study. Mr. Jockim replied that if it is something identified within the General Plan, then it would be looked at, or if they are directed to look at it (example: for health and safety issues). Along those same lines would be Ho`okena. Mr. Cuthbert added that the reason some of these areas are without water is that it is too expensive. Mr. Tanaka mentioned that their study would be a critical tool for the Board in its planning efforts. He asked if there were any way to condense it to be available earlier than projected May of 2005. Mr. Jockim did not have an answer to that because they still had to meet further with staff after this meeting. The Deputy Manager added that a lot of it has to do with how fast staff can get the required data, but that it would do its best. With regard to Ms. Scarr's question of whether or not R. W. Beck, Inc., has the newest County General Plan maps, Mr. Jockim gave assurances that either they have them or they will get them. The Manager stated that the South Kona to Ka`u Water Master Plan will be presented to the County, confirmed by Mr. Heck to be sometime in February. Mr. Wilkins asked that the text of this plan be available to the Board. Also mentioned was Ho`okena and the fact that they need the means to get their system connected. Ms. Scarr mentioned that the Department needs an outreach person -- someone who can assist these communities in their efforts. She added that Research and Development could look for grant- matching programs for Ho`okena for starters. Page 12 of 15 Minutes January 27, 2004, Water Board Meeting.doc The Manager mentioned that Mr. Ted Matsuo, of the USDA Rural Utilities Program has been very helpful and has gone out with the DWS to communities to present their options in financing. Chairman Nakashima recapped that the Department should check with the person from Research and Development and ask her to find grant- matching programs for Ho`okena. 4) Costs and Benefits of Various Financing Options Ms. Garson will try to obtain a summary of financing options within the County and steps needed to create them. She mentioned County Code, Chapters 32 and 33, is probably online as well. There is probably a summary somewhere in the County; and if not, she could create one. The Deputy Manager also mentioned Mr. Rory Flynn with the Legislative Auditor's Office as a good source for summaries of financing options. COMPARISON OF CIP LIST VS. PRIORITIES: 1) Are all projects listed of highest priority? - the Manager stressed that they are prioritized correctly -- otherwise, they would not be on the list. This is also a dynamic list because sometimes projects are moved up due to situations that arise. 2) Timing of projects vs. urgency of needs - the Manager stated that sometimes delays in projects has to do with the complexity of the design (example: environmental assessment process) sometimes delaying as much as six months. 3) Addition to list with currently available capital or additional capital to be raised - Ms. Scarr asked if the Department is thinking ahead to growth, taking into account the already current deficit in storage and sources. In response to her question if the Department is still using 600 -gpd calculation, the Manager replied it is not. The Manager reiterated his concerns for North Kona and North Kohala and mentioned ways the Department is trying to get corridors down from its wells and working with developers. 4) Additional human resources needed for additional projects and monitoring - The Manager stated that the Department has only three engineers handling all contracts that are currently floating out there. There is so much involved in keeping a contract legal, and the engineers are the ones who have to do it. In response to Mr. Tanaka's question of how much the Department is capable if putting out in a year in projects, the Manager stated about $12 million for a year. Mr. Tanaka mentioned it helps in knowing what we are shooting for and what we can do to beef up staff. Suggestions followed on staffing needs: • Mr. Wilkins' prior suggestion at the Strategic Planning Retreat of hiring retired people. • Mr. Tanaka - consulting services to help engineers in managing the projects. The Manager stated that it has not been tried because the ultimate decision still comes back to the Department's engineer. Department's inspectors are able to take care of the projects. Construction management is also very expensive. Page 13 of 15 Minutes January 27, 2004, Water Board Meeting.doc The Manager stated that the Department currently has two temporary employees - -one in Engineering and one in Finance. Ms. Scarr asked if the Department is "maxed out" in its projects for 2004 or if there is room to do more. The Manager replied he thought the Department could do more if it looks at innovative ways of doing it, such as more use of consultants. The department has done $12 million in one year before, so $12 million is achievable. He added that the Department will be getting a new engineer in February and is being assigned to the construction section, so that should help. Ms. Scarr asked what the next step is in pulling together all the financing options and someone who would be prepared to present these things to community groups. The Manager's thought was, before going that far, the Department really needs to know if communities are interested. He suggested that the Board Members offer the Department's services to the areas they think need it and have the Department go out and see how serious they are, and go from there. Ms. Scarr suggested that the Department also identify some problem areas, such as Ho`okena, to get a regular system as opposed to spaghetti lines off a single meter. The Manager stated that that community has been offered all its options, but none of them were looked at seriously. He added that most often, the thinking is that DWS is going to do everything for them; and it cannot, financially. If the Department were to do this for every substandard subdivision out there, it would go broke in a couple of years. Ms. Scarr stated that this is where the Department needs an outreach person to serve the function of providing the knowledge and help empower these communities. Mr. Heck added they may also help find additional financial options. Discussion followed on position descriptions. Ms. Scarr suggested someone, not in the technical field or grant writer, but someone who can meet with community groups and work with them. Need this type of expertise in the Department. The Manager stated that he solicited position descriptions from the other county water departments for a Public Relations Specialist (prefers in -house rather than contracting out). Also in the works is a Contracts Officer in the Engineering Division. The Board will probably see that position coming before it for approval before the Public Relations Specialist. MANAGER'S REPORT: 1. Kona Coastview/Wonderview Status — plan to advertise for bids in February. There will be 90 days between bid opening and award of contract to allow for the needed community meetings. Ms. Garson replied to general questions about the Matsumoto account. She will be meeting with their attorney sometime in the first half of February. No additional payments on account made since the initial $15,000.00. 2. USGS Drilling Program —rig expected completion at Kaneoha end of February. There are problems with the rig that will take up to 90 days to repair, and this Department is Page 14 of 15 Minutes January 27, 2004, Water Board Meeting.doc committed to pay for the repair. Mr. Tribble has given his assurance that he will drill the well at Ocean View. However, after that is completed, the Department is considering getting out of the program because of the expense and the fact that Mr. Tribble will only allow it for drilling up to 1,000 feet. After Kaneoha and Ocean View are finished, the Department will be owing USGS one and 1/3 years of payments - -that is 1 -1/3 x $440,000.00. Ms. Scarr mentioned sharing in a new drill rig. The Manager stated that Maui and Kauai expressed that the program is too expensive. You also only get three wells drilled per rotation (every three years). 3. AWWA National Conference, June 13 -17, 2004, Orlando, Florida reminder. 4. Kona Water Quality - There have been comments about the salt content in the Kona Shaft and the Holualoa wells. The comments were that the salt levels are rising and there were ill effects to consumers. The Department responded that the salt content is high but is not on the rise. The Department's research on consumption is that recommended is no more than 2,400 mg. sodium per day, which means to have health effects, you would have to drink 61 glasses of water (recognizing it is not the only source of sodium). Ms. Scarr and Mr. Wilkins mentioned the idea of desalination. It has never been tried by the Department. The Manager stated he could check on the cost per thousand gallons to desalinate. Ms. Scarr's thought was to treat the water that it is currently pumping from the shaft, just to give it a try. 5. Financial Management System — County received 10 responses to its request for proposals. They have chosen one, and the DWS is now looking into sole source evaluation and selecting the same company as the County. It should be an Agenda item for the February 24, 2004, Water Board Meeting. K. CHAIRMAN'S REPORT: Chairman Nakashima commented that the Board has a lot of business to attend to this year; but if it is taken by priority and schedule, it will work well, with the Board's cooperation. Also, if the Board has any items for agenda, to bring it up with him or the Manager. ANNOUNCEMENTS: A. Next Meeting: The next Water Board Meeting will be held on February 24, 2004, 10:00 a.m., at the King Kamehameha's Kona Beach Hotel (Ballroom #2) 75 -5660 Palani Road, Kailua -Kona, Hawaii. ADJOURNMENT ACTION: Chairman Nakashima adjourned the meeting at 2:53 p.m. Secretary Page 15 of 15 Minutes January 27, 2004, Water Board Meeting.doc