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HomeMy WebLinkAbout2004-03-23 Water Board MinutesMINUTES DEPARTMENT OF WATER SUPPLY COUNTY OF HAWAII WATER BOARD MEETING March 23, 2004 DWS 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. Thomas Goya Mr. Leonard Tanaka Mr. George Wilkins Mr. Milton D. Pavao, Manager (ex- officio 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. Steven Lim, Carlsmith Ball LLP Mr. Bill Brooks, Westpro Development Mr. Dave Jochim, R. W. Beck, Inc. Mr. Tom Cutting, R. W. Beck, Inc. Department of Water Supply Staff: Mr. Quirino Antonio, Deputy Manager Mr. Glenn Ahuna, Engineering Division Head Mr. Lawrence Beck, Engineering Division Mr. Daryl Ikeda, representing Mr. Dennis Lee, Chief of Operations Mr. Richard Tsunoda, Waterworks Controller Mr. Richard Sumada, Assistant Waterworks Controller Ms. Crestita Hudman, Customer Service Supervisor CALL TO ORDER: Chairman Nakashima called the meeting to order at 10:04 a.m. and introduced the newest Water Board Member, Mr. Thomas Goya. STATEMENTS FROM THE PUBLIC: None Page 1 of 18 Minutes March 23, 2004, Water Board Meeting.doc APPROVAL OF MINUTES MOTION: Mr. Heck moved for approval of the Minutes of the February 24, 2004, Water Board Meeting; seconded by Ms. Hons. Corrections to be made noted as follows: Page 2, Approval of Addendum - remove Mr. Tanaka's name from the roll call vote (ayes). Mr. Tanaka was not present at the meeting. Throughout the document, correct the spelling of Dr. Lorshbough's name. ACTION: A vote was taken on the Motion to approve Minutes, with corrections noted. Minutes approved unanimously by voice vote. APPROVAL OF ADDENDUM: ACTION: Ms. Scarr moved to add South Hilo, JOB NO. 98 -721 extension of contract time; seconded by Mr. Mochida and carried by roll call vote (Ayes: 8 — Mss. Hons and Scarr; Messrs. Heck, Goya, Mochida, Tanaka, Wilkins, and Chairman Nakashima; Nays: 0). SOUTH HILO: A. JOB NO. 98 -721, KAWAILANI NEW 1.0 MG CONCRETE TANK & REMOVAL OF EXISTING 0.5 MG STEEL TANK: The Board considered a request from the contractor, Jas. W. Glover, Ltd., for an 84 -day contract time extension for reasons listed in the Agenda. The Manager recommended that the Board grant this extension of contract time of 84 calendar days to Jas. W. Glover, Ltd., for JOB NO. 98 -721, KAWAILANI NEW 1.0 MG CONCRETE TANK & REMOVAL OF EXISTING 0.5 MG STEEL TANK. If approved, the contract completion date will be extended from March 8, 2004, to May 31, 2004. ACTION: Mr. Tanaka moved for approval of the Manager's recommendation; seconded by Mr. Wilkins and carried unanimously by voice vote. NORTH KONA: A. JOB NO. 2003 -836, KAHALUU BOOSTER PUMP "A" AND `B" REPAIR: Bids were opened on March 11, 2004; and the results were enumerated in the Agenda. The Manager recommended that the Board award the contract for JOB NO. 2003 -836, KAHALUU BOOSTER PUMP "A" AND "B" REPAIR, to the lowest responsive bidder, Wai`eli Drilling & Development, for their bid amount of $54,890.00 plus $5,110.00 in construction contingency for a total contract amount of $60,000.00, subject to review as to form and legality of the contract by Corporation Counsel. Page 2 of 18 Minutes March 23, 2004, Water Board Meeting.doc MOTION: Mr. Wilkins moved for approval of the Manager's recommendation; seconded by Ms. Scarr. In response to Ms. Scarr's question of why the Department is replacing pumps, Mr. Ikeda replied that the mechanical problems it has been giving is an indicator for replacement. In response to Mr. Wilkins' question if it was known what Beylik's bid would have been, had it been correct, the Manager replied that it is not the practice to ask in that situation. ACTION: A vote was taken on the Motion. Motion was carried unanimously by voice vote. B. ASSIGNMENT OF UNITS THROUGH HAWAII AGRIBUSINESS, LLC -SONNY VENTURES, LLC: Hawaii Agribusiness, LLC, owner of 105 units acquired through the Haseko Agreement, originally assigned to Westpro, as owners of TMK 7 -3- 010:003, 047 & 048, desires to assign these units to Sonny Ventures, LLC, a successor in interest to Westpro, to be used only on TMK 7 -3- 010:047 & 048. The Manager recommended that the Board approve this consent, 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; seconded by Mr. Heck. Mr. Brooks was asked to come forward and answer some questions as follows: • Ms. Scarr: Why are we transferring these units? Mr. Brooks: 105 were picked up in the initial process through Haseko and approved by the Board before. Before they could be recorded for financing, Westpro transferred to Sonny Ventures (all owned by John Stevens). Because of that technical procedure, it is necessary to come back to finalize the transfer of 105 to Sonny Ventures, LLC (Sonny). It is basically the same entity. Westpro is the managing partner of Sonny. Ms. Garson stated that the Board approved the settlement agreement for Westpro. Westpro then transferred Parcel Nos. 47 and 48 to Sonny Ventures. Because the original transfer from Hawaii Agribusiness to Westpro of Parcels 47 and 48 were not complete before the transfer, she asked them to come back and formalize to Sonny. As part of the process, they will no longer assign units to Parcel No. 3. • Ms. Scarr: What happens with Parcel No. 3? Mr. Brooks: Parcel No. 3 is left out at this time for two reasons; one, because it still resides in the name of Westpro; and two, they do not need those units for anything other than Parcels 47 and 48. For formality, it is the most practical thing to do. Instead of going to No. 3, it is going to two parcels and the change of name is from Westpro to Sonny. • Mr. Wilkins: Will this increase the amount of active water rights and will it result in migration of consumers downslope of Kaiminani? What impact will it have on water availability in the area? Manager: This was committed a long time ago. It is not increasing the amount of water commitments—simply reassigning them. Page 3 of 18 Minutes March 23, 2004, Water Board Meeting.doc C [C ACTION: A vote was taken on the Motion. Motion was carried unanimously by voice vote. IRRIGATION AGREEMENT, KAHAKAI -KONA, LLC: The Department received the Irrigation Agreement that will be executed by and between Iokepa Makai, LLC, and the Water Board for the Iokepa Subdivision, Tax Map Key 7 -5- 016:086. The Agreement specifies the terms and conditions for one (1) 5/8 -inch water meter with one (1) unit of water at a maximum daily rate of 600 gallons. The Manager recommended that the Board approve this consent, subject to the approval of the Corporation Counsel and that either the Chairman or the Vice - Chairman be authorized to sign the document. ACTION: Ms. Scarr moved for approval of the Manager's recommendation; seconded by Ms. Hons and carried unanimously by voice vote. ASSIGNMENT OF RIGHTS TO WATER COMMITMENT THROUGH KEALAKEKUA SOURCE AGREEMENT - PUALANI ESTATES, INC.: Through the Kealakekua Water Source Agreement, the following parcels are currently assigned rights to water commitments as follows: TMK Number of rights 7 -5- 017:028 & 029 420 7 -5- 017:32 12 7 -5- 017:001, 019, 023, 025 & 026 368 800 Pualani Estates, Inc., is requesting to reassign these rights as follows: TMK Number of Rights Assignee 7 -5- 017:29; 7 -5 -41:01 through D.R. Horton - Schuler Homes, LLC, dba and including 54; and 7 -5 -42:01 313 Schuler Homes through and including 78 7 -5 -17:35 72 Pualani Estates, Inc. 7 -5 -17:32 and 34 27 International Development Projects, Ltd., and Pualani Estates, Inc. 7 -5 -17:21 20 Uluwehi Properties, LLC 7 -5- 17:01, 19, 23, 25 and 26 368 Westpro Development, Inc. The Manager recommended that the Board approve this consent subject to the approval of the Corporation Counsel and that either the Chairman or the Vice - Chairman be authorized to sign the document. Page 4 of 18 Minutes March 23, 2004, Water Board Meeting.doc MOTION: Mr. Heck moved for approval of the Manager's recommendation; seconded by Mr. Wilkins. In response to Ms. Scarr's question if this finally straightens things out and if it included all mistakes—in otherwords, no more mistakes, Mr. Lim replied that they did settle the matter. He participated in the settlement discussion. The settlement was signed by all parties, and the Board has copies. He acknowledged the work done by the Manager and his staff and Ms. Garson, who assisted in the settlement. (The Manager also thanked Ms. Garson for her time spent on this.) There are no further mistakes that he knows of. The parties are indemnifying the Water Board against further liability. 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 EASEMENT AND BILL OF SALE PUALANI ESTATES SUBDIVISION, PHASE I (Phased Construction Plans) EWO NO.: 2003 -004 Grantor: D. R. Horton – Schuler Homes, LLC TMK: (3) 7 -5- 017:028 & 029 Lots: 10 Zoning: RS -7.5 Facilities Charge: Paid (Portion of 302 Units) Final Inspection Date: December 8, 2003 Water System Cost: $32,500.00 2. GRANT OF EASEMENT (Portion of Existing Ahualoa Water System) Grantor: Eric P. Witt and Jeanne T. Witt TMK (3) 6-2-013: Portions of 001, 002 & 004 3. CANCELLATION OF GRANT OF NON - EXCLUSIVE EASEMENT (Puako Pipeline Easements) Assignor: State of Hawaii (BLNR) TMK (3) 6-2-013: Portions of 001, 002 &004 The Manager recommended that the Water Board accept these documents subject to the approval of the Corporation Counsel and that either the Chairman or the Vice - Chairman be authorized to sign the documents. ACTION: Mr. Heck moved for approval of the Manager's recommendation; seconded by Ms. Hons. Page 5 of 18 Minutes March 23, 2004, Water Board Meeting.doc B. WATER TREATMENT PROPOSAL NO. 2002 -02, FURNISHING AND DELIVERING POLYMERS TO WAIMEA WATER TREATMENT PLANT: Due to changing water conditions during the past 20 months, the Department has used more polymers to treat the water at the Waimea Water Treatment Plant than originally predicted. It is projected that the remaining polymers the Department is able to purchase with its original budget will last until the middle of June 2004. In order to provide an adequate supply of polymers to treat the water until August 2004, which will be a sufficient overlap when this contract expires on June 30, 2004, an additional $30,000.00 is required. The Manager recommended that the Board award an additional $30,000.00 to WATER TREATMENT PROPOSAL NO. 2002 -02, FURNISHING AND DELIVERING POLYMERS TO WAIMEA WATER TREATMENT PLANT, to Pural Water Specialty Co., Inc. The contract will increase from $300,000.00 to $330,000.00. MOTION: Ms. Scarr moved for approval of the Manager's recommendation; seconded by Mr. Wilkins. In response to Mr. Heck's question about what created the problem, the Manager replied that it is almost impossible to calculate exactly how much polymer will be needed in a contract period because of turbidity, due to rainfall. ACTION: A vote was taken on the Motion. Motion was carried unanimously by voice vote. C. PROPOSED AMENDMENTS TO RULES AND REGULATIONS: 1) The following is a proposed amendment (ramsayer format) to the Department of Water Supply's Rules and Regulations, dated October 10, 2003, submitted by a Water Board Member: Section 3 -10. Meter Tests and Adjustments of Bills (3) The consumer has sole control of the water delivered beyond the Department's meter and the Department is not responsible for the maintenance and repairs to pipes and fixtures beyond the meter. However, adjustments may be granted for excessive bills caused by leakages. The adjustments shall be limited to one -half (1/2) of the consumer's excessive water use billed over and above the previous 6 -month average water use and shall be granted only when repairs shall have been duly made. Additional adjustment over and above the one -half (1/2) of the consumer's excessive water use over and above the previous 6 -month average water use may be granted where the cause of leakage is directly due to earthquakes, flooding, high winds, or other acts of nature. This additional adjustment shall not exceed forty - percent (40 %) of the consumer's excessive water use over and above the previous 6 -month average water use. [Consumers shall also be limited to one (1) adjustment per 3- year period for each service.] Special adjustments over and above the one -half (1/2) of the consumer's excessive water use over and above the previous 6 -month average water use may be granted when the cause of leakage is due to criminal acts by third parties as documented by a police report. In the case where the consumer has been given a notice of high consumption, or has received their billing indicating high consumption, the consumer shall be given thirty (30) Page 6 of 18 Minutes March 23, 2004, Water Board Meeting.doc days within which to make the necessary repairs and shall be given sixty (60) days within which to apply for an adjustment of water bills. Consumers with individual meters in private water systems may be eligible for adiustment of excessive water bills as specified in Section 3, if (a) The conditions of loss specified in Section 3 are met; (b) The water loss can be documented with records of the individual's meter readings for at least 6 billing periods; (c) Records of water use for the entire water system for at least 6 billing periods are provided; (d) The private water system's design and construction was approved and inspected in accordance with DWS standards, and Rules and Regulations in order to comply with the Hawaii County Subdivision Code, and the private water system is connected to and serviced by the DWS water system through a master meter; (e) The individual's water loss is not due to any negligence on the part of the individual or the individual's agents; (f) The private water system in which the individual is a member has an agreement with the Department to make such adiustments directly with the individual; and The adiustment does not contravene any other applicable rules, regulations, ordinances, or statutes. MOTION: Ms. Scarr moved that the Board accept this proposed amendment; seconded by Mr. Heck. Ms. Scarr stated that the need for this new rule was discussed at the last Water Board Meeting. What is proposed is a collaboration between herself and Mr. Hee and Ms. Garson. This requires private systems to document their meter readings, be in compliance with Code, and not neglect their system. It is something that a subdivision would need to implement themselves. This enables an individual, like Dr. Lorshbough, who appeared at the last Meeting, for some relief without having to come before the Board. He could go to his subdivision and ask that they come to the DWS for the adjustment. It is the same kind of relief offered to other individuals at the present. Chairman Nakashima mentioned the fact that the agreement is between the association and the individual. The Manager spoke against this amendment. It contains two portions —one is attempting to take away the 3 -year requirement. That means anyone could have an adjustment anytime they want. There would be no incentive to take care of their plumbing. He also mentioned the Department's spending on water leak adjustments (in 2002, $185,000.00; in 2003, $160,000.00). By taking away the 3 -year period, the amount will escalate, and the Department would be giving up funds where it should not be. He reminded the Board that the Maui Board of Water offers no adjustments. Other counties offer similar to this County. He felt that three years is reasonable. The second issue is granting leak adjustments in private systems. Everything has a consequence. The Department would have no problem giving an adjustment to the master Page 7 of 18 Minutes March 23, 2004, Water Board Meeting.doc meter, but it is wrong to go inside the subdivision and give adjustments to individuals. An example: Pepsi sells bottled soda to Walmart. You buy it, take it home, the bottle breaks can you go back to Pepsi for a refund? No. You might be able to go back to Walmart. He reminded the Board that individuals in private subdivisions are not customers of the Department. They are an indirect customer. Ms. Scarr stated that she failed to speak earlier to the first issue of the proposal to delete the 3 -year limit on adjustments. Defer that for the moment. We created the problem of the master meter by our own rule that we will not read meters in gated subdivisions. That was changed but not implemented in any way. We have not set conditions to allow private systems (existing systems) in. Hawaii Electric Light Company, Inc. (HELCO), reads meters within these subdivisions; the Fire Department has their own special keys. We did not follow HELCO's example. To answer Mr. Wilkins' question, Section D speaks to the issue about conditions of the private system and we would have to know what happened. It is no different than if you had the system built to your own standards. No less able to specify what the problem is than for any individual homeowner who does not live in gated communities. There would have to be a map of the system and you would know which meter it is because it was read. Mr. Wilkins mentioned two things —one, it is the responsibility of the subdivision management to identify the loss within the subdivision. DWS can treat the entire subdivision as one customer. However, he would support this on a trial basis. Mr. Tanaka stated that it is a noble gesture to think about the consumer; but at the same time, he must think about the financial responsibilities for the Department. Item D design construction would have to approved by DWS. That is not happening now, and he knew of some out there that are not up to DWS' standards. Are you saying we have to go out and look at these systems? The Manager replied that it only applies to those water systems that are in compliance with DWS' standards. Because of the Code, it has to comply. The issue of those built before Code (1963) is not a concern. In relation to Ms. Scarr's earlier comment that we created this by our own rule, he argued that it is because they chose to live with their privacy. If they want to have individual adjustments, the only way is to have their systems dedicated to the DWS. He reiterated that people on master meters are not our customers. The definition of a customer is someone receiving water from the Department. They are not. They receive their water from their association, through the DWS. Ms. Scarr only saw the difference as being who reads the meters. She reiterated that the leak to the master meter would not show very large but is a very large amount to the individual meter running from it. She also did not feel this would change the financial situation of the DWS very much. Mr. Wilkins pointed out the first line in Section 4, "consumers of individual meters may be eligible." To him, that means the decision lies in the Manager's hands. (The Manager stated in that case, he would not grant the adjustment.) Page 8 of 18 Minutes March 23, 2004, Water Board Meeting.doc Mr. Heck felt that it balances out in F(4), which he assumes does not exist at the moment. If this agreement is reached, there should be no problem if you know it is up to standard and they let the DWS have a key to get in and read their meters. The Manager stated that all "17" does is provide an agreement between them and the Department whereby adjustments will be made with the individual. Mr. Ahuna mentioned the process he has been working on for accepting private systems. That is the avenue that really should be addressed. It should be more of a procedure for them to get their system up to standard —not to make a transitional change in the Rules and Regulations. Mr. Mochida agreed with Mr. Ahuna in the effort to have systems brought up to our standards first. But as of now, the owner of the master meter is our only customer. He recalled an incident some time back where someone had incurred damage to their waterlines as a result of pigs digging them up. That is a good argument for the 3 -year rule. Who is to say the pigs cannot dig it up again if it is not buried or not deep enough so they cannot get at it. The consumer has to improve their waterlines and not just take from the Department. Mr. Tanaka recommended going with Mr. Ahuna's suggestion of working to bring them into the Department's system. The Deputy Manager mentioned something relevant to this issue —that being Section 8 -2 of the Hawaii County Charter, as follows: "The Board operates the waterworks of the County." He believed that means whatever systems we maintain. Right now, we say we maintain up to the master meter, and that is our customer. Beyond that, he thinks it goes beyond the Charter provisions. MOTION TO TABLE: Ms. Scarr moved to table this item; seconded by Mr. Wilkins and carried by a show of hands. Ms. Garson stated that if at any time, you are proposing guidelines and addressing the public, you have to do it as a Rule. Another way is to say "in accordance with guidelines adopted on a specific date." That would be more like incorporating it by reference. More like an attachment to the Rules. It has to be a Rule before it can be enforced. Ms. Scarr felt it should be a policy. The Manager stated the Board could adopt the guideline but does not have to put it in the Rules. 2) For discussion only - Rule pertaining to dedication to the Water Board of Private Water Systems. See attached DRAFT Private Water Systems - Acceptance Requirements. Discussion followed on criteria for accepting private water systems and their age. Ms. Scarr made the suggestion of requiring a system more than 20 years old to come into compliance with contemporary standards. The Deputy Manager responded to Mr. Heck's questions about stand -alone systems. By not being interconnected with other systems, the operating costs to the Department become burdensome. Page 9 of 18 Minutes March 23, 2004, Water Board Meeting.doc Ms. Scarr applauded staff for working on this draft Private Water Systems - Acceptance Requirements, but suggested removing the following from Page 1, Item 1(b), last sentence: "In all cases, the Manager reserves the right to enforce the current standards and Rules & Regulations for critical elements of the water system." She felt it opens the door for litigation. The Manager agreed that is too vague, and Ms. Garson had cautioned staff not to leave anything for discretion, so that will be changed. RECESS: 11:18 a.m. to 11:30 a.m. D. MONTHLY PROGRESS REPORT: Mr. Tanaka noted most projects on Page 5 are dated 1997 and asked if there are problems with any of them. The Manager replied that there are some problems with the Pohakea Water System project— leak tests on the tanks and problems with easements from landowners (may need to change the realignment). Ms. Scarr asked about condemnation procedures. The Manager went on to explain about the Kaieie Booster Pump —error in design on our part. Olaa No. 5 is similar to Pohakea. Ms. Scarr asked for an update on efforts in obtaining easements for the corridor and about the tank on Hina Lani. The Manager replied that staff is working with landowners. A consultant has been hired for Hina Lani. E. REVIEW OF MONTHLY FINANCIAL STATEMENTS: Department has not caught up in its billings that resulted from the downtime in the financial billing system last fall. The initiation of hand -held meter reading in some areas is also part of the slow down. Mr. Sumada had stated that it would be caught up by fiscal year end. Mr. Tanaka noted power and pumping has risen sharply. The Manager stated the reason for this is not increases in HELCO's rates, but due to Saddle Well Production Well and other booster pump improvements coming online. F. REFERRAL FOR EXECUTIVE SESSION: ACTION: Ms. Scarr moved that the Board enter into Executive Session to consult with Counsel on a lawsuit, Borges v. County of Hawaii, Civil No. 02 -1 -0112; seconded by Mr. Wilkins and carried unanimously by voice vote. Executive session began at 11:45 a.m. and ended at 11:59 a.m. Civil No. 02 -1 -0112, Borges v. County of Hawaii ACTION: Ms. Scarr moved to approve Corporation Counsel's recommendation on Item F; seconded by Ms. Hons and carried unanimously by voice vote. Page 10 of 18 Minutes March 23, 2004, Water Board Meeting.doc G. MANAGER'S REPORT: 1) Kona Coastview/Wonderview status — bids to be opened April 7, 2004. Manager expects the bids to be high; however, the positive is that there are several Intents to Bid already in. 2) USGS Drilling Program — rig still at Kaneoha and is at a depth of 1,560 out of the total 1,840 feet to go. It will be another couple of weeks. 3) AWWA National Conference — members were asked to finalize their plans as soon as possible. 4) Hawai'i Section AWWA Conference - May 11 to 14, Oahu - Mr. Wilkins asked if the Hawaii Section AWWA conference (Honolulu) could be paid for by himself and reimbursed by the Department later. He thought it would be a lot easier for everyone to keep their receipts. The Manager stated that everything else other than conference is per diem and should not be a problem. 5) Kona Water System Quality — a notice was prepared by the Department's Microbiologist to be advertised in the West Hawaii Today and the Hawaii Tribune Herald to procure consultant. Ms. Scarr mentioned that Mr. Larry Ford met with Mr. Steve Bowles at the Kukio Desalination Plant. Water 750 ppm salt, filter, gravity -fed additional cost is not huge. It comes out at 10 ppm. Upon her request if the Department could look into it, the Manager replied that the consultant will be looking into it. Mr. Heck mentioned the health community should be getting notice of the water quality. To send it to each customer seems a little too detailed. Suggestions on the Department issuing a statement were again questioned by Mr. Hee. It maybe stepping in the jurisdiction of the Environment Protection Agency, the agency charged with the water quality. The Manager stated that before sending anything out, it will be sent to the Department of Health. Mr. Goya recommended avoiding using negative words such as "contaminants" and use more positive words to reinforce that the water is still drinkable with a detectable taste. The message the Department should be conveying is that the water is safe to drink. 6) Financial Management System — staff viewed a demonstration of the system the County is looking at, and it seems like a good system. The Department will be seeking Board's approval in the future. 7) Mr. Heck asked if the Manager has any concrete plans on retirement, noting that he has mentioned it on occasion. He commented that the Manager has been with the Department so long, the Board would not have any plan at all on how to replace him. The Manager stated he has no plans on retirement and did not know where that information came from. Mr. Heck was relieved to hear that. The Deputy Manager noted that he is not retirement age if the Board were ever put in the position of finding a replacement for the Manager. 8) The water outage in Waimea was mentioned by the Deputy Manager. Heavy rains had washed out two 12" waterlines in the Waikoloa Stream, and Waimea was without water from Sunday (3/17), until Tuesday night (3/17). He thanked the Waimea crew for speedy repair and also thanks to Parker Ranch for their line, which was left intact. Without it, they would still be without water. The permanent repairs should take about two weeks. Page 11 of 18 Minutes March 23, 2004, Water Board Meeting.doc H. CHAIRMAN'S REPORT: Mr. Tanaka agreed to form the Finance subcommittee with Ms. Scarr as was mentioned last month. Mr. Heck asked that the South Kona to Ka`u Water Master Plan be placed on the agenda for next month. He will have Townscape get copies of their draft report out to the Board Members. LUNCH BREAK: 12:28 p.m. to 1:15 p.m. STRATEGIC BUSINESS PLANNING SESSION: Mr. Jochim from R. W. Beck, Inc., reviewed the Department's progress so far in its Strategic Business Planning Sessions. They identified a total of 16 goals to achieve, shown in handouts given to the Board. The next step is implementation, and they need strategic direction from the Board. Mr. Tom Cutting of R. W. Beck, Inc., had with him a copy of the strategic plan they put together last year for the Orange County water district; and the process is identical to what they are using here. They had limited themselves to a resolution of between five and seven issues, or challenges, that need to be addressed. They have identified five that need to be taken care of within their timeframe. Their mission statement is, "OCWD rate payers will have reliable supply of quality water at nationally based cost." He asked that this Board also concentrate on five issues here. It was mentioned that a lot of the Department's energy goes into maintaining what it has. We need to know what the margin is that we can ask for more from them (staff). Ms. Scarr mentioned things never get placed on the Agenda to plan what the next step is in accomplishing things. Mr. Cutting stated that the 5 -year plan gets updated every year; and every year, one more year gets added on. It is a guideline. The Board defines strategic direction and then the Department goes through the following: ■ Issues (problems) ■ Strategies (solutions) ■ Tactics ■ KPI (key performance indicators) Ms. Scarr mentioned the County Charter gives direction, "meet the water needs of Hawaii County." Subsumed under that should be the following directions: • assist and facilitate developing water systems in areas currently not served, • determine the best rate structure and financing options to accomplish goals, • ensure we service critical customers along the way, • ensure we can improve the water infrastructure along the way, Page 12 of 18 Minutes March 23, 2004, Water Board Meeting.doc look at the issue of agricultural water, and look at master - metered subdivisions (another customer issue). Mr. Heck has observed that the Board deals with things a lot by piecemeal and never comes into one real vision and hoped this process will help with that. Mr. Cutting mentioned that a lot of time is spent by the Orange County Water District Board in the tactical area. What was missing is the definition of (vision). Mr. Wilkins stated that it gets hard to maintain a sight on strategic direction when you have other County agencies constantly modifying that direction. An example would be where today, there was an application to the County Planning Commission who allowed variances on the quality of the piping that went into the development of an area of land. The DWS' policy is never to accept any substandard development into the County water system, and he applauds the DWS for that. He does not applaud the Planning Department for changing the DWS' methods. Mr. Cutting reviewed the Department's mission statement, "Provide customers with an adequate and continuous supply of safe drinking water in a financially responsible manner, comply with all relevant standards and assist and facilitate development of water systems in areas not currently served" and asked if there are any parts of it that are not being done. Mr. Heck and Ms. Scarr agreed that the last part is not being done, and that is "assist and facilitate development of water systems in areas not currently served." Ms. Scarr added that the "adequate and continuous supply of safe drinking water" also has its problems -- customers who are not getting a very reliable source (i.e. they do not always have water pressure). However, part of the reason that R. W. Beck, Inc., is here is to develop a rate structure to address the issues of financial responsibility. Mr. Wilkins added EPA's rapidly changing guidance, forcing the Department to abandon historic sources of water and developing new sources and tightening the restrictions on "contaminant levels" in the water that we drink. It is a burden to the Department. His comment on the last portion of the mission statement is that the Department is making an honest effort to respond to the Board's dictates in that area. Mr. Cutting directed the Board toward doing a gap analysis, and that is the difference between the current condition and the future condition. He asked the Board to briefly tell what the current condition is from a strategic Board level point of view. Gap analysis: Mr. Heck: Personnel not satisfactory to meet our needs (Board has plans to do things and does not have enough personnel to do it). Mr. Wilkins: New skills should be resident in the Department that are not present. When asked by Mr. Cutting what the future condition would be, he sees more staff, more highly skilled and adequate to respond to requests, requirements, and directives. You could define Page 13 of 18 Minutes March 23, 2004, Water Board Meeting.doc problems, write the requirements, and oversee the contract. What bothers him is that the Department has to turn so often to outside consultants. Ms. Scarr: This problem is not only with engineering but is also in the financial end. Mr. Tanaka: We should be more resourceful in finding ways of funding projects so we could meet the last portion of the Mission Statement. Ms. Scarr: The County is not creative enough. Insufficient knowledge of how to make good use of the money we have (investments) how to use it to attract more money. Mr. Heck: Need new ideas to create /find grants /more money to fund. Mr. Cutting asked what the condition would be at some point in the future, if this were solved. Mr. Heck: There would be a whole lot of money and nobody to do anything with it. The Board has heard from staff sometimes that things could be done if they had the funds, but could not be done because they do not have the personnel. Ms. Scarr: That we have capital and operational budget adequate to address the maintenance and development needs of the Department. Mr. Wilkins mentioned the 5 -year C.I.P. budget and wonders why some of the projects never seem to move. Some things should be given a higher priority and move up in the plan, especially responses to disastrous environments like the floods we just had. It has been a condition 35 years he has associated with government here in Hawaii. Mr. Mochida mentioned the current conditions are continually changing— volatile and unpredictable (war, terrorism, economic conditions), low interest rates resulting in people building and we have to keep up with them. Ms. Scarr: Need a long -range commitment to priorities. Mr. Wilkins disagreed with that in a way because sometimes priorities should change. As new technologies come along, an old priority may become obsolete. Would like to see an annual resetting of the C.I.P. schedule. Ms. Scarr: One thing talked about in strategic planning that did not come through in these priorities was the difficulties of staffing because of Union rules and Civil Service rules. The current situation is much of the Department's work is in West Hawaii but we cannot send a permanent staff to live over there because of lack of appropriate supervision according to union rules. We therefore have teams of people commuting five hours roundtrip to do three hours of work in West Hawaii. Tremendous waste of energy and time. These rules prohibit having a crew based in West Hawaii because of lack of supervising personnel in that office. Not unique to this department - -it is County -wide. Mr. Wilkins added that the Planning Department has 80% of its work in West Hawaii and has only 3% of their staff over there. Mr. Cutting asked what the future condition should be. Mr. Wilkins: Dispersal of staffing. Ms. Scarr: Efficient use of human resources. Mr. Cutting stated there are more resources than just human resources. Example would be financing. He noted, however, that one of the big problems is the inefficiency of human resources. He asked for other conditions that are important to the Board. Mr. Wilkins: Water supply capability. It falls short of near - future needs. Not developing water supplies and transport as rapidly as will be needed in the near future, especially in West Page 14 of 18 Minutes March 23, 2004, Water Board Meeting.doc Hawaii. An example would be Ali`i Drive -- hundreds of acres of condominiums all drawing on a system, which is being overpumped. Mr. Cutting asked what the opposite of that is. Mr. Wilkins replied it would be increased effort, increased distribution capability, increased or new sources of funding, increasing the priority for solutions to this problem, resulting in primarily more water to extend and to replace existing water systems. Mr. Tanaka added adequately providing service to our existing and future customers. Mr. Cutting asked if the following are covered somewhere in his notes: ■ "in a financially responsible manner" Ms. Scarr and Ms. Hons noted it is in the operations and capital budget and ability to invest money (financial management). Mr. Wilkins stated that it has been addressed in the past by asking the water rates to be raised simply to give the additional capital to address problems like this. ■ "comply with all relevant standards" Ms. Scarr stated that the Department tries very hard to do that. Mr. Heck added that EPA standards is a major concern. When asked by Mr. Cutting what the current condition is, he replied it is more of a threat than a condition. At any time, the EPA may impose large fines if their standards are not complied with. Mr. Wilkins mentioned the conditions in West Hawaii where a small geographical grouping of wells supply all the water used along the North Kona shoreline from the airport down to an area they call Red Hill. That water is exceeding the EPA recommendations on salt content for people with any kind of high blood pressure or heart disease. The rate of development and consumption of water from these wells is skyrocketing. The only solutions are either cleanse the water or find more water to feed into the area. Ms. Scarr stated that the current conditions are that the Department is struggling to meet State and Federal standards. It goes back to the first point made in that so much of the Department's effort is spent on doing what they are already doing and struggling to keep up. What is the margin that will allow them to do the things the Board is asking of them. Mr. Cutting asked what would be described as a counter to this in the future. Ms. Scarr replied it would be that we only spend 25% of our effort on compliance and maintenance and have 75% of resources (human and otherwise) to spend on doing better things for people. ■ "assist and facilitate development of water systems in areas not currently served" Page 15 of 18 Minutes March 23, 2004, Water Board Meeting.doc Mr. Cutting asked about water supply falling short of demand. Future condition would be new water supplies provide service to existing and future customers. Ms. Scarr did not think it was entirely covered because existing and future customers could be in the same system. If you are talking about what we really need to do, it deserves a separate item which says that in our current state, we are not serving 30% of the people who live in Hawaii County. We do not meet the demand for agricultural water -- whether we should or not is a matter of discussion. That is more than just talking about "future customers" because the Department tends to think of a future customer as being someone within the system that only has to plug in later. These are "unserved areas" that do not have access to our water. Mr. Wilkins added that it is more a reality that only 1/3 of the geographic area of our island suffers from water inadequacy. The other portion is trying to "get out of the flood." If you want to think of some place in between, it would be the Puna area where water lies close to the surface but still no infrastructure. These people are on water catchment because the water below their feet is not accessible. They also need to be given proper concern. Mr. Cutting asked if the six points he had in his notes cover the Board's concerns. Mr. Heck stated that they do not cover one more thing, and that is agricultural water. It is a major draw from potable water. Aside from the one agricultural source in Waimea, our potable water is used for agriculture and for drinking. As agriculture uses more water, it takes it from the residential customers. Mr. Wilkins stated that he visited the Four Seasons Resort in Kona, along with Mr. Heck and Ms. Scarr, and saw how he thinks the next generation will treat water, solving the agriculture and human consumption problem. They have high- altitude wells, which bring up brackish water suitable for agriculture but not for human consumption. They lead it in pipelines down the hill so that the pressure drives a reverse osmosis plant, and the effluent that comes out is potable water on one side and water still suitable for agriculture on the other side. His concern is if the Department has to abandon a surface water source, it does not have a provision for using it for agriculture. Mr. Heck added that the Department has no distribution capability for agricultural water. Mr. Wilkins stated that we may not be able to retrofit the whole system, but we should be constantly looking for a way to use all of the water to its own specific purpose. Mr. Cutting asked what the problem is with putting in a different distribution system. Mr. Mochida stated it is the cost. Ms. Scarr added that the State of Hawaii, Department of Agriculture, is in charge of agricultural water; and she is not sure that we even have a mandate to put in agricultural water systems. Mr. Cutting asked what the reverse condition of that is. Page 16 of 18 Minutes March 23, 2004, Water Board Meeting.doc Ms. Scarr replied that we have an agricultural water distribution system, which serves agricultural customers with non - potable water. The Manager stated if that is to be the case in the future, then it is contradictory to the Mission Statement. Ms. Scarr stated that one of the problems will be jurisdictional- -that is, it is really the Department of Agriculture that has the mandate to supply agricultural water. Unfortunately, they do not do it. (Ms. Hons left the meeting at 2:30 p.m. Messrs. Tanaka and Mochida left at 2:40 p.m.) Mr. Cutting asked for seven strategic directions from the Board, and they are as follows: 1. Add /increase core competencies in sufficient numbers to accomplish strategic vision /direction. 2. Develop financial skills /knowledge to identify new funding sources and manage financial resources. (Ms. Scarr mentioned asking around in the banking communities and they said if you want to learn how to invest, go to California.) Mr. Cutting said there is a person in California who works with Citicorp and he is the "guru" of utility finances. He goes up and down the State of California working with utilities. 3. C.I.P. that achieves strategic vision /direction (proactive and forward thinking). 4. Efficiently utilizing human resources to reduce costs and achieve goals. (Mr. Heck did not see how you could ever do anything about human resources because of Civil Service. It is a fact.) Mr. Cutting mentioned it is a nightmare trying to get change with unions involved, but there are techniques. It does not happen overnight but perhaps in the long haul. 5. Accelerate development of source water and water distribution systems. 6. Stay ahead of EPA/DHS regulations in order to reduce impact on staff. (The Manager questioned how you could ever stay ahead when you do not know what is coming up.) Ms. Scarr mentioned they have a long list of contaminants. The Manager replied there is a list, but there is more than that. Ms. Scarr mentioned the lead -time you have because EPA goes out to public hearings. 7. Explore the possibility of supplying agricultural customers with non - potable water. RECESS: 3:25 to 3:30 p.m. The Board chose the next date to meet with R. W. Beck, Inc. A special meeting will be held in the Hilo Operations Conference Room on Wednesday, April 28, 2004, starting at 10:00 a.m. and will last 4 hours at least. ANNOUNCEMENTS: 1. Next Regular Water Board Meeting: The next regular meeting of the Water Board will be held on Tuesday, April 27, 2004, 10:00 a.m., in the Ocean View Community Center. 2. Special Water Board Meeting: A Special Meeting of the Water Board will be held on Wednesday, April 28, 2004, 10:00 a.m. in the Hilo Operations Center Conference Room. Page 17 of 18 Minutes March 23, 2004, Water Board Meeting.doc ADJOURNMENT ACTION: Mr. Heck moved for adjournment of the meeting; seconded by Mr. Wilkins and carried unanimously by voice vote. Meeting adjourned at 3:34 p.m. Secretary Page 18 of 18 Minutes March 23, 2004, Water Board Meeting.doc