HomeMy WebLinkAbout2006-04-25 Water Board MinutesMINUTES
DEPARTMENT OF WATER SUPPLY
COUNTY OF HAWAII
WATER BOARD MEETING
April 25, 2006
HILO OPERATIONS CENTER CONFERENCE ROOM
MEMBERS PRESENT: Mr. Thomas Goya, Vice - Chairman
Ms. Paula Helfrich (10:33 a.m.)
Ms. Millie Kim
Mr. Bernard Konanui
Mr. Ivan Mochida
Mr. Riley Smith
Mr. George Wilkins
Mr. Milton D. Pavao, Manager, Department of Water Supply
(ex- officio member)
ABSENT: Mr. Loren Heck, Chairman
Mr. George Harai, Water Board Member
Mr. Christopher Yuen, Director, Planning Department
(ex- officio member)
Mr. Bruce McClure, Director, Department of Public Works
(ex- officio member)
OTHERS PRESENT: Ms. Katherine Garson, Deputy Corporation Counsel
Ms. Amy Self, Deputy Corporation Counsel
Department of Water Supply Staff
Mr. Quirino Antonio, Jr., Deputy Manager
Mr. Kurt Inaba, Engineering Division Head
Mr. Daryl Ikeda, Chief of Operations
Mr. Richard Tsunoda, Waterworks Controller
Mr. Richard Sumada, Assistant Waterworks Controller
Mr. David Mellom, Credit and Collection Clerk
Mr. Lawrence Beck, Civil Engineer V, Water Resources and
Planning Branch
CALL TO ORDER - Vice - Chairman Goya called the meeting to order at 10:00 a.m.
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STATEMENTS FROM THE PUBLIC
None.
ADDENDUM OR SUPPLEMENTAL AGENDA
ACTION: Mr. Smith moved to add Addendum Item (0) under Miscellaneous - Waiakea Judiciary
Lease; seconded by Ms. Kim and carried by roll call vote (Ayes: 6 - Ms. Kim, Messrs. Konanui,
Wilkins, Smith, Mochida, and Vice - Chairman Goya; Nays: 0; Absent: 3 - Ms. Helfrich,
Mr. Harai, and Chairman Heck).
APPROVAL OF MINUTES
ACTION: Mr. Wilkins moved for approval of the Minutes of the March 28, 2006, Water Board
Meeting; seconded by Ms. Kim and carried unanimously by voice vote.
SOUTH KOHALA:
A. JOB NO. 2004-851, LALAMILO DEEPWELL D MOTOR CONTROLLER
REPLACEMENT:
The Board considered a request from the contractor, Able Electric, Inc., for a contract time
extension of 51 calendar days due to the addition of a new Power - Factor - Correction - Capacitor
(PFCC) assembly. This item was not included in the bid and is recommended to increase the
electrical power factor and lower the electric bill. The PFCC assembly has to be specially
manufactured to be compatible with the existing electrical cabinets and bus bars. This item is due
to arrive by June 5"' and has to be installed prior to the rest of the motor controller due to its
location in the sequence of electrical cabinets. This first time extension request was reviewed by
Engineering staff and found to be justified.
The Manager recommended that the Board grant this extension of contract time of 51 calendar
days to Able Electric, Inc., for JOB NO. 2004 -851, LALAMILO DEEPWELL D MOTOR
CONTROLLER REPLACEMENT. If approved, the contract completion date will be extended
from May 9, 2006, to June 30, 2006.
ACTION: Mr. Mochida moved for approval of the Manager's recommendation; seconded by
Mr. Wilkins and carried unanimously by voice vote.
NORTH KONA:
A. PETITIONER: KEITH KING
The Board considered the petitioner's request for a declaratory ruling relating to the applicability of
Section 3 -5 (Connections) and Section 3 -6 (Facilities Charge) of the Rules and Regulations of the
Department of Water Supply, County of Hawaii.
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(Mr. King was not present for this declaratory ruling.)
Vice - Chairman Goya stated that the Board has been provided with documentation on this from
both Mr. King and from Corporation Counsel, and he asked if the Board had any questions of
Counsel or the Manager. There being none, the Manager recommended that the Board declare that
the provisions stated are applicable.
MOTION: Mr. Smith so moved; seconded by Mr. Wilkins.
Mr. Smith stated that he had read all of the information from Mr. King, and he is raising two
issues - -one is the drop -in fee and one is the water facilities charge. He thought he understood the
facilities charge, but what he thought is going on is that the Matsumoto Water Company paid the
facilities charge years ago for this large master meter that serves all of these houses. Mr. King is
saying that since someone else paid the facilities charge for water that he has been buying from
them, he should not have to pay this Department the facilities charge.
Ms. Garson confirmed that was part of it.
Mr. Smith continued that someone else paid the facilities charge; someone else is entitled to the
water. Mr. King did not pay for the facilities charge so he really does not have any credit or is a
customer of this Department.
The Manager stated that in addition to that, the total facilities charge that was paid for the seven
meters, which is now six meters, was only about $1,200.00. Those six meters are serving 170 to
180 people of which did not pay the facilities charge. He did not think there is any question that
Mr. King needs to pay the facilities charge.
Mr. Smith stated that technically, since there are still meters issued to Matsumoto Water Company,
this Department is still obligated to provide water to those meters.
The Manager clarified that this Department is not obligated because Matsumoto Water Company
has not been paying their dues; however, this Water Board went on record to say it would not cut
off service to the people on that water system. The other thing is that the replacement system is so
close to completion that hopefully this will be resolved soon. There should not be any question
that Mr. King needs to pay facilities charge.
Mr. Smith stated he was comfortable with that. He asked about the drop -in fee because he was not
as familiar with it.
The Manager explained that it is a fee for staff's labor and also materials to install the meter into
the meter box and also furnish the customer valve.
Mr. Wilkins asked if this declaratory ruling would set a precedence for all Coastview/Wonderview
subdivision residents or if it only applies to Mr. King.
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Ms. Garson responded that it would set precedence. Everyone in the subdivision would have to be
treated alike.
Mr. Wilkins also asked for clarification on the facilities charge. He has heard many different costs
for a water meter -- $5,600.00, $2,500.00, and $1,190.00.
The Manager explained that $2,600.00 is charged for anyone who lives off a County road to have a
service lateral installed. It does not include the facility charge. If you have an existing lot of
record, you pay a facility charge in addition to the installation charge of $1,190.00. If you create
another lot in addition to the existing lot of record, that lot is assessed a $5,500.00 facility charge.
The rationale is that if you are creating a new lot, you are putting additional burden on the system;
therefore, you pay an extra premium on the service over and beyond the existing lot. The three
fees are applicable to three different circumstances.
Ms. Garson added that these costs are outlined in the water rate schedule, which is available by the
Department as well as being posted on its website.
Mr. Smith commented that Counsel did a great deal of research and wondered why Mr. King was
not present today.
Ms. Self stated that it was Mr. King's choice whether to appear or not. He has already provided his
information to the Water Board and was provided with an Agenda for this meeting. Based on what
was received from the Department, the Water Board has enough to base its decision on. The fact
that Mr. King was not present should not impact the Board's decision.
The Manager asked if Mr. King could ask for a Contested Case Hearing.
Ms. Self replied that she did not believe so because there would not be anything to contest. This is
a Declaratory Ruling on how the Sections in the Rules and Regulations apply. Mr. King has not
been charged the fees yet. At some point when the Department actually charges him for the fees,
he may have something that he disagrees with and could possibly come back to the Board or
perhaps file a lawsuit in Circuit Court. This Declaratory Ruling is so he will know how the Board
views this so he can decide what he wants to do after this.
Ms. Kim asked if the Department cannot charge the fees until the Board does this Declaratory
Ruling.
Ms. Self replied that is not the case. It is just not time yet for the charges. At that time, when the
Department begins transferring people over to its new system, then these fees will be charged if
Mr. King wants to hook up to the County meter.
Vice - Chairman Goya asked what the Department's cost is for putting in the system.
The Manager replied that the Department's contribution is through its engineer's time. Everything
else will be paid back through the Improvement District/Rural Development program over 30
years.
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ACTION: A vote was taken on the Motion that the Board declare provisions stated in Section 3 -5
(Connections) and Section 3 -6 (Facilities Charge) of the Rules and Regulations of the Department
of Water Supply, County of Hawaii, are applicable. Motion was carried unanimously by voice
vote.
MISCELLANEOUS:
A. RENEWAL OF CONTRACT FOR MAINTENANCE AGREEMENT — SOUTH
KOHALA, HAMAKUA, AND LAUPAHOEHOE SITES (BRANTLEY CENTER, INC):
Brantley Center, Inc., presently has a Maintenance Agreement for site maintenance for the
Department's South Kohala, Hamakua, and Laupahoehoe tank and pump sites and has requested
renewal of the Agreement for two years from July 1, 2006, to June 30, 2008, at the following rates:
Hamakua - $2,330.00 /month
Laupahoehoe - $658.00 /month
South Kohala - $3,032.00 /month
Brantley Center's performance has been satisfactory, and the costs are reasonable. The Department
has the right to award the contract to Brantley Center, Inc., without advertising or calling for bids,
according to Subsection 103D -1010 of the Hawaii Public Procurement Code. Brantley Center,
Inc., has submitted the necessary documents to meet the requirement as a qualified rehabilitation
facility.
The Manager recommended that the Board award the contract for the MAINTENANCE
AGREEMENT — SOUTH KOHALA, HAMAKUA, AND LAUPAHOEHOE SITES, to Brantley
Center, Inc., for a period of two years from July 1, 2006, to June 30, 2008, at the rates as follows,
and that either the Chairman or the Vice - Chairman be authorized to sign the documents, subject to
approval of our Corporation Counsel:
South Kohala Sites ($3,032.00 /month x 2 years)
($2,330.00 /month x 2 years)
($658.00 /month x 2 years)
Hamakua Sites
Laupahoehoe Sites
TWO -YEAR TOTAL:
$72,768.00
55,920.00
15,792.00
$144,480.00
ACTION: Mr. Mochida moved for approval of the Manager's recommendation; seconded by
Mr. Wilkins and carried unanimously by voice vote.
B. PERSONNEL SERVICES CONTRACT FOR ENERGY ANALYST:
With increasing electric bills, the Department needs to stay on top of all of its energy issues. The
current personnel services contract came to an end on April 19, 2006. In order to maintain
continuity in the Department's energy savings projects that include hydrogeneration, alternative
energy, Rider M contracts with Hawaii Electric Light Company, Inc., and others, the Department
has created a new personnel services contract to hire a temporary Energy Analyst. The permanent
position will be filled in the coming months by the normal civil service process.
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The Manager recommended that the Board approve the new personnel services contract with
Ms. Bettina Arrigoni until the permanent position is filled. If approved, the contract will start on
May 22, 2006, and last no longer than one year.
MOTION: Ms. Kim moved for approval of the Manager's recommendation; seconded by
Mr. Mochida.
In response to Mr. Smith's question of whether this was a temporary hire, the Manager replied it is
until the Department can secure a permanent position. He added that this is one position where it
actually pays for itself because of the savings realized by the Department. Because of this position,
the Department recently got a grant, so it is a good program.
Vice - Chairman Goya asked about the hiring of the spouse of the former person occupying the
position - -in particular, the sharing of information as the other person will be with the County.
The Manager did not see it as a problem; and in fact, it may be beneficial to share ideas about
energy savings.
Mr. Ikeda added that there would be some continuity in that the new person can pick up where the
other person left off.
Vice - Chairman Goya commented that this is the type of thing the Department should publicize to
get the word out to the public about its efforts in energy savings.
ACTION: A vote was taken on the Motion. Motion was carried unanimously by voice vote.
C. GASOLINE BID NO. 2006-05, FURNISHING AND DELIVERING GASOLINE AND
DIESEL TO THE DEPARTMENT OF WATER SUPPLY:
Bids were opened on April 12, 2006, at 1:30 p.m.; and following are the bid results:
Part "A" - Hilo Baseyard
Aloha Petroleum Ltd. Hawaii Petroleum, Inc.
Unleaded Plus Gasoline (delivered gallon price) $2.7512 $2.916
Part `B" - Kona Baseyard
1. Unleaded Plus Gasoline (delivered gallon price) $2.8658 $2.916
2. Low - Sulfur Diesel (delivered gallon price) $2.8553 $2.569
Part "C" - Waimea Baseyard
Unleaded Plus Gasoline (delivered gallon price) $2.8449 $2.916
The Manager recommended that the Water Board award the contract for GASOLINE BID
NO. 2006 -05, FURNISHING AND DELIVERING GASOLINE AND DIESEL TO THE
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DEPARTMENT OF WATER SUPPLY, to Aloha Petroleum, Ltd., for Parts A -1, B -1, and C -1, and
to Hawaii Petroleum, Inc., for Part B -2 for the amounts shown above, and that either the Chairman
or the Vice - Chairman be authorized to sign the contract(s), subject to review as to form and
legality of the contract(s) by Corporation Counsel. The contract period shall be from July 1, 2006,
to June 30, 2008.
MOTION: Mr. Wilkins moved for approval of the Manager's recommendation; seconded by
Mr. Smith.
In response to Mr. Wilkins' question regarding the use of unleaded plus rather than regular
unleaded, staff explained that the Department's vehicles average 150,000 to 160,000 miles; and
Unleaded Plus helps extend the life of the vehicles.
ACTION: A vote was taken on the Motion. Motion was carried unanimously by voice vote.
D. WATER TREATMENT BID NO. 2006-03, A - FURNISHING AND
DELIVERING LIQUID CHLORINE TO VARIOUS LOCATIONS IN THE
ISLAND OF HAWAII (ON AN AS- NEEDED BASIS), B - FURNISHING AND
DELIVERING LIQUID AMMONIA TO WAIMEA WATER TREATMENT
PLANT, DISTRICT OF SOUTH KOHALA (ON AN AS- NEEDED BASIS),
C - FURNISHING AND DELIVERING 50% LIQUID CAUSTIC SODA TO
WAIMEA WATER TREATMENT PLANT, DISTRICT OF SOUTH KOHALA
(ON AN AS- NEEDED BASIS); FOR THE DEPARTMENT OF WATER SUPPLY:
Bids were opened on April 12, 2006, at 2:00 p.m.; and following are the bid results:
Bidder Amount
(Phoenix V LLC dba BEI Hawaii)
PART A - FURNISH AND DELIVER LIQUID CHLORINE
I. HILO DISTRICT
a. Panaewa Deep Well (125 cylinders per year)
Cost per 150 -1b. cylinder $273.00
IL PUNA DISTRICT
a. Panaewa Deep Well Chlorinator Building (20 cylinders per year)
Cost per 150 -1b. cylinder $283.00
(Panaewa Deep Well site is the delivery point for the chlorine, to be used in the Puna District)
III. KA`U DISTRICT
a. Pahala Deep Well Chlorinator Building (12 cylinders per year)
Cost per 150 -1b. cylinder $329.00
IV. KOHALA DISTRICT
a. Waimea Water Treatment Plant
Cost per 1200 -1b. cylinder (20 cylinders per year) $2,015.00
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Cost per 150 -1b. cylinder (60 cylinders per year) $296.00
V. KONA DISTRICT
a. DWS Kona Baseyard (150 cylinders per year)
Cost per 150 -1b. cylinder $303.00
PART B — FURNISH AND DELIVER LIQUID AMMONIA
a. Waimea Water Treatment Plant (12 cylinders per year)
Cost per 150 -1b. cylinder No bid
PART C — FURNISH AND DELIVER 50% LIQUID CAUSTIC SODA
a. Waimea Water Treatment Plant
Cost per dry ton
$1,422.00
The Manager recommended that the Board award the contract for WATER TREATMENT BID
NO. 2006 -03, A - FURNISHING AND DELIVERING LIQUID CHLORINE TO VARIOUS
LOCATIONS IN THE ISLAND OF HAWAII (ON AN AS- NEEDED BASIS), B - FURNISHING
AND DELIVERING LIQUID AMMONIA TO WAIMEA WATER TREATMENT PLANT,
DISTRICT OF SOUTH KOHALA (ON AN AS- NEEDED BASIS), C - FURNISHING AND
DELIVERING 50% LIQUID CAUSTIC SODA TO WAIMEA WATER TREATMENT PLANT,
DISTRICT OF SOUTH KOHALA (ON AN AS- NEEDED BASIS); FOR THE DEPARTMENT OF
WATER SUPPLY, to Phoenix V LLC dba BEI Hawaii at the unit prices listed above for the period
from July 1, 2006, through June 30, 2008, and that either the Chairman or the Vice - Chairman be
authorized to sign the contract(s), subject to review as to form and legality of the contract(s) by
Corporation Counsel. For Parts where no bid was received, staff shall obtain quotations in the best
interest of the Department.
ACTION: Mr. Wilkins moved for approval of the Manager's recommendation; seconded by
Mr. Mochida and carried unanimously by voice vote.
E. MATERIAL BID NO. 2006-04, FURNISH BASE COURSE, SAND, COLD MIX, HOT MIX,
PORTLAND CEMENT, AND NO. 3F ROCK TO THE DEPARTMENT OF WATER SUPPLY:
Bids were opened on April 12, 2006, at 2:30 p.m.; and following are the bid results:
Page 8 of 17 4 -25 -06 Minutes.doc
Jas. W.
Glover Ltd.
Yamada & Sons,
Inc.
West Hawaii
Concrete
Grace Pacific
Corp.
DISTRICT I:
A.
3/4 -Inch Base Course (Cost per ton)
$18.70
$17.19
No Bid
No Bid
B.
11/2-Inch Base Course (Cost per ton)
$15.40
$16.14
No Bid
No Bid
C.
No. 3F Rock (Cost per ton)
$20.35
$18.23
No Bid
No Bid
D.
#4 Sand (Cost per ton)
$21.75
$24.48
No Bid
No Bid
E.
Mortar Sand - ASTM C144 (Cost per ton)
No Bid
No Bid
No Bid
No Bid
F.
Portland Cement 94 lb. bags (Cost per bag)
No Bid
No Bid
No Bid
No Bid
G.
Cold Mix- ASTM D4215 -87 (Cost per ton)
$130.00
$78.12
No Bid
No Bid
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H.
Blended Material (Cost per ton)
$24.75
$25.52
No Bid
No Bid
L
Hot Mix - County Mix IV (Cost per ton)
No Bid
$70.73
No Bid
No Bid
DISTRICT II:
A.
3/4 -Inch Base Course (Cost per ton)
No Bid
No Bid
$18.06
No Bid
B.
11/2-Inch Base Course (Cost per ton)
No Bid
No Bid
$17.11
No Bid
C.
No. 3F Rock (Cost per ton)
No Bid
No Bid
$21.98
No Bid
D.
#4 Sand (Cost per ton)
No Bid
No Bid
$25.55
No Bid
E.
Mortar Sand - ASTM C144 (Cost per ton)
No Bid
No Bid
$41.24
No Bid
F.
Portland Cement 94 lb. bags (Cost per bag)
No Bid
No Bid
No Bid
No Bid
G.
Cold Mix- ASTM D4215 -87 (Cost per ton)
No Bid
No Bid
No Bid
$110.00
DISTRICT III:
A.
3/4 -Inch Base Course (Cost per ton)
No Bid
No Bid
$20.13
No Bid
B.
11/2-Inch Base Course (Cost per ton)
No Bid
No Bid
$19.19
No Bid
C.
No. 3F Rock (Cost per ton)
No Bid
No Bid
$24.06
No Bid
D.
#4 Sand (Cost per ton)
No Bid
No Bid
$27.63
No Bid
E.
Mortar Sand - ASTM C144 (Cost per ton)
No Bid
No Bid
$43.38
No Bid
F.
Portland Cement 94 lb. bags (Cost per bag)
No Bid
No Bid
No Bid
No Bid
G.
Cold Mix —ASTM D4215 -87 (Cost per ton)
No Bid
No Bid
No Bid
$104.00
H.
Hot Mix - County Mix IV (Cost per ton)
No Bid
No Bid
No Bid
$97.00
The Manager recommended that the Board award the contract for MATERIAL BID NO. 2006 -04,
FURNISH BASE COURSE, SAND, COLD MIX, HOT MIX, PORTLAND CEMENT, AND
NO. 3F ROCK TO THE DEPARTMENT OF WATER SUPPLY, by Parts to the following for the
amounts shown above, and that either the Chairman or the Vice - Chairman be authorized to sign the
contract(s), subject to review as to form and legality of the contract(s) by Corporation Counsel.
District I - Parts A, C, G, and I to Yamada and Sons, Inc.
Parts B, D, and H to Jas. W. Glover, Ltd.
District II - Parts A, B, C, D, and E to West Hawaii Concrete
Part G to Grace Pacific Corp.
District III -Parts A, B, C, D, and E to West Hawaii Concrete
Parts G and H to Grace Pacific Corp.
For the Parts where no bids were received, staff shall obtain quotations in the best interest of the
Department. The contract period shall be from July 1, 2006, to June 30, 2007.
ACTION: Mr. Smith moved for approval of the Manager's recommendation; seconded by
Ms. Kim and carried unanimously by voice vote.
F. VEHICLE BID NO. 2005-07, FURNISHING AND DELIVERING VEHICLES
TO THE DEPARTMENT OF WATER SUPPLY:
The Board considered a request from Clark Automotive Group, Inc., dba Island Chevrolet, for an
extension of contract time. Staff has evaluated this request and finds that the 15 days extension for
Parts A and F and 60 days extension for Part C is justified.
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This would be their first extension to the contract.
The Manager recommended that the Board grant Clark Automotive Group, Inc., dba Island
Chevrolet, a 15 -day extension for Parts A and F, and a 60 -day extension for Part C for VEHICLE
BID NO. 2005 -07, FURNISHING AND DELIVERING VEHICLES TO THE DEPARTMENT
OF WATER SUPPLY. The contract for Parts A and F would be extended from April 23, 2006, to
May 8, 2006, and Part C would be extended from April 23, 2006, to June 22, 2006.
ACTION: Mr. Smith moved for approval of the Manager's recommendation; seconded by
Mr. Mochida and carried unanimously by voice vote.
G. JOB NO. 2003-818, DWS UPDATE TO THE WATER USE AND DEVELOPMENT PLAN:
The consultant, Fukunaga & Associates, Inc., has submitted a change order proposal for additional
work to conduct eight (8) islandwide Public Informational Meetings as requested by the State
Commission on Water Resource Management and agreed to by DWS. Staff has reviewed the
proposal in the amount of $37,000.00 and recommends acceptance. The original contract amount
was $250,000.00. The amended total contract amount will be $287,000.00. Funds for the
additional work are available. So far, four (4) Public Informational Meetings were held - -one each
in Hilo, Waimea, Kona, and Ka`u.
The Manager recommended that the Board approve the fee proposal for additional services as
submitted by Fukunaga & Associates, Inc., for a total additional amount of $37,000.00 as Change
Order No. 1 for JOB NO. 2003 -818, DWS UPDATE TO THE WATER USE AND
DEVELOPMENT PLAN, and further that the Chairman or Vice - Chairman be authorized to
execute the appropriate change order.
MOTION: Mr. Mochida moved for approval of the Manager's recommendation; seconded by
Ms. Kim.
(Ms. Helfrich joined the meeting.)
In response to Ms. Kim's question as to the reason for the increase in hearings, the Manager
explained that when the initial scope of work was defined, there was no funding for community
meetings. The Commission on Water Resource Management mandated that they hold public
meetings, upon the consultants presenting their methodology to them.
Vice - Chairman Goya mentioned that the requirement was to include all districts; however, in the
first round of public hearings, some districts had little or no attendance. He thought in the future,
these meetings could be summarized for the public rather than only address those that attend
meetings.
ACTION: A vote was taken on the Motion. Motion was carried unanimously by voice vote.
Page 10 of 17 4 -25 -06 Minutes.doc
H. MONTHLY PROGRESS REPORT:
No questions.
I. DEPARTMENT OF WATER SUPPLY PROPOSED OPERATING AND
CAPITAL IMPROVEMENT BUDGETS FOR FISCAL YEAR 2006 -2007:
In response to Vice - Chairman Goya's question of whether the budget assumes full employment for
twelve months, Mr. Tsunoda replied that what he did was scale back the allowance for the
budgeted vacancies from 100% to 75 %. Most of the time, vacancies are not filled until after the
first quarter.
Mr. Smith asked about the summary sheet under "Power Purchased" where it decreased from
$16 million to $15.8 million.
Mr. Tsunoda explained that the numbers were provided by Mr. Arrigoni as part of the energy
savings program. The Finance Division rounded it off to $16 million. When the numbers were
revisited in hopes of reducing costs, Mr. Arrigoni's actual number of $15.8 million was used.
Mr. Arrigoni's methods came from looking at the increase from 2004 to 2005 using the energy
consumption increase and assuming 10% rate increase by HELCO in the second half of the fiscal
year.
Mr. Wilkins asked about the increase in the Rental Expenses on Page 4 and what would generate
such a large rise.
Mr. Tsunoda explained that the rental increase comes from the rental fee for a trailer that will
house the inspectors at the Kona Baseyard.
Vice - Chairman Goya asked for an explanation to account for the 16% increase in salaries.
Mr. Tsunoda explained that it includes roughly 3.5% for collective bargaining unit increases for
most of the employees and also the budgeted vacancies, and step movements for selected
employees.
In response to Vice - Chairman Goya's question about the increase in contractual services, the
Manager mentioned that this may be from the service lateral installation plans.
Mr. Ikeda added that a lot of it may be from the Operations Budget where they want to do some of
the upgrades on the motor control centers.
In response to Vice - Chairman Goya's question if the budget is based on not only operational but
capital improvement projects that are expected to be carried out for the year, the Manager stated
that the C.I.P. budget is separate.
Mr. Tsunoda added that there may be limited instances where something is not in the C.I.P. Budget
and preliminary engineering work is needed where the Operating Budget may be used.
Page 11 of 17 4 -25 -06 Minutes.doc
The Manager invited the Board to contact Mr. Tsunoda with any questions about the budget.
J. WRITE -OFF OF DELINQUENT ACCOUNT - KONA KAI FARMS:
The Board considered a write -off of Kona Kai Farms' delinquent balance of $42,531.87 as
recommended by Deputy Corporation Counsel, Ms. Amy Self. The account was opened in
February 1999. Service was disconnected in March 2003. Collection efforts by Corporation
Counsel were unable to locate the account holder.
Mr. Tsunoda stated that Mr. David Mellom, Credit and Collection Clerk, was present to answer
questions.
In response to Mr. Mochida's question of how long a period the $42,531.87 covers, Mr. Mellom
replied that most of this balance comes from a roughly six -month time period where they had
major water leaks and were not really cooperating with the repair of the leaks and with the
Department. Finally, the meter was removed, but then they disappeared.
Mr. Wilkins noticed there is an identification of Kona Kai Farms and also a Kealakekua Bay
Farms. He asked if they were the same.
Mr. Mellom and Ms. Self explained that Kona Kai Farms did not have a good reputation; and
around 2000 or 2001, they changed their name to Coffee By Kealakekua Bay Farms. They were
actually bought out by Kealakekua Bay Farms.
In response to Mr. Smith's question of who the landowner was, Mr. Mellom replied that the land is
leased from Bishop Estate.
Mr. Wilkins asked about their disappearance.
Ms. Self replied that they were in bankruptcy court in Las Vegas (the owners were there), but the
case was dismissed before the debts were discharged. They were in Third Circuit Court for a huge
debt from this other company that was trying to collect against them. Ms. Self had contacted one
of the attorneys that was representing that company and informed them that this Department was
trying to get its bill paid. The attorney indicated that the money would never be found. An address
was found on the Department of Consumer and Corporate Affairs website, but they were nowhere
to be found at that address. Since that time, this company was bought by some kind of trust
company in Illinois. It was so far reaching that it may not be worthwhile because of the expense of
finding them. The company that tried to sue them actually ended up getting sued because these
guys are so slippery with where they put their money.
Mr. Mochida asked if there was still coffee on the property.
Ms. Self stated that someone took over the property, but she did not know what they were doing
with it.
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Ms. Helfrich stated that they were the ones that were sued because of the 10% Kona coffee rule,
and there was not enough coffee there to make a difference.
Ms. Self indicated that the person is in federal prison right now.
Mr. Mochida indicated that if there was any capital improvement to the property, Bishop Estate
would take that, so maybe the Department could go after them. The question of who is
responsible - -the tenant, the landlord, etc., has been discussed before.
Ms. Self stated that at this point, the Department does not go after landlords. It is the tenant that is
responsible because they are the ones that sign the agreement for services. The Wastewater
Department is now finished changing their code so they can now go after the landlord for whatever
the tenant owed. For this Department to do that, it would require a rule change.
The Manager stated that this Department tried that; but after careful consideration, it was decided
against because it was going to get too complicated.
Ms. Self stated that since Mr. Mellom has joined the Department, they have developed a good
system. Now the bills are not allowed to get that far behind. It is faster for her if she gets them
when they are smaller amounts. They are contacted by mail first, and sometimes they settle up
right away. If not, she can take them to small claims court.
Mr. Smith asked how many months would go by before the Department would remove a residential
meter.
Mr. Mellom replied that they get two mailed notifications of delinquency, which indicate that their
meter is subject to removal. Generally, it depends on the account history. If they have a pattern of
making payments, even if it is not the total of the bill, he would work with them rather than just
remove the meter.
Ms. Kim asked Mr. Mellom if he finds the delinquencies decreasing, increasing, or staying the
same since he joined the Department.
Mr. Mellom replied that recently, he has been seeing a lot more partial payments. He is trying to
get people to make more timely payments. For example, if a water bill is $60.00 but they pay only
$40.00 each time, after a while, it accumulates.
Vice - Chairman Goya thanked Ms. Self and Mr. Mellom for their diligence.
The Manager added that Mr. Mellom's position is another one that partially pays for its salary from
revenues that might otherwise be lost to the Department.
Ms. Self indicated that the Board needed to make a formal motion because the write -off is over
$10,000.00 and needs approval by the Board.
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ACTION: Ms. Kim moved that the Board approve the write -off of Kona Kai Farms' delinquent
balance of $42,531.87; seconded by Mr. Wilkins and carried unanimously by voice vote.
In response to Mr. Wilkins' question of whether this absolves the Kona Kai Farms from any future
responsibility or if it could ever be reopened in the future.
Staff explained that if the person were to come in to sign up for new water service, they would be
asked to pay the money. They can be declined for water service until they pay up.
K. REVIEW OF MONTHLY FINANCIAL STATEMENTS:
Vice - Chairman Goya asked about the $6 million in cash on the balance sheet and how long it
would remain as cash.
Mr. Tsunoda indicated that it is temporary but will be transferred to restricted deposits.
Vice - Chairman Goya assumed the other large change is due to the General Obligation Bonds (on
Page 5 under Restricted Deposits).
The Manager stated that it is the Department's intent is to use the Bond money as soon as possible;
and the Palani Road Transmission Waterline (Mamalahoa Hwy. to Palani No. 2 Reservoir) would
be the most recent one (hopefully by year -end).
O. WAIAKEA OFFICE PLAZA LEASE AMENDMENT — JUDICIARY CONTRACT
NO. J04205:
(By request, this Addendum item was taken up early.)
The Judiciary, State of Hawaii, is a tenant at the Waiakea Office Plaza leasing 11,544 square feet
of office space. They occupy the entire lower level of the building plus a 876 - square foot office on
the upper level. This lease amendment extends the term of the lease until Judiciary's move into
their new office building and increases lease rent from $1.90 to $2.166 per square foot as follows:
July 1, 2006, to December 31, 2007 $25,000.00 per month
January 1, 2008, to June 30, 2008 (month to month) $25,000.00 per month
Current market rates for office space in Hilo start at $1.25 per square foot plus common area
maintenance. Waiakea Office Plaza's common area maintenance approximates $.80 per square
foot.
The Manager recommended that the Board approve the Judiciary Lease Amendment to Contract
No. J04205 and that either the Chairman or the Vice - Chairman be authorized to sign the document,
subject to review as to form and legality by Corporation Counsel.
MOTION: Mr. Mochida moved for approval of the Manager's recommendation; seconded by
Ms. Kim.
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The Manager noted that Mr. Sumada checked market values and came up with a fair price.
Caution was taken not to make it too high because they may not agree to renew the lease. The
downstairs area is not the ideal location; and if someone else were to move in, the Department
would have to do a lot of improvements. The Judiciary's new building may be completed in 2008.
ACTION: A vote was taken on the Motion. Motion was carried unanimously by voice vote.
BREAK: 11:07 a.m. toll: 18 a.m.
L. MANAGER'S REPORT:
1) Kona Coastview/Wonderview Improvement District Project
Meetings are being held in the community about the connections. Customer Service personnel
will be going to the area soon to help with the sign -ups.
2) USGS Drilling Program
The equipment is now at the Department's Panaewa Well Site. After the equipment is
auctioned off, the proceeds will be divided among the water departments that share in the
ownership of the drill rig. Also, Mr. Ikeda is working with Mr. Tribble on some of the
equipment that the Department wanted for its baseyard.
3) Kona Water Quality
Timetable will be six to eight months before going out for construction.
4) 2006 Water Board Meeting Schedule
The Board chose to hold its June 27, 2006, Water Board Meeting as well as the Public Hearing
on the 2006/2007 Budget at the Hilo Operations Conference Room.
Discussion followed regarding the use of video - conferencing equipment, as the County Council
does, as an alternative to holding meetings in various districts. Ms. Helfrich asked that it be
researched and reported on.
5) Hawaiian Ocean View Estates
The Manager reported that a letter from the Governor indicated that the money would be
released. The Mayor's Office is suggesting that the Manager be designated as the Procurement
Officer in an effort to make the project more efficient as the money will not be transferred to
the DWS but, rather, will remain with the County. This will also allow the DWS' Waterworks
Controller to certify the funds for the project.
Discussion followed regarding whether this release of funds came without conditions.
The Manager informed the Board that it is without conditions. In response to Mr. Smith's
question about a recent newspaper article indicating water would be available if there is a
school, the Manager replied that the article was erroneous. However, if a school were to be
built in the area, this Department would grant water at the prevailing rate.
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Discussion also revolved around a timetable. The Manager stated that the Department should
have a consultant on board within three months. Community input will be gathered on four
possible scenarios. The exploratory well can be started soon because that is the easiest part of
the project. What he envisions is a well, pump, motor controls, transmission pipeline to a
reservoir, and from the reservoir, probably distribution to the commercial center and a truck fill
station. The $6 million will not be enough to provide distribution system to the lots within the
subdivision. The whole process may take up to three years.
Vice - Chairman Goya mentioned that discussion will probably come later on adjustments that
may be needed in the Operating Budget for the upcoming extra facilities in Hawaiian Ocean
View. The Manager agreed and mentioned that there may be a need for the Ka`u District to
have its own electrician stationed there. The other thing the Board may need to consider is
whether it wants to keep the same rates or establish a special rate district because the water is
going to be expensive. The electrical costs are going to be high.
6) Waiakea Office Plaza
In response to questions about the office space vacated by Merrill Lynch, the proposed canopy
at the front entrance, and the air conditioning system, the Manager stated that the Land Branch
(Engineering Division) and some of the Finance Division personnel will be relocated to the
vacated space temporarily. This will free up space in the two wings currently occupied by the
Department. Because of the expense to renovate, the Department will wait until the Judiciary
moves out from downstairs and do it all at once. The cost to move personnel into the vacant
space is approximately $4,000.00 for telephone service. There was an inquiry from the
Mayor's Office about their moving in there temporarily while their offices are being renovated,
but they have not indicated anything for certain so the DWS will go ahead with moving its
personnel in there. As for the canopy for the front entrance, it is currently under design by the
consultant. The other project to replace the air conditioning system will need to be worked out
further. The reason is that the consultant sent their recommendations, but they are proposing
the Department move out of each wing for six months at a time. They intend to change all of
the air ducts. Moving out for six months would be too inconvenient for staff. Efforts will be
made to find a better strategy. He added that this is one project that the consultant pointed out
will save money in seven to eight years in energy savings.
7) Inventory
Vice - Chairman Goya asked for an Agenda item for next month's meeting on how the
Department manages its inventory.
10) Cost of Government Commission Letter
Ms. Helfrich mentioned a letter the Board received from the Commission, dated April 10, 2006,
asking for input. Ms. Garson suggested the Board may want to place it on the Agenda for next
month to discuss further.
M. CHAIRMAN'S REPORT:
None.
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N. EXECUTIVE SESSION:
Pursuant to Section 92- 5(a)(4), Hawaii Revised Statutes, as amended, Corporation Counsel
requested an attorney -client confidential discussion in executive session to consult with the Water
Board of the County on Hawaii v. Akalea, LLC, Frank DeLuz III, Civil No. 05 -1 -0204.
ACTION TO ENTER EXECUTIVE SESSION: Mr. Mochida moved that the Board enter into
Executive Session for the reasons stated; seconded by Ms. Kim and carried unanimously by voice
vote. (Executive Session began at 11:40 a.m. and ended at 11:50 a.m.)
After Executive Session ended, Mr. Mochida moved that the Board approve Corporation Counsel's
recommendation; seconded by Ms. Kim and carried unanimously by voice vote.
ANNOUNCEMENTS:
1. Next Meeting:
The next meeting of the Water Board will be held on May 23, 2006, 10:00 a.m., in the Hilo
Operations Center Conference Room; 889 Leilani Street, Hilo, Hawaii.
STATEMENTS FROM THE PUBLIC
None.
ADJOURNMENT
ACTION: Ms. Kim moved for adjournment of the meeting; seconded by Ms. Helfrich and carried
unanimously by voice vote. Meeting adjourned at 11:52 a.m.
Secretary
The Department of Water Supply is an Equal Opportunity employer and provider.
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