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HomeMy WebLinkAbout2006-10-24 Water Board MinutesMINUTES DEPARTMENT OF WATER SUPPLY COUNTY OF HAWAII WATER BOARD MEETING October 24, 2006 HAWAIIAN OCEAN VIEW COMMUNITY CENTER MEMBERS PRESENT: Mr. Loren Heck, Chairman Mr. Thomas Goya, Vice - Chairman Mr. George Harai Ms. Millie Kim (10:25 a.m.) Ms. Paula Helfrich Mr. Bernard Konanui Mr. Riley Smith Mr. George Wilkins Mr. Milton D. Pavao, Manager, Department of Water Supply (ex- officio member) ABSENT: Mr. Ivan Mochida, Water Board Member Mr. Bruce McClure, Director, Department of Public Works (ex- officio member) Mr. Christopher Yuen, Director, Planning Department (ex- officio member) OTHERS PRESENT: Ms. Katherine Garson, Deputy Corporation Counsel Mr. Hugh Ono, SSFM International Mr. Stephen Yee, SSFM International Mr. William Dement, SSFM International Mr. Dick Hershberger Mr. Don Nitsche Mr. Andrew Levin Honorable Robert N. Herkes Sammie & Buddy Fo Ms. Adeline Cho Mr. Mike Morrow Mr. Jeff Anderson Mr. George Wallace Mr. Ken Wicks, President, Ocean View Chamber of Commerce Ms. Carole Baker Mr. Gary Schauweker, Kau Boy Farm Ms. Rachel Pavlin Ms. Velvet Replogle Mr. Bruce Coates Page 1 of 21 10 -24 -06 Minutes (Ocean View).doc Mr. Lamson Mr. Woodward Mr. Richard Lopes & guest (name unknown), Relo Construction (10:28 a.m.) Department of Water Supply Staff Mr. Kurt Inaba, Engineering Division Head Mr. Lawrence Beck, Engineering Division Ms. Shari Komata, Engineering Division Mr. Daryl Ikeda, Chief of Operations Mr. Clyde Young, Operations Division Mr. Richard Tsunoda, Waterworks Controller Mr. Richard Sumada, Assistant Waterworks Controller CALL TO ORDER - Chairman Heck called the meeting to order at 10:10 a.m. and introduced the Board Members; Representative Robert Herkes; Mr. Andrew Levin of the Mayor's Office; and Messrs. Ono, Yee, and Dement of SSFM International. STATEMENTS FROM THE PUBLIC - verbatim 1) Mr. Dick Hershberg_er D. HERSHBERGER: Thank you Mr. Heck, members of the Board. Basically, I have some questions that are written down here for you; but I would like to preface my remarks by stating that a year and a half ago, I was at a Zone 24 meeting for Rotary International; and Rotary International has taken a big step forward in providing fresh drinking water for areas of the world that don't have them. The Rotary Club of Kona , under my leadership last year, established two water projects- - one in Thailand and one in Africa; and for the amazing amount of -, less than $3,000.00 spent on behalf of our club added to some money from Rotary International, provided drinking water for almost 50,000 people in Africa and Thailand last year. The year before that, for less than $2,000.00, provided deep water wells and provided water for 17,000 people. At the meeting when these water projects were being discussed, I was sitting there and had just moved to Ocean View, knowing full well that water wasn't provided here as part of the County or State services; but people were stunned when I said, `Hold it just a minute -- people are looking for a water project, I know where you can do that. I drive 25 miles roundtrip to get my drinking water.' They were shocked that this was actually happening here in the United States. On to my questions: 1. In light of past dealings with other State and County of Hawaii entities and the inability of these agencies and elected officials to meet the promised needs and desires of this community, is it unreasonable of us to ask the Department of Water Supply that they be transparent and open in proceeding with the Ocean View Well Project through a website easily accessible to members of our community so that we can track this along with you? 2. What kind of timetable has been established to meet the end time criteria of this project and who specifically in Part B is responsible for the oversight of that timetable? 3. There's $6 million someplace that was released by the State of Hawaii for this project. Where is it? Is it in a bank account drawing interest; and if so, what's going to be done with the interest money from that $6 million? Page 2 of 21 10 -24 -06 Minutes (Ocean View).doc 4. What are the sites that are currently being considered for the water outlets? I understand that many members went and explored an area over by the park today, and I know that there are many citizens of the Ocean View community who would be interested in finding out just exactly where those sites are. Thank you. And thank you for your time and for coming down here. CHAIRMAN HECK: Mr. Hershberger... D. HERSHBERGER: Yes Mr. Heck. CHAIRMAN HECK: These issues are going to be covered in Item 9 on our Agenda. D. HERSHBERGER: I understand. CHAIRMAN HECK: And more than likely, that is going to be moved up to the top of the Agenda, so please be here for that. We will address that information. D. HERSHBERGER: Alright. Thank you. I appreciate that. I know that those are questions that have been discussed among the members of the communities, several of whom are here today. I know that these are questions of concern for the people within the community here, and I look forward to having these questions addressed. CHAIRMAN HECK: And the one I do see here that maybe wasn't going to be addressed was the website. And I don't have, personally, an answer as to what our plans are to have this particular issue on the website. I know I continuously have that information; and you can contact me, being the commissioner from this region. The website, now as I understand it, is maybe a little confusing or there is some problem with the website. D. HERSHBERGER: There are areas -, there are blind alleys in the website that lead to information that finalizes in the year 2004; and there is no information on several projects that you have beyond that point. So your webmaster could bring some things up to date there. And if you could find some space in the jungle of your website to do that. Trying to find, for instance, the criteria for giving testimony at this hearing today is -, CHAIRMAN HECK: Difficult. D. HERSHBERGER: It's virtually impossible to find it. Trying to find an Agenda on the website for this meeting is impossible. And it would certainly be good to know what is going to happen during the course of a meeting before that happens. A note to make things easier for the public to be in contact with you and for the public to be able to come and address you. (Chairman Heck noted that he had asked staff to work with the webmaster to simplify things so the public can get to the right location.) Page 3 of 21 10 -24 -06 Minutes (Ocean View).doc 2) Mr. Don Nitsche D. NITSCHE: Good morning. I represent Ocean View Community Development Corporation; and I have been the Chairman of the water committee for a number of years, and most of you have heard from me before. We are very happy to have gotten this far along now, and we really would like to have everything fast - tracked as much as possible. We recently found out that you can proceed with a test well or a feasibility study or whatever you want to refer to it as without an EIS (Environmental Impact Study). And we feel, as soon as possible, a contract should be let to drill the test well, and then we'll know what the source is at the park location where we propose this would be the best place to put the next test well. And if that is better than the USGS test well below the highway, that would be the site to put it in. And in the meantime, the EIS could be getting prepared for that site and it would save a lot of time instead of standing still and then starting the test well after the EIS is developed and the other things that have to be developed, I'm not sure what all they are. So we would just really like to have this project fast - tracked as much as possible. We're a little disappointed that it hasn't gotten off dead center until this point. I know you have picked a very good consultant company to do it, and I think they are prepared to go forward; but I would like the Department of Water Supply to direct them to do it as rapidly as possible. Every day, we are hauling -, and fuel and wear and tear on equipment on the 28 -mile roundtrip to haul water goes on and on and on. Every day is adding to our other problems we are having - -fuel and our cost of water. I can vouch for this - -I have my own water truck and I haul probably a couple of loads a week just for myself; and to keep my old truck running and to fuel it and all that adds a tremendous amount to our cost. So the quicker we can have a source within Ocean View, the better off the whole community is going to be. And we really request that you direct them to go forward as fast as possible. Thank you. APPROVAL OF MINUTES ACTION: Mr. Goya moved for approval of the Minutes of the September 26, 2006, Water Board Meeting; seconded by Mr. Wilkins and carried unanimously by voice vote. ADDITION OF ADDENDUM AND SUPPLEMENTAL ITEMS TO THE AGENDA ACTION: Mr. Wilkins moved to add ADDENDUM Item 8C) NORTH KONA, JOB NO. 2007 -026, KALOKO TANK #2 HYDROELECTRIC PROJECT; and SUPPLEMENTAL Item 10D) MISCELLANEOUS, EARTHQUAKE DAMAGE RECOVERY, to the Agenda; seconded by Ms. Helfrich and carried unanimously by roll call vote (Ayes: 7 - Ms. Helfrich, Messrs. Goya, Harai, Konanui, Smith, Wilkins, and Chairman Heck; Absent: 2 - Ms. Kim and Mr. Mochida). ACTION TO MOVE ITEMS UP ON AGENDA ACTION: Mr. Goya moved to take up the following items early - #9)A. HAWAIIAN OCEAN VIEW ESTATES WATER SYSTEM DEVELOPMENT, and #9)B. REPORT FROM SUBCOMMITTEE FOR HAWAIIAN OCEAN VIEW TEST WELL, on the Agenda to accommodate the residents and the consultants present; seconded by Mr. Wilkins and carried unanimously by voice vote. Page 4 of 21 10 -24 -06 Minutes (Ocean View).doc KA `U: A. HAWAIIAN OCEAN VIEW ESTATES WATER SYSTEM DEVELOPMENT: The consultant team (SSFM International) was introduced earlier. The Manager asked Mr. Ono to give a brief background on the company. Mr. Ono stated that SSFM International (SSFM) is a locally based company. They started on Oahu as a civil firm and diversified into civil engineering, project management, and construction management. The firm is about 45 years old. About 10 years ago, the company started spreading out to the outer islands. They have about 100 employees and have offices in Hilo and Kona and also on Maui and Kauai, and some operations in Guam and Saipan. They are primarily a project delivery firm, and the two managers that will be working on this project are Messrs. Yee and Dement. The Manager reported that the Department will be having a meeting with SSFM tomorrow to go over timelines not yet developed. He noted that SSFM comes with some very innovative concepts. Because this is a government project, there are rules that have to be played by. There is only so much you can do to "fast- track." However, the Department will make every effort to speed up what it can. One of the things the Department will be doing is consulting with its attorney to investigate the possibility of doing the exploratory well without an EIS. Discussion followed regarding the EIS. The consultant estimated it normally takes six to eight months to prepare, but perhaps an accelerated one could be done in half the time. The only time the EIS is not done first would be during an emergency declaration, such as earthquakes, where exemptions are given by nearly all of the permitting agencies. Ms. Helfrich mentioned the same issue arose (EA/EIS) while working on the Hamakua Ditch project. They were able to get an EA (Environmental Assessment) in less than three months because of community consensus and consensus among government agencies. She personally did not think it was appropriate to start a project of this size without all the paperwork in place. The Manager explained that certain things can be done concurrently with the paperwork process, such as land survey for waterline routes, once the exact locations are known. The thing that will hold up the final design is the determination of water level /water quality, how much can be pumped, etc. Those types of things will have to be known prior to developing the control system, the tank system, etc. He added that the meeting with the consultant will involve going over Phase 2 (design) also. The current contract with them is for Phase 1 (exploratory well; determine source). Maybe they can do some innovative ways of proceeding with Phase 2 already, and hopefully not slow things up. Mr. Wilkins asked if the consultant will also exercise oversight on the design of the well, distribution system, and drilling of the well (Manager replied in the affirmative). Mr. Wilkins requested the Board get copies of the agreement with the consultant so the Board may examine what exactly is involved in the project. (Manager will provide it once it is executed.) Page 5 of 21 10 -24 -06 Minutes (Ocean View).doc In response to Mr. Harai's question if the consultant would place a role in the site selection, the Manager replied they would. Chairman Heck asked the consultant if they would be going back to look at the site more closely ( Kahuku Park). He mentioned the South Kona to Ka`u Water Plan, which offered locations for a test well. Mr. Ono replied that they were aware of the site prior to this because of a letter that is on file and from previous discussions with some members of the community and with the DWS. This is a good time to furnish them with any information before they get too far along in the process. Chairman Heck asked how the Source Water Protection rule would affect, for example, Paradise Circle where there are homes nearby. Mr. Yee replied that it is governed by the State of Hawaii, Department of Health (DOH). After the development of a drinking water source, there is a Department of Health regulation that prohibits the development of cesspools within a 1,000 -foot radius. Normally, they would also prohibit septic systems; however, there is a variance that is allowed if they receive concurrence from DOH. A member of the public stated that everything above the highway in Ocean View Estates is required to have septic systems. There are no cesspools. The Manager commented that source water protection, if it becomes a mandatory program, would take this 1,000 -foot radius farther upslope. In response to Mr. Smith's questions about the consultant's scope of work if found that any residences needed retrofit to comply with the EA, Mr. Ono stated they would work with DWS to address that if it came up; and if an amendment to the contract were necessary to expand their scope of work, it would be worked out with the Department. Mr. Goya mentioned that some newer members of the Board might not have copies of the Ka`u to South Kona Water Master Plan, prepared by Townscape, Inc. (The Manager will have staff check for extra copies and send them out.) Chairman Heck mentioned there is a copy of it at the Ocean View Community Center office for anyone who wished to look at it. The study cost $250,000.00 to do and is very comprehensive. He went through Mr. Hershberger's list of questions. There is one site being considered for the exploratory well (upper part of Kahuku Park where there is County property). The Mayor's Ocean View Water Development Advisory Committee, back in 2004, decided that it would like the transmission line to go from that location, down Keaka Parkway and then possibly left on Lehua Parkway so it would then go down to the highway. Then at the highway, there is land up for sale, and there would be a potential location there for standpipes and spigots. There is also a potential location where the USGS test well was done last year (in Hawaii Ranchos Subdivision). There are no timelines yet for this project as the contract is in the beginning stages. Page 6 of 21 10 -24 -06 Minutes (Ocean View).doc The Manager addressed the question about where the $6 million State Appropriation is located. It is still with the State of Hawaii and will not be released until this Department draws from it to pay the contractor. Even then, the payments will come from the County of Hawaii. The money only gets released as needed to pay the contractor. Regarding the question about procedures to testify before the Water Board, he added that they are covered in the Department's Rules and Regulations, which is on the website. In response to Mr. Goya's question of how the Department would be managing the system once it is up and running, the Manager stated that it would be the Board's decision. At some point in time, the Board would need an Agenda item if it wants to someday take over the system and may want to consider if it wants the same water rate or establish a special rate. He mentioned that the operation and maintenance of this system would be much more expensive than the average system because of electrical costs due to the 2,000 -foot well depth, divided by total gallon output. Chairman Heck commented that the road corporation in Hawaiian Ocean View Estates is ready to do their trenching, and the community is ready to have the well in. There is obviously a big push on getting this moving. He asked if anyone that viewed the site today had anything to share that was outstanding or of concern for them. Mr. Ono stated that he did not see anything that could not be addressed. Their staff understands the interest and focal point of this project, and will optimize whatever they can to take advantage of any time savings. The Manager mentioned his concerns about where the intended well is to be, based on topography. He noticed a very large gully running through the area and was told that it may be a collapsed cave. One of his concerns was the 100 -year flood and if that is in the flood zone. If it is in a flood zone, it hampers development. The Department's preference would be to have the well and the tank on the same site. B. REPORT FROM SUBCOMMITTEE FOR HAWAIIAN OCEAN VIEW TEST WELL: Chairman Heck reported that at this time, the subcommittee has no findings since it has just viewed the site today. At the next Water Board Meeting, their findings could be presented. He asked if any committee members had any impressions after today's site visit. Their comments follow: • Mr. Harai — he has visited the site below the highway and also this one today. He has lived in Hawaii all his life. His thoughts were similar to the Manager's. It looks like a large ditch that at one time or another, water ran through. • Mr. Wilkins — had a flat tire and did not get to join the rest of the group on this tour. However, he spoke to the Chairman and thinks the site would be excellent, depending on interference on other projects laid out in the master plan. He recommended that the storage facility be as high on the site as reasonable to get gravity feed of sufficient pressure to supply water to the commercial area down below. • Ms. Helfrich — complimented everyone in this community. She has not been to Ocean View in a couple of years. It was very rural with no infrastructure at all. Now she is looking at a thriving community. She congratulated the community in its efforts. Page 7 of 21 10 -24 -06 Minutes (Ocean View).doc Chairman Heck asked Mr. Lamson to give some details of that area (he is chairman of Friends of Kahuku Park). Mr. Lamson stated that there are six acres above what is developed. The area seems to have several "rivers" running through it. He assumed they were lava tubes at one time that have collapsed. He feels that this is the best area to use. Future plans for the park are to have tennis courts and a swimming pool. Mr. Woodward addressed Mr. Wilkins' concern by stating that the elevation at the site is 2,300 feet. The area they are planning for the spigots is a little less than 2,000 feet. There would be a 300 -foot drop and that equals 150 pounds per square inch (psi) from that drop. You should have plenty of pressure no mater where you put the reservoir. Chairman Heck commented that he is very happy that this is moving along. He asked who should be the person to call if the community has questions - -if it would be SSFM. The Manager preferred that questions be directed through the Department of Water Supply, who would relay information to SSFM. Regarding Mr. Goya's suggestion of getting information to the community, the Manager stated that information on the project could be provided on the Department's website. Ms. Helfrich also mentioned that Orchidland Community Association has its own website and can grab public information from whatever is online and place it on their website. If Ocean View had something similar, that may eliminate the extra step. Chairman Heck mentioned that the Ocean View Community Center has a website. Mr. Coates added that the Ocean View Chamber of Commerce has one, and they have a very good webmaster. Chairman Heck stated that the information could be provided to the Chamber of Commerce. The Manager stated that he would review, with the consultant, the possibility of monthly updates on their progress and place it on the website. Mr. Ono mentioned that Mr. Bill Dement will be the lead project manager who will be working with the Department and will be taking the lead on the project. The Manager added that the project engineer from the Department of Water Supply would be Ms. Shari Komata. Mr. Schauweker urged the Board to consider Ocean View agriculture water rates as it looks forward to designing this system. There are several small farms in Ocean View. It would be advantageous to have a spigot they could make use of. The farmers need to have access to the water, even if they have to haul it themselves. County -wide, the farmers are given a discount on their water rates (about 70 cents per thousand gallons). He is paying $25.00 per 1,000 gallons for Page 8 of 21 10 -24 -06 Minutes (Ocean View).doc his water. This County imports over 85% of its products off - island and needs to promote more agriculture. Mr. Ken Wicks stated that the people of Ocean View would be interested in who is distributing this $6 million. Chairman Heck suggested that he speak with Mr. Levin. There being no further discussion, the Chairman called for a short break. RECESS: 11:00 a.m. to 11:15 a.m. (Members of the Ocean View community and representatives of SSFM International left the meeting.) Pi TNA A. JOB NO. 2003-833, OLA`A NO.3 DEEP WELL REPAIR: The Board considered a request from the contractor, Beylik Drilling and Pump Service, Inc., for a contract time extension of 90 calendar days due to a delay in the manufacture of the spare Byron Jackson submersible motor. The contractor's supplier has scheduled a shipping date of January 8, 2007, from the east coast. This first time extension request was reviewed by Engineering staff found to be justified. The Manager recommended that the Board grant this extension of contract time of 90 calendar days to Beylik Drilling and Pump Service, Inc., for JOB NO. 2003-833, OLA`A NO. 3 DEEP WELL REPAIR. If approved, the contract completion date will be extended from October 30, 2006, to January 29, 2007. ACTION: Ms. Kim moved for approval of the Manager's recommendation; seconded by Mr. Wilkins and carried unanimously by voice vote. SOUTH HILO: A. JOB NO. 2003-812, CONSTRUCTION OF THE SOUTH HILO G. I. PIPELINE & SERVICE LATERAL REPLACEMENT — PART "A" & PART `B ": The Board considered a request from the contractor, Willocks Construction Corporation, for a 220 - calendar day extension to the contract time. The time extension is to compensate for the time delays the contractor experienced with scheduling the asphaltic concrete scarifying and resurfacing work and to perform additional water system improvement work as requested by the Department of Water Supply. Staff has reviewed the contractor's request and finds that the 220 - calendar day extension is justified. This is the first extension to the contract time. The Manager recommended that the Water Board approve a contract time extension of 220 calendar days from April 4, 2006, to November 10, 2006, to Willocks Construction Corporation, for JOB NO. 2003 -812, CONSTRUCTION OF THE SOUTH HILO G. I. PIPELINE & SERVICE LATERAL REPLACEMENT — PART "A" & PART `B." Page 9 of 21 10 -24 -06 Minutes (Ocean View).doc ACTION: Mr. Goya moved for approval of the Manager's recommendation; seconded by Ms. Kim and carried unanimously by voice vote. NORTH KOHALA: A. SITE ACQUISITION FOR THE PROPOSED KYNNERSLEY 0.30 -MG RESERVOIR: The Department of Water Supply is seeking to acquire a site in the North Kohala district for a proposed 0.30 -MG reservoir. The subject site is along Kynnersley Road and is adjacent to the existing 0.10 -MG Kynnersley No. 1 Reservoir site at an elevation of approximately 950 feet. The 0.30 -MG Reservoir will replace the 0.10 -MG Reservoir which is nearing the end of is useful lifespan. The new site is 0.420 acres in size and was appraised by Lawrence Appraisal Group at $315,000.00 (fee simple) as of April 1, 2006. In negotiations with the owner, Surety Kohala Corporation, the Department of Water Supply pointed out that the real estate market has cooled somewhat in recent months. In response, the owner has agreed to reduce the selling price to $300,000.00. The site to be acquired is Tax Map Key 5 -4- 002:022. Additional expenses may include one half of the closing cost, which is estimated to be $500.00. Funds are available in the current budget for this land acquisition. The Manager recommended that the Water Board approve the purchase of the 18,295 -sqare -foot site identified as Tax Map Key 5 -4- 002:022 for the purchase price of $300,000.00 plus one half of the closing cost and further that the Chairman or Vice - Chairman be authorized to execute the appropriate purchase documents. MOTION: Mr. Goya moved for approval of the Manager's recommendation; seconded by Ms. Kim. Mr. Riley had concerns about landowners being treated fairly with respect to the market fluctuations and appraisals. Mr. Beck stated that the $300,000.00 was their suggestion after this Department mentioned getting a reappraisal. Mr. Goya noted that this on the 2001 C.I.P. list and asked about a timetable. The Manager stated that after this land acquisition, a consultant will be procured. Completion would be probably in another two years. ACTION: A vote was taken on the Motion. Motion was carried unanimously by voice vote. B. JOB NO. 2002-805, MAKAPALA PRODUCTION WELL AND SUPPORTING FACILITIES: The Board considered a request from the contractor, Isemoto Contracting Co., Ltd., for a 59- calendar day time extension. This request is due to delays resulting from Hawaii Electric Light Company, Inc.'s (HELLO), problems in trying to obtain their required easements. They Page 10 of 21 10 -24 -06 Minutes (Ocean View).doc will most likely need to redesign their pole layouts due to non - response from a landowner. This is their fourth time extension request. The previous extensions were listed in the Agenda. Staff has reviewed the request and finds that the 59 calendar days are justified. The Manager recommended that the Board approve a contract time extension of fifty -nine (59) calendar days from October 31, 2006, to December 29, 2006, to Isemoto Contracting Co., Ltd., for JOB NO. 2002 -805, MAKAPALA PRODUCTION WELL AND SUPPORTING FACILITIES. ACTION: Mr. Wilkins moved for approval of the Manager's recommendation; seconded by Mr. Smith and carried unanimously by voice vote. NORTH KONA: A. JOB NO. 2005-880R, KAHALU`U SHAFT BY -PASS HYDROELECTRIC PROJECT AT THE KAHALU`U SHAFT: Bids for this project were opened on October 12, 2006, at 2:00 p.m. This project involves the installation of a 40 -kW hydroelectric generation unit at the Kahaluu Shaft Deep Well off Kamehameha III Road in North Kona. Mr. Clyde Young and Ms. Garson explained that there were deficiencies in the bid documents, and plans are to rebid the project. Plans and specifications were prepared "in- house." Ms. Garson suggested that the Board cancel award and authorize the Department to rebid the project. ACTION: Ms. Kim so moved; seconded by Mr. Wilkins and carried unanimously by voice vote. B. KONA COASTVIEW WONDERVIEW IMPROVEMENT DISTRICT PROJECT: An update of the water hook -ups was given by the Manager. As of October 23, 2006, of the 426 lots, 339 are hooked up to meters. Forty -seven lots have meters installed but are not hooked up to the meter yet. Forty lots have no meter installed, 21 of which are vacant. There are still some that need to be connected. Fifty customers, including 6 Matsumoto accounts, have not closed existing accounts on Mamalahoa Highway and Kona Highlands. These are areas where they have meters and are feeding them down to the subdivision. As for Matsumoto Water Company and a time schedule, based on consultation with Ms. Garson, the Department's Rules and Regulations, and when the meters are to be read, the Department will send Matsumoto Water Company a first letter on November 13, 2006, with a due date of November 22, 2006, for payment. A second letter is to be sent November 23, 2006, with a due date of December 8, 2006, which will allow the Department every legal right to remove the meters any time after December 11, 2006; and that is the Department's intent. This is to assure the Department that it is following the Rules and Regulations so it cannot be contested. Page 11 of 21 10 -24 -06 Minutes (Ocean View).doc Ms. Garson clarified that there is an appeal procedure in place on the amount and it could be dragged on longer, depending on the outcome. First there is an administrative hearing, and then one with the Board, and then it is possible that a civil lawsuit could be filed. The Department already has a civil lawsuit filed on collection, so they could probably be consolidated. Mr. Goya stated that there are two issues - -one is with Matsumoto Water Company, which is an entity, to whom the Department will be sending notices as discussed, and the other is a legal matter with an individual who claims they represent Matsumoto Water Company. Chairman Heck asked if that meant that the deadline for turning off the meters is December 11, 2006, and asked if approval is needed by the Board. The Manager replied that was correct and that no approval is needed by the Board. This is covered in the Department's Rules and Regulations. Mr. Wilkins commented that he was trying to separate two populations in his mind. One population is people now receiving water through Matsumoto Water Company and the other population includes individuals who have taken individual action, not necessarily relating to the Matsumoto Water Company. He asked if that was correct. The Manager replied it was correct but added that there are some that were on the Matsumoto Water Company, some on Department of Water Supply water, and some on the Kalaoa Water Company. Actually, there are three different populations. Mr. Wilkins commented that he may ask later on for relative numbers of people in those three populations. C. JOB NO. 2007-026 KALOKO TANK #2 HYDROELECTRIC PROJECT: The Department of Water Supply was initially awarded $175,000.00 from the USDA Rural Utilities Grant Program for the Kaloko Tank #2 Hydroelectric project. The original cost estimates had increased two -fold so staff inquired as to the possible availability of additional funding. The Department has been awarded an additional $275,000.00 for the project. Project Scope: This project involves the installation of a 40 -kW hydroelectric generation unit at the Kaloko Tank #2. The Manager recommended that either the Chairman or the Vice - Chairman be authorized to sign the addendum for the additional funding of $275,000.00 from the USDA Rural Utilities Grant Program for the Kaloko Tank #2 Hydroelectric project, subject to review and approval by Corporation Counsel as to form and legality. MOTION: Mr. Wilkins moved for approval of the Manager's recommendation; seconded by Ms. Kim. Page 12 of 21 10 -24 -06 Minutes (Ocean View).doc In response to Mr. Smith's question for clarification if the total the Department would be getting would be $450,000.00 ($175,000.000 plus additional $275,000.00), the Manager replied in the affirmative. He added that the Department's Energy Management Analyst, recently hired, has already earned several years of her salary by getting this $275,000.00. After discussion regarding how this benefits the Department, it was noted that it will be getting power purchase from HELCO at the avoided cost rate. In response to Mr. Wilkins' question of where Kaloko #2 tank is located, the Manager replied it is on Hinalani Drive. ACTION: A vote was taken on the Motion. Motion was carried unanimously by voice vote. KA `U: A. HAWAIIAN OCEAN VIEW ESTATES WATER SYSTEM DEVELOPMENT: Discussed earlier. B. REPORT FROM SUBCOMMITTEE FOR HAWAIIAN OCEAN VIEW TEST WELL: Discussed earlier. MISCELLANEOUS: Ms. Garson noted that representatives from Relo Construction, Inc., were present and suggested the Board take up its Executive Session, Item 10(G) - Matsumoto, and 10(A) - Equipment Bid No. 2006 -09, at this time. G. EXECUTIVE SESSION: ACTION: Mr. Goya moved that the Board convene an executive meeting regarding the following case, pursuant to Section 92- 5(a)(4), Hawaii Revised Statutes (HRS), as amended, for the purpose of consulting with its attorney on questions and issues pertaining to the Board's powers, duties, privileges, immunities, and liabilities, including the current status of the litigation. A two - thirds vote, pursuant to HRS Section 92 -4, is necessary to hold an executive meeting. 1) Department of Water Supply vs. Lillian Matsumoto, Civil No. 05- 1 -0080K 2) Equipment Bid No. 2006 -09, Sale of Used Drill rig and Appurtenances from the DWS Motion seconded by Mr. Wilkins and carried unanimously by voice vote. Executive Session began at 11:40 a.m. and ended at 11:50 a.m. A. EQUIPMENT BID NO. 2006-09, SALE OF USED DRILL RIG AND APPURTENANCES FROM THE DEPARTMENT OF WATER SUPPLY: Bids were opened on October 11, 2006; and following are the bid results: Page 13 of 21 10 -24 -06 Minutes (Ocean View).doc Bidder Bid Amount Part A (Items on Big Island) Bid Amount Part B (Items on Kauai) Relo Construction, Inc. $400,600.00 $2,500.00 Derrick Moreia Well Drilling $227,001.00 $0 Be lik Drilling & Pump Service, Inc. $187,000.00 $2,500.00 Techworld Solutions, LLC $110,000.00 $0 RJR Services $75,050.00 $0 Water Resources International, Inc. $35,000.00 $1,600.00 Identical Part B bid amounts by Beylik Drilling & Pump Service, Inc., and Relo Construction, Inc., were submitted. Lots were drawn and Relo Construction, Inc., won. As previously agreed upon with the Department of Water Supply (DWS), Counties of Maui and Kauai, the proceeds from this sale will be divided equally among the three DWS Counties of Maui, Kauai and Hawaii. In addition, each of the DWS Counties had previously selected appurtenant equipment to keep (which was not included in the bid package). After dividing the proceeds equally, the value of the equipment that each DWS County decided to keep will be subtracted from their share of the proceeds. The values of the equipment were obtained by an independent appraiser on the mainland and by estimates obtained by the DWS County of Hawaii. The agreed -upon estimates for the equipment that each County will keep are as follows: County Item Estimated Value Hawaii Forklift $3,000.00 Hawaii Subtotal $3,000.00 Maui 1996 Freightliner Truck $12,500.00 20'x8' Trailer $1,800.00 12'x8' Utility Trailer $500.00 Maui Subtotal $14,800.00 Kauai Welder $2,500.00 40' Container $3,500.00 Kauai Subtotal $6,000.00 Total Estimated Value of Equipment: $23,800.00 Page 14 of 21 10 -24 -06 Minutes (Ocean View).doc The proceeds would then be divided as follows: Total Sale of Equipment ($400,600.00 + $2,500.00): $403,100.00 Value of Equipment To Be Kept: $23,800.00 Total Value To Be Divided ($403,100.00 + $23,800.00): $426,900.00 Each County is Entitled To ($426,900.00 divided by 3): $142,300.00 Subtracting the value of items that each County is keeping, the value to be paid to each County equals: County of Hawaii: $142,300.00 minus $ 3,000.00 = $139,300.00 County of Maui: $142,300.00 minus $14,800.00 = $127,500.00 County of Kauai: $142,300.00 minus $ 6,000.00 = $136,300.00 The Manager recommended that the Board award EQUIPMENT BID NO. 2006 -09, SALE OF USED DRILL RIG AND APPURTENANCES FROM THE DEPARTMENT OF WATER SUPPLY, to Relo Construction, Inc., for the bid price of $403,100.00 and the proceeds to be divided by the Department of Water Supply Counties of Maui, Kauai, and Hawaii, as shown above. MOTION: Ms. Helfrich moved for approval of the Manager's recommendation; seconded by Ms. Kim. Chairman Heck asked if anyone from Relo Construction, Inc., wished to make a statement. Mr. Lopes stated that he was here to listen in on the proceedings. He is from Maui and is the owner of Relo Construction, Inc. He is prepared to make full payment today. He added that he has scheduled the shipment of the equipment with Young Brothers; and as soon as it is approved, he is ready to call them. The Manager asked what the procedures would be for turning over ownership or if there was anything that would hamper the transfer. Ms. Garson replied that Mr. Ikeda has the certificates of title, so he can go ahead and take care of that. Mr. Lopes asked about a bill of sale, and also about a license for the truck. Page 15 of 21 10 -24 -06 Minutes (Ocean View).doc Ms. Garson replied that whatever title this Department received from USGS would be turned over to Relo Construction, Inc. Ms. Kim asked about transport on the road to Young Brothers. Mr. Lopes replied that it would be trucked over. He added that he may need a bill of sale to forward it to Young Brothers and needed all the paperwork because it is being delivered tomorrow (October 25, 2006). He asked if that could be arranged. Ms. Garson replied that the certificates of title should be adequate; but if Mr. Lopes needed another document, she could draft one up when she returns to her Hilo office. Perhaps the Vice - Chairman, since he is from Hilo, could be delegated authority to sign any documents necessary for the transfer. Mr. Lopes asked what the time limit was for the high bidder to produce the funds. (Mr. Ikeda indicated it is one month from time of award.) Mr. Lopes indicated that if things get stalled, they have a month to pay in full and then another month to remove the equipment. He wanted to make sure that the gates are not locked and that he can get in to remove the equipment. Mr. Ikeda advised him to contact the Department to make the arrangements. The Manager added that the Department would try to do the paperwork as soon as possible so they could take possession. It is in the Department's best interest not to delay and is anxious to have it taken away. He was sure Ms. Garson could provide them with whatever documentation they needed to make the transfer legal. Ms. Garson stated that Mr. Lopes would need to take their own precautions for what needs to be done to register the vehicle, etc. As far as the transfer from the Department of Water Supply to Relo Construction, Inc., of what the Department is in possession of, she could help with that. She suggested that someone make a friendly amendment to the Motion to authorize either the Chairman or the Vice - Chairman to execute any transfers of certificates of title. AMENDMENT: Mr. Smith so moved; seconded by Ms. Kim. ACTION: A vote was taken on the Motion to award EQUIPMENT BID NO. 2006 -09, SALE OF USED DRILL RIG AND APPURTENANCES FROM THE DEPARTMENT OF WATER SUPPLY, to Relo Construction, Inc., for the bid price of $403,100.00 and the proceeds to be divided by the Department of Water Supply Counties of Maui, Kauai, and Hawaii, as shown above, and that either the Chairman or the Vice - Chairman be authorized to execute any transfers of certificates of title. Motion was carried unanimously by voice vote. Mr. Lopes thanked the Board and added that it will make a lot of families happy on Maui. That is their whole purpose of purchasing the drill rig. Page 16 of 21 10 -24 -06 Minutes (Ocean View).doc (Representatives from Relo Construction, Inc., left the meeting at 11:59 a.m.) B. MONTHLY PROGRESS REPORT: Mr. Goya asked for clarification on budgeted projects, which stay on this report until they get done. Looking at the grand total, there is $52 million -plus on the books. However, the contracted projects total less than $40 million. It takes some time for projects to move through the system. In essence, a lot of projects that are currently being approved will be completed two or three years down the road, based on land acquisition or other considerations. The Manager stated there are two types of approval. If the Board approves the general concept of the project itself, that project may not get done for the next several years. The other type of approval is a construction award, and that usually gets done within 11/2 years. Mr. Goya mentioned that as the Department starts talking about rate increases based on capital budgets, it should keep in mind that it is based on actual construction and completion. C. REVIEW OF MONTHLY FINANCIAL STATEMENTS: In response to Mr. Goya's request for an update on the Public Information and Education Specialist, the Manager stated that it has not been advertised yet but should be soon. Chairman Heck had questions on who makes decisions on investing. Staff explained that it lies with the County Treasurer. It is not within the Board's authority. The Manager mentioned a workshop that was held during the HWWA Conference on Kauai that covered innovative ways of investing money. They plan to try and schedule another meeting and include finance personnel. D. EARTHQUAKE DAMAGE RECOVERY: By Supplemental Agenda, the first item under this category is the Department's need of procuring the services of a professional engineer (structural) to evaluate the damages to the DWS concrete reservoirs and steel tanks from the earthquake. DWS is unable to determine an amount at this time as staff is still finding more damages. Subsequently, construction contracts may be required to perform some of the repairs as DWS may not have adequate personnel and/or equipment to do the job(s). FEMA funding for this work will be pursued. The Manager recommended that the Board approve the request to procure a professional engineer and subsequent construction contracts to repair the damages as recommended by the professional engineer. This request is being done at this time to allow DWS to address the existing safety and health issues as quickly as possible. MOTION: Mr. Wilkins moved for approval of the Manager's recommendation; seconded by Ms. Kim. Page 17 of 21 10 -24 -06 Minutes (Ocean View).doc In response to Mr. Smith's concern that no dollar amount is included, Ms. Garson stated that the procurement process is involved here because of the disaster declaration. Because of the timing of this meeting, it was placed on the Agenda this way to inform the Board of what is happening. The declaration allows the Department to procure these services. ACTION: A vote was taken on the Motion. Motion was carried unanimously by voice vote. The second item under this category was a report by the Manager on the damage sustained by the Department during the earthquake of October 15, 2006. By districts, the report is as follows: • Kau - no damage. • Puna - no damage, other than power outages that caused pumps to knock off. • Hilo - one small pipeline break in Kaiwiki. • Hamakua Coast - several leakages; major leak at Laupahoehoe. The entire Waipunalei area was without water for a day or so. Major break in Pauilo mauka, which was repaired the next day. • Waimea - several small main breaks. The treatment plant went down for awhile, but staff was able to get it back online. • North Kohala - some small main breaks. • Kona - tanks were designed to slide on their sliding joint; and they did, but it caused them to leak (6 or 7 tanks affected). Some of the consultant work will include plans to repair them. He added that the major problem the Department had was this past weekend with the notice of water bubbling up from two of the three 50- million gallon reservoirs in Waimea. The way the reservoirs were designed, they were made on a side hill so one side is cut and the other is fill. On the fill side, the water is bubbling from the bottom, or "toe," of the embankment. That was discovered Friday afternoon (October 20). Inspectors came from both the State of Hawaii, Department of Land and Natural Resources, and from the Bureau of Reclamation and determined that it posed a threat of breaching. The Department immediately began draining the two reservoirs to a point where the bubbling stopped in Reservoir No. 1; for No. 2, it did not stop. Consequently, No. 2 will be drained all the way down and repaired. No. 1 is being drained into the treatment plant so the water can be used. Reservoir No. 3 has no damage. All of this will not hamper the Department's ability to serve the community as long as the weather pattern continues with rainfall on the mountain. Otherwise, the Department may have to consider issuing water conservation if the rain were to dwindle for two or three weeks. The average consumption in Waimea is about 2 million gallons a day. There is also a well, but it only produces about 700,000 gallons a day. The prediction of a drier winter because of El Nino may create a problem. Also, the Waimea irrigation system is out of commission. They lost their flume because of the earthquake. In turn, they have activated one of their wells behind the 60- million gallon reservoir to provide irrigation water. Prior to the discovery of the problems with the Department's reservoir, they were looking for this Department to give them some water. Needless to say, the Department cannot provide that since only one 50- million gallon reservoir available. He commended the Operations personnel for responding well and getting water back online very timely. Everything is operating okay right now, except for Waimea, which may take quite a while to repair. The initial assessment is to line the reservoirs with some sort of liner; however, the Page 18 of 21 10 -24 -06 Minutes (Ocean View).doc consultant will also do a structural evaluation to make sure the structures are sound and come up with recommendations on linings. Mr. Harai asked about the days between the earthquake and when the reservoirs in Waimea were found to be bubbling, and if it only happened then or if it was happening right after the earthquake. He also asked what impacts there would be to the community if any of the Waimea reservoirs were to breach. The Manager replied that the Department's staff did an initial check of the reservoirs after the earthquake and did not find anything. When the inspector from the Bureau of Reclamation came, he checked it thoroughly and found the bubbling. It probably was happening before it was detected. As far as impacts, Nos. 1 and 2 would dump into the Waikoloa stream, in which case, it could result in some flooding downtown if it overflowed below the bridges. If No. 3 breached on the embankment side, the water could theoretically end up in the Waimea ballpark area and take out some homes on the way down. Ms. Kim commented that the situation with Waimea was handled really well. She thought of the Public Information and Education Specialist this Department will be hiring and how that person would play a role in this type of situation. She hoped the person knows that each of the communities on this island have different kinds of "coconut wireless." In Waimea, because of the president of the Waimea Community Association we have on our Board, Waimea is the most email conscious community she has seen on this island, so that would have been a very effective way of letting people know right away of what was happening. The Manager stated that because of this particular event being a "disaster," all information was put out by Civil Defense Agency. They get updates from this Department and get the information out. It is best that way all around. Ms. Helfrich commented that she also experienced water outage and could not say enough nice things about the Department and how the water was back in service so quickly. She also added that this event is like a wake -up call and mentioned a synchronized matrix program to take place October 31, 2006, at the Hapuna Beach Prince Hotel and hoped that DWS is represented. Mayor Kim will be the chief spokesperson for it, and it is a Homeland Security Conference. It is very important that people pay attention to all those opportunities to communicating better. Mr. Smith stated that on both occasions, October 15 and 21, a lot of people were getting in touch with him with their concerns. At all times, he was able to keep in touch with the Manager, Deputy Manager, and staff so that he could give updates. He appreciated their responses. The Manager informed the Board that something was written about the Waimea reservoir having a crack. He did not know where that information had come from. He added that there are no cracks. Chairman Heck asked if the Department is considering lining Reservoir No. 3 in the future. The Manager stated there were no plans to do that, but maybe it could be made part of the scope Page 19 of 21 10 -24 -06 Minutes (Ocean View).doc of work. It would need to be separate, since it does not fall under the emergency category and would not qualify for FEMA funding. He asked Mr. Ikeda to check with the consultant on whether that would be something they could take a look at. E. MANAGER'S EVALUATION: The Board decided that each Member use the form provided to evaluate the Manager's past performance and submit them to the Secretary, who will forward them to Ms. Kim to compile the results. She asked for a sample of how it was done in past years (will get from Secretary). F. MANAGER'S REPORT: 1. Kona Water Quality - Mr. Young reported on the design of the column pipe modifications to the Kahaluu Shaft pump. Hopefully, it should be out by the end of the year. The Manager briefed the Board on the negotiations for the water corridors. The one with Bolton, Inc., is very close; and the Department is still working on two others. 2. Water Service to Kona Hospital - working on getting parties together for the November meeting (discussed at the September 26, 2006, Water Board Meeting). 3. Palani Road Transmission Waterline project - goal is to have it ready for advertisement by December 2006. Looking at about $12 million. It will be a great benefit to the system in Kona and will help the quality of water going down to Kailua -Kona. 4. Negotiations with Kamehameha Investment Corporation (KIC) - staff met with Ms. Garson and got some advice and is currently going over some things. Information has not been relayed to KIC yet because staff is waiting on some figures being prepared by Engineering. The Department is making its best effort to get this thing going. Mr. Smith suggested that KIC be made aware that the Department is working on something and will be getting back to them. Ms. Garson mentioned she could follow up. 5. American Water Works Association (AWWA) National Conference - next June 24 to 28, 2007, in Toronto. Please let Ms. Takeguchi know if attending. Passports will be needed, not to enter Canada, but to return to United States (beginning December 31, 2006). Additional information may be checked at AWWA.org (look for ACE conferences). The Department's tapping team will be representing Hawaii, and the Department intends to send the four members as well as their supervisor, Mr. William Yamamoto. 6. Chairman Heck asked about the article discussed last month, to be published in the newspaper regarding statements Ms. Ford had made on Kona water as part of her campaign. The Manager stated that the Deputy Manager and Mr. Okamoto were working on it, and he would follow up. G. EXECUTIVE SESSION: Taken up earlier. H. CHAIRMAN'S REPORT: Chairman Heck mentioned testimony given last month by Ms. Tobey Hazel regarding special water rates for the elderly and handicapped. He thought it was worthwhile discussing. Page 20 of 21 10 -24 -06 Minutes (Ocean View).doc Mr. Goya suggested deferring that to the consultant working on the water rate study, R. W. Beck, Inc., and have a request for some information and maybe have some later discussion on it when they come to talk with the Board on the water rate study. Ms. Garson will do research in the meantime on whether it is legal to give such a rate, and provide a letter to the Board on her findings. The Manager stated that he had intended to place, on next month's Agenda, an item to get input from the Board on what they would like the consultants to discuss as far as rates, and this could be one of them. The concerns could be addressed by the consultant the next time they come to the Water Board Meeting (January 2007). Ms. Kim stated that if anyone would know whether other jurisdictions impose such a rate, it would be the consultants. ANNOUNCEMENTS: 1. Next Meeting: The next meeting of the Water Board will be held on November 28, 2006, 10:00 a.m., at the Department of Water Supply, Hilo Operations Center Conference Room; 889 Leilani St., Hilo, HI. STATEMENTS FROM THE PUBLIC None. ADJOURNMENT ACTION: Mr. Goya moved for adjournment of the meeting; seconded by Ms. Kim and carried unanimously by voice vote. Meeting adjourned at 12:40 p.m. Secretary The Department of Water Supply is an Equal Opportunity employer and provider. Page 21 of 21 10 -24 -06 Minutes (Ocean View).doc