HomeMy WebLinkAbout2008-11-25 Water Board MinutesMINUTES
DEPARTMENT OF WATER SUPPLY
COUNTY OF HAWAII
WATER BOARD MEETING
November 25, 2008
Hilo Operations Center Conference Room
MEMBERS PRESENT: Mr. Thomas Goya, Chairperson
Mr. Riley Smith, Vice - Chairperson
Mr. George Harai
Mr. Bryan Lindsey
Mr. Francis Kuailani (10:06 a.m.)
Mr. Robert Meierdiercks
Mr. Milton Pavao, Manager, Department of Water Supply
(ex- officio member)
ABSENT: Ms. Millie Kim, Water Board Member
Mr. Bernard Konanui, Water Board Member
Mr. Dwayne Mukai, 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
Mr. Earl Ichimura, Pural Water Specialty Co., Inc.
Mr. John Derby, Executive Secretary, Hawaii Conference Foundation of
the United Church of Christ
Mr. Hugh Morita, Pural Water Specialty Co., Inc.
Mr. Harold Hart, Pural Water Specialty Co., Inc.
Mr. Sherman Hee, Attorney (for Pural)
Mr. Steve Lim, Carlsmith Ball LLP (representing O'oma)
Department of Water Supply Staff
Mr. Quirino Antonio, Jr., Deputy Manager
Ms. Kris "Kanani" Aton, Public Information and Education Specialist
Mr. Kurt Inaba, Engineering Division Head
Mr. Keith Okamoto, Engineering Division
Mr. Lawrence Beck, Engineering Division
Mr. Richard Sumada, Waterworks Controller
Mr. Daryl Ikeda, Chief of Operations
Mr. Clyde Young, Operations Division
Ms. Julie Myhre, Energy Management Analyst, Operations Division
Mr. Terrance Nago, Engineering Division
Page 1 of 26 Water Board Minutes — 11 -25 -08 Meeting
CALL TO ORDER — Chairperson Goya called the meeting to order at 10:01 a.m.
STATEMENTS FROM THE PUBLIC
None
APPROVAL OF MINUTES:
ACTION: Mr. Meierdiercks moved for approval of the Minutes of the October 28, 2008,
Water Board Meeting and of the Minutes of the October 28, 2008, Public Hearing on Proposed
Amendment to Frequency and Method of Calculating the Power Cost Charge; second by
Mr. Harai and carried unanimously by voice vote.
APPROVAL OF SUPPLEMENTAL AGENDA:
ACTION: Chairperson Goya entertained a Motion to approve the addition of Supplemental
Agenda Item No. 7, regarding Job No. 2007 -043, Construction of the Waikoloa Reservoir No.
2 Earthquake Repairs, County of Hawaii, State of Hawaii, FEMA- 1644- DR -HI, FIPS NO.
001- UVK -00, PW NO. 638, to the Agenda.
MOTION: Mr. Harai so moved, seconded by Mr. Smith, and carried unanimously by voice
vote.
ACTION TO MOVE AGENDA ITEMS:
Noting that there were several changes to the Agenda to accommodate people making
presentations, Chairperson Goya entertained a Motion to move up following Item S (A) 01a 'a
Flume Spring Source, Item 9 (E) Power Cost Adjustment Clause to have the information filed
for proper time of public notice of the upcoming Public Hearing on December 16, 2008, and to
take up Item 8 -D, Resolution No. 08 -08 of Support for Development of Water Desalination
Facilities for O'oma Beachside Village LLC.
MOTION: Mr. Meierdiercks so moved; seconded by Mr. Smith and carried unanimously by
voice vote.
SOUTH HILO:
A. OLA`A FLUME SPRING SOURCE:
The Manager introduced a presentation by Mr. Ichimura of Pural on a proposed water
treatment plant to use the Ola` a Flume Spring source located near the Kaumana City
subdivision to supply the Hilo water system. In an effort to reduce its energy consumption,
the Department of Water Supply is considering purchasing the water as a replacement for the
existing well and also as a supplement to other existing wells, provided that the treatment
process and the treated water meet all Environmental Protection Agency (EPA) and
Page 2 of 26 Water Board Minutes — 11 -25 -08 Meeting
Department of Health standards and requirements. It will also have to be at a cost less than the
Department's cost to produce the water from the existing wells.
Mr. Ichimura began by stating that this "Living Water" project is mission -driven by the
church, and he introduced Mr. John Derby, executive secretary of the Hawaii Conference
Foundation; Mr. Sherman Hee, a member of the Property Committee of the Foundation;
Mr. Harold Hart, team leader from the Big Island for Pural; and Mr. Hugh Morita, project
engineer for Ola' a Flume Spring. Mr. Ichimura noted that the team had been working on the
project for the past six years.
Mr. Derby represented the land owner where the Ola Flume Spring source is located, Hawaii
Conference Foundation United Church of Christ. The Foundation is the investment and
management arm of the United Church of Christ in Hawaii.
Mr. Derby noted that the church's roots in Hawaii date back to 1820 when missionary Hiram
Bingham arrived on Maui. Today there are 130 UCC churches in Hawaii, with 29 on Hawaii
Island, and holds title to the Ola' a Flume Spring. The Ola' a Flume Spring, on conservation
land on the slopes of Mauna Kea above Kaumana City, was bequeathed to the Foundation by
missionary Titus Coan.
The Department of Water Supply has a 50 -year water lease with Hawaii Conference
Foundation for the Ola' a Flume Spring made in 1978, which expires in April 2028. Mr. Derby
indicated that the current rental is up for renegotiation. Since the source is not in use by the
County at this time, they have not needed to set the rental for the opening period, but should at
some point. Pural Water Specialty, Inc., has been working with Hawaii Conference
Foundation for the past six years as a technical adviser. At this point, Mr. Derby turned it
back to Mr. Ichimura of Pural Water Specialty, Inc. to explain the proposed Ola' a Flume
Spring water treatment plant.
Mr. Ichimura explained his 20- year -old company's background as a specialty contractor
certified in the State of Hawaii to operate water treatment plants and water distribution
systems, including approximately 20 water systems in the state. The flume spring was created
by an 1855 lava flow at an elevation of approximately 2,000 feet on Saddle Road above
Kaumana City. The tunnels were developed in the 1890s for the purpose of flowing cane
down to the Ola'a Mill, about 500 feet of collection systems in the mountain and several arms
in the spring, tunnels where the water is collected.
Mr. Ichimura noted that up to 2002, the Department of Water Supply used the Ola' a Flume
Spring source to service Hilo. According to their records and the Department's records, about
25% of Hilo's water was provided through this spring source. He said the source has never
dried up since the 1890s. However, the Department stopped using the source due to a new
Federal Surface Water Treatment Rule whose treatment requirements were not met at the time.
From that time, DWS replaced Ola' a with water from the Saddle Road Well A and Piihonua
Well C.
Page 3 of 26 Water Board Minutes — 11 -25 -08 Meeting
This spring was a revenue source for the Foundation that enabled the church to do mission
work, but the revenue source has stopped so the Foundation had kept it on the back burner. At
the time, the timing was not right because oil prices were low, but now with high energy
prices, Mr. Ichimura believed the time was right to meet with the State Department of Health
to propose reactivating the spring source. They did a financial feasibility study and presented
a proposal to the Manager and Mr. Inaba which would involve design, building and operating
a water treatment plant using membrane technology which the State Department of Health has
approved. The model looks appealing and can beat the costs of pumping the water out of the
ground. The Department of Health has approved two manufacturers in partnership with the
Hawaii Conference Foundation on Maui.
Mr. Ichimura said Pural proposes to the DWS and the Board to do all of the design,
construction and operations work through a federal Rural Development Loan at low interest;
there would be no capital cost to the Department of Water Supply. He noted that the Ola a
Flume Spring in the years since its inception in 1890 has been a good, reliable source of water,
and records show the Department has bought 100s of millions of gallons in the past of
excellent quality water, although EPA has ruled that it needs to be treated through a filtration
system.
If it is acceptable, Mr. Ichimura said they would furnish the water in a buy -sell agreement with
DWS. Their commitment, according to their records, is that since 1890 it has been a good,
reliable source.
Mr. Ichimura said they have the know -how of operating a surface water treatment plant, and
the membrane technology has been proven in this state, and various counties are using it.
Mr. Ichimura said that they have access to low interest capital, and the source water can be
offered to DWS within a short period of time. He noted that that its water would benefit the
Hilo community as an abundant, reliable source of water, noting that currently the wells in
Upper Hilo have no backup. The spring is a backup, and the spring will be a primary source.
The treatment plant would be especially beneficial to (Hilo Medical Center) as a backup
source of water.
Delivering the water from the spring on the mountain would not require much energy, making
it a green technology. Pural would provide the capital, not DWS; and with gravity flow, it
could be off -the -grid for two wells. The power requirement is not as high as the two existing
wells. Mr. Ichimura said he hoped that the Board would give the green light to DWS staff to
renew the lease with Hawaii Conference Foundation for a longer period of time to ensure a
good, reliable backup source for Upper Hilo.
Mr. Ichimura proposed that the Board authorize DWS staff to pursue and execute the
necessary agreements to implement proposals that allow the plant to supply DWS with water.
He added that financial information was contained in the handout provided and that full
financials were available to Mr. Inaba. He then opened the floor for any questions.
Page 4 of 26 Water Board Minutes — 11 -25 -08 Meeting
Chairperson Goya asked the Manager to give a briefing on his experience with this project.
The Manager noted that Mr. Ichimura came to him to discuss whether they could produce
water cheaper than DWS can produce, and establish that the water meets all regulations and
requirements of the DOH and EPA. The Manager said he was glad for the opportunity to buy
water whereby it would save the Department energy, money, and provide a backup. The
Manager did note that the spring has gone low in the past, and there were conservation notices
for the area. But in normal times, it is an abundant source of water that is being wasted every
day. He noted that this project would be a win -win situation for the Department and for the
church, and that he looks forward to the DWS utilizing the water and saving the groundwater
and saving electrical costs.
Chairperson Goya asked if surrounding subdivisions in Kaumana City can use the water.
The Manager said that the DWS has a main trunk line from the spring to the tank, (that is the
line that the design will probably incorporate to flow the water to the treatment plant because
it goes into DWS' tank), and that from the tank to the spring source, no potential users were in
between and there was no potential for the subdivisions up there to utilize it. From DWS'
tank, it is not possible to serve Kaumana City because pressure conditions are not low enough.
The Manager noted that in the past 15 -20 years or more there were proposed plans for a mauka
tank which were never done. The pipeline in the ground is well over 20 years old and is not
reliable, and a new booster pump system would be needed for that subdivision.
Mr. Smith asked where the treatment facility would be, and Mr. Ichimura said it would be in
Kaumana City on land the church owns. Mr. Ichimura said that the facility would be run by a
third party that is part of Pural, but not actually Pural.
Mr. Smith asked if Pural was eligible for low- interest loans and if they were a non - profit
organization. Mr. Ichimura replied that they have explored (low -cost loans) but they have not
been finalized.
Mr. Smith mentioned the Xenon membrane technology used at Grove Farm on Kauai. (An
explanation of how Xenon's membranes work to filter out impurities from water was given in
the handout). Mr. Ichimura said they were looking at Grove Farm as a possible template.
Mr. Smith asked what action was called for by the Board, and the Manager said no action was
called for at this time and that when an agreement is set, it will be put before the Board. The
Manager reiterated that it was a win -win for the Board, the church and the community in
general. The Manager then asked for reaction from the Board on the concept itself, which
would determine how much energy is put into the project.
Chairperson Goya asked if there were any thoughts, and Mr. Harai said it was a great idea, a
win -win situation.
Mr. Meierdiercks asked if Pural would have an annual cost to set it up whether the Department
uses it or not, and Mr. Ichimura said the current contract has a flat rate if the water is not used.
Page 5 of 26 Water Board Minutes — 11 -25 -08 Meeting
There would be a minimal expense that they would need to cover, so there would be a flat rate
on an incremental use structure.
The Manager agreed, saying it would be one of two rates: one rate is a flat rate that would be
for the privilege of taking water, and whenever the Department takes water, there would be a
per- thousand gallon rate also, which is similar to when the Department was using the source.
Mr. Meierdiercks asked what the breakeven point would be where the Department would still
be ahead of its costs, and how many million gallons it would produce.
The Manager replied that was discussed with Mr. Ichimura from the beginning. As long as the
Department can buy it for less than it would take to produce it, the Department wants it.
Mr. Meierdiercks noted that the Department is going to have so many gallons to meet that
(breakeven) point.
The Manager said that the flat rate has to be considered, but when the Department purchases
water, it can compare the purchase rate versus the rate of electricity necessary for pumping it
out of the ground; and that would be the comparison.
Mr. Harai asked if it was necessarily the primary source, and the Manager said it would be the
primary source, and that the wells would be the backup as long as there was sufficient water
coming from the flume. The Manager noted again there were times that the flume would not
provide everything so there will be a time when the Department will have to start up the
pumps. They would need to be started up anyway to keep them in good working order.
Chairperson Goya said there is an opportunity here because of high energy costs.
Mr. Smith said he was very supportive of the DWS not relying just on groundwater or perched
water. Ola'a is an example, as long as the Department covers its risks; he just wanted a good
understanding of the reliability of this (membrane) technology. He noted years of track
records using the technology, citing Grove Farm using it the past four or five years as an
example. He said that he was assured that the technology was proven elsewhere (at Grove
Farm).
Mr. Smith asked what kind of volumes are being talked about, going back to concerns about
the spring running low at times.
The Manager reiterated that the Ola' a Flume Spring source does on occasion go down to less
than a million gallons a day, and that DWS used to bring water all the way down to Kawailani
Street, but not anymore. The demand depends a lot on how far down you bring the water.
The Manager said the mode the Department uses is 2.5 million gallons a day.
Page 6 of 26 Water Board Minutes — 11 -25 -08 Meeting
The Manager noted that there would be times when the Department would have to start up the
wells. He said that an important fact was that amid high energy rates, there have meanwhile
been great strides made in membrane technology and that membrane technology has improved
tremendously. It used to be that you needed 100 pounds to push the water through, but now
they are down to 20 pounds, using vacuums.
Mr. Smith noted that this would be considered a potentially high -level source such as perched
water, and you use much less energy that would lend itself to an in -line hydro such as in
Hinalani. You have higher water coming to lower water so there are possible other benefits to
pursuing this.
The Manager said the only problem is the pressure difference between the source itself and the
tank water is only 28 pounds, 40 pounds. That would lend itself to a very specialized hydro -
generator.
Mr. Smith said that if you are taking water from the Saddle Road reservoir and getting it down
to Kawailani, there would be plenty of pressure drop.
The Manager noted that the flow is variable and splits into different tanks, with variable flows
not lending themselves well to hydro - generation.
Mr. Smith asked about the source of funding for the Saddle Road well, and asked if DWS
either accepted an improvement by a developer and was maintaining it, or it paid for the well.
Mr. Okamoto noted that the Saddle Road wells received State Revolving Loan funds.
Mr. Harai asked if Yamada (Construction) was water hauling from the church to Pohakuloa
Training Area (PTA) for construction. The Manager noted that it is raw water they are buying
from the church, not from this Department.
Mr. Kuailani asked if this Department would be taking water that would go to a surface stream
or river somewhere else.
The Manager said that it is not a spring source and the water flows through a tunnel to a
collection box that the Department used to use. He was sure the water was now going to the
ocean somewhere. He said it was a tunnel, flowing through multiple tributaries and that it is
not really a spring.
Chairperson Goya thanked Mr. Ichimura for his presentation, adding that hopefully they
would be providing additional information to the Board and that an agreement will be reached.
Chairperson Goya looked forward to welcoming Pural to the next Hawaii Water Works
Association (HWWA) conference, to be held on Hawaii Island in October.
Page 7 of 26 Water Board Minutes — 11 -25 -08 Meeting
NORTH KONA:
D. RESOLUTION NO. 08 -08 OF SUPPORT FOR DEVELOPMENT OF WATER
DESALINATION FACILITIES FOR O'OMA BEACHSIDE VILLAGE LLC:
Resolution No. 08 -08 is in support of water desalination facilities for O`oma Beachside Village
LLC situated in the North Kona area, Tax Map Key (3) 7 -3- 009:004 and 022.
The Department has been working with O`oma Beachside Village LLC to find alternate ways
of providing potable water to support their development since water availability from our
water system in that area is not available. The Resolution supports O`oma's effort to develop
water desalination facilities that meet all applicable rules, regulations, and water quality
standards for the State of Hawaii, Department of Health.
The Manager recommended that the Water Board adopt Resolution No. 08 -08 which supports
the development of water desalination facilities for potable use by O`oma Beachside Village
LLC.
MOTION: Mr. Smith moved for approval of the Manager's recommendation, seconded by
Mr. Kuailani.
The Manager said that a briefing on the project would be given by Mr. Steve Lim, attorney for
O`oma Beachside Village LLC. Mr. Lim explained that the project was located between the
Kohanaiki Shores project, the Airport and Natural Energy Laboratory of Hawai' i Authority
(NELHA). They originally filed a petition with the Land Use Commission in 2007, with the
final Environmental Impact Statement due to be filed next month. The project is mixed use
commercial, residential and affordable housing units, with 950 -1,200 residential units. It
includes an open space corridor that will link up with Kohanaiki Park, an oceanfront buffer of
1,200 -1,500 feet for the public.
O'oma Beachside Village LLC wants to pursue an alternative source of water with DWS, and
it is important for the developer to understand that the Board is in support of this alternative
concept and understands the requirements for any dedication of a desalination plant to DWS,
as to what would be the method, infrastructure, DOH approvals and even the period of
operations.
Mr. Lim noted that neither the Department nor O' oma has any experience with a desalination
plant, and noted that whatever agreement is reached with DWS that was approved by the
Board would include all of these elements (listed above), and asked for support of Resolution
No. 08 -08.
The Manager said the Resolution in no way agrees to anything; all it says is that the Board
supports the concept of finding alternative sources of water. With scarce water sources in
Kona, O' oma wants to go faster than the Department can to provide water, so O' oma has
proposed the desalination plant. This Resolution would be a good opportunity for DWS and
the Board to show it recognizes that there is a limited, finite supply of water and that there is a
Page 8 of 26 Water Board Minutes — 11 -25 -08 Meeting
need to think outside of the box and do other things to supply water to the area, especially in
the Kona area. This Resolution is not binding; it just shows support. He assured the Board
that they would negotiate in the best interests of DWS, should this proceed any further.
Mr. Meierdiercks asked about the timeline. Mr. Lim said the Land Use Commission
proceedings would take 12 -18 months; the County rezoning would take another 12 -18 months
or so, with actual construction another two (2) years out. Mr. Lim said they have not decided
on the type of desalination facility because by that time, the desalination technology will have
improved so much, and that it will be much cheaper than it is now.
The Manager noted that desalination technology used to be expensive, but has come along
tremendously. It used to cost $10 per 1,000 gallons to develop, but now it is 4 (dollars) or the
high 3s to develop because the technology has improved so much. That too uses membranes,
and membrane technology has exploded. The whole world seems to realize the need to
provide something to make it affordable.
Mr. Meierdiercks asked if they would be using Ocean Thermal Energy Conversion (OTEC) as
a source, and Mr. Lim said they would use OTEC or drill mauka sources on state lands.
Mr. Lim said the higher you can drill, the more "head" you have on it to drive it through the
membrane. That would be better for them, he said.
The Manager noted that by going higher to get water, there would be less salt in the water,
probably brackish and therefore less energy would be needed to push through the membrane.
It becomes profitable to use the purest water possible.
Mr. Lim noted that because there were National Park Service (NPS) concerns, they might have
to punch further through the sea water and go deep. Because the NPS objects to any
withdrawal of brackish water, unless that is resolved, they will have to go deep, not just water
treatment like they do at Hualalai Resort and Kukio projects on the coast. That is why they are
looking at desalination.
Mr. Smith said he supported the Resolution, saying that he believes it is important that the
Department explores these opportunities. Where demand exceeds supply, the Department
needs to explore alternatives like they do on Oahu. There are some concerns with minimal
treatment of surface water but Mr. Smith thinks it is important to pursue this. Mr. Smith noted
that Kukio kept their desalination facility completely private; DWS was not involved at all.
He asked if, like Kukio, that O' oma could keep the system private.
Mr. Lim replied that theoretically they could keep it private, but it would be a project cost
going forward and it would affect the sales price of the lots. O' oma will not be doing high -end
property like Kukio, where one -acre lots go for something like $10 million. The lots will be
4,500 -5,000 square feet so it will be less high -end. He said they felt it would be a good option
for the Department to consider.
The Manager said that if it were private, it would be much more expensive because they would
not be able to use the existing water system as a means of transmission, requiring booster
tanks, transmission, and the need to cross the state highway to develop pressure for it. From
Page 9 of 26 Water Board Minutes — 11 -25 -08 Meeting
the Department's point of view, it would make more sense to make it dedicable. He noted that
O'oma does not have mauka lands like Kukio.
Mr. Smith noted that the Board's obligation is to its customers, and that it is not the Board's
obligation to solve O' oma's problems. He suggested that maybe O'oma could make an
arrangement to provide water to the County system and take the water off a master meter;
desalination is more expensive than a master meter. The Department does not get involved
with the costs. If O'oma takes a million gallons, it puts in a million gallons into the County's
reservoir and pays an operational maintenance fee to keep those things working. The
Department would not care how much they pay to desalinate; they just pay the Department for
using the water.
The Manager said there were all kinds of issues that need to be negotiated. The Department
would get a subsidy from O'oma over and above what its normal costs would be. He said
O'oma would have to make a duplicate plant of a similar capacity; and if they do, they would
need their own redundancy. They have agreed to that, but there are other things to be
negotiated.
Mr. Smith said he understood and that the Board needs to look out for its customers and DWS.
Mr. Lim said O'oma felt that bringing up the concept of potentially dedicating of the
desalination plant was a good idea because of the limited supply of groundwater sources.
The Manager said it would be good for the Department to get experience in running this kind
of small desalination plant along the coast.
Mr. Kuailani asked if there was any liability issue in getting water from a private source. The
Manager said O'oma would operate it for a time; but after dedication, the Department would
own everything. It would be a case of the Department taking somebody else's water.
Chairperson Goya said it was important to get input from the community as well. At the
HWWA Maui conference, desalination was put at the back of the pack again. It takes time to
take place and there is a need to inform the community that it will not happen tomorrow. He
said it was not the only way to go; but the Department and the Board need to have a dialogue
with the community and hear their opinion. There are other options to be explored, although
in the past, even some past Board members thought it was the only way to go in Kona.
The Manager noted that in North Kona there are no springs or river flows and the only way is
to get water out of the ground, and that desalination was the only way that is going to be
available.
Chairperson Goya thanked Mr. Lim for coming to make his presentation.
ACTION: A roll call vote was taken on the Motion. Motion was carried by Ayes: 6 —
Messrs. Harai, Kuailani, Lindsey, Meierdiercks, Smith and Chairperson Goya; Nays: 0;
Absent: 3 — Ms. Kim, Messrs. Mukai and Konanui.
Page 10 of 26 Water Board Minutes — 11 -25 -08 Meeting
MISCELLANEOUS
E. POWER COST ADJUSTMENT CLAUSE:
The Department's new PCC formula allows updating of the PCC every 2 months and is to be
computed by dividing power costs by consumption. Currently, since July 1, 2008, the PCC is
$1.70 per 1,000 gallons which has resulted in a loss of $2,145,335.77 compared to the amount
paid for power over the first 4 months of this fiscal year. While an increase in the PCC is
warranted in order for the Department to cover its power costs, an increase of the PCC to
$2.38 per 1,000 gallons as shown in the table below may be too severe an increase for its
customers. It is therefore suggested that the actual cumulative PCC resulting from the month
of September 2008 be used and assessed to the customers. This will provide a more tolerable
increase in PCC since July 1, 2008.
The Department recommends increasing the PCC rate from $1.70 per 1,000 gallons to
September 2008's actual cumulative PCC of $2.23 per 1,000 gallons effective the first day of
the month after the PCC rate is established by the Water Board.
MOTION: Mr. Smith moved to approve the recommendation, seconded by Mr. Meierdiercks.
The Manager noted that he and Mr. Sumada tried to stay as low as possible by selecting
certain months to do the calculations on, that they originally thought they could get by with as
low as $2.03 in October. However, they saw that the Department was losing $1.4 million, and
the September figures showed a $2.1 million loss. They felt that losing these monies month
by month would affect line -item budgets, the Department's ability to transfer money to CIP,
which would affect getting projects out. Therefore it was decided to bite the bullet and go
with the $2.23. As seen in October, it is at $2.38 already. He discussed with Mr. Sumada that
if it was kept at $2.23 and everything stays the same, the Department would not gain back the
$2.1 million. The only way the $2.1 million can be gained back would be if it stays at $2.23
and HELCO's rate drops. If it remains at $2.23 and nothing happens, then it will have to be
adjusted in two months, because the Department is already losing $2.1 million since July 1st
Mr. Smith noted the public hearing (on October 28), and that the Board's role is to watch the
interests of the customers and the Department. There was never an opportunity to adjust
before, and this gives the Department the ability to do that. It is the Board's fiduciary
responsibility to make up the money to address the shortfall. The choices are to go for $2.38
Page 11 of 26 Water Board Minutes — 11 -25 -08 Meeting
Actual Power
Costs
Actual
Consumption
('000 gallons)
PCC in
effect
Power Costs
Recovered
Power Cost
Losses
Actual PCC
Incurred
Actual
Cumulative
PCC
Oct. 2008
$1,944,282.50
665,552
51.70
$1,131,438.40
($812,844.10)
52.92
52.38
Sept. 2008
$2,051,402.72
927,274
51.70
$1,576,365.80
($475,036.92)
52.21
52.23
Aug. 2008
$1,812,068.10
693,493
51.70
$1,178,938.10
($633,130.00)
52.61
52.24
July 2008
$1,727,435.85
884,183
51.70
$1,503,111.10
($224,324.75)
51.95
51.95
TOTAL
$7,535,189.17
3,170,502
$5,389,853.40
($2,145,335.77)
The Department recommends increasing the PCC rate from $1.70 per 1,000 gallons to
September 2008's actual cumulative PCC of $2.23 per 1,000 gallons effective the first day of
the month after the PCC rate is established by the Water Board.
MOTION: Mr. Smith moved to approve the recommendation, seconded by Mr. Meierdiercks.
The Manager noted that he and Mr. Sumada tried to stay as low as possible by selecting
certain months to do the calculations on, that they originally thought they could get by with as
low as $2.03 in October. However, they saw that the Department was losing $1.4 million, and
the September figures showed a $2.1 million loss. They felt that losing these monies month
by month would affect line -item budgets, the Department's ability to transfer money to CIP,
which would affect getting projects out. Therefore it was decided to bite the bullet and go
with the $2.23. As seen in October, it is at $2.38 already. He discussed with Mr. Sumada that
if it was kept at $2.23 and everything stays the same, the Department would not gain back the
$2.1 million. The only way the $2.1 million can be gained back would be if it stays at $2.23
and HELCO's rate drops. If it remains at $2.23 and nothing happens, then it will have to be
adjusted in two months, because the Department is already losing $2.1 million since July 1st
Mr. Smith noted the public hearing (on October 28), and that the Board's role is to watch the
interests of the customers and the Department. There was never an opportunity to adjust
before, and this gives the Department the ability to do that. It is the Board's fiduciary
responsibility to make up the money to address the shortfall. The choices are to go for $2.38
Page 11 of 26 Water Board Minutes — 11 -25 -08 Meeting
or eat it because 50 cents is thought to be too much. The Department needs equipment, etc.,
for all the other services it provides. Mr. Smith said he feels that the Department should
charge the actual.
The Manager said they went back to $2.23 because oil prices are going down, but if there is no
reduction in HELCO's rates in two months, the Department will have to adjust to the next
higher level. The Department proposes $2.23, but the Board can decide on $2.38 if it chooses.
Ms. Garson noted that there will be a public hearing next month, so this is not the final
decision.
The Manager said that what the Board decides today will go on the public hearing notice, and
the Secretary needs to call the Tribune - Herald today with the amount.
Mr. Harai said he supports $2.38.
Mr. Smith asked what the policy is on cases of hardship, and what would happen if people are
delinquent in their payments. The Manager replied that the Department offers payment plans
but that they insist that customers keep current, while trying to be as lenient as possible. He
noted that the Department has had to shut off water service; but it is especially hard to shut the
water off on families with small children and babies.
Ms. Garson added that there is a shut -off process that the Department needs to follow.
Mr. Harai asked if $2.38 would really affect the customers.
The Manager replied that he thought it would because it is a 68 -cent hike. The 53 cents
represents approximately 20 -25% of the total bill for two months. A 50 -cent increase on
20,000 gallons for two months would mean a $10 increase in your bill. With a 68 -cent
increase you are looking at a $13.60 increase.
Chairperson Goya said that it is a larger increase in smaller increments.
Mr. Meierdiercks asked if every time this rate needs to be changed, whether it would require a
public hearing.
The Manager replied that in order to change it each time, it does require a public hearing. At
this time, the newspapers must be notified before 12:00 today to have the figure change (in the
notice of the public hearing, which would be held December 16).
Chairperson Goya said that by taking the high road with the current costs now, it leaves the
Department with more flexibility in the next six months with regard to energy costs and the
adjustment factor.
Ms. Garson said the public hearing is useful to test the waters with the community.
Page 12 of 26 Water Board Minutes — 11 -25 -08 Meeting
AMENDMENT TO MOTION: Mr. Smith moved to amend the recommendation to adjust the
public hearing rate to $2.38 per 1,000 gallons, seconded by Mr. Harai. Motion was carried
unanimously by voice vote.
Chairperson Goya then went back to the original motion.
ACTION: A vote was taken on the original motion, as amended, to raise the rate to $2.38.
Motion carried unanimously by voice vote.
Mr. Smith said it was very important that the Department is just as quick in notifying the
public about a rate reduction as a rate increase.
The Manager said there are no plans to reduce it until the $2.1 million lost so far is recouped.
If HELCO rates go down, the rate is still going to stay at $2.38 until the Department can
recoup the $2.1 million.
The Manager said the (Cost Adjustment Clause) gives the Department the ability to change it
every two months; it does not mention increases or decreases.
Chairperson Goya asked the Manager to confirm that it is not really a loss; but instead it is a
budget shortfall at this time.
The Manager said it is an increase in a budget line -item that was never foreseen.
Chairperson Goya said the Department needs to show its customers that it is doing everything
possible in their interests to minimize the operational kinds of expenses which the Department
has some control over.
The Manager said he asked Ms. Aton to draft an informational sheet for the Hawaii Tribune -
Herald and West Hawaii Today reporters so they can publish it in their newspapers; but today
the ad for the public hearing, including the rate that the Board voted on today, will be sent in.
Chairperson Goya said the Department and the Board need to be proactive in informing the
public and elected officials.
Ms. Garson noted that the public hearing will be held just before the next Board meeting, at
9:00 a.m. on December 16.
HAMAKTTA
A. JOB NO. 95 -621, CONSTRUCTION OF THE POHAKEA WATER SYSTEM
IMPROVEMENTS, HAMAKUA, HAWAII, COUNTY OF HAWAII, STATE OF
HAWAII
Plans and specifications were prepared by the project consultant, Imata & Associates, Inc, and
a cost proposal was submitted by Willocks Construction Corporation for the repair and seismic
upgrade of the Pohakea Tank and the Mahuna Tank. Both tanks were damaged by the October
15, 2006 Kiholo Bay earthquake. Repairs will involve sealing cracks in the walls and floor of
the tanks. The seismic upgrade will bring the tanks into compliance with Seismic Zone 4
Page 13 of 26 Water Board Minutes — 11 -25 -08 Meeting
building code requirements. The cost for the repairs and seismic upgrade per the cost proposal
is $607,365.37.
The cost breakdown for this work was reviewed and compares favorably with the recent bid
for Job No. 2007 -919, Construction of Earthquake Damaged Tank Repairs (North Kona
Tanks) opened on July 10, 2008. Also included in this request for additional funds are other
miscellaneous work items totaling $122,555.21, including the necessary earth work and
culvert repair in the Shuman Ranch land to keep storm water in the natural drainage way and
prevent it from washing out the waterline in the Department's road easement at the top
reservoir. A breakdown of the additional work items is provided. Also, to date, HELCO has
not resolved the easement issue with a land owner and will not be able to provide power at the
top reservoir until such time as they are able to obtain the easement. DWS will run the pump
system manually until such time as power is available at that site. The original proposal has
been revised based on staff review and accepted by the contractor. Staff finds the revised
change proposal acceptable as submitted, and requests that an additional $35,000.00 be
approved for potential additional (unforeseen) costs prior to completion of the project. This
would bring the total of additional funds being requested to $764,920.58. A tentative schedule
has also been submitted and the anticipated completion date is June 30, 2009. Staff finds this
schedule acceptable; and this would require an extension of contract time from the previous
completion date of October 30, 2004 (1704 calendar days). This would be the sixth time
extension.
Original Contract Amount: $2,559,795.00
Change Orders to Date: $ 149,423.00
Current Revised Contract Amount: $2,709,218.00
1st time extension —
225 calendar days
2nd time extension
— 153 calendar days
3rd time extension —
152 calendar days
4th time extension —
91 calendar days
5th time extension —
92 calendar days
The Manager recommended that the Board grant this request for additional funds of
$764,920.58 and the extension of contract time of 1704 calendar days to Willocks
Construction Company. If approved, the contract completion date will be extended from
October 30, 2004, to June 30, 2009.
MOTION: Mr. Smith moved for approval of the Manager's recommendation, seconded by
Mr. Harai.
The Manager noted that this project has had problems from Day One, with the Department's
inability to get an easement from private individuals, in particular. At first the landowners
seemed okay with it, then they grew more demanding, which caused delays. In addition, there
were delays caused by HELCO because they could not negotiate an easement with the owner,
compounded by the delays caused by the October 2006 earthquake because the reservoirs,
which were basically completed but not tested and accepted, had sustained structural damage.
There were many delays because of involvement with FEMA because this was not yet a part
of the Department's system and had to be brought up to Seismic Zone 4 readiness.
Page 14 of 26 Water Board Minutes — 11 -25 -08 Meeting
The Manager noted that there is one engineer dedicated to the project, Mr. Terry Nago. He
added that because of the earthquake, the contractor was not responsible for that damage, and
the Department had posted a sole- source notice to have the contractor retro -fit the reservoir to
Seismic Zone 4, and finally received the prices and the exemption and agreed to a price.
Today, it is all go- ahead.
Chairperson Goya suggested re- blessing the project. He added that the (approximately
$765,000) additional funds were not in the Department's capital budget in the current fiscal
year.
The Manager said that fortunately the Department has bond money, noting that it has not been
used up but that there is an obligation to spend the bond money.
Mr. Smith said he understood a lot of the cost breakdown because of the earthquake and that it
was unanticipated with the system geared to Seismic Zone 3, so he was fine with the cost. He
noted that the contractor, Willocks, has had to deal with five years of delays, and asked if this
allowed for their labor cost increases.
The Manager said he assumed it would be a part of the costs.
A discussion ensued of the number of days' extension they were seeking. Mr. Inaba said they
were asking for an extension of 1,704 days. There would have to be community input amid
the land issue, the $765,000 cost and a total 3,000 calendar days, which was clarified to 2,400
calendar days.
The Manager noted 2,400 calendar days meant six years.
In response to Chairperson Goya's question of whether this project could be closed in the
current fiscal year, and Mr. Inaba replied that the contractor said they believed they could.
Mr. Nago noted that the prices for upgrading the tanks came from DYK, Inc., so they will be
doing the work. The Manager added that DYK was famous for their pre- stressed tanks.
Mr. Smith asked if Willocks' bond fee and carrying costs were in the price of $765,000 for six
years, and Mr. Inaba said it was incorporated into the cost.
ACTION: A vote was taken on the motion, and was carried unanimously by voice vote.
Page 15 of 26 Water Board Minutes — 11 -25 -08 Meeting
SOUTH KOHALA:
A. JOB NO. 2007 -043, CONSTRUCTION OF THE WAIKOLOA RESERVOIR NO.
EARTHQUAKE REPAIRS, COUNTY OF HAWAII, STATE OF HAWAII,
FEMA- 1644- DR -HI, FIPS NO. 001- UVKJ8 -00, PW NO. 638:
Bids were opened on November 20, 2008; and following are the bid results:
Bidder
Amount
Goodfellow Bros., Inc. LOWEST RESPONSIBLE BIDDER
$1,859,046.00
Willocks Construction Corp.
$3,016,931.73
Isemoto Contracting Co., Ltd.
$3,463,547.00
Kiewit Pacific Co.
$4,260,880.00
Engineer's Construction Cost Estimate: $2,650,000.00.
Construction Contract Duration: Two hundred seventy (270) calendar days.
Project Scope: This project consists of interior and exterior repairs to Waikoloa Reservoir No.
2, which sustained damage during the October 15, 2006, Kiholo Bay Earthquake. The scope
of work generally includes 1) interior repair: rehabilitate existing concrete liner; provide
synthetic liner system. 2) exterior repair: provide internal filter- drainage system; provide
seepage - stability berm and drainage; instrumentation; provide outfall structures; access road;
borrow area; and temporary facilities.
The project cost will be as follows
Project Cost:
1) Low Bidder (Goodfellow Bros., Inc.) $1,859,046.00
2) Construction Contingency ( -10 %) 185,954.00
Total Construction Cost: 2.045.000.00
Funding for this project will initially be from DWS C.I.P. budget; however, DWS will be
pursuing reimbursement from the Federal Emergency Management Agency (FEMA) for up to
75% of the synthetic liner system cost.
Department Staff has reviewed the bids and finds the bid from Goodfellow Bros., Inc.,
acceptable as submitted.
The Manager recommended that the Board award the contract for JOB NO. 2007 -043,
CONSTRUCTION OF THE WAIKOLOA RESERVOIR NO. 2 EARTHQUAKE REPAIRS,
COUNTY OF HAWAII, STATE OF HAWAII, FEMA- 1644- DR -HI, FIPS NO. 00 1 -
UVKJ8-00, PW NO. 638, to the lowest responsible bidder, Goodfellow Bros., Inc., for their
bid amount of $1,859,046.00 plus $185,954.00 for construction contingency for a total
contract amount of $2,045,000.00 and that either the Chairperson or the Vice - Chairperson be
authorized to sign the contract, subject to review as to form and legality of the contract by
Corporation Counsel.
MOTION: Mr. Kualani moved to approve the recommendation; seconded by Mr. Smith.
Page 16 of 26 Water Board Minutes — 11 -25 -08 Meeting
Mr. Smith noted that Goodfellow Brothers, Inc. (Goodfellow) was the lowest responsible
bidder, but asked if that meant that somebody was rejected. He noted that their bid was lower
than the engineer's estimate and that it was good.
Mr. Inaba said the design engineer reviewed the bid prices to make sure that Goodfellow was
comfortable with their prices and confirmed that they are, partly because they have another
project there already.
Mr. Smith asked about the fact that DWS will be pursuing reimbursement from the Federal
Emergency Management Agency (FEMA) for up to 75% of the synthetic liner system cost.
He asked if, in that case, the Department's cost after FEMA will be $900,000, which the
Manager confirmed.
The Manager said the Department will be providing full -time construction oversight upon
which FEMA is very insistent. Therefore the Department will have to hire somebody to be
on -site all the time. In addition, the Department has an agreement with Kleinfelder to come
down at certain times.
ACTION: A vote was taken on the Motion. Motion was carried unanimously by voice vote.
Mr. Smith asked about the status of the other reservoir, and noted that the community needs to
be informed on the schedule on the reservoir repairs. Ms. Aton said it was part of the
presentation that has been going to the community and is on the DWS website.
NORTH KONA:
A. PALANI TRANSMISSION PROJECT:
Covered under Resolution No. 08 -07 below.
B. RESOLUTION NO. 08 -07:
This Resolution is being introduced for the condemnation of a portion of Tax Map Key
7 -4- 004:003 and a portion of Tax Map Key 7 -4- 004:076 for the purpose of creating an access
and utility easement for a transmission waterline and related road. This transmission line is to
be a key component of the overall plan to bring source water from wells located above
Mamalahoa Highway down to the high- demand service areas of North Kona below the
highway.
This condemnation is required because the landowner has not been able to come to a suitable
agreement in a timely manner, and time is of the essence to proceed with the transmission line
proj ect.
The Manager recommended that the Board approve this Resolution No. 08 -07 and authorize
the Department and Corporation Counsel to continue with the condemnation process.
Page 17 of 26 Water Board Minutes — 11 -25 -08 Meeting
Mr. Beck said that the Department is working toward an agreement, but time is critical so the
land owner and their attorney have been informed that an agreement has to be executed or the
Department will have to proceed with the condemnation process.
Ms. Garson said the Resolution has to go through two readings so there is still a chance of
negotiating an agreement with the owner.
The Manager said that an appraisal of the land would be to the Department's benefit because
prices are lower. Hawaiian Home Lands would benefit because they need this project for their
next phase in Kealakehe, and they will contribute towards the cost to oversize one of the
reservoirs.
Chairperson Goya said he believed that it was very important in many ways.
The Manager said this project would allow the Department to cut back on the Kahulu'u Shaft,
which should improve the water quality in Kailua town.
Chairperson Goya entertained a motion to approve the recommendation.
ACTION: Mr. Meierdiercks so moved to approve the resolution; seconded by Mr. Kuailani,
and carried unanimously by roll call vote, with Ayes: 6 — Messrs. Harai, Kuailani, Lindsey,
Meierdiercks, Smith and Chairperson Goya; Nays: 0; Absent: 3 — Ms. Kim, Messrs. Mukai
and Konanui.
C. JOB NO. 2004 -839, KEOPU - PUUHONUA PRODUCTION WELL AND 1.0 MG
RESERVOIR
The Board considered a request from the contractor, Isemoto Contracting Co., Ltd., for a 197
calendar -day time extension. This request is due to delays beyond the control of the contractor
with the manufacturing, shipping and testing of the motor and pump combination. Staff has
reviewed the request and finds that the 197 calendar days are justified. This is the second time
extension request. The first time extension granted at the April 22, 2008, meeting was for 91
calendar days from August 19, 2008, to November 18, 2008.
The Manager recommended that the Board approve a contract time extension to Isemoto
Contracting Co., Ltd., of one hundred ninety -seven (197) calendar days from November 18,
2008, to June 3, 2009, for JOB NO. 2004 -839, KEOPU- PRODUCTION PRODUCTION
WELL AND 1.0 MG RESERVOIR.
ACTION: Mr. Smith moved for approval of the recommendation; seconded by Mr. Kuailani
and carried unanimously by voice vote.
Page 18 of 26 Water Board Minutes — 11 -25 -08 Meeting
MISCELLANEOUS:
A. DEDICATION OF WATER SYSTEMS:
The Department received the following documents for action by the Water Board. The water
systems have been constructed in accordance with the Department's standards and are in
acceptable condition for dedication.
1. GRANT OF EASEMENT AND BILL OF SALE
Hualalai Vistas Subdivision
Subdivision Application No. 2004 -038
Grantor /Seller: HV ASSOCIATES, LLC
TMK: (3) 7 -3 -007: 027 and 050
E.W.O.: 2006 -071
Lots: 47 and 4 Roadway Lots Zoning: A -la
Facilities Charge: $57,380.00 Date Paid: 4/05/07
Final Inspection Date: 3/07/08 CAF: $5,000.00
Water System Cost: $ 660,280.00
2. GRANT OF EASEMENT AND BILL OF SALE
Subdivision Application No. 2003 -0125
Grantor /Seller: Dianne Jamieson - Feeney
TMK: (3) 6 -4 -002: 003 and 076
E.W.O.: 2008 -066
Lots: 14 Zoning: A -la
Facilities Charge: $66,000.00 Date Paid: 11/06/08
Final Inspection Date: 11/05/08
Water System Cost: $155,500.00
3. GRANT OF EASEMENT OVER EASEMENT A
(For Road and Utility Purposes)
Grantor: Surety Kohala Corporation
TMK: (3) 5 -4 -003: 003 and 002
The Manager recommended that the Water Board accept these documents subject to the
approval of the Corporation Counsel and that either the Chairperson or the Vice - Chairperson
be authorized to sign the documents.
ACTION: Mr. Kuailani moved to approve, Mr. Lindsey seconded, and was carried
unanimously by voice vote.
Mr. Meierdiercks said that in future he would like to have a map on the wall for the Board to
see where a dedication is, where they are tying into the system, etc. This would help give an
idea of the number of lots involved, and where it is.
Page 19 of 26 Water Board Minutes — 11 -25 -08 Meeting
The Manager said it could be done via electronic file, using the overhead.
B. WATER HAULING BID NO. 2008 -10, PRICE AGREEMENT TO PROVIDE WATER
HAULING SERVICES TO VARIOUS LOCATIONS ISLAND -WIDE (ON AN
AS- NEEDED BASIS) FOR THE DEPARTMENT OF WATER SUPPLY:
Proposals were opened on November 13, 2008, at 2:00 p.m.; and the bid results were attached
to the Agenda.
The Manager explained that should the situation occur and the Department is in need of
services, a contract will be made and the contractor will be selected based on criteria in the
best interests of the Department for the particular situation.
Ms. Garson and Mr. Ikeda added that this was a unique procurement bid. Not necessarily one
water purveyor would handle it.
There may be instances of emergencies to haul water going over the $25,000 level. Therefore,
the Department had vendors submit a bid, which is basically a price agreement in case there is
a need to haul water in certain locations. These prices do need Board approval to do contracts
with them.
Ms. Garson said in a case where the lowest bidder is not available, the Department can go to
the next lowest bidder.
The Manager recommended approval of the bid prices for water hauling on an as- needed
basis, and authorize the DWS to enter into contracts based on the lowest available bid.
MOTION: Mr. Smith moved to approve the recommendation; seconded by Mr. Meierdiercks.
Mr. Kuailani asked if in the time of an emergency, the Department can enter into a contract
with any of the people on the list without going to the Board. Chairperson Goya said no, they
would have to come to the Board to approve any contract; the Board has a fiduciary
responsibility.
Mr. Smith asked if they are ranked based on the hourly rate and quantity, what happens with
the overtime rate, or if this means that the Board is approving both the lowest price on regular
hours and the overtime hours. If there was an overtime situation, would the Department call a
different vendor based on what its needs are.
The Manager stated that it would depend on the nature of the emergency. If it is something
foreseen for a long period of time, it would probably go with regular hours. If it is an
emergency that goes two or three days, it may not necessarily run into overtime hours if
hauling continues in regular hours.
Mr. Smith stated that his concern was to do the lowest cost.
ACTION: A vote was taken on the Motion; Motion was carried unanimously by voice vote.
Page 20 of 26 Water Board Minutes — 11 -25 -08 Meeting
C. PROFESSIONAL SERVICES AGREEMENT:
Professional Services Agreement contract for the following Department of Water Supply
project is currently being processed. However, the project is not listed on the Department's
current five -year Capital Improvement Projects list. Funding will come from the
Department's Operating Budget under "Contractual Services."
1) SCADA Master Plan consists of doing a comprehensive island -wide radio path survey,
evaluate current and future hardware and software needs, study tank site security needs,
and to develop a master plan. The plan is needed to accommodate future growth as
more and more tank and pump stations come online.
Consultant: To be determined
Fee: $200,000.00 (estimate, subject to negotiation)
The Manager recommended that the Board approve the new project, the professional services
contract, subject to results of the Procurement process, and that either the Chairperson or the
Vice - Chairperson be authorized to sign the documents, subject to approval by Corporation
Counsel.
MOTION: Mr. Smith moved to approve the recommendation, seconded by Mr. Meierdiercks.
Mr. Smith said his concern was being inundated by vendors. His experience with SCADA is
that it does not always work: all electronics are not created equal. He noted that HELCO's
SCADA system is state -of -the -art. He suggested hiring a consultant to use a system tested
somewhere else.
The Manager agreed that very few SCADA systems work the way they should, and there are
not many people in Hawaii who know how to do it and the Department has experienced
problems with it.
Chairperson Goya asked if the Department had a short list of consultants.
Mr. Okamoto said this is to develop a master plan of SCADA needs, not the actual
construction, and it entails basically an electrical engineer.
The Manager said the Department can always seek more resumes.
Mr. Smith said the consultant selection is based on qualifications, and not on the low bid.
The Manager said they look for past experience on similar work types, for projects completed,
etc., and then they are ranked.
Mr. Smith said the Department should make sure who the vendor is, and what kind of supply
system and support are available.
ACTION: Motion carried unanimously by voice vote.
Page 21 of 26 Water Board Minutes — 11 -25 -08 Meeting
D. REALLOCATION REQUEST FOR THE WATER PLANT ELECTRICIAN -
MECHANIC SERIES:
The existing duties and responsibilities of the Water Plant Electrician- Mechanic positions have
expanded significantly in recent years. The position:
• Requires more electronic and computer skills due to advances in technology.
• Performs installation, repairs, maintenance and operation of new electronic and SCADA
equipment. Some of the new equipment includes soft starters, programmable logic control
units, alarms and water monitoring equipment.
• Performs duties that are typical of the Plant Electrical/Electronic Equipment Repairer at
the Honolulu Board of Water Supply, who are rated one step higher.
The County's Department of Human Resources performed a recent audit of the positions and
has determined that the Water Plant Electrician- Mechanic series should be upgraded
(reallocated) one step for each position in the series.
An organizational chart was attached to the Agenda showing both the "existing" positions and
"proposed" reallocated positions in the Operations Division.
The Manager recommended that the Board approve the proposed reallocations and amendment
to the existing Table of Organization.
MOTION: Mr. Smith moved to approve the recommendation; seconded by Mr. Meierdiercks.
Chairperson Goya said the recommendation was self - explanatory.
The Manager added the key is that the Department of Human Resources (formerly known as
Civil Service) is recommending this.
Mr. Smith noted that once you make such a recommendation, you cannot go the other way, so
you need to make sure you know what you are asking for.
ACTION: A vote was taken on the Motion; carried unanimously by voice vote.
F. COMMUNICATION AND EDUCATION OF THE DEPARTMENT'S
SUSTAINABILITY PROGRAM:
Ms. Aton, along with Ms. Myhre, presented a Power Point on the Department's outreach
efforts to heighten internal and external awareness of the need for sustainable water attitudes,
wise water practices and the value of water.
The presentation stressed the need to be proactive instead of waiting until a crisis occurs to
communicate with the public. Internal education is another key component in getting the
Page 22 of 26 Water Board Minutes — 11 -25 -08 Meeting
message across. Ms. Myhre mentioned recycling and more efficient use of office space as in-
house ways Department staff can get involved.
Ms. Aton said the Department is well on its way with the Motto change, ramping up outreach,
and clearly implementing sustainability efforts in the Department and the community. Ms.
Aton had taken her education initiative to the schools on two Fridays every month through
June. She mentioned the need for more outreach in West Hawaii, which will be promoted in
the new year.
Mr. Kuailani asked on what basis internal rollout was taking place.
Ms. Myhre said they plan to do it monthly as an ongoing thing, with the main office next on
the list. The first installment was at the baseyard where they held a Recycling Lunch. The
idea is to focus on a monthly topic such as recycling, fuel reduction, etc.
Chairperson Goya praised their efforts, saying they have come a long way.
Mr. Smith said the outreach to the Kona Water Roundtable and visiting the Rotary Club were
really key to raising the Department's credibility in the community.
The Manager thanked Chairperson Goya for spurring them on.
Chairperson Goya said he wanted to carry the message even further, with all in responsible
positions needing to understand our role as communicators. He added that there is a need to
get back to basics in better understanding the Hawaiian way of doing things, and the Manager
commended Ms. Aton for deepening the Department's understanding of Hawaiian traditions.
Mr. Meierdiercks suggested that as a utility, the Department get involved in the McGruff child
safety program, by putting the McGruff logo on the Department's vehicles, as HELCO and the
Gas Company do.
Ms. Aton said she would work on it.
G. MONTHLY PROGRESS REPORT:
Chairperson Goya noted that the Monthly Progress Report was available to all, and that the
new Council members and the administration should be educated on what Department projects
are underway.
In response to Mr. Smith's question on whether an orientation for the new Mayor would be
done, the Manager replied that the Department sent in a Transition Report and that he plans to
meet with the new Mayor after he is sworn in. He wants to discuss the need to fill vacancies
on the Board in a timely manner.
Ms. Garson said the Corporation Counsel is scheduling a meeting of Board Members one -on-
one with their respective Council members.
Page 23 of 26 Water Board Minutes — 11 -25 -08 Meeting
Mr. Kuailani said the Board needs to meet with the new department heads, particularly the
Planning Department and Department of Public Works, who are ex- officio members of the
Board.
H. REVIEW OF MONTHLY FINANCIAL STATEMENTS:
Chairperson Goya commended the Manager and Mr. Sumada for keeping the Board up -to -date
on the financial picture. He said it would have been helpful if revenue was reasonably close to
forecast to avoid shortfall. He asked if revenue was matching, and if the Department foresees
any financial areas of concern. By looking at the expense sheet, it is pretty much summarized.
An example is when transportation costs are going up, the Board needs to be kept informed so
they know what to do. There needs to be flexibility in that area, but that the question remains
whether travel costs are in line with what others are doing, and if other utility costs are going
up, postage increases, etc.
Chairperson Goya asked that the Department keeps the Board up to speed regarding budgeted
positions; noting that of 26 positions requested in the budget, only 13 are filled and there are 8
unfilled positions. Going forward, the kind of things the Board is concerned about is the
current state of the economy; the next year or two are going to be tough. The Department
needs to ask what it is doing to manage the budget more efficiently.
Chairperson Goya also talked about the HWWA conference on Maui last month, where Board
members learned a lot from each other and from colleagues on other islands including ex-
officio members on Kauai. He called on the Manager to address the Board on the kind of
contingency plans they are looking at and the various scenarios in case the economy does not
improve.
L WATER RATE STUDY:
Chairperson Goya said he wanted to leave the Water Rate Study to the next Water Board, but
thinks that incremental increases are better than asking for a large increase. Maybe next year,
the Department should look at various scenarios and what kind of rate increase would meet
future needs.
The Manager said that more and more, what is expected by policy, regulations, the
Department of Health, etc., the Department needs to increase staff to get things done. That is
going to be the biggest challenge because increasing staff is not necessarily the best thing to
do but sometimes it has to be done.
Chairperson Goya said that the Department hires consultants regarding what is needed to be
done, and the Board has given the Department latitude to hire more people, but he stressed the
need to be sensitive on future rate increases and to manage the perception of the public on
what the Department is doing and how it conducts its business.
Page 24 of 26 Water Board Minutes — 11 -25 -08 Meeting
The Manager said the Department is fortunate that the people it has hired are proving to be
really good.
J. MANAGER'S EVALUATION:
Chairperson Goya noted that Ms. Kim has agreed to compile the information from the
Evaluation Forms, and he asked the Board to please forward their Manager's Evaluation forms
to Ms. Kim or the Secretary. The compiled information should be available at the next Board
Meeting.
The Manager said in light of what is happening in the economy, the Board does not need to be
thinking about a raise this year.
Mr. Smith said that to come to that conclusion, the Board needs to look at the salary data of
other department heads and counterparts on other islands.
K. MANAGER'S REPORT:
The Manager provided an update or status on the following:
1. Hawaiian Ocean View Exploratory Well (HOVE) — It is going pretty well. The well
has not been tested yet, so there are no results to report on.
2. Negotiations with Kamehameha Investment Corporation (KIC) — Manager spoke with
Mr. Ray Soon, but KIC is still discussing internally.
3. Automatic Meter Reading (AMR) Program — Everything is going well. Chairperson
Goya asked for a short presentation at the next Board Meeting.
4. Water Hauling (Pepeekeo and other areas — The well is back on line, and everything is
back to normal.
5. Recycling Program -- already covered by Ms. Myhre.
6. Transportation Committee -- already covered by Ms. Myhre.
7. Mai or West Hawaii Projects (executed agreements) — Manager has asked for an update
next month.
8. Emergency Generators Installation -- all are at the sites. Haleki'i contract will be
awarded next month. If disaster hits, the Department can respond in four hours. This was
summarized in the Department's Transition Report. Chairperson Goya asked that a Thank You
letter be sent to Mayor Kim.
9. Kona Water Roundtable Meeting - November 3, 2008 — Manager said it was very
interesting and urged the Board to attend the next meeting.
10. Water Quality Meeting, West Hawaii - November 11, 2008 — Mr. Loren Heck was there
to speak about getting the HOVE well going. Manager and staff talked about the Department's
projects in Kona. The participants were appreciative and thanked the staff, it was a good
meeting. Council member Ms. Brenda Ford spoke about the sodium, and thanked the
Department for good water in Captain Cook 98% of the time.
11. E Malama Festival — A lot of staff participated, and Ms. Aton spearheaded it; featured
giveways and games. Chairperson Goya was thanked for spending a lot of time there with Key
Club kids.
12. Hawaii Water Works Association (HWWA) Conference, Maui - October 29 to 31,
2008. Chairperson Goya asked if this could be summarized next month, to justify why staff
and Board members are going to conferences like this.
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The Manager noted that in 2009, the Department will host the HWWA conference and that it
is looking at venues already.
The Deputy Manager noted over the weekend that the Kohala Ranch system wells went down,
and that the Department provided some assistance by providing a temporary meter at
Kawaihae, with water hauling off the meter.
Chairperson Goya read a letter to the Board from Ms. Ilene Wood, a Customer Service
Representative in Hilo, who attended the HWWA on Maui. She thanked the Board for the
opportunity to learn alternative ways of providing service to the public and it was a valuable
learning experience. Chairperson Goya thanked Ms. Wood for her letter, which provided food
for thought about why the Department and the Board attend conferences and how beneficial
they are for employees.
ANNOUNCEMENTS:
1. Next Meeting:
The Board chose to hold the public hearing for the Power Cost Adjustment Clause at 9:00 a.m.
on December 16, 2008, and to change the regular meeting time for that day from 10:00 a.m. to
9:20 a.m. The meeting place will be in the Hilo Operations Center Conference Room, 889
Leilani Street, Hilo, Hawaii.
Venues for the 2009 meeting will be at the discretion of the next chairperson, but the January
Board meeting will be in Hilo. The Manager noted that there is a provision that Mr. Goya and
Mr. Konanui have the legal authority to serve 90 days more or until the next person is selected
for their places on the Board, whichever comes first. This is entirely by choice. Chairperson
Goya thanked him for the invitation. He reminded the Board that at the next meeting the
election of a new chairperson and vice - chairperson will take place, and that will be placed on
the Agenda.
ADJOURNMENT
ACTION: Mr. Smith moved for adjournment of the meeting; seconded by Mr. Kuailani,
and carried unanimously by voice vote. Meeting adjourned at 12:17 p.m.
Senior Clerk- Stenographer
The Department of Water Supply is an Equal Opportunity employer and provider.
Page 26 of 26 Water Board Minutes — 11 -25 -08 Meeting