HomeMy WebLinkAbout2009-09-22 Water Board Minutes PHMINUTES
DEPARTMENT OF WATER SUPPLY
COUNTY OF HAWAII
WATER BOARD MEETING
September 22, 2009
Waimea Community Center, 65 -1260 Kawaihae Road, Kamuela
MEMBERS PRESENT: Mr. Riley Smith, Chairperson
Mr. Dwayne Mukai, Vice - Chairperson
Mr. George Harai
Mr. Francis Kuailani
Mr. Bryan Lindsey
Mr. Robert Meierdiercks
Mr. Art Taniguchi
Mr. Milton Pavao, Manager, Department of Water Supply
(ex- officio member)
ABSENT: Ms. Millie Kim, Water Board Member
Ms. Bobby Jean Leithead -Todd, Director, Planning Department (ex-
officio member)
Mr. Warren Lee, Director, Department of Public Works (ex- officio
member)
OTHERS PRESENT: Ms. Kathy Garson, Assistant Corporation Counsel
Department of Water Supply Staff
Mr. Quirino Antonio, Jr., Deputy Manager
Mr. Kurt Inaba, Engineering Division Head
Mr. Daryl Ikeda, Chief of Operations
Mr. Rick Sumada, Waterworks Controller
Ms. Kanani Aton, Public Information and Education Specialist
Ms. Julie Myhre, Energy Management Specialist
Mr. Lawrence Beck, Engineering Division
MINUTES
WATER BOARD
PUBLIC HEARING ON
PROPOSED AMENDMENT TO FREQUENCY AND METHOD
OF CALCULATING THE POWER COST CHARGE
Waimea Community Center, 65 -1260 Kawaihae Road, Kamuela
June 30, 2009
PRESENT: Mr. Riley Smith, Chairperson
Mr. Dwayne Mukai, Vice - Chairperson
Mr. Francis Kuailani
Mr. Robert Meierdiercks
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Mr. Art Taniguchi
Mr. Milton Pavao, Manager, Department of Water Supply
(ex- officio member)
Mr. Quirino Antonio, Jr., Deputy Manager
Ms. Kris "Kanam" Aton, Public Information and Education Specialist
Ms. Candace Pua, Assistant Waterworks Controller
Mr. Daryl Ikeda, Chief of Operations
Mr. Kurt Inaba, Engineering Division
Mr. Larry Beck, Engineering Division
Mr. Craig Masuda, Deputy Corporation Counsel
Mr. Christopher J. Bennett, Watanabe Ing LLP
CALL TO ORDER: 9:30 a.m.
CHAIRPERSON SMITH: I'd like to call to order the Water Board Public Hearing on the proposed new
Cost of Power Adjustment Clause. Will the Public Hearing on the proposed new
Cost of Power Adjustment Clause please come to order? The notice of this
public hearing was published in the Hawai' i Tribune - Herald and in the West
Hawai' i Today on June 5f' and June 7th, 2009. Good morning. My name is
Riley Smith. I'm the Chair of the Water Board, and we have our Board
Members present here: Francis Kuailani, Dwayne Mukai, our Vice Chair, Bob
Meierdiercks, member, and Art Taniguchi. We have a quorum. We also have
our staff here. Would all of our staff members like to introduce themselves?
Doreen, do you want to start? It's on my Agenda; I'm reading it.
STAFF MEMBERS: Doreen Shirota, Secretary; Kanam Aton, Public Information and Education
Specialist; Kurt Inaba, head of Engineering Division; Quirino Antonio, Deputy
Manager; Candace Pua, Assistant Waterworks Controller; Daryl Ikeda, Chief of
Operations.
CHAIRPERSON SMITH: Craig, do you want to introduce yourself as Corp. Counsel?
CRAIG MASUDA: Craig Masuda, Corporation Counsel.
CHAIRPERSON SMITH: The Department of Water Supply is operated and controlled by this Water Board
as provided by the Hawaii County Charter. Section 63 of Part III, Chapter 54,
HRS, and it reads as follows:
"The Board of Water Supply may fix and adjust rates and charges for the
furnishing of water and for water services so that the revenues derived therefrom
shall be sufficient to make the waterworks and water systems self - supporting and
to meet all expenditures authorized by this part; the Board may establish variable
rates among the several districts of the County, or among the areas served by the
individual water systems within the County, for the purpose of establishing
charges as closely as possible to the necessary amount required for the
maintenance and operation of the particular individual water systems; provided
no rates and charges shall be fixed or adjusted prior to the holding by the Board
of a public hearing, public notice of which shall have been given not less than
twenty days before the date set for the hearing. The notice shall state the time
and place for the hearing and the proposed rates and charges to be considered
thereat. The time within which the notice shall be given shall be computed by
including the first day, and excluding the last day."
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We are here to receive comments or testimony on the proposed amendment to
the Power Cost Charge, from $2.38 per 1,000 (gallons) to an appropriate revised
charge. As stated in the hearing notice, all comments or testimony were to be
filed in writing before the time of the hearing or are to be presented in person at
the time of the hearing. We would like to follow this format as closely as
possible; however, because there may be some of you who do not have any
written statements but would like to testify or comment, we would like to afford
you this opportunity to do so, but would like to limit such presentations to five
minutes because of the time limit.
The hearing is now open for comments from the floor. Do we have anybody
available to testify? Okay, hearing none, I would like to entertain a Motion that
this Public Hearing be closed.
BOB MEIERDIERCKS: So moved.
CHAIRPERSON SMITH: Do I have a second?
FRANCIS KUAILANL Second.
CHAIRPERSON SMITH: Second by Francis. Any discussion? All those in favor, say Aye.
BOARD MEMBERS: Unanimous ayes.
CHAIRPERSON SMITH: Any opposition? Hearing none, Motion carried. The Hearing is closed.
(Public Hearing adjourned at 9:35 a.m.)
Senior Clerk- Stenographer
The Department of Water Supply is an Equal Opportunity employer and provider.
CALL TO ORDER - Chairperson Smith called the Meeting to order at 10:OX a.m.
STATEMENTS FROM THE PUBLIC:
None.
APPROVAL OF MINUTES:
MOTION: Chairperson Smith entertained a Motion to approve the Minutes of the
August 25, 2009, Water Board Meeting. Mr. xxx so moved; seconded by Mr. xxxxx.
ACTION: Motion to approve Minutes was carried unanimously by voice vote.
APPROVAL OF ADDENDUM AND /OR SUPPLEMENTAL AGENDA:
Chairperson Smith entertained a Motion to approve the addition of Supplemental
Agenda Item No. 8 (H), regarding WATER RATE STUDY.
ACTION: Mr. xxxx so moved, seconded by Mr. xxxxx, and carried unanimously by
voice vote.
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ACTION TO MOVE AGENDA ITEMS: ??
? ?Chairperson Smith noted a request to move Item 8 (A), INTRODUCTION OF STATE
PIPE TAPPING TEAM CHAMPIONS OF 2009 to the top of the Agenda, ahead of Item 5
(A), 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.
The Board approved the changes in sequence, by consensus.
SOUTH KOHALA:
A. 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 - UVKJ8 -00, PW NO. 638:
The contractor, Goodfellow Bros., Inc., has requested an 82- calendar day time extension. This
request is due to delays beyond the control of the contractor, and consists of 72 calendar days
for rain -outs and unworkable conditions, and 10 calendar days for investigating the pending
closure of the DuPont Hypalon CSM polymer manufacturing plant.
Burke Industries, the supplier of the Hypalon liner to be used for this project, was required to
delay the shop drawing submittal while looking for an adequate alternate source of Hypalon
CSM polymer. An alternate source was located, but Burke Industries issued another letter
saying DuPont will manufacture enough CSM polymer to meet most, if not all, of the 2009
demand.
Note: There is no additional cost associated with this time extension.
Staff has reviewed the request and finds that the 82 calendar days are justified. This is the first
time extension request.
1st time extension — 82 calendar days
The Manager recommended that the Board approve a contract time extension to Goodfellow
Bros., Inc. of 82 calendar days 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. 001 - UVKJ8 -00, PW NO. 638. If so
approved, the contract completion date will be revised from November 9, 2009 to
January 30, 2010.
NORTH KONA:
A. NO. 2004 -839, KEOPU- PU`UHONUA PRODUCTION WELL AND 1.0 MG
RESERVOIR:
The contractor, Isemoto Contracting Co., Ltd., requests a 74- calendar day time extension.
This request is due to additional work requested by the Department for off -site waterline work
needed to allow water from this project to feed into the Department's existing distribution
system.
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Staff has reviewed the request and finds that the 74 calendar days are justified.
This is the fifth extension request.
Ext.
#
From:
To:
Calendar
Days
Reason for Time Extension
1
8/19/2008
11/18/2008
91
Process building permit
2
11/18/2008
6/3/2009
197
Deepwell motor and pump
manufacturing, shipping, testing
3
1 6/3/2009
1 7/10/2009
37
Clean and bail well
4
7/10/2009
9/30/2009
82
HELCO and Hawaiian Tel work
5
913012009
1211312009
74
Additional off-site waterline work
Total Days (including this request):
481
The Manager recommended that the Board approve a contract time extension to Isemoto
Contracting Co., Ltd., of seventy -four (74) calendar days from September 30, 2009 to
December 13, 2009, for JOB NO. 2004 -839, KEOPU- PU`UHONUA PRODUCTION WELL
AND 1.0 MG RESERVOIR.
B. AMENDMENT OF WATER FACILITIES AGREEMENT — SEASCAPE
DEVELOPMENT, LLC:
On October 28, 2008, Seascape Development, LLC ( "Seascape ") and the Water Board entered
into a Water Facilities Agreement for the development, construction and installation of certain
improvements and other water transmission - related facilities in the vicinity of the Water
Board's existing Kalaoa Well. Seascape was to also complete the engineering and design
work, and assign the same, as well as obtain all necessary permits in accordance with DWS
requirements within one year of the executed Agreement.
The current deadline is October 28, 2009. However, the current challenging economy as well
as the bank liquidity crisis makes it impossible for Seascape to proceed on the schedule it
originally had envisioned. Seascape is proposing to amend the Water Facilities Agreement to
extend such submittal deadline to October 28, 2010, an extension of one year. Seascape feels
that this new deadline will enable them to meet their obligations in the current economic
climate.
Staff has reviewed the Amendment of Water Facilities Agreement and finds it acceptable.
The Manager recommended that the Water Board approve the Amendment of Water Facilities
Agreement subject to review and approval by Corporation Counsel.
SOUTH KONA:
A. TRANSFER OF 25 KSA II EOUIVALENT UNITS OF WATER — TAX MAP KEY
8 -1- 008:004:
The department has received a request from Ms. Sharilyn Shields, with West Hawaii
Excavating, Inc., on behalf of Robert E. and Amy Hagen Cowell, to transfer 25 water
commitments attached to Tax Map Key Parcel 8 -1- 008:004, formerly owned by
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Timothy and Sheryl Dernback, to the Amy Hagen Cowell Trust, the current owner of
TMK Parcel 8 -1- 008:004.
The 25 units originated with the Kona Source Agreement II (also known as KSA 11), under
which DWS gave water commitments to landowners who helped invest in source water
development.
The Manager recommended that the Water Board approve the transfer of water commitments
for twenty -five (25) equivalent units from the former owners, Timothy and Sheryl Dernback,
to the current owner, the Amy Hagen Cowell Trust.
MISCELLANEOUS:
A. INTRODUCTION OF STATE PIPE TAPPING TEAM CHAMPIONS OF 2009:
Members of the Waimea Pipe Tapping Team, the state champions for 2009, were introduced
to the Water Board. The team is comprised of Mr. Norris Gonsalves, Pipefitter;
Mr. Ted Lindsey, Pipefitter; Mr. Leonard Midallia, Lead Pipefitter; and Mr. Roy Miyasaki,
Lead Pipefitter.
As state champions, the team will represent Hawaii in the national pipe fitting competition at
next year's American Water Works Association conference in Chicago.
B. DEDICATION OF WATER SYSTEMS:
The Department has 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
Subdivision Application No. 2007 - 000677
Rodillas Subdivision
Grantor: Francis H. and Martha A. Rodillas
TMK: (3) 2 -5- 040:018
E.W.O. 2009 -047
No. of Lots: 2
Final Inspection Date:
Facilities Charge: $5,500.00
Water System Cost:
Zoning: FA -2A
(TBA)
Date Paid: 09/10/09
(TBA)
The Manager recommended that the Water Board accepts these documents subject to the
approval of the Corporation Counsel, and that either the Chairman or the Vice - Chairman be
authorized to sign the documents.
C. VEHICLE BID NO. 2008 -11. FURNISHING AND DELIVERING VEHICLES TO THE
DEPARTMENT OF WATER SUPPLY:
Mr. Ikeda provided an update on the location of the vehicles, which have arrived on U.S. soil.
D. ENERGY MANAGEMENT ANALYST UPDATE:
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Ms. Myhre reported that XXX
E. MONTHLY PROGRESS REPORT:
F. REVIEW OF MONTHLY FINANCIAL STATEMENTS:
G. POWER COST CHARGE UPDATE:
A Public Hearing on the Power Cost Adjustment Clause was held today. The Public Hearing
Notice was published in the Hawaii Tribune - Herald and in the West Hawaii Today on
August 31 and September 2, 2009.
The Department's power cost charge (PCC) formula allows updating of the PCC as often as
every two months. The PCC was changed to its present $1.83 per 1,000 gallons effective
July 1, 2009. The Power Cost Adjustment for August 2009 was $1.68 per 1,000 gallons.
The Manager recommended that the Water Board approve the proposed cost of the Power
Cost Adjustment to $1.68 per thousand gallons based on the August 2009 calculations,
effective the first day of the month after the proposed establishment of the rate by the Water
Board.
H. WATER RATE STUDY:
The Department selected RW Beck to conduct a five -year rate study and is seeking approval
of a contract totaling $94,700. A budget of $100,000 was set aside for the rate study in Fiscal
Year 2010. The contract provides for the following tasks:
Task 1 — Request for information, $5,400.
Task 2 — Develop revenue requirements, $17,500.
Task 3 — Prepare cost of service analysis, $12,600.
Task 4 — Develop rate options, $15,700.
Task 5 — Water Board workshop and Public Hearings. $27,000.
Task 6 — Draft and final reports, $15,800.
Task 7 — Hawaii excise taxes, $700.
If the contract is approved, RW Beck and the Department will commence with Tasks 1 -3
(October 2009 — January 2010).
RW Beck will present the results of their revenue requirements and cost of service analyses to
the Water Board, and seek input for providing three (3) rate options for the Water Board to
consider (February 2010).
The Water Board selects which of the three rate options to take to public hearing
(March 2010).
RW Beck returns to provide technical support for the selected rate option at public hearings in
Hilo and Kona on consecutive days (April 2010).
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Water Board approves final rates for implementation July 1, 2010 (May 2010).
Draft reports will be provided to the Water Board for their review and approval. Final reports
will be provided to the Department after rate implementation.
Important Contract Assumptions:
1) RW Beck will not make any changes to the rate structure currently in place. In other
words, the three rate options they will provide will continue to incorporate the 4 -block
rates, standby, power cost charges, and separate agriculture rates.
2) RW Beck will not analyze the Department's facilities charges, as any changes in these
rates require the Department to conduct a "needs assessment" estimated at $46,800.
RECOMMENDATION: It is recommended that the Water Board approve a contract with RW
Beck to conduct a water rate study in the amount of $94,700, and that the Chairperson or Vice -
Chairperson be authorized to execute the contract subject to approval by Corporation Counsel
as to form and legality.
I. BUDGET STATUS AND PROPOSED ACTIONS:
The status of the current budget was discussed, along with proposed actions implemented and
anticipated savings. The Department provided the Board with its FY10 Budget Analysis.
J. MANAGER'S REPORT:
The Manager provided an update on the following:
1. Update on use agreement on KIC wells -- XXX.
2. Palani Road Transmission Project -- XXXXX.
3. Hawaii Water Works Association (HWWA) '09 conference update -- xxxxxxx
4. Use of lobbvists by City and Countv of Honolulu Board of Water SUnnly — xxx
5. DWS financial daily receipts procedures — xxxxxxxxxxx
6. Status of filling Water Board vacancies — xxxxxxxxxx
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K. CHAIRPERSON'S REPORT:
Chairperson to provide comments and /or information relating to the following matters of
concern to the Water Board:
Discussion /Action regarding establishing an Ad Hoc Finance Committee --
Discussion /action included the creation of the committee, the scope of the matters to be
investigated by the committee, and the selection of the members of the committee.
ANNOUNCEMENTS:
1. Next Meeting:
The next Meeting of the Water Board will be held on October 27, 2009, at the Department of
Water Supply, Operations Center Conference Room, 889 Leilani Street, Hilo.
2. Following Meeting:
The following meeting of the Water Board will be held on November 24, 2009, at the Royal
Kona Resort, Resolution Room, 75 -5852 Ali`i Drive, Kailua -Kona.
STATEMENTS FROM THE PUBLIC:
None.
ADJOURNMENT:
Chairperson Smith called for a voice vote to adjourn the Meeting at xx:xx a.m.? p.m.?
Senior Clerk- Stenographer
Anyone who requires an auxiliary aid or service for effective communication or a modification of
policies or procedures to participate in this Water Board Meeting should contact Doreen Shirota,
Secretary, at 961 -8050 as soon as possible, but no later than five days before the scheduled meeting.
The Department of Water Supply is an Equal Opportunity provider and employer.
Notice to Lobbyists: If you are a lobbyist, you must register with the Hawai `i County Clerk
within five days of becoming a lobbyist. {Article 15, Section 2- 91.3(b), Hawai `i County Code} A
lobbyist means "any individual engaged for pay or other consideration who spends more than
five hours in any month or $275 in any six -month period for the purpose of attempting to
influence legislative or administrative action by communicating or urging others to communicate
with public officials. " {Article 15, Section 2- 91.3(a)(6), Hawai `i County Code} Registration
forms and expenditure report documents are available at the Office of the County Clerk - Council,
Hilo, Hawai `i.
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