BOARD OF WATER SUPPLY
COUNTY OF MAUI
REGULAR MEETING

 
Taken at the David Trask Building, HGEA Conference
Room 207, 2145 Kaohu Street, Wailuku, Maui, Hawaii, commencing
at  9:00 a.m. on January 27, 2000.
 
Reported By:  Rachelle Primeaux, CSR #370
 
ATTENDANCE:
Members Present:
Bob Takitani, Chair
Clark Hashimoto
Peter Rice
Mike Nobriga
Jonathan Starr
Orlando Tagorda
Adolph Helm
Elmer Cravalho
    
Staff Present:
Howard Fukushima, Corp Counsel
David Craddick, Director
Fran Nago, Secretary
Herb Kogasaka, Chief Engineer
Jacky Carroll
Mike Quinn
Larry Winter
        
 
Others Present:
Garrett Hew
Randall Moore
Clayton Suzuki
Harry Eager
Ed Harada
Jim Smith
 
IWADO COURT REPORTERS, INC.

REGULAR MEETING
JANUARY 27, 2000
 
CHAIRMAN TAKITANI:   Good morning.  I would like to
call the Board of Water Supply County of Maui Regular Meeting
to order.  It's Thursday, January 27, 2000, 9:00 a.m.  The
meeting is in the HGEA Conference Room, David K. Trask, Jr.,
Building, Room 207.  In attendance, we have members Elmer
Cravalho, Adolph Helm, Orlando Tagorda, Clark Hashimoto, Mike
Nobriga, Peter Rice, Jonathan Starr and myself, Bob Takitani.
We have Corporation Counsel, Howard Fukushima; Director, David
Craddick; Board Secretary, Fran Nago; Recording Secretary,
Rachelle; Fiscal Officer, Mike Quinn; Engineering, Herb
Kogasaka.  We have Harry Eager from the Maui News, Clayton
Suzuki from Wailuku Ag, Garrett Hew from EMI and Randall Moore
from HC&S.
 
We have a quorum present.  The agenda has been
properly noticed and filed.  We go to approval of minutes,
Number 3.  We have regular minutes for regular meeting December
21st, 1999.  Executive session December 21st, 1999, and the
reconvened Board of Water Supply Regular Meeting at Pukalani on
January 13th, 2000.
 
MR. NOBRIGA:  Chairman, I move that these minutes be
received subsequent to 30-day review at which time they will be filed.
 
MR. HASHIMOTO:  Second.
 
CHAIRMAN TAKITANI:  Moved by Mr. Nobriga, seconded
by Mr. Hashimoto.  Minutes have been received with a 30-day
review period subsequent to which they will be filed.  All
those in favor, say "aye."
 
VOICES:  Aye.
 
CHAIRMAN TAKITANI:  Opposed, "nay."
 
(No response.)
 
CHAIRMAN TAKITANI:  Aye's have it.  The minutes are
received.  We'll go to testimony from the public.  Is there any
public testimony on non-agenda items?

Seeing none, we've had a request from three busy
people to include their items up, so we'll go to Old Business
Roman Numeral 6, Item B, Discussion and possible action
regarding the Iao Waikapu Ditch, Page 15.
 
MR. CRADDICK:  There is a letter that was handed out
this morning from the staff, and I would just like to read that
over since the Board Members haven't had a chance to get it.
The agreement concerning temporary withdrawal from Iao/Waikapu
ditch is presented for your approval.
 
The term is for two years and covers withdrawals
during peak flow times when stream flow is 65 MGD or more up to
2 million gallons and that's up to 2 million gallon daily.  The
cost of delivery is $120 per million gallons.  The price
represents the previous price less the loss of water for sugar growth.
 
The price is double the rate we pay for upcountry
water, however, our yearly cost should the water be used 30
percent of the time would be $29,000 plus tax.  The 30 percent
time of use is very optimistic in my estimate.  The time of use
would probably be closer to 15 percent of the time, which would
cut the yearly cost in half to $15,000.
 
The problems associated with the use of source are
many.  The benefit is a reduction in Iao aquifer withdrawal of
.2 to .4 million gallons a day over the span of one year
depending on the amount of use.  In addition to Iao reduction,
there is some benefit in keeping the units operational as
sitting will cause other operational problems when the units
are put in service at another location, Awalau or other
locations.  The staff recommends approval of this agreement as
it does not take water that has historically been used for
agricultural purposes.  We are only taking what is considered
excess water during high flow periods.
 
CHAIRMAN TAKITANI:  Any discussion from the Board?
 
MR. STARR:  Yeah, I don't like this agreement
because it only allows us to take water from the ditch when
it's running at very heavy surplus capacities, and my own
feeling is we should try to work a deal where we can take water
year round, and with that, make a real reduction in the draw of
Iao aquifer.  This is the basis that the previous Board had
committed to the State Commission on Water Resource Management
when the State was considering designation saying that use of
the Iao ditch water, which we did for about 18 months on a
steady basis, would be the main reason for being able to take
the load off Iao and not having Iao designated.
 
So I don't see any real benefit from being able to
take it 15 percent of time.  And I also do not really believe
that this is an issue about that water being needed for ag
use.  To my understanding, the water is available to us but
that the entities involved, Wailuku Ag and A&B, are looking for
a somewhat higher rate for the water.  So I think that it's a
function of price and not a function of need for this water.
And my feeling is that we should take this opportunity to lock
in the use of that water for our customer base.  I know that
we're definitely going to be called on to issue quite a few new
meters and services in central and south Maui in the next year
or two before the East Maui Project has a chance to come along
and that we desperately need this ditch water.  We have the
processing plant which would need to be upgraded, but I would
much rather see us moving to get a real ability to use this
water 100 percent or at least 90 percent of the time.
 
CHAIRMAN TAKITANI:  Would you gentlemen like to
respond to Mr. Starr's comments.
 
MR. CRAVALHO:  Just a procedural question again.
There was nothing before the Board until such time as there is
a motion one way or the other to approve or disapprove.  So to
provide the opportunity for discussion, I move for the approval
of the contract strictly for the purpose of getting the subject
on the floor.
 
MR. NOBRIGA:  Second that motion, Mr. Chairman.
 
CHAIRMAN TAKITANI:  Moved by Mr. Cravalho, seconded
by Mr. Nobriga that we move the agreement to the floor for
approval.  All those in favor, say "aye."
 
VOICES:  Aye.
 
MR. STARR:  I think we have the opportunity for
discussion first.

CHAIRMAN TAKITANI:  Any discussion?
 
MR. CRAVALHO:  Mr. Chairman, I believe that in order
to bring it to the floor for discussion, a motion is necessary.
 
CHAIRMAN TAKITANI:  Garrett.
 
MR. HEW:  Chairman Takitani, Board Members, we're
here today just as resource people.  We've been asked by David
to come and answer any of your concerns or questions about the
Iao/Waikapu ditch.  You know, as far as the ag side, we have
Clayton and Randall here that can go into more detail if you
need more details.  I don't know what specific questions.  If
you have a specific question to ask of us, we'll try to answer it.
 
CHAIRMAN TAKITANI:  I guess the specific question is
how necessary is that water for the ag use of Wailuku Ag and A&B?
 
MR. SUZUKI:  That 15 percent is pretty accurate
where we have surplus water.  It may be less, but other than
that, we use all the water that we take into our ditches.  All
the water is consumed in agriculture operations.
 
MR. TAGORDA:  How do you address the concern of Mr.
Starr of trying to utilize that Iao ditch not only when it's on
it's peak flow but on a daily basis?  Would it really hamper
agriculture that much when we take or the County takes, wants
to take 2 million gallons daily?
 
MR. HEW:  I think the question to that, Orlando, is
yes because of the fact that the source is Iao stream and that
source varies daily.  And, as you know, during times of low
rainfall, the flow is low.  Whatever water is in the stream is
diverted and used for ag purposes.  On a day like today when,
you know, there's water going down to the ocean, we can
consider that excess.
 
MR. TAGORDA:  To follow up my line of questioning is
there was a set level, which is 65 million gallons daily.  On
average, that Iao ditch, how low it can come and how high it
can go up when there is low rainfall and high rainfall?
 
MR. SUZUKI:  At low rainfall, we've seen it drop to
11 million gallons daily, and peak is at 65 million gallons.
 
MR. TAGORDA:  Again, but my concern is the 65
million gallons daily.  Once you go below that, there was a
penalty imposed on the contract, which is 1,020 per million
gallons if I'm correct in my reading of the contract.  So there
is only a very limited access to the water unless you go for
being penalized.
 
CHAIRMAN TAKITANI:  Mr. Craddick, you want to respond?
 
MR. CRADDICK:  I really don't have any comment on
that.  You know, we wouldn't use it.  If we're going to be
penalized, we're not going to be using it.
 
MR. TAGORDA:  But the 65 million gallon level is set
that you cannot take below 65, so what you can only take is
when the peak flow goes up to 65.

MR. CRADDICK:  The 65 million is a threshold
number.  If it is less than 65 million, then their fields are
wet enough to where they're not going to be irrigating them.  I
suspect that we're still going to be able to take water below
that.  They're just not saying in the agreement that we can do
it, and that may be, you know, why they would allow that.
That's why I give the range of numbers between 15 and 30
percent, because if they allow that, we may be able to use it a
little bit more of the time, but I'm not betting on it.
 
I think more, you know, for our concerns is the
operational consideration that we don't actually flat out shut
them down, because when that happens, there's a relatively long
period of time to get them back up to operation again.  And,
you know, if we are going to use them 100 percent of the time,
you know, I would say keep them at some -- I think the minimum
amount of water that we can run through it is 200 gallons a
minute and have the meters and things like that work.
 
Now, if that's a possibility, that obviously would
help us out and keep it operational with some very, very low
number when we're not -- when we don't have all this water.
That might be some kind of a compromise, but just so you know
that that operational comment that I put in there is a very
real comment.  And we've actually had permission from them to
use it to get these operational.  It's taken us over a week to
do it already since they gave us permission to start using the
water to get it operational.
 
MR. HASHIMOTO:  Most of this water goes to HC&S and Maui Pine?
 
MR. MOORE:  Is goes to HC&S.
 
MR. SUZUKI:  We have a share agreement on the
percentage of water share.  The pineapples grow on our land, yes.
 
CHAIRMAN TAKITANI:  Mr. Starr.
 
MR. STARR:  When we were using this water for that
period of about 18 months, how did that affect your ag
operation?
 
MR. HEW:  I think, was it 18 months?  I thought it
was a lesser time.
 
MR. CRADDICK:  Yeah, it was only ten months.
 
MR. HEW:  I thought it was ten months.  I think
during that period, we were lucky that flows were pretty well
up.  But as far as the total flows in the ditch, even if you
folks are taking it too, it's still sufficient for us to go on
with our ag, but I think some of the fields were short on water
because of the taking.
 
MR. SUZUKI:  During most of that ten months, we were
short.  We couldn't meet the demands of our weekly irrigation
schedules.
 
CHAIRMAN TAKITANI:  I think the one problem I have
with this is the fee of 12 cents per thousand on water
withdrawn from the Iao/Waikapu ditch.  Now, correct me if I'm
wrong, but there's a backwash operation that returns a
substantial amount back to the ditch.  So if I'm reading this
correctly, the water withdrawn, we're paying for the backwash
water also?
 
MR. CRADDICK:  That's correct the way it's worded
right now.  And over that ten-month time, keep in mind the -- I
think average daily draw was about one and a half million even
though we didn't go up to 2, but with downtime, backwash,
whatever, only one-and-a-half-million a day actually went into
the system.
 
CHAIRMAN TAKITANI:  So what's the percentage of backwash?
 
MR. CRADDICK:  It's on the order of 10 to 15 percent
because normally we recycle the water back to the head where
it's run through the plant again.  There's no reservoirs or
anything out there, so we don't have that option in this case.
And that water goes in their ditch.  And from there, I'm not
sure where it goes from there.
 
CHAIRMAN TAKITANI:  So would there be any objection
to going back and possibly revising that to only the actual
amount withdrawn minus the backwash?
 
MR. HEW:  You're talking about just the net usage
into the system?
 
CHAIRMAN TAKITANI:  Since the water is being
returned to the stream flow anyway, we're not really taking it.

MR. HEW:  That can be considered, and we have to get
back to you on that.
 
MR. CRAVALHO:  Mr. Chairman, based on your comments
to Mr. Hew, I move that we defer action on this until we have
that particular question satisfactorily resolved.
 
MR. NOBRIGA:  Second.
 
CHAIRMAN TAKITANI:  Moved by Mr. Cravalho, seconded
by Mr. Nobriga to defer action regarding Iao/Waikapu ditch
agreement until we resolve some of these issues, particularly
this one about the backwash.
 
MR. STARR:  I would like another piece of
information when we do get back to this, which is I would like
to know what the annual operating cost of this is going to be.
I know we've already spent a million and a half on the
equipment, and I just want to know how much manpower and time
we're going to have to spend to garner this not very large
quantity of water.  So I request the Director come back to us
with his projected operational cost for the year.
 
CHAIRMAN TAKITANI:  Any other discussion?
 
 (No response.)
 
CHAIRMAN TAKITANI:  If not, it's been moved that we
defer this item until we get resolution to some of these
matters.  All those in favor, say "aye."
 
VOICES:  Aye.
 
CHAIRMAN TAKITANI:  Opposed, "nay."
 
    (No response.)
 
CHAIRMAN TAKITANI:  The aye's have it.  The
agreement is deferred.  During that time though, David, are we
attempting to utilize that water?
 
MR. CRADDICK:  They have given us permission to try,
but we've had a number of problems trying to get the plant back
in operation.  There's a flow meter problem, a couple of them.
The valve twisted off.  The strainer has twisted off a couple
of times, so, you know, when it sits, those kind of things
happen.  So even though we've had this week to try to get it
operational during high flow times, we haven't been able to use it.
 
CHAIRMAN TAKITANI:  But if we get those resolved --
 
MR. CRADDICK:  Yeah, I believe the last one was the
flow meter coming out of the tank.  And what we've found out
there was just that the flow going through the meter was not
high enough.  It wasn't that the meter didn't work.  The flow
just wasn't high enough, and I guess during wintertime, there's
not much demand out there.  So the particular line in this one
was there wasn't a whole lot of draw on it, so even though we
had the water there that we could have put it in the system,
the system wasn't taking it.  So that's another issue here.
When there is high rainfall in the ditch, nobody is using water
because it's raining in wintertime.  So the system adjustments
have to be made to draw that water out, and we're working on that.
 
CHAIRMAN TAKITANI:  The next Board meeting is
February 10th.  Will we be able to have a resolution by then?
 
MR. CRADDICK:  Yeah, I believe so.
 
CHAIRMAN TAKITANI:  Okay.  We'll go back to our
regular agenda Roman Numeral 5, Director's Report 00-03,
Request approval of a budget amendment for the amendment of the
SEIS for East Maui Water Development Plan.  Thank you, Garrett,
Mr. Moore.  Mr. Craddick.
 
MR. CRADDICK:  Herb, can you -- we have Mink &
Yuen's proposal in there for $95,500 plus tax, estimated time
of completion is 12 months.  And I think to that 12 months is
any review time that we have.  That's their time.  And we've
brought in there the amendments that we would make to the
contract.
 
MR. CRAVALHO:  Mr. Chairman.

CHAIRMAN TAKITANI:  Mr. Cravalho.
 
MR. CRAVALHO:  To appropriately consider it, we
should have a motion.  I will not make a motion to accept or to
approve, but if I may, with the permission of the Board,
enumerate a list of questions which I have which I think are
very pertinent with respect to the proposal and with respect to
the current EIS and the implications and impact of this
proposal on the present EIS.
 
Now, is the proposal intended to cover and update
the present EIS to conform with the judge's decision that the
current EIS, which was acted on back in 1994 or '95, somewhere
around there, that this is to update and review those
objections?  Is this the limitation on this proposal?  A simple
yes or no.
 
MR. CRADDICK:  No.
 
MR. CRAVALHO:  Okay.  Does this proposal then
include by reference or by annexation the entire upcountry area
as it relates to Waikamoi, Olinda, Wailua ditch, et cetera, the
whole gamut?
 
MR. CRADDICK:  No.
 
MR. CRAVALHO:  If I may ask, Mr. Chairman, what is included?
 
MR. CRADDICK:  What is included is studying the
Makawao, Kula and Haiku-Paia community plans, determining
projected water needs from those areas.
 
MR. CRAVALHO:  As part of the current EIS?
 
MR. CRADDICK:  No, that's not part of the current EIS.
 
MR. CRAVALHO:  Okay, fine.  A separate EIS study?
 
MR. CRADDICK:  That's right.
 
MR. CRAVALHO:  An EIS study for the district as such
as contrasted to an EIS study for project by project?
 
MR. CRADDICK:  That's correct.
 
MR. CRAVALHO:  Mr. Chairman, let me point out some
of the potential problems based on our experience with the
current EIS.  When an EIS, my understanding, is done and
completed, it is subject to review and it is subject to
challenge as to its applicability and its all inclusiveness.
Once the challenge is initiated into the court process, we are
not able to move on any particular project in that project area.
 
And once it is entered into the process for the EIS
and recognized by the courts, those decisions either for or
against is immaterial.  The decisions are challengeable and
appealable.  That's my understanding.  With such being the
case, are we opening the door, yeah, to an airport situation
which is nine long years and still unresolved?  Are we opening
up the situation with respect to the implications or the
experiences of H3 on Oahu which ran how many years and the cost
of one billion dollars, okay.
 
Now, I think we need to look at this before we get
into an area of opening ourselves up to a whole variety of
challenges and problems.  Simultaneously, Mr. Chairman, we are
in the process of evaluating and extending or reaching an
understanding on that Wailua ditch thing.  We have before us
proposals that are dealing with the adequacy of water supply,
the source for a variety of reasons.  But, nevertheless, those
proposals are here, and they're going to be handled
individually, okay.
 
The dangers at this stage of including or having a
separate EIS study for that area I think is fraught with great
danger at this stage and at this time.  It would be I think
prudent, much more prudent for us to go and update the present
EIS statement and get that damn thing off the ground because
that has been holding us up for four to five years.  And we're
saying leave that alone for now and let us go and open the door
upcountry, which may put us in the position of being in an
identical place as we are now with the present EIS study and
the present EIS matter that's before the court.
 
The question is one for the Board to make a decision
on, and I don't think it would be known by any stretch of the
imagination if it comes to that at this particular meeting what
my vote is going to be.  And I want it also understood that I
will then utilize whatever legal resources may be available to
me because I think this particular proposal now for
implementation now is full of great danger, and it will have a
bad effect on what we're trying to do in the area at this
stage.  Enough said.
 
MR. CRADDICK:  As you recall, we had a proposal from
Mink & Yuen to do just what he said, and that was our
recommendation to go along with that.  And I believe it was the
Board's recommendation to stop that process, open it up.  I
don't believe that this -- what is being proposed here, adding
more wells onto the East Maui plan to supplement the upcountry
water system would prevent the Board from going into the
upcountry system.  This is about ground water, not surface
water.  This is about ground water only.
 
MR. CRAVALHO:  Mr. Chairman --
 
MR. CRADDICK:  Can I finish?
 
MR. CRAVALHO:  I know you're not finished, but I'm
going to anticipate you a little.  And I think you've observed
me for six months to seven.  I've observed you.  And I know the
methodology.  I think, included in this study, if we're not
careful, are matters this Board did not approve in the past,
the request for funds for experimental drill links, drill links
in that area for which, Mr. Chairman, the Director did try to
go directly to other sources to get this approved.  The
Director did go to the Mayor to sit on the Mayor's support for
this particular question after the Board had taken the position
on the policy question and the policy matter.
 
And all I'm saying, Mr. Chairman, is that at this
time, it's a little bit premature.  I'm not suggesting that we
reject it in its entirety, but at this meeting without
reference to other areas and other plans and other proposals, I
think it's a danger.  And, if I may, Mr. Chairman,
Mr. Craddick, if I may repeat what I've said before.  There are
many cases and many contracts and many agreements which by and
of itself appears to be very good.  Put them all together and
they have a very completely different effect and a different impact.
 
And, Mr. Chairman, we went through that today with
respect to the Iao and without consideration of the
implications of the utilization of that water and the entire
central Maui area, the irrigation for pine and the irrigation
of sugar for sugar.  And all we were saying all this time,
Mr. Chairman, is put these things together so we have a
complete picture of what we're doing and we're being
spoon-fed.
 
MR. CRADDICK:  Can I finish, Bob.
 
CHAIRMAN TAKITANI:  Mr. Craddick.
 
MR. CRADDICK:  This study here, there's no question
if the Board wants to include wells in the upcountry area such
as Pookela, Piiholo, they could do it in here.  That is not
this proposal.  This proposal is to add more wells to the East
Maui plan in order to supplement the upcountry area.  Now, I
myself feel if the Board wanted to proceed with upcountry
separate from this, that is certainly their choice, and quite
frankly, it would be my recommendation to do just that.
 
MR. CRAVALHO:  Welcome to the church.
 
MR. CRADDICK:  But that is a choice you can make
right here today.  If you just say you do not want it, we'll go
back to Mink & Yuen and say don't include those.  At the
meeting we held at the Pukalani Community Association, it
seemed the general consensus was to do those things.
 
MR. CRAVALHO:  Following Mr. Craddick's statement,
it appears to me what has been suggested really is an update
and review of the present EIS.  And I have no quarrel with
that, absolutely none, and if we proceed on that basis, I'm
with you all the way as long as there are absolutely no
implications in the upcountry area right now because we're not
quite ready for it.  We're in the process of reaching some
agreements.  I think you know that and I know that.  So let's
limit ourselves.
 
If we're doing this study to, in effect, look for
the East Maui sources of water that is contained in the East
Maui plan at the present time, I don't have a problem.  I have
a problem if you add, okay.  And in the process of adding, has
it been combined either as a separate total EIS statement or as
a combination of the present EIS which may make it subject,
yeah, to whatever court appeals that we have at the present
time?  It becomes part of this, and I think this is a danger.
 
MR. CRADDICK:  There's no question, it's a danger.
 
MR. STARR:  I really feel we're going backwards
here.  The original EIS called for us to exploit sources in
East Maui and toward upcountry and with the sole ability of
moving that water to central and south Maui.  And the feeling
on the Board at previous meetings, and certainly my feeling, is
that we should have the ability to take that water and use it
upcountry as well as for central and to be able to use that
water in East Maui and upcountry to solve the problems up
there.  And that was the reasoning in adding that to the scope
of the SEIS, and that also seems to carry favor with most of
that community.
 
MR. CRAVALHO:  Mr. Chairman, with all due respect to
Mr. Starr, to the limited community that was present at the
meeting that I wasn't present.  If I had been, I would have
raised these same questions at the time also.  Let us,
Mr. Chairman, focus our attention on the exact proposal and its
implications.  Can we accomplish what we want to accomplish in
a different manner without becoming involved as a part of the
present EIS which is before the court and under appeal?  Does
this place the entire area as part of that, and does it place
the entire question under appeal?
 
And I think these questions should be resolved first
before we enter into a contract with anybody.  And I think it's
reasonable, extremely reasonable.  And if we go by history, I
don't think at any time that I have brought a matter of legal
question before this body that I have been in error.  Even
though it has cost a couple of bucks in the process, I don't
think I have been in error.
 
And I think the possibilities of what I'm talking
about are real.  And if there is a methodology that we can
study, yeah, and review fast, not slow, fast, to eliminate the
concerns that I have and solely concentrate what we want to get
done so we can proceed together, I think we should, and I don't
think we lose very much if we err on the side of caution.

CHAIRMAN TAKITANI:  I think Board Member Cravalho's
comments are extremely valid and that Mr. Starr's comments are
also very good; however, we don't want to be drawn into
something that we don't have to be.  And upcountry now being
drawn into this East Maui EIS situation could cause great harm,
because you can see the people, they want a solution to some of
their problems upcountry.  They want ground water in a much
quicker time frame than we're talking, so we need to be very
careful how we proceed.  Mr. Craddick.
 
MR. CRADDICK:  Can I draw a picture on the board of
what I think is being said.
 
CHAIRMAN TAKITANI:  If you can help us picture this better.
 
MR. CRADDICK:  Separate from this in 1991, we had a
link between this system and our, let's call this upcountry
link, completely separate.  We started the EIS on it and
stopped it because we ourself and the staff felt that if it
wasn't included, we would probably be running into problems.
Okay.  Now, here you've got this upcountry system that is fed
by three sources of water.  What we're doing in this or what we
were doing in this EIS was studying this area to deliver water
to the central Maui water system.  I guess actually like this
they would become one and the same.
 
What we are doing right now is looking at some of
the demands up here.  And if we can expand this to supplement
this and include this in this EIS, doing it because one of the
objections were that we're taking this water to bring out and
we're not addressing the water concerns in this area.  And the
people who were at that meeting at Pukalani know that very
well.  That's what we're trying to address.  Now, previously, I
had brought up a proposal to develop ground water up here in
this water system.  This can or does not have to be part of
this EIS.  That is your choice.  I don't recommend that.  I
believe the Board can go ahead with that on their own.  That's
why I proposed it back in September.  If they want to go ahead
with that, that's their choice, and that's something that can
supply water to this system in a lot less than a year's time
probably, because we would do it at our tank site where there's
50 feet or 100 feet of pipeline to get it into this system.
That's a choice that you make here today.  Just the fact that
we're addressing the concerns and the court challenge to
address the water demands in this system with this upcountry
link, I myself, I do not believe that the person challenging
this is going to say, if the Board separately on their own
decides to go ahead with this, is going to say, Oh, this is
part of this.  I mean this isn't even East Maui anymore.
 
MR. CRAVALHO:  Mr. Chairman, I agree with what the
Director is saying, okay.  I don't have a quarrel with that,
but I want to be absolutely sure that any agreement entered
into is limited to the present EIS and it cannot be directly or
indirectly linked to the upcountry area because one of the
resulting proposals of this study may be the movement of water
up into that upper area at this time, that it does not resolve
in an automatic inclusion.
 
Now, you may say that it may not be in the
provision, it may not be in the contract.  I only present to
you, Mr. Chairman, and Director what the courts have said with
respect to other questions which may or may not have been the
intent of the Board, okay, and what the courts have said,
regardless of what your intent may have been, this is it.
 
And we have a case being presented to us today by
you of what the court had decided even though it wasn't the
intent of the Board.  So, again, I just stress, Mr. Chairman,
yeah, if we do err, we err on the side of caution to make sure
that what we do do is what we want to do and we spell it out.
 
CHAIRMAN TAKITANI:  Mr. Nobriga.
 
MR. CRADDICK:  Herb has also brought up to me here
one other thing that is in this revision.  It's also looking at
the possibility of raising the elevation of wells up here to
cover the DBCP possibility.  That is also one of the changes
that is in this proposal here.
 
MR. CRAVALHO:  Mr. Chairman, again, that brings in
another facet.  My understanding is when the funds were made
available upon the contamination, it dealt with possibilities,
not to be making this as part of the plan.  If and when we have
to, then we look at it.  Now, if we spell out very carefully
and very clearly what our objectives are, I don't have a
problem.  But if it's just a case of a potential relocation of
the overall, I have a problem if that relocation has not, in
fact, been caused by contamination.
 
CHAIRMAN TAKITANI:  Mr. Nobriga.
 
MR. NOBRIGA:  Thank you.  I understand the vision
that I guess we had with the project.  But looking at the
figures and the report from the consultant, I think our vision
was just too huge of a chunk for us to bite off in one swallow,
so I would side with Mr. Cravalho that we split the darn thing
up and we look at one thing first and then the other thing.  In
Director's Report 00-03, are any of the five tasks specifically
related to central Maui?
 
MR. CRADDICK:  No.
 
MR. NOBRIGA:  No?
 
MR. CRADDICK:  No.
 
MR. NOBRIGA:  It's all commingled.  So I would urge
that we go back to Mink & Yuen and have him submit two separate
pricings, if you will, or even three separate pricings because
it's like three different jobs.
 
MR. CRADDICK:  When you say a separate price, we
already have the thing going for the water going to central
Maui.  We already have his price to do it for that.
 
MR. NOBRIGA:  Okay.
 
MR. CRADDICK:  That's what was already going and we
stopped at the Board's request to address this upcountry issue,
which is, quite frankly, it's a part of the case right now.  So
if you leave it out, you're opening yourself up to challenge
right there, automatic challenge.
 
MR. CRAVALHO:  By who?
 
MR. CRADDICK:  The same group that's challenging us right now.
 
MR. CRAVALHO:  You know and I know it ain't so.
 
MR. CRADDICK:  I'll tell you, if you leave out water
from upcountry, I guarantee he will challenge it.  He has said so.
 
MR. CRAVALHO:  Isaac Hall?
 
MR. CRADDICK:  Yeah.
 
MR. STARR:  The Director is right there and that was
part of the thinking in trying to unify this that there was
definitely a desire on the part of Mr. Hall and other
members -- let me speak.  You've had your chance to speak.  Out
of courtesy, I have my chance to speak.
 
MR. CRAVALHO:  You're missing the point.
 
CHAIRMAN TAKITANI:  Mr. Cravalho, Mr. Starr has the floor.
 
MR. STARR:  You've had your chance.  I have the floor.
 
MR. CRAVALHO:  Right after.
 
MR. STARR:  Thank you.  We have heard from them that
they want to see this joined together in one plan, and I feel
it's the right thing to do.  I myself don't feel that it's
right to solely solve the upcountry problems and not solve the
rest of the problems nor do I feel that it would be right to
solely take East Maui water and bring it to central.
 
However, I think that if we don't move ahead with
this, we're taking a very sad step back.  I do feel that by the
time the thing moves forward, central Maui is going to be in a
very precarious position regarding its water supplies.
 
At present rate, at present rate of growth, if East
Maui is not developed in two years or three years from now, we
would be looking at having to issue a moratorium, which would
not be a pleasant thing to do because there will not be
additional sources, especially when we see that the likelihood
of constant supplies from the Iao ditch is also in question.
So I think that we should move ahead with this thing, and we
should not be scared because it may be challenged.  Anything
may be challenged and probably will be challenged.  But that's
why we're here to try to go ahead and to operate in the most
equitable fashion possible and to answer any questions or
challenges when they come up.
 
I think that we're dealing right now in an open way
and trying to invite in as much public comment as possible, and
through this EIS process, it will certainly be a very, very
large opportunity for the public to weigh in and put their
concerns and for us to answer them at a later date.  But if we
don't start the ball rolling now, it's just the time before we
developed these water sources is just going to extend out
another week, another month, another year.  And it's been too
long already.  And I see a -- the Board has discussed in the
past and said that we do want to integrate the water systems,
and this is the step to do that to be able to provide long-term
sufficiency for upcountry forever having sufficient water
upcountry and this will do that.
 
It will also provide sufficiency for central and
south Maui, and I for one feel we should do that.  And I would
be very surprised to see the rest of the Board not being
willing to proceed at this point and to say let's go and carve
it up or look at it in different ways or maybe not act or
whatever.  And, in this light, I move that we -- that we accept
the Director's report and proceed with the SEIS.
 
MR. CRAVALHO:  The previous speaker obtained the
floor to make a presentation not to make a motion, therefore,
it's improper, and I thought I yielded so that I could respond
to his comments.  I previously mentioned that I thought the
previous speaker was missing the point, and I repeat that.
There has not been, from my part, an opposition to do a study
or a review.
 
My concern is that if there is an automatic linkage
of it and it becomes part of the present EIS, it may be filled
with a number of dangers along the line.  This is what I have
said.  And to prevent such an occurrence and to make possible
our continuing efforts in different projects and problems we
have ongoing now, that we do not automatically have a result in
our hands that would provide this linkage and if it would also
provide then, yeah, the adherence and complicity and compliance
with the existing court order.
 
Let us focus our attention to what the question is
and not be guided or misguided into other directions.  Let's
focus our attention on the question and how we can best do
this.  And, Mr. Chairman, historically, and I'm not going to
make reference to my rightness, I think I'm familiar with the
situation.  And we need to resolve the needs, okay, and we have
said before we move here, we must meet the need upcountry.  And
if such is the case and with the reemphasis of the action of
this body with respect of the Dowlings, et cetera, et cetera,
yeah, what I think I am proposing is consistent and will really
speed things up, not slow, speed.
 
CHAIRMAN TAKITANI:  I think the Board is really
sympathetic on both Mr. Starr and Mr. Cravalho's presentation
because we want an upcountry link.  The only question Mr.
Cravalho is bringing is the fact that we may getting into
dangers, and if we can somehow insure that we're taking the
proper steps to be sure we don't fall into that trap, then I
think all of us will be better served.  I think that's all he's
saying.  Mr. Rice.
 
MR. RICE:  Mr. Chairman, I think I heard Board
Member Cravalho say that there were some things that he needed
or that needed to be investigated that should be done quickly,
and I might ask if quickly means maybe the next meeting?
 
MR. CRAVALHO:  Absolutely.
 
MR. RICE:  Then possibly we should consider a motion
to defer this until those items are determined, not to make a
motion to go one way or the other at this point.
 
MR. CRAVALHO:  I have no problem with that.
 
MR. NOBRIGA:  I would support that.
 
CHAIRMAN TAKITANI:  The other thing, the February
28th deadline for the Wailua ditch agreement also.  So those
are the kinds of things Board Member Cravalho is talking
about.  We need to combine all these, make sure they're all
interlocking so we have a unified position.
 
MR. NOBRIGA:  See the whole picture.
 
MR. TAGORDA:  Mr. Chairman.
 
CHAIRMAN TAKITANI:  Yes.
 
MR. TAGORDA:  In addition to what Mr. Rice is
asking, I would also like to know more about those summary
court orders or challenges that was brought up in court, and I
think I would like to understand more about the current EIS or
the scope of agreement that was brought up to us amending all
the EIS, then this becomes a supplemental EIS, answer some of
those court challenges.
 
MR. CRAVALHO:  Again, let's not belabor the point,
okay.  What Mr. Rice is saying, we have a deferral, yeah.  This
Board instructed the Chair on that East Maui Wailua ditch.
That's a factor that's under consideration, and there is a
deadline.  It has to -- whatever is done there has to be
consistent.  The preparation and the review for assurances of
the concerns that I have have been met.  I think it's a
two-week kind of a thing.  Now, my express concern is nothing new.
 
I expressed this concern at the last meeting
informally outside to some of the interested parties because I
was aware, and I said take a look at these things before we
finalize, and based on what I see, my concerns were not
completely addressed and not completely done.  I think it's
part of our responsibility to not only meet the needs of the
community but also to express whatever concerns we have to make
sure that those needs are met and not lost in a technicality as
we have been losing a couple of things along the line.  You
know I'm right.
 
MR. RICE:  If a motion is appropriate at this time,
Mr. Chairman, I would make the motion that the item be deferred
until February 10th.
 
MR. CRAVALHO:  Second the motion.
 
CHAIRMAN TAKITANI:  Moved by Mr. Rice, seconded by
Mr. Cravalho to defer Director's Report 00-03 until February
10th, our next meeting date.
 
MR. STARR:  More discussion?
 
CHAIRMAN TAKITANI:  Discussion.
 
MR. STARR:  I don't see how the needs of the
community are met by delaying this any further.
 
CHAIRMAN TAKITANI:  Any other discussion?  Moved and
seconded that Director's Report 00-03 be deferred until
February 10th.  All those in favor, say "aye."
 
VOICES:  Aye.
 
CHAIRMAN TAKITANI:  Opposed, "nay."
 
MR. STARR:  Nay.
 
CHAIRMAN TAKITANI:  One nay.  Mr. Starr.  The aye's
have it.  Director's Report 00-03 is deferred to February
10th.  Move to Director's Report 00-04, request for approval of
budget amendment for Napili A Well.
 
MR. NOBRIGA:  I would like to move to approve the request.
 
MR. CRAVALHO:  Second.
 
CHAIRMAN TAKITANI:  Moved by Mr. Nobriga, seconded
by Mr. Cravalho to approve Director's Report 00-04. Discussion?
 
MR. NOBRIGA:  Did this request come out of the DBCP settlement?
 
CHAIRMAN TAKITANI:  That was exactly my question,
too, Mr. Craddick.  I would think this is coverable.
 
MR. CRADDICK:  At some stage, I would expect the
Board would do that, but right now the project is funded out of
the Bond Fund and we want to draw that Bond Fund down.  That's
why we're making the proposal we have here, but I would expect
at a future time, the Board will do exactly that.
 
CHAIRMAN TAKITANI:  How much is in the Bond Fund?
 
MR. CRADDICK:  I think right now unencumbered is 3.6
million, somewhere in that neighborhood.
 
MR. QUINN:  2.7 million unencumbered.
 
CHAIRMAN TAKITANI:  So eventually, you think it will
be coverable under the DBCP?
 
MR. CRADDICK:  Yeah.  It's the Board's choice if
they want to take that money.  Well, I would expect we would
since we got the GAC settlement money.  I would expect they
would.  But right now, unless we go back to the Council and
reprogram that bond money, we've got to spend that for the
purpose that's intended.  And if we go back to them and say we
don't want to do that, we're looking at potential arbitrage
charges, so we don't want that either.
 
CHAIRMAN TAKITANI:  Moved and seconded Director's
Report 00-04.
 
MR. NOBRIGA:  One more question.  We're not using
Mr. Soong anyway on this project?
 
MR. CRADDICK:  Not to my knowledge.
 
MR. NOBRIGA:  Okay.
 
CHAIRMAN TAKITANI:  All those in favor, signify by
saying "aye."
 
VOICES:  Aye.
 
CHAIRMAN TAKITANI:  Opposed, "nay."
 
         (No response.)
 
CHAIRMAN TAKITANI:  The aye's have it.  Director's
Report 00-04 is approved.  Go to director's 00-05, Request to
procure services of the Legislative Liaison to State
Legislature, Page 6.
 
MR. NOBRIGA:  Move to accept the report -- approve
the report, I'm sorry.
 
MR. HASHIMOTO:  Second.
 
CHAIRMAN TAKITANI:  Moved by Mr. Nobriga, seconded
by Mr. Hashimoto to approve Director's Report 00-05 requesting
the procurement of services of the Legislative Liaison.  Any
discussion?
 
MR. NOBRIGA:  Although the Members of this Board can
probably deliver a better focus to the Legislature in person,
unfortunately, I'm still trying to run a business, so I don't
have the time to dedicate.  A small fee should be very well
worth our efforts.
 
CHAIRMAN TAKITANI:  She does do a good job of
keeping on top of legislation and notifying the Director and
the staff of significant items.
 
MR. CRADDICK:  We'll let you know when we need the
heavyweight up there.
 
CHAIRMAN TAKITANI:  Any other discussion?  If not,
moved and seconded to approve Director's Report 00-05.  All
those in favor, say "aye."
 
VOICES:  Aye.
 
CHAIRMAN TAKITANI:  Opposed, "nay."
 
 (No response.)
 
CHAIRMAN TAKITANI:  The aye's have it.  Director's
Report 00-05 is approved.  Why don't we take a ten-minute  break.
 
         (Recess taken.)

CHAIRMAN TAKITANI:  I would like to reconvene the
Regular Board of Water Supply Meeting.  Go to Roman Numeral 6,
Old Business, Director's Report 99-55, Request budget amendment
to upgrade the Olinda Water Treatment Facility.  Mr. Craddick.
 
MR. CRADDICK:  Larry, do you want to explain the new
information here that we've provided.
 
MS. NAGO:  Larry, maybe if you come over here,
Rachelle can get you better.
 
MR. WINTER:  At the December 21st meeting, the Board
approved a portion of our request for a budget amendment, that
being for the contractor and some miscellaneous and
administration costs, and did not include the other portion,
the remaining portion, which would cover the consultant's
contract amendment.  And they also move to reopen negotiations
with M&E Pacific.
 
This supplemental report breaks down the various
portions of the M&E contract extra work.  There's a table at
the bottom of the first page you can follow.  The requested
design changes total is $6,860.  Memcor shop drawing reviews
total $11,440.  Assist construction manager with electrical
work $4,700.  Consultation on estimates and change orders
$1,600, and meetings and job site visits $7,100.  Our total
request is $31,700.
 
CHAIRMAN TAKITANI:  Mr. Starr.
 
MR. STARR:  Yeah, is there a purchase order for this?
 
MR. CRADDICK:  Jonathan, if you go to the next page,
it says, "The above extra work was performed by the consultant
during the construction of the project at the request and/or
direction of the Department, even though payment for the
additional services was not requested by the consultant until
after the fact."
 
So there's no purchase order.  This is a change
order request and would be processed as such at the time that
it is approved.
 
MR. STARR:  Can I see the request for doing this
work, can you give us a copy of that?
 
MR. CRADDICK:  Staff request you mean?
 
MR. STARR:  You said it was done at the request and
direction of the Department.  Could I see a copy of the request
and direction?
 
MR. WINTER:  In most cases, those were verbal requests.
 
MR. STARR:  Do you have any certification that this
work was done or that it was requested?
 
MR. WINTER:  Our files would have the --
 
MR. CRADDICK:  Larry, who was the person that
requested it, you?
 
MR. WINTER:  I would have been the one requesting them.
 
MR. CRADDICK:  That's the only certification.  He's
the one who requested it, and we know was the work done.
 
MR. WINTER:  Yes, the work was done.
 
MR. NOBRIGA:  For discussion purposes, I would like
to move that we accept this proposal.
 
MR. HASHIMOTO:  Second.
 
CHAIRMAN TAKITANI:  Moved by Mr. Nobriga, seconded
by Mr. Hashimoto to approve Director's Report 99-55, Request
for budget amendment for the Olinda treatment facility. Discussion?
 
MR. NOBRIGA:  By hook or by crook, I know somebody
is going to end up paying for this darn thing.  I just have a
hard time accepting a lot of these requests.  I just feel very
uneasy about the entire package.  I'm okay until the
consultation of estimates and change orders and meetings and
job site visits.  The last two items is very tough for me to swallow.
 
CHAIRMAN TAKITANI:  Mr. Starr.
 
MR. STARR:  There's no way I could vote for this
without having some kind of paper trail to it, and I'm very
surprised even to this date the Department hasn't given a
purchase order or some kind of certification that on paper that
this work was requested and that work was done.  I mean there's
nothing, and I certainly can't vote for paying for something
for which there is not anything on any paper.
 
This is not the procedure that this Department
should be following nor is it one that we should encourage in
the future by approving, not until there's some kind of paper,
paper trail created on this thing.
 
CHAIRMAN TAKITANI:  Mr. Craddick.
 
MR. CRADDICK:  The paper trail would be created when
this is approved.  What happened here, work was requested, the
work was done.  We felt it was part of the contract.  The
consultant did not feel it was part of the contract.  If both
parties before the fact feel that it's not part of the
contract, a written change order has to be processed.  That's
what the contract says.  It has to be in writing.  Well, after
this work was done, then it came up that, Hey, we want a change
order for this.
 
And, you know, as it shows in there, we did our best
to negotiate it down from what was requested.  $72,000 was
requested.  This is a lot less than $72,000.  Now, the rest of
this stuff, we may have the uneasiness that you do also.  But
the bare facts remain.  When we go to court, they're going to
ask, Did somebody request for this work?  Was the work done?
It was.
 
And I've already brought it up to you before, you
know, are we ready to go to court over something like this.
This payment is not going to be made until the paperwork that
Jonathan is talking about is all made up.  But we're not going
to make it up if the Board is going to say, Hey, we're not
going to pay this, which is your option.
 
CHAIRMAN TAKITANI:  The problems still exist today
if this work was done today?
 
MR. CRADDICK:  Yeah, the plant is all operational.
This work was done.
 
CHAIRMAN TAKITANI:  My question is do you not have a
work order that requests some certification that this work was
being requested, et cetera?
 
MR. CRADDICK:  Well, we have the request from the
consultant for the money.  There's no question we have that.
But our paperwork on our side is the change order itself.  That
is our paperwork.
 
CHAIRMAN TAKITANI:  We spent an inordinate amount of
time on this matter, and it just seems to be a procedural kind
of matter regarding the modus operandi of the Department.
 
MR. CRADDICK:  Yeah, what happened was they came out
doing the work, us thinking it was part of the contract and I
guess them doing the work.  And, keep in mind, you know, I
guess M&E is kind in the same boat we are because their
contractor/subcontractor did not tell them that they thought
they should be paid extra for this, you know.
 
CHAIRMAN TAKITANI:  Mr. Harada, could you come up to
the table to address this.
 
MR. HARADA:  Mr. Chairman, is it all right if I
stand?  I have a very bad cold.  I'm Ed Harada with M&E
Pacific, consultant for the project.  I think much of this is
the result of the action of the staff.  To do the construction
management services in-house, traditionally, even on the Big
Island, what we do is, once the project is bid, then we hire a
consultant to do what we call construction management.  And
then the construction manager would be staffed with all of the
people that would be required to manage the construction.
 
Now, in this case, because David elected to do it
in-house with a big savings to the Board, some of the work
traditionally done by the so-called formal construction
manager, there was really nobody for David to go to except
somebody like us, because, you know, we did the design.  We're
familiar with the project.
 
So if you look at the tabulation of costs, those
three last items, assist CM with electrical expertise, that's
because David's staff is not geared to provide that type of
service.  If you have a construction manager, then it's his
job, it's in his fee to provide that service.  So in this case
then, Larry came to us.  David Soong was our subconsultant that
provided that service.
 
Consultation on estimates and change orders, this is
again a result of the fact that the staff did the CM work.
Traditionally, the CM would do that, but because the County
elected to do it by themselves, they asked for our help.  And
same thing with the last item, meeting and job site visits,
usually the CM is there, so they would take care of everything
related to construction.
 
Now, in this case, because they were doing the 
management in-house, they needed some help from our part.  So
these last three items directly relate to the fact that the
department elected to do the CM by themselves resulting in a
savings.  Now, the first two items, requested design changes
are a result of things that came up during the construction
that the Department felt that they wanted to implement.  And in
that case, they came to the designer, which is us, who provided
the modification for which there was a charge for that.
 
The second item, Memcor shop drawing review, now,
the Memcor equipment was provided outside of our effort.  It
was kind of like a package that was provided by the vendor,
which was not part of our scope of work for shop drawing
review, so consequently, it's a separate pay item.  And both
ourself and David Soong was party to that review.  If you look
at all of these items, the majority of it is a result of the
fact that they went and did their own CM work; and secondly,
the other parts are traditionally things that come up during
the construction of a project.  This is not unusual at all.
This is like the rule rather than the exception.
 
There's nothing devious about any of our requests.
The work was done in good faith on our part.  We delivered the
service to the Department, and, you know, hopefully then, based
on that, we can get compensated for this.  It's been a long,
long time.  You know, the project ended in the early part of
1998, and we've been after this for about almost two years
now.  And this is a result of really nobody's fault.  From our
part, our project manager, James Okuzaki, decided to relocate
to the mainland right after the job was completed.  There was a
staff change on the part of David's crew.
 
Ed Kagehiro retired at the end of 1998 and Herb
Kogasaka took over, so there was some transition that resulted
in some delay.  So I think both David's staff and our staff,
we've been negotiating in good faith all the way along.  And,
you know, hopefully, you look at this on a favorable basis.  If
you have any questions, I would be happy to respond to it.
 
MR. HASHIMOTO:  How much would the additional cost
be if you had a CM?
 
MR. HARADA:  The CM would be hired by the Board.
Usually it runs between 7 to 10 percent of the construction
cost.  What is the construction cost on this?
 
MR. WINTER:  Three-something million.  We were
estimating a CM would probably cost about half a million dollars.
 
MR. HARADA:  This is a very complicated,
sophisticated project, so it would run about in that
neighborhood, yeah.
 
MR. CRAVALHO:  Mr. Chairman, it seems as though
we're getting into a discussion of the merits and/or the merits
and the appropriateness of the charges.  We seem to be,
however, also ignoring the requirements that may be statutory
or by rule or reg or whatever, but these are requirements such
as any change order needs to be preapproved by a variety of
agencies.  My understanding is this process was not followed.
That has very little, if anything, to do with the propriety in
terms of the expenditure.  If one proceeds to approve this
change order, which was supposed to have all these protective
devices put in, then we're, in effect, saying here is a
contract which means almost nothing.  We do not need to follow
the legal requirements for change orders, and so a contract
price is meaningless.  And a price then is presented to us and
we've got to pay, because we all operated, quote, in good faith.
 
I would assume that when a bid is entered, it is
entered in good faith and it is entered on the basis of meeting
all of the legal requirements.  And if there are any
necessities for change orders, and there are, there are
procedural setups that need to be met.  This is a point that
Mr. Starr has raised, very valid, and gets to the crux of the problem.
 
If, for example, or just for the sake of discussion,
we would approve such a payment on the basis of a moral
obligation, it still does not detract from the legal obligation
of any responsible party or parties, yeah, who fail to meet the
procedural requirements for change orders.  And I think this is
what we need to focus on because the alternative to that is
that a contract means nothing, squat.  No need to file the
procedural requirement for a change order, yeah.  So anybody,
anytime, anyplace, say I talked to him, he talked to me, we did
this, now pay.  And what if the change order costs come up
above the funds available, what you going to do?  End of sermon.
 
MR. TAGORDA:  Mr. Chair.
 
CHAIRMAN TAKITANI:  Mr. Tagorda.
 
MR. TAGORDA:  On the moral issue of this request, I
am going to approve paying the $31,000 that's requested because
the work has been completed and done.  But on the legal issue,
the procedural aspect of this request, which a change order was
not followed, then I'm really uneasy of saying, yes, take our
money.  So next time we need to follow procedures strictly.
 
CHAIRMAN TAKITANI:  Thank you, Mr. Tagorda.  Mr. Starr.
 
MR. STARR:  What is so shocking to me is even at
this late date, the Department is still, in the words of the
Director, uncomfortable about this to the extent that they've
not been willing to give us a piece of paper, a purchase order
even after being prodded.  On the previous amount that we
approved at the last time we went over this item, there was a
freshly cut purchase order for the other portion of it by the
Department, and we approved it on the basis of that.  But I
really don't think we should approve this at this time, and I
would be a little bit more sympathetic toward approving it if
we had a piece of paper from the Department saying that they
asked that this work be done and that it was done as a purchase
order or a change order or something which we don't have.
 
I don't see how we can approve the thing without any
proper documentation.  I think that's a very, very wrong move
to make even though the amount is not all that large and we do
have a verbal -- we have been told verbally that the work was
legitimate.
 
CHAIRMAN TAKITANI:  Mr. Craddick.
 
MR. CRADDICK:  We do have a contract amendment
here.  It's not, these kind of things are not done by purchase
order.  There's a contract here as was mentioned earlier and a
contract amendment has to occur.  And if you want to look at
this, the contract amendment is signed by M&E meeting these
points on here.  And again, you know, where we -- the
consultant was doing these things and asked for the change
order afterwards.  I believe it was our impression that we
thought these were covered under the current contract.

That's why this was not an issue until afterwards
when they submitted an invoice for it that wasn't covered under
the contract.  And, you know, I'm not certain that something
like this could have been even caught beforehand.  We'll
certainly be a lot more careful, you know, asking people to
come to meetings and stuff like that unless there is a clear
understanding that it's part of the existing contract, and if
not, process the contract change order beforehand as required.
 
But I think this caught us off guard also, and
that's why we're a little bit uncomfortable about it.  But,
nevertheless, I'm not that uncomfortable about it because I
know it was work that needed to be done, was done, and I'm
certainly not ready to recommend to this Board to go to court
over $30,000.  I mean just our fees alone will exceed this.
We've probably spent 20 percent of this doing all these
presentations to the Board.
 
CHAIRMAN TAKITANI:  Mr. Rice.
 
MR. RICE:  Mr. Harada, you made a comment about this
being the rule, not the exception.  But the classic case of
contractor dispute has to do with work done before change
orders are approved.  Is that not the case?
 
MR. HARADA:  That's correct.  I think the point that
Mr. Cravalho made is very valid.  I've worked for the
Government for 20 years and we rule by the legal procedures,
and that's the way to keep order.  You know, in this case, much
of this was done on a verbal basis as the project was going
on.  And some of it, like the last item, I know David and the
staff were not aware of our intention to ask for funding for
this.  But when we inspected the contract and looked very
carefully at the provisions of what our requirements were for
these services, it was lacking this item that we're asking
compensation for.
 
And the only reason why I think we were involved in
doing the work is because the staff did the CM work rather than
having it contracted out.  You know, we had David Soong here
available on this island.  It was very convenient for the staff
to call and ask for his advice and direction on items that came
up during the construction.  David kept a very clear and very
precise diary on all of those numbers and hours and times that
he was involved in job site visitations and meetings that
affected the project.
 
These costs would be more or less implicit in the
CM's project, so they would not be flagged out separately, but
in this case, since we were not tasked to do any construction
management type work, we filled in time to get paid for it.

MR. CRAVALHO:  Mr. Chairman, I understand based on
the testimony given that the party involved did receive verbal
authorizations to proceed on this whole variety of projects or
implementation of projects.  Such assurances or such requests
came from staff or people who had the responsibility and the
authority at least in the public eye, yeah, of speaking for the
Department.  And, therefore, the contractor, yeah, was
appropriate, although negligent in a couple of instances, acted
appropriately in terms of the authorization to proceed.
 
And so under those circumstances, even though some
of the legal niceties have not been met, the moral
responsibility has been because representations were made on
behalf of the Department.  And so I would extremely
reluctantly, extremely, sir, vote to pay with the understanding
that, hey, one time enough, yeah.  One time enough.  We don't
have any repeat, and we adhere, yeah.
 
But again, basing it on the interpretation and the
acceptance that whatever approval was given to proceed was made
by an employee who had authority to move accordingly and that
it could constitute, yeah, obligations on the part of the
Department and the Board.
 
CHAIRMAN TAKITANI:  Well stated, Mr. Cravalho.  I
think that all the Board has been saying, Mr. Craddick, is that
we have procedures that should have been in place.  We need to
ensure that the Department is going to continue in an orderly
and legal manner in implementing direction of the Board in
doing contracts.  So please, we ask you, one time is enough, as
Mr. Cravalho is saying, no more.  That's all we've been
saying.  We've spent an inordinate amount of time doing that.
I know we all have an obligation to perform.  This is a little
trip to the woodshed.
 
Moved and seconded that Director's Report 99-55,
Request for budget amendment to update the water treatment
facility be approved.  All those in favor, signify by saying, "aye."
 
VOICES:  Aye.
 
CHAIRMAN TAKITANI:  Opposed, "nay."

MR. STARR:  Nay.
 
CHAIRMAN TAKITANI:  One nay.  Mr. Starr.  The aye's
have it.  Director's Report 99-55 is approved.  Thank you, Mr. Harada.
 
MR. HARADA:  Thank you very much.
 
CHAIRMAN TAKITANI:  We'll move to Item C, Discussion
and possible action on an amendment Section 16-202-05 of the
Board of Water Supply Rules of Practice and Procedure.
 
MR. NOBRIGA:  Move that this amendment goes to
public hearing, Mr. Chairman.
 
MR. CRAVALHO:  Second.
 
CHAIRMAN TAKITANI:  Moved by Mr. Nobriga, seconded
by Mr. Cravalho that --
 
MR. FUKUSHIMA:  If I may, Mr. Chairman, there were a
couple of things that I would like to indicate to the Board
that perhaps should be changed or noted as a possible change.
Number one would be in the definitions, to delete from
applicant and subdivider and subdivider as a defined term and
subdivider under applicant.
 
I believe in place already is an opportunity and
provisions for subdividers to come before the Board to ask for
waiver of subdivision requirements, so it may be unnecessary to
include them as part of this particular procedure.  Secondly,
and perhaps more significantly, under standards of appeal, I
was directed by one of the Board Members, and I just wanted to
point this out to the Board, with respect to -- and this is on
the last page, Section 16-202-79(a)(2), which states arbitrary,
capricious or inconsistent.  I have a small problem with the
language "inconsistent" in that it may give the impression that
if the Director or the Department had erred in the past, that
that error would have to be perpetuated.  And it would appear
that including "inconsistent" in standards to be applied by the
Board in determining an appeal is, in my opinion, a little shaky.
 
MR. CRAVALHO:  Arbitrary and capricious.
 
MR. FUKUSHIMA:  And just leave it at that?
 
MR. CRAVALHO:  Yeah.
 
MR. FUKUSHIMA:  Another portion would be in
Section B.  The language would be changed to "in appeal" rather
than "in appeals," which would make it a complete sentence.
That was left blank.  The impetus for this was in application
or requests a few meetings ago where an individual had come in,
and because there was no provision for adjusting bills, this
particular individual was quite put out.  In drafting this
particular provision, I wasn't sure of what the Board would
approve of.  There's a blank there.  I wanted some direction
from the Board as far as -- and what was intended to be placed
in there was some sort of percentage.  And what I was hoping
for was some kind of direction from the Board as to inserting a
particular percentage when a person comes in when there may
have been some or there is a repayment plan suggested by the
Director which exceeds by a certain percentage the person's
billing average.  So at least there's a mechanism that's set up
so the Board can consider instances where there may be charges
unanticipated by the consumer.
 
CHAIRMAN TAKITANI:  Mr. Starr.
 
MR. STARR:  May I suggest 500 percent.
 
MR. CRAVALHO:  Mr. Chair.
 
CHAIRMAN TAKITANI:  Mr. Cravalho.
 
MR. CRAVALHO:  In this public hearing, the document
is subject to amendment?
 
CHAIRMAN TAKITANI:  That's correct.
 
MR. CRAVALHO:  So whether we put 500 or 200,
whatever, it's subject to review by the public.  Whatever, I
think it's excessive, but as long as it's amendable based on
the hearings we have, fine.
 
CHAIRMAN TAKITANI:  Mr. Quinn, how many instances do
we have -- what is a representative figure for that?
 
MR. QUINN:  For this percentage?
 
MR. CRADDICK:  Before you get to that question, what
are we talking about, exceeds 500 percent over what period of
time, a year?
 
MR. FUKUSHIMA:  The previous 12 months.
 
MR. CRADDICK:  So the repayment plan -- yeah, but
what payment, what are we talking about is the 500 percent?
You have the previous 12 months' payment, and let's just say,
for example, you're paying $100 every two months.  So that's
$600.  Five-hundred percent of that means your bill would go up
to $3,000.  And we would repay that over what?  You know,
what's the repayment time spread over?
 
If it's spread over five years, then even though
it's 500 percent, divided by five, it's still not going to come
to more than $600 a year in payments, which wouldn't meet the
threshold.  So I think the time is important over which you pay
this, because, otherwise, it doesn't mean anything.
 
MR. FUKUSHIMA:  Well, when somebody comes in and
requests a repayment plan be instituted, the Department
necessarily sets up a plan, and that particular plan has a
start and end date.
 
MR. CRADDICK:  Right.
 
MR. FUKUSHIMA:  So it would be measured by the
repayment plan that has been proposed by the Department, be it
over one year, two year or five years.
 
MR. CRADDICK:  But are you talking about the entire
amount they repay so as long as the repayment doesn't exceed
500 percent of the previous 12 months' bills?
 
MR. FUKUSHIMA:  The monthly repayment, monthly
repayment exceeds 500 percent of the previous 12 months monthly
billing, okay.  We'll work with staff to prepare a notice for
public hearing so this can go out.
 
CHAIRMAN TAKITANI:  Any other questions for Mr.
Fukushima?  If not, it's been moved and seconded that
discussion or the amendment to Section 16-202-05 as amended has
been sent to public hearing.  All those in favor, say "aye."
 
VOICES:  Aye.
 
CHAIRMAN TAKITANI:  Opposed, "nay."
 
  (No response.)
 
CHAIRMAN TAKITANI:  Aye's have it.
 
MR. CRADDICK:  Bob, we've been holding up on the
other rule that the Board passed on the time when approvals had
to be given.  That also has to go to public hearing.  We were
waiting for this so we could go to public hearing on both of
them at the same time, so we'll schedule that.
 
CHAIRMAN TAKITANI:  Mr. Nobriga.
 
MR. NOBRIGA:  In light of Other Business A, we don't
foresee needing any amendments to Rule 3-1.  That's the wrong
one.  No, that's the one, yeah.
 
MR. CRAVALHO:  You're under Other Business?
 
MR. NOBRIGA:  No, just making one comment.  Making
confusion.  That's all.  Sorry.
 
CHAIRMAN TAKITANI:  Move to Item D under Old
Business, Discussion regarding audit management letter of
fiscal year 1999.
 
MR. QUINN:  For those Board Members who aren't
familiar with the audit process, I'll just give you a little
background information.  The County Council contracts with an
outside accounting firm.  In this case, it was Deloitte &
Touche to perform an audit of all the County Departments
including the Water Department, and I might add, we pay for our
portion of the audit.
 
And typically, they contract for a two-year period,
and this was the second year for Deloitte & Touche.  And I
believe they've chosen another auditor for the next coming two
years.  In addition to the typical financial audit, the
auditors typically issue a management letter, and that's the
issue that's before you today.  The management letter focuses
on certain matters of internal control and typically recommends
areas that they think might need improvement, and that's what
you have for discussion today.
 
This particular audit, they only found two current
year comments, one of which I agree with.  The first one, the
fixed asset comment, quite frankly, I'm not sure how this
comment came about.  They have furnished us with no specific
instance where we have failed to meet this requirement.  It may
have come up in conversation with one of our employees.  Quite
frankly, I don't know, but anyway, we have a procedure in
place, when the asset is retired, that particular division is
supposed to notify us via a form, and we retire that asset.  I
don't believe, in my opinion, that we have abused that control
and I am still waiting for the auditors to give me any
specifics as to why this comment came up.
 
With respect to the payroll comment, I totally agree
with them.  We do have a problem with timely submittal of time
sheets, and that probably isn't a major problem.  But, for us,
since it meant, in some cases, we do allocate labor to
particular jobs, it becomes an important issue for us because
it holds us back in terms of getting our financials together
and our ability to present them to the Board on a timely fashion.
 
The rules regarding that are that all employees are
to have time sheets into our payroll area three business days
after the close of the pay period.  In most cases, employees
meet that requirement, but there's a few I would say hard core
employees that miss this deadline on a regular basis.  So we've
just tried to reinforce this, and the Director has at the staff
meetings reviewed late time sheets every Monday morning at the
staff meeting.  Hopefully, that should improve.  We have seen
some improvement actually.  I shouldn't say hopefully.
 
MR. CRAVALHO:  Try hold back the check.
 
MR. QUINN:  Yeah, well, I'm not sure if we can do that.
 
CHAIRMAN TAKITANI:  Why can't you?
 
MR. QUINN:  If we had --
 
MR. CRADDICK:  Let's put it this way.  They can
grumble about it, but we can certainly try it.
 
MR. QUINN:  I'm sure we'll have a few grievances on that.
 
MR. CRADDICK:  We will, but at least maybe they'll
 smarten up.  What I've done is told the supervisors that we're
going to start with them first because it's actually their job
to make sure the employees get those things in.  So the
disciplinary action probably has to start there first, so if we
ever do hold the check back, there's going to be some
repercussion on the supervisor.
 
MR. CRAVALHO:  Mr. Chairman, whatever procedures are
required or information they're being told, et cetera, it can
be enforced, and it's reasonable.
 
MR. QUINN:  We'll take that into consideration and
see if we can do that.
 
MR. CRADDICK:  To me what this is is probably
indicative of a bigger problem.  What happens is the field guys
will, I'm going to use randomly for lack of a better
description, but what they'll do is randomly call up and say
they're on vacation today or sick leave, whatever spirit moves
them, that's what they have available to use for a day off that
they take.
 
And that's what causes these things to be late and
some of them more, what was the word, hard core cases.  And
we're also trying to attack that problem also.  So we're going
at this from not just one front, but this may be another one to
try and get to, just say sorry, you didn't get your time sheet
in, we don't have a paycheck for you.  A grievance may be
filed, but I think maybe the next time around they'll be a
little bit more aware.
 
CHAIRMAN TAKITANI:  As long as you post a letter
notifying them saying that's the ramifications.
 
MR. CRADDICK:  If we notify something like that,
there will be a grievance filed immediately without even
waiting for the paycheck to be held up.  I don't think it will
have the same effect as if they just don't get the paycheck.
 
MR. QUINN:  Those were the only two comments.  I
don't see them as earth shattering comments.  Actually, the
audit went fairly smoothly this year.
 
CHAIRMAN TAKITANI:  What about this disaster
recovery plan.  That seems to be a significant one.
 
MR. QUINN:  That's an area where we've done -- well,
the operations end of it, they've already developed somewhat of
an emergency recovery plan.  This particular comment though, if
you'll notice, is geared towards the billing system, and there
is somewhat of a backup sense that, as the Board knows, we use
the Honolulu Board of Water Supply.  They do back up the data
on a daily basis and it's stored in another offsite building.
 
Where we're weak is not in that area, quite frankly,
but if in the event we couldn't get into the fifth floor, say
there's a fire or whatever, some kind of a disaster, we need to
develop a plan that addresses that situation.  That can get to
be an expensive proposition in the sense that you have to have
an alternate site.  You have to have phone hookups.  You have
to have access to the billing system.  And we're looking at
that, but quite frankly, we haven't looked at it as thoroughly
as we should because of lack of manpower to do it and probably
a lack of funds, too.  But we have to do something in that
order.  Perhaps maybe look at the baseyard as a minimal area
that we might be able to use in the extent of an emergency and
have a few phones at least so our customers can call us on an
emergency basis, but we do have to address that.
 
CHAIRMAN TAKITANI:  Do we have a plan like tsunami
or hurricane?
 
MR. QUINN:  We do, I believe, David, correct me, on
the operations in the field.
 
MR. CRADDICK:  Yeah, field operations.  This is
 pertaining more to our electronic data processing systems more
than field operational systems.
 
MR. QUINN:  In a way, we're lucky that we do utilize
the Honolulu Board, actually that data, not only is it stored
here, but it's also stored over there, so there is backup.
 
CHAIRMAN TAKITANI:  David.
 
MR. CRADDICK:  One other thing that's going on, I
believe the County is looking at leasing space in Kaahumanu
Center, not Kaahumanu, Kahului Mall, to relocate a lot of their
collections area for the County.  And they're saying that in
there, we could also have collections for the Water
Department.  So perhaps, you know, if we get the computer link
down there, we could have more than just one in the event we
had to relocate to that area.  So there are some things going
on that we may be able to tag onto and take care of this issue
so we're not totally dependent on the fifth floor.
 
MR. QUINN:  As part of the disaster recovery plan,
we've also for the past two years both in the fiscal division
and engineering division have been scanning all of our
documents.  It's a monstrous task.  There is no easy way to get
around that except for feeding these items into a scanner, and
we can store this information off site.  We are vulnerable in
the sense that our customer files are on the fifth floor and
both fiscal and engineering, so we have to continue with that
scanning process to store those records off site.
 
But that's been going on for two years, and it will
be an ongoing effort.  That's all I had to say basically unless
the Board has any further questions.  And we do appear before
the County Council on these items and are open to any questions
that they may ask.  And typically, that happens.  Actually, it
should have happened already.  I don't know, they haven't, for
some reason, put it on the agenda.  It usually happens in January.
 
MR. RICE:  Do we need a motion for accepting?
 
MR. CRAVALHO:  I think he's correct.  You so move?
 
MR. RICE:  I so move that we accept the management
letter from the auditors Deloitte & Touche and recommendations
for staff to follow up on.
 
MR. CRAVALHO:  Second.
 
CHAIRMAN TAKITANI:  Moved by Mr. Rice, seconded by
Mr. Cravalho to accept the management letter from Deloitte &
Touche and the recommendations for action by the Department.
All those in favor, say "aye."
 
VOICES:  Aye.
 
CHAIRMAN TAKITANI:  Opposed, "nay."
 
(No response.)
 
CHAIRMAN TAKITANI:  The aye's have it.  The audit
management letter has been accepted.  Move to Item E,
Discussion and possible action regarding complaint for
declaratory judgment Civil Number 00-1-0001(1).
 
MR. NOBRIGA:  I move we go into executive session to
consult with the attorney pursuant to HRS 92-5(a)(4) to consult
with the Board's attorney on questions and issues pertaining to
Board's powers, duties, privileges, immunities and
liabilities.

MR. HASHIMOTO:  I second the motion.
 
CHAIRMAN TAKITANI:  Seconded by Mr. Hashimoto.  It's
been moved and seconded that the Board go into executive
session regarding complaint for declaratory judgment.  All
those in favor, say "aye."
 
VOICES:  Aye.
 
CHAIRMAN TAKITANI:  Opposed, "nay."
 
(No response.)
 
CHAIRMAN TAKITANI:  The aye's have it.
 
(Whereupon, the Board went into Executive Session.)
 
MEETING RESUMES
 
MR. NOBRIGA:  Mr. Chairman, I move that we defer any
action on Civil Case Number 001-0001(1) until next week.
 
CHAIRMAN TAKITANI:  Moved by Mr. Nobriga to defer
action on claim for declaratory judgment Civil Number
001-0001(1).
 
MR. HASHIMOTO:  Second.
 
CHAIRMAN TAKITANI:  Seconded by Clark Hashimoto.
Any discussion?  If not, all those in favor, say "Aye."

VOICES:  Aye.
 
CHAIRMAN TAKITANI:  Opposed, "nay."
 
(No response.)
 
CHAIRMAN TAKITANI:  We'll defer Item E to the next
meeting.  We'll go to item Roman Numeral 7, Other Business.
Discussion regarding the Director's finding that the upcountry
water system has enough source capacity to meet peak day
demands during low rainfall.
 
MR. CRAVALHO:  Mr. Chairman, as this is an
informative communication, I suggest that we lay it on the
table for further review by the Board if and when it is
warranted.
 
MR. STARR:  I second that.  I definitely have some
questions about this that I would like to look at.
 
CHAIRMAN TAKITANI:  Moved by Mr. Cravalho, seconded
by Mr. Starr to lay this matter on the table.  Mr. Craddick.
 
MR. CRADDICK:  I believe we have somebody here, a
member of the public.
 
MR. CRAVALHO:  I have no objection.
 
CHAIRMAN TAKITANI:  Mr. Smith, would you like to
come forward.
 
MR. SMITH:  Chairman Takitani, Members of the Board
of Water Supply, my name is Jim Smith.  I was the Plaintiff in
the lawsuit that is referenced in the letter that is now
referenced in this letter to you, which is dated January 27th,
2000, from the Director in which several things occur.  He
announces a finding of fact and he also announces action and he
also announces that the action will be taken, and it's inferred
without your review or approval.  And among the things that he
lists as the action are restricting existing meters, upsizing
to .2 MGD, also restricting the numbers of services to a total
of .2 MGD, and he doesn't reference any process upon which a
determination will be made.
 
He simply says it's going to happen.  And he
justifies this by stating that the court case concerned the
acceptance by the Board of a communication.  This is a
misrepresentation of what occurred from my perspective.  The
process of developing a finding in 1993 took place over several
meetings with the Board of Water Supply.  Concurrently, the
intent to allow the Kula Rule to expire, okay, was reached.
 
At the point of the expiration of the Kula Rule, the
Board of Water Supply acted on its word, which was to
deliberate on provisions of this document, which is described
as the finding of source capacity inadequacy for upcountry or
words to that effect.
 
I filed my lawsuit and there appeared to be a
manufacturing of legal arguments.  What the defendants did at
that time was say that my lawsuit, and I'm not a lawyer so I
shouldn't know these things, but I've made myself of aware of
them.  What they said was in this lawsuit, I failed to exhaust
administrative remedies.  That was the key defense; in other
words, I should have come to you.  But the court was not
persuaded by that argument.  The court looked to the substance
of the language, and this is reflected in the transcripts of that.
 
And, in essence, he said you're affecting the public
rights.  This is a rule, and you have not held, no matter who
you are, you have not held public hearings.  This is invalid.
Throughout the documentation by corporation counsel, the use of
the word "announcement" appears, the use of the word
"Director's findings" appears.  The use of the word "press
release" appears, all of it to minimize the very serious,
serious effects of what was about to occur.
 
You are now given a letter that specifically states
that certain things are going to occur regardless of what you
do, regardless of what is listed in this, which incidentally is
quite shadowy.  If you look at the finding, which I submitted
to you, you will see that it is based upon a drought
circumstance.  In other words, during a drought circumstance,
there is a deficit, a deficit of source supply of .2 MGD,
okay.  It says the capacity during drought conditions is 6.7
MGD, and the demand rose to 6.9 MGD.  And as a result of this,
they found they needed to enact these procedures.
 
Arguments have been raised regarding the conditions
and the attachments that may have occurred after the Board's
review means nothing.  The substance of the issue was that the
finding affected public rights.  It was, in fact, a rule.  And
now you are informed that a new rule is going into effect
without your review.  And it's submitted to you as a letter.
And the Chair isn't even named as the Chair.  It's simply a
casual little, Hello, by the way, Dear Chairperson and Members,
I am going to issue meters to a formula I shall devise to limit
to 2.2 MGD, and I'm going to do all these things, and because I
have not listed how I am going to do that, it's not a rule.

Well, the court heard of that.  And they decided
that in our society, the legislative authority and the
administrative authority are separate.  And the administrative
authority is subservient to the legislature.  We live by rules
in our society, and this is what's vacated currently by
Mr. Craddick in this circumstance.  And you are entertaining a
motion to simply refer it to a committee or defer contemplation
of it.  And there is wisdom to that, I suspect.  I'm pretty
sure there is wisdom to that, but I would say these actions are
going on now.  They're being taken.  And this finding is sad.
It tells you that the demand during a drought was 10.3, and
that's 3 million gallons more than the demand was when they
found the inadequacy and the necessity to implement a finding
and the emergency and the urgency to do such a thing.
 
References to sources of water.  Wailua ditch during
a drought.  What is the water in that, 8.6 million gallons?
You don't even need any other resource and you've exceeded the
1993 capacity of 6.7 that was the normal use.  So it's a
hodgepodge from my perspective of information simply directed
to changing the system, the way we govern, the way you protect
all of us and keep Mr. Craddick responsible to the people.
 
So I would ask you based upon the sheer -- I don't
want to -- this to me is an insult to you in the sense that it
trivializes something very, very, very, very important, and
that is the decisions that you make have the force and effect
of law that affects individual rights.  And if rights mean
nothing to you, fine.  And if all you're concerned about is the
money for a meter, fine.  But when you compare this and you
compare the finding that I submitted to you, there are going to
be serious deficiencies, and all the while Mr. Craddick is
going to continue to exercise authority he does not have,
authority that on its face belongs to you and a policy enacted
by you.
 
Now, I'm hoping you will condition receiving of the
document on the basis that it is not in any way a finding of
the sufficiency and also that you would direct Mr. Craddick not
to change any practices that he has been doing prior to the
time he made his decision, which may have begun three months
ago or whenever is referenced in here.  I haven't seen any.
 
Have you guys been brought up to speed on any of the
facts?  Has there ever been a presentation to you by the
Director or the administration that it was, in fact, devising a
finding or revising a finding?  Has he done any of that yet?
No.  That's where we need to start.  How come?  Are you on the
same team?  Are you on the same Charter?  I think you are.  I
think you are in the same Charter and you are subservient in
policy issues -- I mean you are superior in policy issues.  And
that is a policy issue as the court declared with its
declaratory judgment the Supreme Court incidentally took up
twice.  Not once, twice.  I had to appeal to the Supreme Court
twice because corporation counsel entered a flawed final
judgment which the Supreme Court bounced back because it was
insufficient which made my first appeal, okay, premature, which
meant I had to go back around a loop all the way back to the
top for them to tell me the lower court was right.  It's a
rule.  There's no damages or anything, but it's a rule.  And
they did that.
 
So I would ask you to save someone else's process,
request or tell the Director, Look, you cannot proceed as you
plan based upon this without you telling people how they can
qualify for the 2.2 million gallon a day extra or the .6
million gallon.  How can they equate with anyone else and then
get their name on?  Because missing from this is the operation,
but it's going to be done by the courtesy of Mr. Craddick,
which is not the way our system should be run.  So I would ask
you for two things.  First of all, direct Mr. Craddick not to
implement any changes in any practice, and two, please review
this in its broad historical context and find exactly where
this track has been left.  Thank you very much.
 
MR. CRAVALHO:  Mr. Chairman, there is a pending
motion for the matter to be received on the table.  And it's my
understanding that the Director has indicated prior to the
motion that it is also his intention to proceed in a
reevaluation and review with respect to upcountry and the
farmers and what have you.  It has a bearing on this and I
think it kind of helps the situation.
 
MR. CRADDICK:  Could I just say that for the
record.  I know this was said in conversation but not
necessarily for the record.  We did have a meeting last night
with the Farm Bureau, and some issues were brought up that lead
me to believe that we need to look at some of the issues in
this presentation that was given to you.  And aside from that,
you know, this presentation right here, Mr. Smith says on its
face as to the fact and legal issues involved in the Smith
versus Director Craddick, and what he's presenting to you here
may be the facts and legal issues that were presented in the
case.  But these are not the facts as they were.  What is
presented in here was not given to the Board other than that
the Board may have seen in the press release afterwards.  That
is not what the Board saw in the Board meeting.  I do have all
those things here, and I will make them available to the Board.
 
CHAIRMAN TAKITANI:  Mr. Starr.
 
MR. STARR:  Yes, I'm not really enjoying what I'm
hearing here.  I would like to get a real clear clarification
from the Director.  On the last page of his memo, he says,
Therefore, pertaining to the affected areas, and effective
immediately, the Director shall proceed to process
applications, process subdivision applications, all of that stuff.
 
Do you intend to do that at this time?
 
MR. CRADDICK:  No.
 
MR. STARR:  Will you do that before taking it back
to the Board irregardless of what discussions you may have
with, you know, agricultural discussion groups or anyone else?
 
MR. CRADDICK:  I wouldn't have brought this to the
Board now if I was going to do that.
 
MR. STARR:  What?
 
MR. CRADDICK:  I wouldn't have brought this to the
Board now if I was going to do that.  I believe, for whatever
reason I went to the Board in the first place, and let me just
read the motion that was made here by the Board, or I'll
actually read the suggestion that was made by the Chair.
Chairman Jefts suggested that it may be helpful for the Board
to validate the Director's action to make it clear the Board is
behind his decision.  The motion is made.  Ms. Kimmey moved
that the Board accept the document from the Director dated
today, 3/16/93, 3 p.m., and acknowledged that the Director has
the authority to proceed in the way he sees fit.  Seconded.
Passed.  And the Board, you know, for whatever reason the Board
wanted to support, I feel it's my obligation to at least inform
the Board what we may be contemplating because the Board was
made aware of what happened in the first place.
 
MR. STARR:  That's a very long answer.  What I'm
trying to get at is will you change your procedures without
bringing it back to the Board?
 
MR. CRADDICK:  I'm not sure what you're talking about.
 
MR. STARR:  Do you intend to change your procedure
regarding upcountry shortage and issuance of meters without
coming to the Board before you proceed with any further action?
 
MR. CRADDICK:  No.
 
MR. STARR:  Thank you.
 
CHAIRMAN TAKITANI:  I think the heart of this matter
is this matter of definition of source development, water
source development.  Maybe Mr. Fukushima can clarify that for
us because I think this is a pattern that, according to that
definition, Mr. Craddick is using that for the basis for saying
the Director and the Department --
 
MR. CRAVALHO:  Mr. Chairman, we're getting into the
discussion of the merits and demerits of this stage.  The
purpose of my motion was precisely to avoid that at this
particular date because we all have various questions along the
line.  The Director has given this Board assurances in response
to the questions of Mr. Starr that he will not be proceeding to
change any of his processes and procedures that he has at the
present time until he brings it back to the Board, which is the
next board meeting probably.  And I think if we proceed on that
basis and with that understanding, we will all be in very,
very, good shape.  We will have a chance to see and reevaluate
our positions.
 
CHAIRMAN TAKITANI:  I think that's well stated.
 
MR. CRAVALHO:  I ask for the question, please.
 
CHAIRMAN TAKITANI:  Mr. Smith, whatever you want to ask.
 
MR. SMITH:  Excuse me, it should be very clear that
the Board was involved in a legislative matter with the
evolution of this finding and the citing of those particular
minutes was simply a final point.  If you will review the
minutes throughout '93, from January through, I sat at meetings
in which each item was discussed and battered back and forth,
so it's a pretense to project the notion that administrative
authority is vested here, the Board is really a casual
observer, and I appreciate your input, but that position, okay,
conflicts with what occurred with the original finding.
 
Now I'm not privy to what's going on now, but let's
keep that in mind that this was not a rubber stamp issue.  This
was a process issue, and that's the substance of this finding
affecting personal property rights and public rights and was
therefore an invasion of the function in rule making and
violated administrative procedures.  Thank you very much.
 
CHAIRMAN TAKITANI:  Thank you.
 
MR. NOBRIGA:  Moved by Mr. Cravalho, seconded by Mr.
Starr that this matter be laid on the table to such time that
the director has reconstructed his figures and has sufficient
justification to be brought forth.  All those in favor, say
"aye."
 
VOICES:  Aye.
 
CHAIRMAN TAKITANI:  Opposed, "nay."

(No response.)
 
CHAIRMAN TAKITANI:  The aye's have it.  The matter
is laid on the table.
 
MR. CRAVALHO:  Mr. Chairman, just as a matter of
clarification, our action today does not mean we have directly
or indirectly put the stamp of approval on the contents of the
communication.
 
CHAIRMAN TAKITANI:  Thank you.  Okay.  We'll move to
Item B, Update on water development issues discussed at public
meetings.  Mr. Craddick.
 
MR. CRADDICK:  We had the meeting with the farm
group obviously last night, and again, the issue that a number
of farmers had cut back.  Their consumption would have had an
effect on the maximum day usage number that we're having that
we had in there.  And we need to I guess make an estimate of
what would have happened with the consumption had they not cut
back and how much water that would have used.  And then I
believe, let's see, we had our Pukalani Community Association
meeting and we went over some of the same issues and listened
to their concern about getting an inadequate water supply for
the upcountry water system.
 
 CHAIRMAN TAKITANI:  Mr. Starr.
 
MR. STARR:  I attended that Pukalani Community
Association meeting, and Mike Nobriga did as well, and there
was a presentation by the Director and Jacky Carroll.  There
was certainly a lot of concern by the community desiring to get
the system upgraded, and pretty much there was aloha and
positive spiritedness.  But one thing occurred that I didn't
feel very good about, and that was at that meeting the Director
said that the whole upcountry shortage situation could have
been cured by drilling a well at Pookela tank and that he
brought it to the Board and that the Board had denied it and
that he couldn't do it at any time without any EIS or EA.
 
MR. CRADDICK:  No, Jonathan, that is not correct.
 
MR. STARR:  And that by now the problem would have
been solved but it was the Board had been held back from doing
that.  And I did not really feel that that was a very fair
assessment.
 
MR. CRADDICK:  That is not correct.  I did not say
we didn't need to follow the environmental process.  I think
everybody knows we have to do that.
 
MR. STARR:  You certainly hinted that it could have
been done.
 
MR. CRADDICK:  It could have been done, Jonathan,
and you know and I know that it could have been challenged, so
it could have been done.
 
CHAIRMAN TAKITANI:  But in the spirit of teamwork, I
don't know that such a comment should be made advising in
public meetings whereby the big bad board is portrayed as the
villain that is not able to provide more water upcountry.
 
MR. CRADDICK:  Well, so noted.
 
CHAIRMAN TAKITANI:  Any other public hearings or
meetings that we were involved in?
 
MR. NOBRIGA:  How about that guy that had like four
pounds pressure?
 
MR. STARR:  Gary Vares.
 
MR. CRADDICK:  Vares.  He hasn't come in yet.  I
told him to come in and see me so we could look at the
situation, and he hasn't come in.
 
CHAIRMAN TAKITANI:  Four pounds, not much pressure.
 
MR. NOBRIGA:  How can one take one shower?

MR. CRADDICK:  His situation is not unique
upcountry.  There are many situations like that.  The Makalani
line, they came to the Board.  Some people on Calasa Road, same
situation, they came to the Board.  His condition is that he is
the first service below Pookela tank and his service could be
transferred to the line that comes down to Maluhia tank.  He
does not want to pay to relocate the service line. That's all
it takes is him paying to relocate his service line, and he
could do it to get the higher pressure line.
 
Now, why it was put there in the first place, I
don't know, you know.  I guess to get it attached to the other
service line, he's got to run at a much longer distance.  And
you know, perhaps back when they first put the service line in,
they didn't want to pay that money to put it there, I don't
know.  But that is the problem.  He's the first service out of
the tank, so if that Pookela tank goes down, there is not much
pressure there.
 
CHAIRMAN TAKITANI:  Mr. Hashimoto.
 
MR. HASHIMOTO:  They want to accomplish that --
Warren Watanabe, President of the Farm Bureau, said that they
have a problem of, you know, I guess Water Board issuing new
meters without taking care of the regular customers first like
himself where he doesn't have enough pressure to fully utilize
his acreage.  And neither does Ulupalukua or people in that
 range, so I guess his statement was that they have a problem of
issuing new water meters without taking care of the present
customers that have, you know, meters right now.
 
CHAIRMAN TAKITANI:  Mr. Craddick.
 
MR. CRADDICK:  Warren Watanabe's particular
situation is one of a service pump off of a transmission line.
And as the demand goes up on the line and the velocity
increases in the line, the pressure drops in the line.  I've
brought this up to the Board on a number of occasions.  Whether
they believe that or not, that is what happens.  And he also, I
suppose, could ask to relocate his service and pay for
relocation of that service off of the transmission line and
avoid that problem.
 
It might be to where that is so far below his farm
that they have to pump it back up.  I don't know.  But his farm
is, I mean it's right there below the transmission line, and
his service is about the width of my hands off the transmission
line.  I went and looked at it.  And there are a number of
people that have been, for whatever reason, they were given
service off of transmission lines.  It shouldn't be done.  We
try to avoid it.  But people will go to the Mayor, the Council
Member, they will go to individual Board Members.  We've got a
bunch of them coming up on Dowling's line, people I guess that
were told they could hook up to the transmission line there.
 
And, you know, they may have even been told that by
some of the staff.  But these are the kind of problems that we
have later on when people hook up to transmission lines.  And
not to, you know, minimize the bigger problem of our
distribution system.  I mean I'll be the first to admit there's
a lot of places in our distribution system where these problems
occur.  But whether we allow additional source or don't allow
additional source, it's not going to change that.  If we do
allow the meters out, there's the possibility some of these
people might fix the system up, which would possibly benefit
some of these situations.
 
But exactly where they are located in relationship
to the people that have these problems of low pressure because
they're too close to where the source of either the
transmission line or storage tank, I can't really say.  But
those are admittedly problems when there's an inadequate
distribution system.
 
MR. STARR:  Mr. Craddick, are you going to allow for
the people to connect up to these transmission lines?
 
MR. CRADDICK:  We try not to.
 
MR. STARR:  What do you mean you try not to?  You
either do or you don't.
 
MR. CRADDICK:  Well, all I can say is we try not to.
 
MR. STARR:  You seem to be alluding that you're
under pressure from the Mayor or Board Members or whoever to do
that, is that the case?
 
MR. CRADDICK:  I'm not certain any Board Members
have, but I know Council Members have.
 
MR. STARR:  Do you give special favor to people
after being requested by Council Members to do so?
 
MR. CRADDICK:  I try not to, but it does create some friction.
 
MR. HELM:  Yeah, Dave, in regards to that pressure
problem, you know, I managed a system before where the high
elevated lots had similar problems when the tank has a low
drawdown.  We kind of advised the property owners to use a
small in-line bladder prompt that was really cheap, maybe
$150.  And it solved that problem, you know, so I don't know if
the Department is trying to help or assist them in that way to
encourage ways to try to increase the in-line pressure in the system.
 
MR. CRADDICK:  Usually a lot of these people that
have these problems, we dig into it and we actually find out
they have elevation agreements that says they must put exactly
that in.  But when they've been, you know, when there's low
demand on the line and they've been going 20 years and having
adequate pressure, you know, suddenly, it may not even be the
same person we're dealing with anymore.  There may have been
two or three exchanges of the property before it comes to us,
and Nihaus is a perfect example of this.
 
We had an elevation agreement.  We got a meter off
the transmission line.  When the Lower Kula Treatment Plant was
put in and we dropped the pressure, and plus we've been having
much higher peaks lately, no pressure in the line.  Suddenly,
it was our responsibility to relocate them.  We would have had
about 15 requests coming to the Board to I guess get rid of the
treatment plant or something.  I don't know what they intended
to do.  But to avoid that, we relocated the service and didn't
charge them, even though, you know, they had the agreement
saying they would put exactly these pumps in.  They don't
care.  They don't care what the agreements say when the
pressure drops after it's been adequate for many nears.
 
MR. HELM:  A lot of these pumps are very affordable
now and it's very efficient and it doesn't cost very much.  I
think maybe if the Department comes up with some problem
solving issue and tries to assist them.  That's all.
 
CHAIRMAN TAKITANI:  I think it's a very good point.
 
MR. CRADDICK:  We certainly can and do.
 
CHAIRMAN TAKITANI:  Move then to Roman Numeral 8,
Staff Reports.
 
MR. CRADDICK:  I think we have a report on the water
pumpage, surface water and ground water.  For December there
was a drop in the Iao Aquifer 12-month average.  We've got our
CIP projects here and the plant operations and field
operations.  A number of contracts that were issued, nine of
them.  And we are now getting the reservations on there that we
were remiss in getting to you before.
 
And then two easements there.  For Iao aquifer, too,
just we know right now that we'll probably have another .1 drop
in the Iao aquifer.  Even though we don't quite have North
Waihee on, nor are we using the surface water plant, just
because of rainfall.  The North Waihee project has been delayed
somewhat because of the heavy rain, but we would still expect
that to be probably complete here sometime in the first couple
of weeks in February.  I thought it would be done by the end of
the month.
 
CHAIRMAN TAKITANI:  What's the joint venture status
of the well and that pump?
 
MR. CRADDICK:  We're looking at trying to get a set
of specs where they supply the pump, and it's sitting there so
when the existing pump is fished out, they don't have to
remobilize because they're wanting a $20,000 charge to mobilize
to the site and I don't want to pay that twice.
 
CHAIRMAN TAKITANI:  You want to comment about the
flume problem?
 
MR. CRADDICK:  Let's see here.  About 70 feet of the
flume I understand collapsed last night, and we have people out
there right now.  That's where I need to go myself right now,
but we're looking into that what we can do there.
 
MR. STARR:  The top or the bottom?
 
MR. CRADDICK:  I'm not sure what you mean.

MR. STARR:  The supports?
 
MR. CRADDICK:  I don't know, Jonathan.  It's right
in the area where EMI was working to fix up the supports.
That's all I know.
 
MR. STARR:  Is there flow?
 
MR. CRADDICK:  No.
 
MR. STARR:  So we'll drawing on Kahakapao until it's --
 
MR. CRADDICK:  And Waikamoi.
 
MR. STARR:  I have two questions regarding stuff I
heard from the news media and I would like some clarification.
One is we did an Iao aquifer test where we tried to stop
pumping for I think 12 hours and it had to be curtailed after
2-1/2 hours I believe.  What happened?
 
MR. CRADDICK:  Actually, we had to start one pump
after about four hours.  At 2 o'clock, we stopped at 10, and we
had to start North Waihee -- not North Waihee, Waiehu Heights
and run it for about an hour at 2 o'clock.  And then we went
until 5 before we had to start the central Maui joint venture wells.
 
And in that process, we noticed that a number of the
tanks out in Kihei, there had been no drawdown of them, so
we're looking at waiting until the Piilani tank is finished and
we will get people out in the field to actually adjust the
transmission lines.  We cut the test off and it looked like our
transmission lines were going to start drawing air.  We didn't
want to get air in there.  And in the meetings we held before,
we knew that's where we were going to end the test, when we
thought the transmissions were going to go empty.  We will try
again when that tank is complete, and we will definitely do a
little more work on adjusting the transmission lines to force
the tanks to draw down out of the Kihei area, which should
allow us to extend the time of the test.
 
As far as the test results, we do have some
preliminary numbers back.  But mainly, they confirm what we
already know is that Iao is a confined aquifer, because the
responses were immediate and very quick, which is indicative of
a confined aquifer.
 
MR. STARR:  So, in any case, it's interesting that
we have about four hours between the time when our pumps stop
and the time when our transmission lines start to suck air.  So
that was an interesting fact for me.  Also I read in the
newspaper that there was a problem with a chemical, some kind
of chemical in the Lahaina system, or could you tell us what
that is about.
 
MR. CRADDICK:  Anytime any source of water is used
that has regulated contaminates, we're required to put a public
notice in the paper.  And because of all the rainfall, the
Lahaina treatment plant was not able to produce the normal
amount of water that it produces.  And the system drew down to
a level where we didn't think we would be able -- again,
transmission lines would have started to go empty, so we got
the Health Department approval to start it up.  They said put
the notice in.  As it turned out, we only had to run it for
seven hours.  But rather we run it for one minute or one hour
or seven days, that notice has to go in the paper.
 
MR. STARR:  And that's because we were pumping water
with more than the MCL of DBCP into the system?
 
MR. CRADDICK:  No, just any amount, we have to notify.
 
MR. STARR:  Were we pumping more than the MCL into the system?
 
MR. CRADDICK:  No.

MR. HELM:  Just in regards, how are we doing with
our operators being up to snuff with certification?  Are we in
compliance now?
 
MR. CRADDICK:  No.  Classes will start next month.
There will be some classes to train them, and I'm not exactly
positive when the exams are being given, but they'll be given
sometime this year.
 
MS. CARROLL:  Adolph, to answer that, the Department
of Health with the Rural Community Assistance Corporation will
be teaching classes I think three times this year here on Maui
and probably two times on Molokai.  And it's about a week long
class just half-day so they can work after that.  And the exam
is at the end of that time, so there will be classes on
Molokai, too, on every island.
 
MR. NOBRIGA:  I just wanted to compliment Jacky.
Her presentation at the Pukalani Association Meeting I thought
was the most pertinent report we ever gave in a public setting
I ever saw.
 
MR. STARR:  I agree.  It was very, very good.  I
really feel that our public presentation has come up many, many times.

MR. HASHIMOTO:  She also did the presentation last night.
 
MR. NOBRIGA:  Same one?
 
MS. CARROLL:  Different.
 
MR. HASHIMOTO:  But she stayed late, too.
 
MR. STARR:  I have one other question.  There's a
lot of talk about MEDB pollution in the water supplies, and are
we testing for MEDB?  Isn't that what it's called?  MTBE, yeah.
 
MR. CRADDICK:  Jonathan is talking about an additive
that's put in gasoline.  None of our wells are downstream of
any service station, so the likelihood of ever picking that up
is extremely remote.  We do test for it because it's a
regulated contaminate.  And nothing, no measure of that --
 
CHAIRMAN TAKITANI:  Do you want to comment on fluoride?
 
MR. CRADDICK:  Well, let's put it this way.  The
State is saying that they talked about using tobacco money
more.  They're expecting $12 million in capital costs.  They
say that there is a 80 to 1, or actually, 1 to 80 cost to
benefit ratio in treating for that.  I will say some comment on
that, and I think that number is being promoted by the Center
for Disease Control, and it's based on normal use on the
mainland and normal treatment procedures on the mainland where
the example is the City of San Francisco that fluoridates.
They fluoridate I believe at three sites to treat the entire
city of San Francisco.  We have to treat at every single pump
station that we have.
 
I think they're using the number that there's five
systems that have to be treated.  They're saying 1,000 or more
in the population would have to be treated.  And to do that, we
have about probably 20 sites of $50,000 a pop, which would be a
million dollars in capital costs plus about 2 cents per 1,000
gallons operating costs.  And I think a lot of the problem with
the State is that they normally reduce the level that these
toxins can be in the system from the federal level.  And the
State has set the regulated maximum contaminate level at two
times the level that has to be in the system in order to do any
good for your teeth.
 
So, you know, they're talking about putting 50
percent of the regulated level into the water, and I guess
that's what a lot of people are concerned about.  And other
than that, it doesn't look like, if it was funded out of the
tobacco fund, that there would be heavy cost implications for us.
 
But that's kind of the debate.  And my
interpretation of the Board's action at the last meeting was
they wanted to kind of keep out of that, so that is what I'm
doing.  We do have some people going over to Kauai tomorrow to
meet with some of the technical people from the Center for
Disease Controls in the event this comes anyway, but, you know,
just to educate ourselves a little bit more on the technical
problems of putting this into the system.  But it doesn't, you
know, at least from the talk, it doesn't look like it may ever
get to a hearing before any committee.
 
CHAIRMAN TAKITANI:  We've done the staff reports.
Go to Item Roman Numeral 9.
 
MR. STARR:  Move for adjournment.
 
MR. RICE:  Is that a test, Mr. Chairman?  Second.
 
CHAIRMAN TAKITANI:  Moved by Mr. Starr, seconded by
Mr. Rice.  All in favor, say "aye."
 
VOICES:  Aye.
 
CHAIRMAN TAKITANI:  Opposed, "nay."
 
(No response.)
 
CHAIRMAN TAKITANI:  The aye's have it.
(The meeting adjourned at 12:30 p.m.)