BOARD OF WATER SUPPLY 
COUNTY OF MAUI 
REGULAR MEETING 

  

Held at the HGEA Conference Room, David K. Trask, Jr.,  
Office Building, 2145 Kaohu Street, Room 207, Wailuku,  
Maui, Hawaii, commencing at 9:00 a.m. on October 25,  
2001. 

REPORTED BY: LYNANN NICELY, RPR/RMR/CSR #354 
IWADO COURT REPORTERS, INC. 
 
A P P E A R A N C E S 
BOARD MEMBERS: 
Peter Rice, Chairman 
Jonathan Starr 
Kent Hiranaga  
Orlando Tagorda 
Adolph Helm 
Howard Nakamura 
Mike Nobriga 

STAFF PRESENT: 
David Craddick, Director  
George Tengan, Deputy Director 
Howard Fukushima, Corporation Counsel 
Fran Nago, Board Secretary 

CHAIRMAN RICE: Good morning, everyone. I  
would like to call to order the Board of Water Supply  
regular meeting, Thursday, October 25th. It's 9 a.m.,  
a little after, HGEA Conference Room 207. In  
attendance board members Adolph Helm, Orlando Tagorda,  
Jonathan Starr, Mike Nobriga, Clark Hashimoto,  
Chairman myself Peter Rice, corp counsel Howard  
Fukushima, director David Craddick, secretary Fran  
Nago, and staff. Let the record show those members of  
the public that are present.  
 First item on the agenda is the approval of  
minutes. There have been no minutes submitted for  
approval. Are there any? No. Okay.  
 We'll move on to testimony from the public.  
At this point if there are members of the public  
present who would like to give testimony at this time  
in the meeting regarding issues that are on the  
agenda, you may do so. We will provide opportunity  
for public testimony also at the point where the item  
comes up in the meeting prior to discussion at the  
board level.  
 Is there any public testimony at this point?  
Hearing and seeing none, we'll move on to the first  
item on the agenda, Director's Report 01-48, request  
approval to accept donation of $3,000. We always  
like these items. Mr. Craddick?  

MR. CRADDICK: What's happened is the attorney  
has basically used up all the available resources that  
we had and we asked for another amount of money that  
we felt would complete the project and they gave it to  
us subject to the board's acceptance of it. 

CHAIRMAN RICE: Any comments from the  
directors?  

MR. NOBRIGA: I see no need for us to take  
this to committee, Mr. Chairman. 

CHAIRMAN RICE: Is there a motion to accept?  

MR. NOBRIGA: I will move to accept the  
donation.  

MR. HASHIMOTO: Second. 

CHAIRMAN RICE: Moved and seconded to accept  
the donation of $3,000. Is there any comments or  
discussion by board members? All in favor, signify by  
saying aye. Opposed, say nay. The motion is carried.  
Director's Report 01-49.  

MR. CRADDICK: This one here probably we could  
take care of that at the end of the day since it  
probably is going to require executive session.  

CHAIRMAN RICE: If there is no objection from  
the board members, we'll move it to the end of the  
agenda. 
 
MR. NOBRIGA: No objection, Mr. Chair. 

CHAIRMAN RICE: Director's Report 01-50,  
request approval of waterline easement through Maui  
Memorial Park.  

MR. CRADDICK: Cancellation of an easement, it  
should say. 

CHAIRMAN RICE: Mr. Craddick. 

MR. CRADDICK: This is an easement that goes  
between Sand Hill and Maui Memorial Park that was the  
old line that fed the Kahului tank. That tank has  
been knocked down. We don't use that line anymore.  
 And the Maui Memorial Park has requested a  
cancellation of it. Since we don't need it, we  
brought it to the board for their approval to cancel  
it. The board gave me authority to accept easements,  
but not cancel them, so -- 

CHAIRMAN RICE: Any questions, comments from  
the board? Let the record show that as I listed the  
board members present, I missed Mr. Nakamura because  
of that space there. Now let the record show that  
Kent Hiranaga is present.  

MR. NAKAMURA: Mr. Chairman, I move to approve  
the request.  

MR. HASHIMOTO: Second. 

CHAIRMAN RICE: Moved to approve the  
director's request to cancel the easement through Maui  
Memorial Park. Seconded. Any comments, questions?  
All in favor, say aye. Opposed, say nay. The motion  
is carried.  
 Mr. Craddick, Old Business, Communication  
01-13 from John and Maria Siele on the exchange of  
1-1/2 inch meter for multiple meters. This was in  
committee and has been referred back to the entire  
board. Are the Sieles present? Would you like to  
make any statement, John?  

MR. SIELE: No, I think basically everything  
has been covered. We covered the savings of water to  
the county, we covered the reliance issue, we covered  
the burden of proof issue, allocation issue, and the  
rules and regulation, not policy issue. I think  
basically this has been stated to the board and the  
department about four or five times. I hope everybody  
is aware of what has been going on. This is an issue  
that goes all the way back to 1992. Now it's in your  
hands to vote. 

CHAIRMAN RICE: Any questions of Mr. Siele,  
board members? 

MR. HASHIMOTO: Peter, is Mr. Siele -- are on  
the list, so-called list?  

MR. CRADDICK: Yes. 
 
MR. HASHIMOTO: He is. Okay.  

MR. NOBRIGA: Mr. Chairman, using normal  
calculations, the Sieles' request to exchange a  
1-1/2 inch meter to 5/8 inch meter under the average  
daily consumption of a 1-1/2 inch meter, the  
department could exchange the 1-1/2 inch meter for up  
to seven 5/8 inch meters with no additional water use  
on an average. The case before us this morning  
involves a 1-1/2 inch meter that has basically been  
left idle. It brings up a question on the  
department's ability to regulate the water use of a  
meter issuance.  
 If there is no procedure or practice of the  
department monitoring all water meters so that they  
fall within the total gallonage estimated for a meter  
for the maximum, then there should not be a  
discrimination against a meter being used at a  
minimum.  
 The rules committee was split on this decision  
with a vote of 2 to 2 on allowing Mr. Siele his  
exchange of a 1-1/2 inch meter for multiple 5/8 inch  
meters.  
 Corporation counsel has advised us that we do  
not have on record any applicable rules which allow us  
to take up this matter on a normal basis although it  
is within the board's purview to grant such requests.  
If I am mistaken, I would like Mr. Fukushima to  
correct me.  

MR. FUKUSHIMA: No correction. 

CHAIRMAN RICE: Good memory, Mr. Nobriga.  
Mr. Craddick?  

MR. CRADDICK: Well, the only thing I can say  
is if all the meters were used to the maximum, as the  
board member says, we would have to have capacity to  
deliver 58 million gallons a day of water right now  
today and quite obviously we don't have that ability  
to deliver that kind of water. So to allow one person  
to do it and jump up on the list because they're doing  
it is a policy decision that you have to grapple with. 

CHAIRMAN RICE: So the issue isn't really the  
use of the water and the meters; it's the issue of  
moving up on the list. Well, if we were to grant the  
exchange, they wouldn't necessarily get the meters  
under the situation that exists today. They just have  
the option to get them at the time that we issued  
meters. 

MR. CRADDICK: No. If the board says right  
now that he can have multiple meters, he can get them.  

MR. FUKUSHIMA: Thank you, Mr. Chairman.  
Again, we've got to caution the board -- we have done  
this on a number of occasions -- in dealing with  
requests or appeals from the director's decision,  
where there is no procedure or rule in place to hear  
those appeals. Again, we caution the board that until  
a rule is adopted which sets forth standards which are  
to be applied when dealing with appeals from the  
director's decision, and this is one, that the appeals  
should not be heard by this board.  
 We do have a rule that or a proposed rule that  
has gone out for public hearing, it is to be submitted  
to the mayor, to handle this issue. We understand  
that this may lead to some hardship, the board not  
being able to make a decision, but we believe that a  
better view of the law is that a rule should be in  
place. 

CHAIRMAN RICE: Mr. Siele?  

MR. SIELE: Number one, this issue doesn't --  
as far as relating to the new meter issuance, this  
issue goes all the way back to 1992 on original  
promises. And as far as new rules and regulations,  
you can't randomly change rules as request of me. I  
mean, you can't go on -- you can't just make rules as  
you go along and change it as people ask questions.  
If there is no rule and regulation in place, then I  
would ask for my decision to be made according to what  
it has been. I don't think it would even be held up  
in a court of law that if I asked for a ruling on  
something that has no ruling 10 years ago what it  
would have to do with you making a ruling next month. 

CHAIRMAN RICE: I think the counselor is  
referring to the rule about appeals, not the rule  
about exchange of meters. That's what he's  
referencing. Am I not correct?  

MR. FUKUSHIMA: That's correct. We've also  
indicated that applicants may not get relief from the  
board; their relief, their remedy is to the court  
system. Until this body adopts rules regarding  
appeals which would set up the administrative appeals,  
then again we would caution the board on hearing this  
type of appeal.  

MR. SIELE: Have there been any other appeals  
approved by the board prior to this, not even relating  
to this by on any other issue? 

CHAIRMAN RICE: I don't know.  

MR. FUKUSHIMA: I don't particularly think  
that's relevant, Mr. Chairman.  

MR. SIELE: Well, if it's about appeals, then  
any appeal would be relevant to this case.  

MR. FUKUSHIMA: There are appeals that the  
rules provide for. Those are appeals from or requests  
for waivers from subdivision requirements. Those are  
the only waivers that this board can give. This  
particular request falls within that category -- I  
mean not within the subdivision category, but within  
category of an appeal or a waiver from the  
department's rules.  

MR. SIELE: You'll have to excuse me, it goes  
beyond my thinking, the common sense issue doesn't  
enter my head when I hear that. But I will just have  
to leave the ruling up to you right now.  

MR. TAGORDA: Mr. Chairman, if I may, I don't  
really recall very much all the informations that we  
have discussed in the past about your case, Mr. Siele,  
but I remember that there is a six-lot subdivision on  
this property that you are asking the board for  
exchange of a multiple 5/8 meters? And then you come  
down to three meters in exchange -- 

MR. SIELE: Originally we were asking for six  
meters and then we brought it down to three meters.  

MR. TAGORDA: I believe it was the  
department's practice in the past to allow downsizing  
or multiple exchange or a bigger meter to smaller  
ones. And they base that past practice and I think  
might be a precedent based on your water usage for the  
past five years and that's how they exchanged these  
water meters. Am I right, David? If you can find out  
the water usage of that property on that water meter  
that he should -- there is a reasonable exchange that  
you can commit the department.  

MR. CRADDICK: Based on an opinion from  
corporation counsel that if the request did not change  
existing consumption in the system, that is what we  
have done. There are no rules which guide that. And  
that I think is the concern of corp counsel. We have  
done that and I think we've presented about four or  
five cases to you there in that analogy of all the  
meters that have been issued since 1993. So it has  
not happened in many case, but the consumption has  
been there. In this case the consumption is not  
there. So if you give the extra meter, consumption  
will likely rise, which is an effect on the system.  
So regardless of what his meter size is, his  
consumption would rise. 

CHAIRMAN RICE: Mr. Nobriga?  

MR. NOBRIGA: If we take into consideration  
Mr. Siele's presence on this priority list which was  
not part of our original discussion but the director  
so admirably noted to us, Mr. Siele has been denied  
requests for additional meters in the past. That is  
why Mr. Siele's name as well as many other fine people  
of this community's name is on our list, our priority  
list for meters.  
 Should we decide, hopefully within my  
lifetime, to finally get water to these residents who  
have been waiting for water meters and water, then  
Mr. Siele's 1-1/2 inch meter would remain a 1-1/2 inch  
meter. By taking action on his request for a 1-1/2  
inch meter in exchange for three 5/8 inch meter, you  
take that 1-1/2 inch meter out of service. If we're  
going to decide to leave Mr. Siele on the list and  
proceed his application by his presence on that list,  
then you're going to still have that 1-1/2 inch meter  
outstanding and Mr. Siele in all possibility will get  
an additional two 5/8 inch meters. 

BOARD MEMBER: But he requested for six. 

CHAIRMAN RICE: He changed it to three, I  
understand. Mr. Siele?  

MR. SIELE: As far as the consumption issue,  
why there was no consumption, number one, the county  
and Mr. Craddick year after year asked for if you did  
not need the consumption, then don't use it.  
When we first had the property, we had over 87  
head of cattle on the property which used a lot more  
water. If we were to also farm it like we had  
intentions of doing at times when we could not get our  
subdivision approvals, the consumption on that 1-1/2  
meter will be eightfold of what we have now. I mean,  
don't just take it on past consumption. The only  
reason we're not using it now is because we had to  
sell a house to keep the property, so we don't have  
the ability to live on the property to use the meter  
right now. So that is the reason there is no large  
consumption. We've had many, many times where we  
could have used -- 

CHAIRMAN RICE: Mr. Craddick.  

MR. CRADDICK: The problem with that argument  
is that to have the board say that ag is not a viable  
use of water upcountry when it's part of the community  
plan, it's the preferred use upcountry, you know,  
again, we've got other meters out there that aren't  
been used. If you allow this one to go forward, I  
don't know how you're going to stop the other ones  
from doing exactly the same thing. And basically what  
you're doing is allowing the person to jump up on the  
priority list. That's basically it, what's going on. 

CHAIRMAN RICE: Mr. Stars?  

MR. STARR: For once in my life I agree with  
the director. I don't see it as -- I don't see it as  
an accomplishment to get rid of a large ag meter. We  
like to see people doing ag. So to me that's not the  
issue. The issue as I just see it as a way of jumping  
the queue. And until we find a way of being able to  
distribute meters to people who have been on the  
waiting list, I don't really feel that we should allow  
any kind of mechanism to allow someone to jump up  
ahead of other people using a loophole, which is the  
way I see this. So I'm against this. But I hope that  
we'll be able to resolve the list issue soon enough so  
that in effect he will be able to get served but in  
the proper way.  

MR. HIRANAGA: Mr. Chair, as a member of the  
Rules Committee, I attended the meeting and upon  
review of the minutes, page 19 and 20, for members who  
were not on the meeting, Mr. Siele accomplished a  
three-lot subdivision in 1993 where he obtained two  
additional 5/8 inch meters. And his current request  
is for subdivision of a remaining large lot, which  
according to the minutes he's not even submitted his  
subdivision application for because he's not unwilling  
to do so unless he is assured that he would receive  
additional meters.  
 Personally, I agree with Mr. Starr that I  
don't see any detrimental reliance or any compelling  
reason to allow him to have an exception for these  
additional meters and I agree with the director that  
any exchange of a large meter for a smaller meter  
should be based upon actual usage and not potential  
usage because there is cost for usage of that. It's  
not a free commodity. So people don't use water  
unless they feel they need to because there is fees to  
be paid for the usage of it. 

CHAIRMAN RICE: Mr. Siele, it sounds like you  
might want to take corp counsel's advice and maybe  
defer the issue until there is an appeal process in  
place. But if you want -- or does a board member want  
to make a motion? Mr. Starr?  

MR. STARR: I move to deny.  

MR. HIRANAGA: Second. 

CHAIRMAN RICE: Discussion? Mr. Nakamura? 

MR. NAKAMURA: Mr. Chairman, I really feel  
conflicted on this request because -- but I will  
probably or I will somewhat reluctantly support the  
motion to deny based on corporation counsel's  
recommendation and also due to the fact that I don't  
think we have clear standards in place to deal with  
exchange of meters. However, I don't necessarily feel  
usage is the appropriate criteria, given the fact that  
our facilities charges are based on a relationship  
between 5/8 inch and 1-1/2 inch meters that is fixed.  
And I think that is one criteria that, you know, while  
may not be totally appropriate, does exist. But I  
take that to support the motion although somewhat  
reluctantly. 

CHAIRMAN RICE: Mr. Nobriga?  

MR. NOBRIGA: I would have to admit that due  
to past practice of the department, these exchanges  
did occur with a review of the actual usage of the  
meter in which case I would have to support the motion  
on the floor. 

CHAIRMAN RICE: Question. All in favor of the  
motion to deny, say aye. Opposed, say nay. Let the  
record show Clark voted nay. The motion carries.  

MR. SIELE: I do have the right to appeal,  
though? 

CHAIRMAN RICE: Sure. 

MR. SIELE: I would like the right to appeal  
and I would like -- 

CHAIRMAN RICE: Mr. Siele, there is an appeal  
procedure, a rule that has been approved by this board  
and sent to the mayor and it will then have public  
hearing -- 

MS. NAGO: It went to public hearing. 

CHAIRMAN RICE: So it went to the mayor.  

MR. CRADDICK: It will finish with the mayor  
on the 1st of November and then go on to the council  
for their 45-day review. 

CHAIRMAN RICE: And then we'll have a set of  
procedures for that.  

MR. SIELE: I would like to ask for the right  
of appeal and I would also like to ask for written  
reasons why we were turned down from both the board  
and the department. 

CHAIRMAN RICE: Thank you, Mr. Siele.  
Moving on, Communication 01-29, Mr. Hall.  

MR. CRADDICK: I would like to say something  
on this matter here. It's not totally related to this  
and the board may feel there is some other way to deal  
with it later on, but in this regard of where the  
protocol for testing and things like that, we have to  
get the well down to where the water is and to do that  
we've had to drill the well about $35,000 deeper than  
what was required. Obviously the $35,000 is not  
something the staff can unilaterally approve. The  
standby charges are $3,600 a day for the equipment.  
So if there is some way to get this on the  
agenda here today to resolve this matter, it would be  
very appropriate because if we have to shut the job  
down, it will probably occur sometime tomorrow or  
Monday. 

CHAIRMAN RICE: Mr. Starr?  
 
MR. STARR: I would like to know what the  
status is of the project.  

MR. CRADDICK: They're opening the upper  
portion of the hole. 

MR. STARR: Okay. So in other words, how far  
have they drilled down?  

MR. CRADDICK: About 150 feet.  

MR. STARR: Okay. And now they're opening it  
up and putting the casing in and grouting the casing?  

MR. CRADDICK: Well, they have to open it up  
first, but the 150 feet was about 30 feet beyond what  
the bid called for.  

MR. CHANG: Thirty or 40 feet. 

MR. CRADDICK: Beyond what the bid called for.  
So that means they're going to have to open up that  
extra 30 or 40 feet which hasn't occurred yet, but if  
we have to stop them -- because they will be down to  
the 120 probably within the next day or two, I  
believe.  

MR. STARR: My understanding is that the job  
is stopped because the compressor is broke, that  
ancient 1940's compressor broke down.  

MR. CRADDICK: If they're stopped for their  
own reasons, then obviously we wouldn't have to pay  
for anything.  

MR. STARR: I just want to be sure that we're  
not going to pay waiting fees while they wait for  
somebody to manufacture compressor parts.  
My concern is that are we measuring the water  
in the bottom of the hole every day and keeping that  
in a log as requested by Mr. Hall?  

MR. CHANG: We took some video camera shots  
Monday or Tuesday, I think it was Monday. That was  
the first 150 feet. There is no water at all coming  
in.  

MR. STARR: But I just want to be clear that  
as requested that at the end of the day we clean out  
the hole and then at the morning we measure how much  
water is sitting in the hole and that goes into a  
logbook. Is that being followed?  

MR. CHANG: We weren't doing that because the  
amount of time it would take to do that, we probably  
end up drilling three hours a day.  

MR. STARR: Excuse me, but that's the entire  
reason why we're drilling this well is to get the test  
results of how much water is sitting in the hole. If  
we're not doing that, then the court is going to  
reject us because you're not following the court's  
demanded protocol. That's the item on the agenda  
right now and I want to be assured that every morning  
we measure the amount of water sitting in the bottom  
of the hole. That is the whole purpose of why this  
well is being drilled. 

CHAIRMAN RICE: Mr. Craddick?  

MR. CRADDICK: We've already responded really  
to this letter to Isaac and the protocol we've  
established is if there is water in the hole, we will  
measure it. If there is no water in the hole, there  
is nothing to measure and we won't measure it. 

MR. STARR: If there is no water in the hole,  
you write zero, correct?  

MR. CRADDICK: No, we won't measure. If there  
is no water in the hole, we don't measure.  

MR. STARR: You're double talking me, David. 

MR. CRADDICK: No, I'm not. 

MR. STARR: If there is no water, there is no  
water and you write zero water. If there is water,  
you measure it. Is that correct?  

MR. CRADDICK: If there is no water, we're not  
measuring.  

CHAIRMAN RICE: We're having a problem with  
semantics here. The procedure whereby we measure is  
what? 

MR. CRADDICK: Once we hit water in the hole,  
we will measure every day. If we don't get water -- 
 
CHAIRMAN RICE: So if today at the end of the  
day there is no water in the hole, tomorrow we won't  
measure. 

MR. CRADDICK: Right. 

CHAIRMAN RICE: That's what he said, there is  
nothing to measure. If we find water, then we measure  
it.  

MR. STARR: And what will you write in the  
logbook? 

MR. CRADDICK: If there is no water in the  
hole? 

MR. STARR: Yeah. 

MR. CRADDICK: I presume they would write "no  
water." 

MR. STARR: Okay. I can accept that. You're  
not writing "no measurement," right? You're writing  
"no water"? 

MR. CRADDICK: I'll leave that up to Herb  
there. 

MR. CHANG: We could require that in the  
driller's log to record if they hit water or not. 

CHAIRMAN RICE: I think what Mr. Starr is  
saying is that in terms of although it may seem to be  
a little bit picky, the protocol and the recognition  
of no water is important rather than some other entry. 

MR. STARR: That's what the judge will be  
looking for when he reviews this is either there is no  
water or there is so many feet of water. So I want to  
be sure that there is not just blanks. 

CHAIRMAN RICE: Mr. Craddick, will you make  
sure that's taken care of? 

MR. CRADDICK: Yes. 

CHAIRMAN RICE: Okay. We're still on the  
issue of the hold time on the drilling. Mike? We  
need what, $35,000 to complete the last 30 feet? Is  
that what I heard?  

MR. CRADDICK: That's the worst case. We're  
going to have to talk about it with Mink because I  
have a hard time wondering why we're opening the hole  
down that far if there is no water in it. Because the  
purpose of this opening was to seal off any water that  
we may encounter, so that's the worst case. But there  
is still some things that we need to clear up ourself.  
So in order to avoid stopping the job for this reason  
to decide whether we're going to approve this, I'm  
asking for the approval but it's also with the  
understanding that we may not spend it if we don't  
have to.  

MR. STARR: Obviously if we need to increase  
the casing a little bit, we should do it. Can I -- is  
there a way to move that funds be made available at  
the chair's, you know, at the request of the chair for  
this, that it be put aside from somewhere? Mike, is  
there -- 

MR. CRADDICK: I think the first thing that's  
going to have to happen is there is going to have to  
be a request to amend the agenda to add this item to  
it. 

CHAIRMAN RICE: We're still having a  
discussion here about protocol. 

MR. STARR: We are discussing this well and  
the drilling of the well.  

MR. QUINN: We currently have an unencumbered  
balance in the source fund which is the source of  
funds for this project of almost $846,000. My only  
question would be I guess to the engineers. I'm not  
sure -- there is two other items that are funded in  
this year's CIP budget from that fund and that's the  
Maluhia well and the Kupaa well. So I just want to  
make sure that doesn't impact those projects. If not,  
then we can go ahead and fund it out of the source.  
I'm not sure of the status -- 

MR. CRADDICK: But when you say the source,  
what are you talking about? 

MR. QUINN: Source fund. 
 
MR. CRADDICK: The water development fee fund? 

MR. QUINN: No, the source fund. 

MR. CRADDICK: The source fund is only for  
Central Maui, so you can't fund it out of that. 

MR. QUINN: The Haiku well. 

MR. CRADDICK: Okay, that's right, that is the  
Central Maui system, yeah, so you could. 

MR. QUINN: That's where it's funded from. So  
the question is, is that going to impact those  
projects? If not, we can fund it out of there. 

MR. CRADDICK: That we just wouldn't know at  
this time until we go to bid. So this job is going  
on.  

MR. QUINN: What we could do is fund it out of  
the source fund and then come back to the board if  
there is a problem later on with those projects. But  
right now the money is available. 

CHAIRMAN RICE: And I think the general  
sentiment here is to approve a system where the  
Director can come to the Chair if it's needed because  
he's not even saying it's needed yet, but he doesn't  
want to lose money on standby time if we're between  
board meetings. And that's reasonable, I think.  
 So I think the first item we ought to take up  
is amendment to Communication 01-29 to include the  
amendment to the agenda to include the issue of  
funding the standby time. Is that the way to -- 

MR. CRADDICK: Well, it's funding the change  
order, not the standby time. 

CHAIRMAN RICE: Funding the change order for  
the test well. If we move to amend the agenda to do  
that, then we can make a motion to -- 

MR. STARR: Question first. Was there any  
contingency in the original scope and funding? 

MR. CRADDICK: No. 

MR. STARR: No? Okay. I move that we amend  
the agenda item VI(B) to include approval for a  
contingency funding. 

CHAIRMAN RICE: Is there a second? 

MR. HASHIMOTO: Second.  

CHAIRMAN RICE: Any discussion on amending the  
agenda? Mr. Nobriga? 

MR. NOBRIGA: I don't think it's in our best  
interests to amend this agenda. The department has  
handled the change orders and I know the direction of  
this board is to change the way the department handles  
change orders. I think it's a breath of fresh air  
that we're finally notified of a change order before  
it happens instead of letting us know six months later  
that it happened. 

CHAIRMAN RICE: Here here. 

MR. NOBRIGA: And for myself, I feel that the  
communication with the director and the chairman is a  
positive step in the right direction as far as change  
orders. I don't feel comfortable at this point in  
amending the agenda to include that item.  

CHAIRMAN RICE: Sounds contrary to me. 

MR. STARR: Can we ask how -- another  
suggested way of handling this?  

MR. NOBRIGA: I don't know if you're going to  
need to come up with the money like tomorrow. Got to  
come up with this money tomorrow? Cut the check? 

MR. CRADDICK: No, no. I said it may not even  
have to be spent. But the problem is, okay, we have  
the broken compressor. If they're just shut down on  
their own accord, obviously there is not going to be  
any worry about any standby charges, they're not even  
drilling right now.  
 When they get back to drilling, it's going to  
take about two days to get to that 120 feet. Once  
they get to that, they're on standby until the change  
order can be approved if we're going to approve it.  
And I feel during that time we can get it cleared up  
whether we're even going to drill that extra depth at  
all if there is no water in the hole. 
 
CHAIRMAN RICE: Mr. Nobriga, I kind of feel  
like you started your comments and that we got to the  
notice in advance which is what we wanted on the  
change orders and I think we want to work to encourage  
that.  

MR. NOBRIGA: Yeah. 

CHAIRMAN RICE: That's why I would like to  
take some action on it. And the action we're going to  
take simply is to coordinate that through the Chair.  

MR. NOBRIGA: The notice coming the day of the  
meeting is not to me -- 

MR. CRADDICK: Well, we I think found out  
about this the 24th at 5:00 p.m.  

CHAIRMAN RICE: Anybody else have any comments  
on that? We have a motion and a second to amend the  
agenda. All in favor, say aye. Opposed, say nay.  

MR. NOBRIGA: Nay. 

MR. TAGORDA: I think there is a question of  
legality about this -- you need two-thirds vote,  
Mr. Chair, right? 

CHAIRMAN RICE: We have two-thirds vote.  

MR. TAGORDA: Roll call vote.  

MR. NAKAMURA: Aye.  

MR. HIRANAGA: Aye.  

MR. HELM: Aye.  
 
MR. TAGORDA: Aye. 

MR. STARR: Aye.  

MR. NOBRIGA: No. 

CHAIRMAN RICE: Motion carries. Yes,  
Mr. Starr.  

MR. STARR: I move that we empower the Chair  
with the ability to approve a change order regarding  
the drilling of the monitoring well currently being  
done at Hog Back Ridge.  

MR. NOBRIGA: Second. 

CHAIRMAN RICE: Okay. Discussion? All in  
favor, say aye. Opposed, say nay. Motion is carried.  
Communication 01-31 from Hugh Starr regarding  
the definition of subdivision. Hugh?  

HUGH STARR: I'll defer to any testimony of  
the Rules Committee. 

CHAIRMAN RICE: I'm going to defer that to the  
Rules Committee if there is no objection from the  
board members. Okay.  
 Request from Wayne Arakaki for three water  
meters and deferral of water tank improvements and  
completion of the waterline along Kekoanui Place.  
Wayne is not here.  

MS. NAGO: You folks were going to refer it to  
committee. 
 
CHAIRMAN RICE: Yeah, I just wanted to make  
sure he wasn't here first.  

MS. NAGO: No. He left. 

CHAIRMAN RICE: Okay. I'm going to refer that  
to the Rules Committee if there is no objection.  
Communication 01-33 again from Wayne Arakaki  
for subdivision approval in the shortage area. 

MR. HIRANAGA: Question, Mr. Chair. On these  
two requests from Mr. Arakaki, is additional  
information going to be provided to the Rules  
Committee beyond these two letters? 

CHAIRMAN RICE: You can request anything you  
want from Mr. Arakaki. 

MR. HIRANAGA: Although I'm not sure if this  
is procedurally correct since you've already referred  
it to the Rules Committee, but I can't quite  
understand his first sentence on his Peahi Hui  
Subdivision. Is he requesting to defer water tank  
improvements and offsite waterline improvements? 

CHAIRMAN RICE: Mr. Craddick?  

MR. CRADDICK: They are, and I believe they  
bonded them. I'm not positive about that. Oh, they  
haven't bonded them yet?  

MR. CHANG: Chris Mamiya is here.  

MR. CRADDICK: Yeah, I know, that's why I was  
looking to him to see whether that was the case,  
whether they were bonded or not. I think what  
happened on this one if you remember a few months  
back, the bid came from the board and it was about a  
hundred thousand dollars over the estimate. And I  
believe we felt that it was because contractors were  
all pretty busy, the bids were coming in pretty high  
and they wanted to wait a little while and go out to  
bid later on. I don't -- I think all he's asking for  
is delay of that tank more than the line. I think the  
line would have to go in in any case; otherwise there  
would be no way to serve them.  

MR. HIRANAGA: If we could just have  
clarification. And then when he says the costs are  
higher, I'd like to know how much higher. And also  
what time frame that deferral request is for because I  
believe the agreement is open ended. 

CHAIRMAN RICE: Okay. Can we make sure we ask  
Mr. Arakaki to provide more information for the Rules  
Committee when it comes up. So 01-33 is referred to  
Rules.  
 Communication from Sumner Erdman on Ulapalakua  
Ranch regarding water service. Pardee? I assume  
you're going to speak on behalf of Sumner?  

PARDEE ERDMAN: I'm going to speak on behalf  
of Sumner. Sumner is on the Board of Ag and he had to  
go to an ag meeting on Kauai today.  
 Basically we're not here to ask for any more  
water meters. We only would like our water meters to  
work. We get eight percent of the water meters. When  
you talk about unused water meters, yes, we've got  
unused water meters because there is no damn water  
coming through the pipe.  
 Now, 30 years ago we had a problem up there,  
we got together with the Board of Water Supply and we  
replaced -- helped to replace a 6-inch line coming in.  
 Ten years ago we started to have water problems up  
there and since then we've got nothing but bullshit.  
 Now, a couple years ago you had a study done  
and you came up with a study, which I imagine all of  
you have seen that it, that the waterline is  
inadequate. And since then, nothing.  
 Now, my friend here tells me oh, well, he's  
got somebody working on the line now. If your finance  
committee wants something to do, they ought to go up  
there and figure out how much it's costing him to have  
employees on the Ulapalakua section of that line every  
day, overtime, the rest of it. I mean, it is just a  
shambles.  
 Now, we need something done. We need some  
action. What we're asking is that you'll give  
Mr. Craddick the permission to go ahead and replace  
the line. And we know when somebody said well, we're  
doing studies; well, any study you do, all you need to  
come up with is a figure above six and that's the size  
of the line you should put in. 

CHAIRMAN RICE: I believe that we do have that  
project in the CPI budget for this year. Do we not?  

MR. CRADDICK: Yeah, to study it. 

CHAIRMAN RICE: To study it.  

PARDEE ERDMAN: Study? What are you studying?  

MR. TAGORDA: Mr. Chairman, I believe it was  
what two years ago that we had budgeted around $50,000  
to design that project from Ulapalakua to Kanaio,  
Mr. Craddick, and what happened to that CPI? 

MR. CRADDICK: I believe it was somewhere  
around $300,000, and to buy the material we were about  
two hundred or so thousand short to buy the material.  
 They offered to dig the line and assist in  
reburying it on their property. There was a segment  
 -- I'm not sure how long -- on Haleakala Ranch  
property. They didn't offer to dig on that because of  
liability concerns, I presume, I don't know what it  
was. But anyways, they were willing to do out of I  
forget how many feet it was, 12,000 feet, Herb?  
Somewhere in that order of magnitude, of either 8-inch  
line or 12-inch line. Eight inches is not really a  
transmission line, so then you'd come to funding  
issues, how you're going to fund it, and whether  
you're going to provide any kind of basic service or  
not. And that's what we're trying to get the board to  
decide, what level of service was going to be  
provided. If that can be said, what level of service  
we're going to provide, we can dispense with the study  
and move ahead into the design.  
 And the decision is just if you're going to  
provide just basic level of service, that means 40  
pounds pressure and adequate fire flow for an ag area,  
which is 250 gallons a minute. If you do that, you  
need an 8-inch line. If you want to supply it with  
1,000 gallons a minute fire fly, you need a 12-inch  
line. And that's what we came up with. 

CHAIRMAN RICE: Mr. Starr?  

MR. STARR: Yeah, I remember we had had this  
discussion some months ago and I think that the  
recommendation that had come up was to go with the  
12-inch line. 

MR. CRADDICK: No, there was no  
recommendation. I think the recommendation was just  
to get a study to get something to the board on what  
was required and I don't believe they'd even done a  
scope of work -- 

MR. STARR: David, I had the floor. I believe  
there was a recommendation from some members of the  
board to go with a 12-inch line since we were going to  
-- if we're going to have a hole dug and lay a new  
pipe, we might as well do it right was the thinking.  
 There was a former member who was very adamant  
that he didn't want to see anything more than a 6-inch  
line out there and I believe that that was where it  
was decided to do a study rather than to implement the  
project.  
 I know I would like to see it done and if  
we're going to open the, you know, open the ground to  
put the larger pipe in. But what I would like to know  
is what's the status of the study so that, you know,  
if that's where it is, how can we get it back to  
what's fast and do it. Because it is needed and it's  
no good for those folks to suffer out there. 

PARDEE ERDMAN: We're waiting to plant grapes  
and this isn't new planting, this is just replanting.  
We don't have the water to do it. Roy here is losing  
strawberries, he doesn't have the water. We need  
something done. 

CHAIRMAN RICE: Howard, we had that project in  
CIP. I thought we had an estimate.  

MR. NAKAMURA: The project is in CIP. My  
recollection is that the recommendation was that  
because there was not consensus on the scope of the  
project, that a preliminary engineering would be done  
which would define what the options were so that we  
could move ahead with the project and I'm not sure  
what the status of that is. 

CHAIRMAN RICE: But that's more than a study,  
though. When we're talking about a study of doing it  
or not, I thought we were doing it, we were just  
trying to get an engineer -- 

MR. NAKAMURA: I think it was intended to be a  
preliminary design. 

CHAIRMAN RICE: That's what I thought.  

MR. NAKAMURA: With some options. But I'm not  
sure what the status of that is. 

MR. CRADDICK: There was no preliminary  
design. That's why I was trying to get the board to  
say what they wanted done and I'm not even certain the  
staff has gone ahead yet because we don't know what to  
write to have the engineer do.  

MR. STARR: Mr. Chair, can I suggest that this  
be put on a committee, I'll accept any committee, mine  
or anyone else's, so we can discuss it and try to get  
some direction? 

CHAIRMAN RICE: Let's do that. It's in CIP  
already and it is budgeted this year, so let's refer  
this to CIP and see if we can get some quick action on  
it. 

MR. HELM: I guess my question is what are we  
going to do to remedy a short-term fix for the problem  
that he has right now? Is there any alternative, a  
short-term fix that we can identify that could at  
least alleviate some of the problems that he has now?  
Is that -- 

MR. CRADDICK: The problem they have now is  
mainly ahead of where the -- I'll call it -- how many  
board members went on the field trip when we went out  
there?  

MR. TAGORDA: Everybody. 

MR. CRADDICK: You remember where the  
strawberry farm was? I know Kent doesn't, he's a  
little bit short, but there is an 1-1/2 meter there.  
From there on, basically the last two months we've had  
people without water. We've been hauling water up  
there to get water to them. So I believe what George  
has done is worked with the staff to get after that  
meter change from 2-inch to 4-inch. It's not going to  
change the portion of the line that Pardee is talking  
about. It's the 2-inch portion after that meter to  
try and get the water out to Kanaio. Because Kanaio  
has basically been without water for sometime there or  
very sporadic, let's put it that way. So if he's got  
8 percent water, these other people have no water.  
And that's the problem we're trying to deal with right  
now. And we're doing that by changing I believe,  
what, 600 feet of 4-inch line? 500 feet? 

CHAIRMAN RICE: Pardee, is this going on all  
the time?  

PARDEE ERDMAN: Yes. 

CHAIRMAN RICE: Or is this seasonal? 

MR. HAMAMURA: May I comment? Hi, my name is  
Roy Hamamura. I'm the guy, the bad guy, the  
strawberry grower out there on a 1-1/2 inch meter.  
They're updating that line and the guys at Kanaio, the  
line goes from a 4-inch to a 2-inch right where we  
are. And you've got a reducer right there. And I'm  
sure that thing is crammed full of rock. That's why  
they're not getting any water in Kanaio. They're  
going to alleviate that problem real shortly with the  
new pipe.  
 But that's not the problem. The problem is  
most of the day in the middle of the day, we have a  
vacuum in the line. There is no water coming out.  
That's what's wrong. And Kanaio is going to be the  
end result of no vacuum beyond us. And that's really  
the problem. When the three laterals running  
Ulapalakua, the vineyard, and over by Kamole there is  
another lateral, when those are flowing heavy there is  
no water in the pipe. It's zero.  
 Now, about four weeks ago, there was no water  
in the pipe, we had just planted the strawberries.  
We've lost the whole thing, 80,000 plants. I had to  
replant. That's another thirty grand to me and I'm  
just a small farmer. And the end result won't be  
known until next June when I total up how much  
strawberry we've actually picked. But I can tell you  
exactly how many damages I'm going to have. It's not  
very funny. And these guys can't plant grapes, they  
can't grow them.  

PARDEE ERDMAN: We have to move cattle every  
day practically. 

MR. HAMAMURA: There is no water out there.  
The pipe has got a vacuum in it. See, Mr. Tengan put  
an accumulator, 24-hour meter to accumulate the usage.  
The thing shows what we're drawing at the 1-1/2 meter,  
but it doesn't show when the line goes into a negative  
vacuum. It just shows no flow. But really what it is  
is a vacuum in the pipe. It's not very funny, but  
that's what's happening. And I don't think everybody  
is aware of it.  
 When George's people are there, I go hey,  
there is a vacuum in the pipe. There is no water  
coming out of there. You don't have much choice. 

CHAIRMAN RICE: Mr. Craddick?  

MR. CRADDICK: Well, if it's referred to  
committee to get some clarification on that study -- 

CHAIRMAN RICE: Refer it to committee to deal  
with the replacement line, but they have an immediate  
problem and I guess that's what Adolph brought up and  
I think that's now the discussion. It's referred to  
committee. 

MR. CRADDICK: I mean, if you want an  
immediate solution, the pipe costs a little over half  
a million dollars to buy the pipe. And if we have to  
put it in ourselves so it doesn't run the cost up, I  
mean, our crews do have other things to do, but if we  
have to put it in ourself with their assistance, I  
mean, that's -- we don't have the money, we don't have  
the money, that's what we would do. And that's what  
we were proposing to do before. 

MR. STARR: How long would it take if, you  
know, it has -- if the committee were able to find  
finance for it? 
 
MR. CRADDICK: Take about 45 days for the pipe  
to arrive here, probably another 60 days to get it put  
in. 

CHAIRMAN RICE: Well, we've got it referred to  
committee, so we can talk about it there. Anything  
more, gentlemen? Pardee?  

PARDEE ERDMAN: That's it. We'll hope to hear  
from you that something is going to happen.  

MR. HASHIMOTO: So what's maybe a time line  
for them? Because agriculture, you know, you don't  
get water, you're going to wilt. Talking about cattle  
or grapes or -- even his existing grapes, a lot of  
them are many years old and if they go down -- 

PARDEE ERDMAN: We've taken the old ones out.  
What it is, we have new ones we need to plant. We'll  
just hold them until we've got enough water to plant. 

CHAIRMAN RICE: Mr. Craddick? 

MR. CRADDICK: One other concern is that we  
have already the project to upgrade the transmission  
line between Alae tank and Waiohuli tank, that 8-inch  
to 12-inch in there. That will become the choke on  
the system. You'll have the ability to drain Kamole  
tank at that point and not be able to supply it. So  
what will happen is the inadequate point will move  
further up the line to around where the 12-inch line  
ends on the other segment. So that project will also  
have to be pushed equally as fast. But that one is in  
design already, right, Herb? 

CHAIRMAN RICE: So you need to have that  
information for us when we have the committee meeting  
so we don't make a decision on this end and get in  
trouble on that end. 

MR. CRADDICK: Yeah, I think it can work out.  
If we get the line in, I believe we can have some kind  
of regulator in there ahead so that we're not starving  
that other end of the system and just get the line in  
and that will solve the immediate problems without  
maybe draining the line.  
 I'm just making the board aware that there is  
other problems with that transmission line besides  
this segment.  

MR. HIRANAGA: Mr. Chair, since I was not  
involved in this project from the beginning, I'm  
wondering if the director can provide a brief recap in  
writing regarding where it started and where we're at  
for the committee's review. And also these  
consequences that he's mentioned, if he could put that  
in writing also for the finance -- for the committee's  
review. If we could have that prior to the meeting. 

CHAIRMAN RICE: Okay. Thank you,  
Mr. Craddick.  

MR. HAMAMURA: I saw a report somewhere that  
the Kamole 6-inch line feeds 157,000, 160,000 gallons  
a day in a 24-hour period. I read it somewhere. That  
1-1/2 meter at the strawberry farm holds about 24,000  
gallons on a good day, 24 hours. So where is the  
other 130,000?  
 The ranch has 30-some-odd meters on it and I  
think Sumner stated that he's only getting 8 percent  
of the water out of those meters. So I sort of think  
you guys have leaking and I don't know where all this  
water is going. But I suspect there is some leaks in  
this line also. Big ones. 

CHAIRMAN RICE: Thank you. It's referred to  
committee. Any other discussion? Okay.  
Finance committee reports.  

MR. NAKAMURA: Mr. Chairman, the finance  
committee met on October 9th on three items. The  
first item, Communication 01-21, which is the request  
from Mr. Hans Michel regarding the agreement between  
Mr. Michel and the Board of Water Supply. The board  
chairman had met with Mr. Michel and his feelings are  
that issues can be resolved. We need to have somebody  
work with Mr. Rice and Mr. Michel from the staff to  
follow up and to ensure that the unresolved issues are  
dealt with. The director was to identify such a  
person and although no action is required at this  
time, the request is whether or not the director has  
identified the appropriate person to work with  
Mr. Rice to bring this to resolution.  

MR. CHANG: I was chosen as the staff member. 

MR. NAKAMURA: This matter would remain in  
committee until such time that Mr. Chang and Mr. Rice  
can follow up with Mr. Michel.  
 Communication 01-28 from Everett Dowling  
regarding the acquisition of some of the capacity from  
the Kaupakalua Well. The committee discussed the pros  
and cons of the offer by Mr. Dowling, including how  
best to value it. There was some concern over the  
proposed acquisition cost or the proposed cost.  
 However, one important consideration to the  
committee was that although the board at the present  
time has the ability to increase the size of the pump  
at the Kaupakalua Well, it can do so only by  
compensating Mr. Dowling a pro rata percentage of the  
cost of the initial development. And one of the items  
of discussion which Mr. Dowling's representative  
agreed to was that if the board were to acquire the  
100,000 gallons from Mr. Dowling, that the provision  
for pro rata reimbursement if the pump were to be  
enlarged would be waived. And on that basis, the  
committee recommended that we proceed with the  
proposal. And so I would move that we accept  
Mr. Dowling's proposal. 

CHAIRMAN RICE: Subject to that -- 

MR. NAKAMURA: Subject to that amendment to  
the agreement.  

MR. STARR: Second that. 

CHAIRMAN RICE: It's been moved and seconded.  
Is there a discussion? Mr. Starr?  

MR. STARR: It's expensive water, we know  
that, but I think that we really need it and it will  
allow us to serve our customers and our people who  
have been wanting to be our customers. So I feel we  
should do it and the fact that they're willing to give  
up the language about them getting a share if the pump  
size is increased makes it an equitable deal. So I  
hope that we will support it.  

MR. NAKAMURA: One other thing, Mr. Chairman.  
The fiscal officer was to identify the appropriate  
force of funding, so perhaps we could ask Mike to do  
that before we go. 

MR. QUINN: Mr. Chairman, we recommended that  
this particular item be funded from the water system  
development fund. Currently we have unencumbered  
balances of about $5.7 million. And luckily we've  
been -- our receipts in this particular fund have far  
exceeded our projections. We've already to date  
received about $1.3 million in this fund and we have  
projected $1.4 million. So based on that, I feel  
comfortable funding this from the water system  
development fund. 

CHAIRMAN RICE: Okay. Any other issues,  
discussion? Mr. Starr?  

MR. STARR: Just whether the motion would  
require that -- I guess if the Chair enter into, draft  
the language necessary because there is actually no  
agreement ready to sign. 

CHAIRMAN RICE: That's correct. We would have  
to do that. And it would be subject to corp counsel's  
review. 

MR. NAKAMURA: And if the motion could reflect  
the source of funding.  

MR. QUINN: Mr. Chair, furthermore, we would  
amend the CPI portion of the fiscal year 2002 budget  
to reflect this item for $800,000.  

MR. HIRANAGA: Mr. Chair, I guess I have been  
reviewing Mr. Craddick's letter to the board regarding  
this recommendation to purchase the additional well  
capacity. I guess my question is are we setting a  
precedent in purchasing additional capacity from  
private developers? And if so, should we be -- what  
if the price was $10 per gallon? It seems like -- I  
guess we have to weigh the need versus the cost and  
the funds being expended by the board to purchase this  
additional capacity. I know there is a strong need  
for water Upcountry, but it just seems like the basis  
for justification, I just don't understand it. So  
what if the offer had been $10 per gallon, would we  
still proceed? Or if it was $15 per gallon? 

CHAIRMAN RICE: Well, I don't know if that's  
-- in theory those are just questions because if we're  
already at an agreement point, I think it's more that  
there is definitely need, I think there is no -- there  
is a risk issue here. There is no risk in obtaining  
this water versus us drilling even though we intend to  
drill for more source. And I think the concession  
that we've received from the Dowling people on the  
cost reimbursement in the event that we put in a  
bigger pump I think is significant also. I don't know  
that -- really your question is is it precedent  
setting. 

MR. HIRANAGA: That, and is it a defendable  
action.  

CHAIRMAN RICE: I think in light of need, it  
is. That's my personal feeling. I've got three hands  
here.  

MR. TAGORDA: I have plenty questions,  
Mr. Chair, to David's letter recommending that we  
should buy that water. However, on page 16,  
Attachment 1, Mr. Craddick, I hope you can just write  
it down on the blackboard because I want to understand  
how did you arrive to all these numbers. It's going  
to be a very lengthy explanation for me -- for you to  
explain to me. You just have to walk me through this  
for me to understand.  
 Right here that right now you have an  
installed pump capacity on the Dowling well, at  
present it's 1.64 mgd, which only will support  
Dowling's project or can get only 738,000 gpd. 

MR. CRADDICK: The 738,000 is on an average  
day basis what you can get from the well. And what  
you're buying is you're buying 100,000 gallons of that  
average day capacity. 

MR. TAGORDA: I understand. And then with  
that price, the buy-out price, if our cost will be $8  
per gallon, right, $400,000. Now, there is another  
option that you folks mentioned that we -- if we deal  
with this, we are -- we can put a bigger pump that can  
pump up to 2 mgd. 

CHAIRMAN RICE: There was a provision for that  
originally. And if that happened, the way the  
original agreement was written, we would reimburse  
more to Mr. Dowling. So one of the concessions that  
they made was they waived that part of the agreement.  
So there is no reimbursement -- further reimbursements  
to them in the event that we decide to put in a large  
pump. Not that we are. But if we do.  

MR. TAGORDA: Before we go on to that, the  
option of trying to put a 2 mgd, which will give us at  
least 268,000 gpd, yeah, Mr. Craddick, our costs will  
be $6.34 per gallon which is less than the buyout cost  
of that 100,000 gallons per day. And I think that  
would be a prudent action for the board to take that  
instead of just buying the 100,000 and then if you  
change the Memorandum of Understanding, you take the 2  
million -- 

MR. CRADDICK: You are getting that option. 

CHAIRMAN RICE: That's the option we're  
getting. We don't have to make the decision to change  
the pump today. We can make that decision now  
whenever we feel it's appropriate. That's what we're  
doing in this agreement.  

MR. TAGORDA: Okay. Outside of that, all of  
this water from that Dowling well, to what extent this  
water will service Upcountry? What area in Upcountry  
it will service? 

MR. CRADDICK: It services the Haiku area. 

MR. TAGORDA: Only? 

MR. CRADDICK: Yes. Right now. Now, if the  
board wants to go up to the full capacity of the well  
during a drought and you don't mind dumping it in a  
ditch and retreating it again or even if you -- if the  
ditch is low, obviously it's low for both -- whether  
you process for domestic consumption as well as the ag  
part. You may not even have to treat this; you may  
just be dumping it in the ditch to go to the ag park.  
I had made an estimate of around $6,000 to do  
that. That's a worst case scenario, you know, if we  
put a permanent structure in there to do this all the  
time. My recommendation would probably be or we'll  
probably have to do this in the future; anyways, get  
some booster station in there so that we can actually  
use it in the Upcountry system. And when I say  
Upcountry, I'm talking about Makawao, Pukalani, Haiku  
area. And you would have to have some kind of a  
booster in there and that price of that booster is way  
down at the bottom of the page below that box where it  
says 500,000 booster included.  
Now, if you exercise that option, I would  
expect it would be like Peter said, you're not going  
to change the pump while it's brand new, you're going  
to wait until it wears out when you would have to  
change it anyways and then you would make the decision  
whether you're going to upsize or not. And at that  
point you would have to be spending that $400,000 in  
any case to replace the pump. So that might not be  
included. So actually, your price might go way below  
$6 per thousand gallons.  
 But again, I caution you on trying to base  
your full decision on that. It's certainly a  
sweetener in the deal, but not the whole -- I think  
the primary things of it's water there now with no  
risk are very important considerations. 

CHAIRMAN RICE: Okay. Are we ready to vote on  
this or do we have more questions? Wait. We have to  
recess. 

(Brief recess.) 

CHAIRMAN RICE: Okay. We were discussing  
Finance Committee report on Everett Dowling water.  
Mr. Tagorda?  

MR. TAGORDA: Okay. Thank you, Mr. Chairman.  
Can David, Mr. Chair, explain to us what -- under  
attachment 1, page 16, maybe on the bulletin board. 

MR. CRADDICK: What do you want to explain? 
 
MR. TAGORDA: I want you to explain to me how  
did you arrive to -- at Kaupakalua Well, how did you  
arrive to cost per gallon at $4.70? And same thing  
with Pookela, $4.32. And down the line, like the  
proposed buyout from Dowling at $8 and our cost per  
gallon if we buy -- we exercise the option of putting  
in a larger pump, at $6.34.  

MR. CRADDICK: And what don't you understand  
that you want written on the blackboard? 

MR. TAGORDA: Just walk me through here so I  
can understand. 

MR. CRADDICK: What we have done is we made a  
best guess estimate of what it cost to put it in. And  
I've put in a number, $300,000, for financing. I  
talked to Don, he said it's way higher than that.  
Even if you triple that amount, triple it, you're not  
going to get much above $5.  
 Now, I don't think the other numbers are way,  
way off, but I'll leave that for you to discuss with  
Kaupakalua. But the Pookela well, again that's our  
best estimate of what it's going to cost us to do that  
project. And I've been conservative in there, I've  
put just 1,000 gallons a minute. Obviously if that's  
higher, we might get more, but it's -- and then the  
unit price would go down. But that's -- those are  
just best guess estimates and the total for the  
Kaupakalua well is about $3.5 million. Ours is about  
$2.8 million. They're getting slightly over a million  
and a half gallons a day or, using our standard of 45  
percent, 738,000, or in our case 648,000 gallons of  
water. Just divide that into the dollar amount and  
then you get the unit cost there, or the cost per  
gallon. 

MR. TAGORDA: Okay. I still didn't  
understand, Mr. Craddick, but anyhow, let me ask you  
again. This Dowling water, will it service most  
people in the priority list? And if so, how many --  
how many names you think you can cover with this  
100,000 GPD that we're acquiring? Only on the  
priority list. Because my intention really is to use  
this water only for those people on the priority list. 

MR. CRADDICK: Again, exactly how many -- our  
standard is 600 gallons per meter. We know obviously  
if somebody gets a meter bigger than 5/8 or if they're  
in the Omaopio area or Haiku area, it could range  
anywhere from 300 to maybe 1,200 or 1,300 gallons per  
meter. So. 

MR. TAGORDA: Okay. I understand. Those  
people that went -- attended the public hearing last  
night, do you -- can the water from Dowling service  
their premises Upcountry? 

MR. CRADDICK: The way we felt this could work  
is Haiku's consumption at the time we entered into  
this agreement was around three-quarters of a million  
gallons a day, average day. That's what the capacity  
of this well is. So essentially between that and the  
Haiku well, we served 100 percent of the demand for  
Haiku.  
 Now, Haiku had been taking all of its water  
from the Kamole treatment plant. So what's happened  
is the Kamole treatment plant has gone from about 2.7  
million dollars a day average output to about 1.5 to  
1.7, somewhere in there. That's the drought listing  
that you get all the time, if you look on Kamole weir,  
that's what it is when we're not pumping any water to  
the upper line or the lower line. That's what Makawao  
and Pukalani demand is.  
 So with that reduction in demand off of the  
treatment plant, obviously the treatment plant can be  
ramped back up to that 2.7 million gallons a day and  
it not hurt anything. And that water can be delivered  
anywhere in the water system. 

MR. TAGORDA: Going back to that, the word you  
used about no financial risk, Mr. Craddick, what  
happen now if that well, the water quality comes low,  
meaning it's not acceptable for drinking. Have you  
had measures or steps taken? 

MR. CRADDICK: We have that risk with any well  
we have, Orlando.  

MR. TAGORDA: So there is financial risk.  
What happen then if that single well by Haiku  
collapse? Do you have a backup well? 

MR. CRADDICK: When you say collapse, I'm not  
sure -- 

MR. TAGORDA: Well, it doesn't work. It  
doesn't produce anymore. Do you have a backup well? 

MR. CRADDICK: At this point we don't have  
backup for it. The treatment plant itself would be  
backup for it and we would hope that the pump didn't  
fail right in the middle of a very bad drought.  
That's all I can say for right now. 

MR. TAGORDA: If you have a pump failure,  
Mr. Craddick, what's your next step? 

MR. CRADDICK: Got to pull it out and change  
it. 

MR. TAGORDA: And how long it takes that for  
the department to do? 

MR. CRADDICK: It could take two or three  
months to do that. 

MR. TAGORDA: The whole development is going  
to be bone dry, Mr. Chair. 

CHAIRMAN RICE: Orlando, that has nothing to  
do with this decision. That could happen to any well.  
That doesn't relate to this decision. That's a  
liability we have everywhere. 

MR. TAGORDA: Yeah, but like I said, I don't  
want to hear things that there is no financial risk  
here involved. 

CHAIRMAN RICE: No, no. I think that means  
that when you decide to drill a well, you take a risk  
as to the well being dry. And this well is producing  
water. That's I think what is meant by no financial  
risk, not that there isn't risk of operating a well.  
We have that -- whatever risk there is of operating a  
well exists in every well we have. 

MR. TAGORDA: Okay, Mr. Chairman, let's go  
back to the priority list, Mr. Craddick. How many  
names on that priority list will be off that priority  
list when we get the Dowling water? 

MR. CRADDICK: I cannot tell you that,  
Orlando, because of the range in consumption and what  
the people are going to use the water for. Obviously  
if the guy is going to do ag, he's probably going to  
use a lot more water and our standards allow for that.  
We say 5,000 gallons per acre is what we figure is  
needed. So depending on what the requirement is for  
the meter that's applied for, you could probably go  
100, 150 names, or maybe as low as 50 names on the  
list. But you are going through the list. 

MR. STARR: I would just like to make one  
comment which is that what we're buying here does not  
directly relate to that well. What we're buying are  
allocation units for water. In other words, even if  
that well were to fail today and never deliver another  
drop of water, we would still be obligated to provide  
the credits that we've given against that well.  
So in other words, you know, the issue is not  
directly that well, but it's the source credits that  
were issued to Kulamalu. And what we're doing is  
instead of those source credits, you know, to be used  
by Kulamalu, those same source credits will be able to  
sell them or give them, as you may, to our own  
consumer base or to people that are on the waiting  
list.  
 So it's really a transfer of, you know, the  
allocation. It's not directly connected to the well.  
Because we're already committed to supply the water,  
whether the well works or it doesn't work.  

MR. HIRANAGA: Mr. Chair, a couple of  
questions. David, did you give the Dowling company an  
opportunity to review your estimates on your costs for  
the Kaupakalua well? 

MR. CRADDICK: No. 

MR. HIRANAGA: I guess looking at this one,  
this is what I understand you're trying to say is that  
-- and of course, the Dowling company may not agree  
with your $4.70 cost per gallon, but what you're  
saying is under the proposed new meter fee of $6,030  
that we're charging approximately $10.05 per gallon  
for even 5/8 inch meter, but the Dowling company is  
offering to sell us at $8 per gallon. But you're  
estimating their cost to produce this was $4.70. 

MR. CRADDICK: Yes, essentially, yes. 

MR. HIRANAGA: So if we were to accept this  
proposal and the proposed meter fee increase is  
approved, we would basically recover the $8 per  
gallon? That's a question I'm asking the director. 

MR. CRADDICK: You're talking about under the  
proposed fee? 

MR. HIRANAGA: Right. 

CHAIRMAN RICE: There is only a certain  
portion -- 

MR. HIRANAGA: Are we comparing apples to  
apples here? 

CHAIRMAN RICE: There is only a certain  
portion. 

MR. CRADDICK: I have both because Board  
Member Nakamura had asked look at the source portion,  
so I've done both, I've looked at the source portion,  
taken the source portion and dividing it by 600, you  
can see what it is for the current and proposed, it's  
$1.25 and $3.40. If you look at the total fee, and  
you divide it by 600, you get $5.58 and the new fee  
you get $10.05. Now at $10.05, you're at least  
covering your out-of-pocket expense of the $8 per  
gallon. You're not covering money for transmission  
line or storage tanks there. But like I said in my  
very first line there, Upcountry has never been a  
positive or even neutral cash flow situation for  
providing source. So this is nothing new for  
Upcountry. It's subsidized. 

MR. HIRANAGA: Eight dollars is for source  
only. 

MR. CRADDICK: That's what we would be buying  
if we exercise this. 

MR. QUINN: Versus a recoverable on the meters  
would be $3.40. 

MR. CRADDICK: On the proposed fee, yes,  
that's correct. 

MR. HIRANAGA: Another question is if this was  
approved, would this additional capacity be dedicated  
to the people on the list or it would just be thrown  
into our general capacity and if 167 other requests  
come in prior to the resolution of the list, that  
these people could possibly use up this additional  
capacity? 

MR. CRADDICK: I think that would be a board  
decision. If they are going to say with this  
additional water the system is adequate, we would  
start through the list.  
 Now, there is still the issue of the off list  
people there and I think that's why corp counsel has  
told the board hey, let's get a rule in place and for  
that reason I think we need to deal with that. But  
whether you deal with it right now today, I mean, if  
we start through the list, overnight we're not going  
to issue a hundred meters. It's going to take  
probably a month or two to process this amount of  
applications. So I would expect the rule would be  
passed in that amount of time and there might be some  
people off the list that would get some of this water. 

MR. HIRANAGA: But you are issuing meters to  
people whose lots existed before 1993 who are not  
requesting for an upsized meter and have -- 

MR. CRADDICK: Just the first meter, right,  
that's correct. 

MR. HIRANAGA: And have adequate  
transmission-distribution fronting the property. 

MR. CRADDICK: That's correct. 

MR. HIRANAGA: So theoretically this could 
be used to fulfill those requests. 

MR. CRADDICK: Could be if the board didn't  
want to start through the list. 

CHAIRMAN RICE: Mr. Nakamura? 

MR. NAKAMURA: Mr. Chairman, just in followup  
to Mr. Hiranaga and Mr. Tagorda's questions, I think  
the clear intent of the committee was to acquire these  
credits as a means of working through the list. I  
think the feeling is that there are many people who  
have been on the list for a long time, as we heard at  
the hearing last night, and that that was the  
priority.  
 However, corporation counsel does make the  
recommendation that we have a rule in place before we  
start working our way through the list and I think the  
appropriate process would be that assuming we acquire  
these credits, that we don't issue meters against them  
until we have a rule that would permit us to treat the  
people on the list in an equitable fashion. 
 And also, David, assuming we use the list and  
work our way through it, are you saying that each time  
you issue a meter, you're going to make a computation  
as to how much you think that meter should be -- the  
consumption of that meter should be charged against  
the amount of water we're acquiring? Or aren't you  
going to use a standard? 

MR. CRADDICK: Herb, do you want to explain  
how you -- 

MR. CHANG: We're thinking of -- we have like  
basically three categories. You have new  
subdivisions, you have people wanting meters just to  
like a lot or something, just a meter, one meter, or  
you want people to upsize. You've got developers,  
you've got farmers who want bigger meters for more  
agriculture purposes. So we have a variety of  
possible consumption.  
 So what we did was we're looking at using  
zoning for as far as requests for meters for like  
residential ag lots, we have a number like maybe six  
hundred for residential, maybe a thousand for  
agriculture, something like that. And then for the  
people who want bigger meter for ag, we actually work  
with -- they give us an estimate. And then we're just  
starting to think about specifics and so far that's  
what we've come up with.  

MR. NAKAMURA: It would seem that based on  
that response that it's even more reason why we need  
to incorporate it in a rule. 

MR. CRADDICK: I'm not certain you could  
incorporate what he's talking about in the rule  
because you have to look at it on a case by case  
situation. 

MR. NAKAMURA: Well, the rule could say that  
or at least set some criteria. 

CHAIRMAN RICE: The simple question was is  
there a way of allocating some of the water by a type  
of meter use and the answer is they're working on it.  
Okay. Any other questions?  

MR. HIRANAGA: Just a comment, I guess. Based  
upon the requested expenditure and the large  
differences in costs that have been presented to us, I  
guess I'm not prepared to -- I'm not saying I'm  
prepared to vote against it, but I'm not prepared to  
vote for it. 

CHAIRMAN RICE: We're about to vote. If there  
are no other comments, I'm going to ask Mr. Tagorda,  
are you looking for something to ask there? I see you  
flipping through the papers.  

MR. TAGORDA: My thing, I would favor this to  
buy that Dowling water, Mr. Chair, if we go through  
that option of putting in a larger pump. And with a  
condition that this water is only going to be used for  
those people on the priority list and if those people  
on the priority list are taken care of, then it can be  
applied generally Upcountry.  

CHAIRMAN RICE: Okay. I don't think anyone on  
this board has a problem with using water for people  
on the list. I think that's an easy one and if  
someone disagrees with me, I'm sure they will speak  
up.  
 But it's my understanding that the life of the  
well is too early to decide to put in a bigger pump.  
I think what we've done is set ourselves up for the  
option to do it at our sole discretion, which I think  
is the best thing at this point. So we can do that.  
We don't have to pay any more money to do that. But  
we don't have enough data about the well to just throw  
a bigger pump in now. So that would be my response. 

MR. TAGORDA: That's fine. 

CHAIRMAN RICE: Okay. All in favor of the  
motion? The motion was to -- recommendation for the  
finance committee to approve the purchase of the water  
credits. Duly seconded. All in favor, say aye.  
Opposed, say nay.  

MR. HIRANAGA: For the record, I would like it  
to be noted that I'm abstaining. 

CHAIRMAN RICE: I don't think you can, up or  
down. 

MR. CRADDICK: No, no. If he just says no --  
or I mean he's not voting, then it's assumed a yes  
vote.  

MR. FUKUSHIMA: That's correct. If he makes  
no vote, it's counted as a yes. He's obligated to  
vote unless he's disqualified. He's stated no reasons  
for disqualification. 

MR. HIRANAGA: Okay, I'll vote nay. 

CHAIRMAN RICE: Okay. The motion is carried.  
One more item.  

MR. NAKAMURA: Mr. Chairman, Director's Report  
01-46. I notice that there is a follow-up report on  
the issue of the old Wailuku Post Office as a  
potential office space. No action is required by the  
board. Hence, the matter will remain in committee  
while the staff obtains additional information. I  
don't know if David wants to very briefly add anything  
to that, but I don't know that it's necessary. 

MR. CRADDICK: Nothing to add. 

MR. HIRANAGA: One comment. 

CHAIRMAN RICE: Yes, Kent.  

MR. HIRANAGA: If the department could also  
find out if lead-based paint is an issue in that  
building. 

MR. CRADDICK: Okay.  

MR. NAKAMURA: That's all, Mr. Chairman. 

CHAIRMAN RICE: Thank you for that report.  
Operations Review Committee.  

MR. STARR: Yes. Mr. Chair, first item which  
is the contract for consultant services to augment the  
Water Use & Development Plan process; resource  
strategies and screening; cost-benefit and financial  
analysis sections of the Water Use & Development Plan  
and portions of the demand analysis.  
 The committee recommends that the board  
approve the contract as provided after review by  
corporation counsel for language and recommendation  
from finance regarding availability of funds. The  
contract is here if anyone is interested in seeing it  
in more detail, but basically this will allow us to  
proceed with the Water Use & Development Plan. The  
consultant is here also if we want to get any  
presentation from him. And I would like to make a  
motion that the committee report be accepted and that  
the contract be signed by the Chair after approval by  
corp counsel and the earmarking of funds be  
accomplished as well. 
 
CHAIRMAN RICE: Is there a second?  

MR. TAGORDA: Second. 

CHAIRMAN RICE: Okay. Discussion? No  
discussion? All in favor, signify by saying aye.  
Opposed, say nay. Motion is carried. Mr. Starr?  

MR. STARR: Next item is Director's Report  
01-47, the request for condemnation by the subdivider  
was withdrawn due to a pending agreement with the  
neighbors, good news. No action is required at this  
time. So that can be dispensed with.  
 Now, moving right along here, we'll go on to  
the evaluation of the director. And -- 

MR. NOBRIGA: It hasn't been noticed that way. 

MS. NAGO: I'm sorry, I put the evaluation  
under Other Business. The director's job description  
and the evaluation form are placed under Other  
Business on the agenda.  

CHAIRMAN RICE: If there is no objection, we  
move that to the Operations Committee where it was  
handled. Seeing and hearing none, go ahead, Jonathan.  

MR. STARR: After a lot of hard work by the  
committee and especially Committee Member Rice, we've  
come up with a job description and there were some  
amendments made at the committee meeting. I just want  
to be sure that they were included in this copy.  
Fran? Okay. The copy that was distributed today  
includes the amendments from me.  
 The committee recommends that the board  
approve the attached job description for the director  
with the inclusion of several changes, additions, as  
were provided with the package. And that being the  
case, I move that the board approve the attached job  
description for the director of the Department of  
Water Supply.  

MR. TAGORDA: Second. 

CHAIRMAN RICE: Motion and second. Yes,  
Kent. 

MR. HIRANAGA: Just for the record, did  
somebody say they proofed the new document to assure  
that all the changes were incorporated? 

CHAIRMAN RICE: I did it from my notes from  
the meeting. So you guys, if I missed something -- 

MR. HIRANAGA: Defer to your -- 

CHAIRMAN RICE: My secretarial skills. We can  
fix it if I made any type of error. Okay. Moved and  
seconded. No other discussion, comments? All in  
favor, signify by saying aye. Opposed, say nay.  
Motion is carried. Great day when the director has a  
job description.  

MR. STARR: Okay. The committee spent a lot  
of time going over the evaluation sheet which relates  
to the job description and is intended to be used by  
the board members for evaluating the water director on  
a regular basis and the evaluation form as amended is  
in our packet. So the committee recommends that the  
evaluation form be amended to include the 5 point  
rating system attached herewith entitled Orlando's  
rating system, along with some other unsubstantive  
changes.  
 The committee further recommends that the  
evaluation form be approved as amended and that the  
board members proceed with the evaluation of the  
director using this form. As such, I would like to  
move that the evaluation be approved as amended and  
that board members proceed with the evaluation of the  
director using this form.  

MR. TAGORDA: Second. 

CHAIRMAN RICE: Okay. You saw the form.  
Everybody got the form? Okay, good. Any comments?  
All in favor, signify by saying aye. Opposed, say  
nay. Okay. Then I will schedule an evaluation and  
notify everybody.  

MR. STARR: Okay. And the last item is a  
discussion/possible action regarding computer security  
and other security measures. The committee deferred  
this item and intends to schedule a committee meeting  
that will concentrate solely on this important item in  
the near future. We all know how critical these  
issues are. We will be attempting to schedule a  
meeting for next week or the week after to deal with  
these issues and hopefully gain some knowledge to the  
board members. Some and possibly all of that  
discussion may have to occur in executive session,  
however, so we'll have to make sure that it gets  
noticed that way. 

CHAIRMAN RICE: Thank you, Jonathan and  
Operations Committee. Excellent work. Thank you.  
Rules?  

MR. NOBRIGA: Mr. Chairman, Communication  
01-22, Mr. Thomas Welch has requested that we defer  
this item until his consultant can come back from  
overseas.  
 On the non-rate portion of the Water System  
Development Fee Rule, we have nothing to report at  
this time and that matter is still in committee.  
 The Water Meter Issuance Rule for Upcountry  
water system is scheduled to reconvene today at 11  
a.m.  
That completes my report. 

CHAIRMAN RICE: Thank you. Okay. We're  
moving on to the Committee of the Whole. The  
committee met on the certification of Central Maui  
source availability this week. We received  
presentations by USGS, John Mink, Bill Meyer, and  
members of the Commission on Water Resource  
Management. It was a process that was intended to  
educate the board on the Iao and adjacent aquifers and  
the theory of aligning aquifers in general. And I  
think the board members received a lot of good  
information and will continue to study that  
information as we move forward and are planning for  
the Maui water supply. If any of the members has any  
other comments -- 

MR. STARR: Mr. Chair, I just want to  
compliment the committee and its chair for a really  
good presentation and any members of the public that  
are here that were not able to attend, I know that  
that was taped for Akaku by Daniel Grantham and they  
should take the opportunity to see that presentation  
because it was really a very good and clear  
presentation. I think it was the first time all of  
these matters were discussed in public and all these  
people were in one room and everyone who had done any  
work on the Iao aquifer for the last 30 years  
presented that day and it was a really good program.  
So thanks for putting that together. 

CHAIRMAN RICE: We'll keep moving in that  
area.  

MR. NAKAMURA: Mr. Chairman, on the next item  
on the Upcountry source adequacy, Committee of the  
Whole met to discuss the letter from the director  
regarding the adequacy of source. There were a number  
of issues raised. Subsequently, I asked the director  
to provide a little additional information. Although  
there were a number of approaches discussed, it seemed  
as though the direction that was evolving was that the  
director's findings in terms of adequacy of source,  
especially during normal or non-drought periods, was  
certainly appropriate.  
 I believe that there is no recommendation at  
this time from the committee and I would suggest that  
the matter remain in committee and that it would be  
taken up at the next meeting in November at which time  
I think that it will be possible to make a  
recommendation to the full board regarding the  
director's findings as to adequacy of source. So that  
would be my thought. 

CHAIRMAN RICE: For some of the people that  
are here today, we have been working on the source  
adequacy for the Upcountry water system and I think in  
light of the decision to purchase the credits from the  
Dowling well, it materially affects our analysis. And  
I think for the public's benefit we're working in the  
right way towards certifying the available water  
source Upcountry. The committee felt they needed to  
talk about some of the finer points of the  
recommendation, so I expect we'll have a Committee of  
the Whole meeting and we'll be able to make a  
recommendation at the next meeting.  
Mr. Craddick?  

MR. CRADDICK: Can I just say something on  
this item? Back a couple of board meetings ago, there  
was some discussion about the Jim Smith court case and  
whether it was finished and I have since -- corp  
counsel has furnished me some documents and clearly  
the Jim Smith court case has been resolved in court  
and I would like to apologize for questioning corp  
counsel's knowledge in the matter. 

CHAIRMAN RICE: Thank you, Mr. Craddick, for  
that humility. Anything else on that issue? 
 We're in Other Business. Attorney for the  
North Waihee land purchase -- you know that I reported  
at the last meeting that I was making progress in  
discussions with Wailuku Ag about the purchase of the  
land and water system and rights that they have and  
there was a need for outside counsel to assist the  
board and there is a need for outside counsel with  
experience in the water field and it was in no way  
intended to be a slight on corp counsel. This is a  
very complicated issue and it requires someone with  
some very precise background and knowledge in water  
areas.  
 As a result of that recommendation, we have  
notified County Council that we would like approval to  
hire outside counsel and we've also sent out the  
notice of solicitation for proposals and the results  
of that solicitation is on this paper that was just  
handed out to you. I believe it's in our best  
interests to come to the Council with a recommendation  
and that's why we've proceeded to this point.  
And the comment that I would make at this time  
for my fellow board members is that there has been  
experience with one of these firms, Mr. MacDougal  
assisted us in a not identical but similar transaction  
in an area that was similar to this. Part of it was  
in this watershed, I believe, wasn't it, David? 

MR. CRADDICK: Yes. 

CHAIRMAN RICE: And I believe that working  
with Mr. MacDougal was a good experience and my  
comment and feeling would be to continue to work with  
him. Mr. Starr?  

MR. STARR: Mr. Chair, I worked with  
Mr. MacDougal, he was very good. There was some --  
there was a problem, though, in that he is -- his firm  
and his own residence is in Washington State. 

MR. CRADDICK: Actually Oregon. 

MR. STARR: I'm sorry, Oregon. So it means  
that when he comes over to work, it has to be  
scheduled well in advance and then we end up paying  
all his expenses for flying over and staying. We were  
doing that last time. 

MR. CRADDICK: We did last time, but I  
believe, Mike, he has offered to cover his own travel  
expenses so that doesn't become an issue. 

MR. STARR: Anyway, he is good, I have no  
problem with that. But there is another name on here  
that I would like us to consider. And other  
organizations that I've been involved with have worked  
with that firm. Bill Tam of Alston Hunt Floyd & Ing,  
he was the author of the State Water Code. He was for  
a very long time the attorney general on staff for the  
State Commission on Water Resource Management. And he  
was in that position at a time when the Water Code was  
drafted and as such he actually drafted a lot of that  
code. And a lot of people are familiar from when he  
was the AG for the water commission and I certainly  
feel he was very, very good at that.  
 He's still very much involved with water  
issues. He just hosted the seminar on public trust  
and water issues that was held by the University of  
Hawaii School of Law two weeks ago and he's here in  
the state and his firm is quite successful. They have  
some notoriety because they're the ones who filed the  
Felix consent decree against the State and we all  
know, whether we like it or not, how successful they  
were with that issue.  
 So I would like us to consider Bill Tam.  
Perhaps there is a way they could present before us or  
something. But I feel that he being in the state and  
working in the state every day and that being a  
commercial firm with operations in the state, we'd  
probably get a higher level of service where he could  
fly in and out on a moment's notice rather than having  
to schedule in advance and block of times.  
 But as I said, Doug MacDougal is a good  
lawyer, too, but I think Bill Tam is the best there is  
for this. Bill Tam or Jim Paul are the two -- their  
involvement in the Waiahole case and other matters  
recently have shown that they're really the best water  
lawyers in the state right now. 
 
CHAIRMAN RICE: Did you have your hand up,  
Mr. Craddick?  

MR. CRADDICK: Yeah. I would just say this is  
on the council's agenda, Committee of the Whole agenda  
for next week and I think you, Peter, are the one who  
knows what the time requirements are in here. And if  
they are, as you said they were at a previous meeting,  
that you're trying to get this wrapped up in a couple  
of months, it's going to require somebody that has a  
lot of knowledge already to deal with the matter. 

CHAIRMAN RICE: Well, I don't know about one  
side's requirements for time and the other side's are  
always different. I think we have to try and select  
the best counsel that we can to represent us. Any  
other comments? 

MR. TAGORDA: Can we get some resumes from  
these people? 

MR. CRADDICK: We have them all right here. 

MR. TAGORDA: Can we have that distributed  
next meeting? I would like a copy of those resumes. 

MR. CRADDICK: I think if you -- 

CHAIRMAN RICE: Who has the resumes, Mike?  

MR. QUINN: Right here.  

CHAIRMAN RICE: Would you get copies of the  
members of the board who would like them?  

MR. QUINN: Right now? 

MR. TAGORDA: No, not right now.  

MR. QUINN: It's quite extensive. 

CHAIRMAN RICE: For the board, we need to go  
to the County Council meeting with a recommendation, I  
think. So I would urge you to get those and review  
them, okay. But we need to make a decision.  

MR. STARR: Mr. Chair, if we're going to  
decide this today, could we have a five-minute recess  
and perhaps we could look at them.  

(Brief recess.) 

CHAIRMAN RICE: Meeting of the Board of Water  
Supply is back in order. We're having a discussion  
about counsel representing us in the negotiations of  
Wailuku Ag and there has been a recommendation for  
Mr. MacDougal by myself, and Mr. Tam. I think that  
there is a good argument for using Hawaii counsel and  
the availability of that counsel here in Hawaii and  
the experience of Mr. Tam is without question so  
certainly the Chair would go along with that if there  
is a motion.  

MR. STARR: Mr. Chair, I move that Bill Tam of  
the firm Alston Hunt Floyd & Ing be recommended to the  
County Council for employment as special counsel in  
this project.  
 
MR. TAGORDA: Second. 

CHAIRMAN RICE: Discussion? Kent.  

MR. NAKAMURA: I just had a quick question.  
Is Mr. MacDougal still in any way officially  
representing the Board in the Central Maui Source  
Joint Venture issue? Is he still on the payroll, so  
to speak? 

MR. CRADDICK: I don't know if the contract  
has been closed, but essentially there is not any more  
work that he's doing for us.  

MR. NAKAMURA: Mr. Fukushima, would you  
suggest that I recuse myself on that basis?  

MR. FUKUSHIMA: Well, generally our office  
doesn't make decisions as to whether a conflict exists  
or not. That is a matter for the Board of Ethics to  
deal with. But it would be my opinion that you would  
not be in conflict. 

MR. NAKAMURA: Thank you. And just as an  
aside, I should make it known that one of these firms  
-- my son-in-law is a principal in one of these firms  
although he's not with the recommended entity and so I  
should make that known. I don't think I have a  
conflict on that either except maybe within my own  
family. 

CHAIRMAN RICE: Yes, Kent.  
 
MR. HIRANAGA: The director recommended  
MacDougal; is that correct? 

MR. CRADDICK: I'm actually, to tell you the  
truth, I'm not recommending anybody and I think the  
arguments to have somebody within the state is  
probably a good one. Whether the travel is free or  
not with MacDougal, I can imagine some kind of a  
problem coming up. So I could certainly support the  
recommendation of the firm that Mr. Tam is in.  

MR. HIRANAGA: I guess personally I would have  
preferred for the record that Dave had made an  
official recommendation since his department was the  
only people who had any privy to the resumes. And  
it's very difficult for me to make a decision when a  
list is presented to me five minutes before the voting  
and there has been no resumes provided, no  
presentations by the soliciting counsel.  
 And the estimated fees that we will be  
incurring for this, has anyone estimated -- are we  
talking about a hundred thousand, half a million, a  
million? 

MR. CRADDICK: We've appropriated $30,000. 

CHAIRMAN RICE: We appropriated at the last  
meeting $30,000. 

MR. CRADDICK: And I would expect somebody  
coming in fresh in it, it's going to be well over  
double that, possibly triple. I wouldn't expect it to  
go much over triple that.  

MR. HIRANAGA: So we're assuming it's going to  
be about 600 hours, based upon $200 per hour. 

MR. CRADDICK: Probably, yeah. I'm not sure  
how much the other people get involved in it. 

MR. HIRANAGA: I guess that includes paper,  
telephone calls. 

MR. CRADDICK: Yes. 

CHAIRMAN RICE: I wouldn't want to  
underestimate it. There is a lot of due diligence  
that would need to be done in this issue. There is a  
lot of old, old documents that will need to be  
reviewed. So I don't know what the estimate is. I  
think because of it, the complexity of the due  
diligence, my comment would be not to underestimate  
the cost. And I think our intention was to  
appropriate an amount to get the process started at  
the last meeting. 

MR. TAGORDA: I guess I'm just really  
uncomfortable that we were not provided copies of the  
resumes prior to being -- it's very difficult to make  
an educated decision. 

MR. CRADDICK: Again, I'll take the  
responsibility for that. The bid closed yesterday on  
the submittal of these proposals and we probably  
should have had copies of all the submittals with it.  
But this was basically the process that we used when  
the North Waihee Land Purchase went through. I know  
all the attorneys that submitted proposals then, you  
know, individual board members probably had some  
knowledge of the firms already and if you don't -- I  
can say Frank Mukai is very knowledgeable on these  
types of things, Bill Tam is, Doug MacDougal is. I  
have no knowledge on the other two. 

CHAIRMAN RICE: Actually, you know, there is  
an element if we want to get somebody to make a  
specific recommendation to the Council for and I've  
been doing a little research and MacDougal and Tam are  
the two names that have been recommended to me by  
other people in the community. And I think that the  
-- those are the two premier names, quite honestly.  
And I'm happy with either one of them, actually. But  
I think there is an argument for somebody who's  
nearby.  

MR. HIRANAGA: Mr. Chair, has each of these  
counsel also declared that they have no conflicts of  
interest concerns? Because I notice here it says  
MacDougal familiar with Brewer. So they all have  
claimed that there is no conflict of interest issues?  
I hate to go down the road with someone and all of a  
sudden that be a concern. 

MR. CRADDICK: I know there isn't with  
MacDougal and I presume if there was, they would have  
said that because we had actually solicited some  
others, Martin Luna specifically, and he said there  
were conflicts and he couldn't submit a proposal. So  
I'm assuming that these people would not have  
submitted -- 

CHAIRMAN RICE: Bill Tam does not have.  
Mike? 

MR. QUINN: Mr. MacDougal has stated in his  
letter that he nor any member of his firm has any  
conflict of interest. 

CHAIRMAN RICE: Okay. Anything else? Okay.  
All in favor of the motion, say say. Opposed, say  
nay. One nay (Kent Hiranaga). Motion is carried.  
Evaluation of the director we've talked about.  
Item C, approval to transmit to the Mayor the Water  
System Development Fee rate increase. There is a  
feeling that we want to go through that document now  
and get that process moved along. We've had some  
public hearing. There has been some comments that I  
think we need to incorporate into the document.  
 Mr. Craddick, are you prepared to go through  
that document today? 

MR. CRADDICK: I am if we could have a little  
recess then we could shoot the document up on the  
wall. We could move this desk back here so all the  
board members and the audience could see it and have  
at it to complete it.  

(Brief recess.) 

CHAIRMAN RICE: Call the meeting back to  
order. We're going to go into executive session on  
the personnel issue. Moved and seconded to go into  
executive session.  

[Executive session held.] 

CHAIRMAN RICE: We're out of executive  
session. Back in order. Mr. Starr?  

MR. STARR: Mr. Chair, I move to approve the  
settlement as discussed.  

MR. HASHIMOTO: Second. 

CHAIRMAN RICE: Moved and seconded to approve  
the settlement as discussed. Any discussion? All in  
favor, say aye. Opposed, say nay. Very good. Moving  
on.  
 Mr. Craddick. The document we're going to  
discuss the development fee rate increase we're  
sending to the mayor.  
 We heard a few comments at the public hearing.  
Do we want to address those in the document or do we  
want to go line by line? What do you guys want to do?  

MR. STARR: I wanted to make some comments on  
comments that we received at the Molokai hearing. 

CHAIRMAN RICE: Okay. One second. Mike, did  
you want to say something?  

MR. NOBRIGA: I defer to Member Starr for  
now. I do want a chance. 

CHAIRMAN RICE: Go ahead.  

MR. STARR: There were three testifiers on  
Molokai. Initially they were -- they said this is a  
very large increase and they felt that it was going to  
be very difficult for people on Molokai.  
 After our presentations, they had a better  
understanding of it and their request was that I guess  
a payment plan be implemented that would be more  
flexible and give people more leeway if we did have to  
keep at a high rate. And I don't know if this is  
going to be the place to implement it or possibly in  
the rule providing the rules regarding the verbiage  
might be a better place for the payment plan. But I  
did want to put that forward. Adolph?  

MR. HELM: Really just to add to Member  
Jonathan Starr's comment on the Molokai public  
hearing. All of them were being basically initially  
against the fee and we had sort of like a round table  
discussion about just to get some clarification on the  
fee and the proposal. But getting back to some of  
ideas for economically Molokai is a little different  
in terms of the ability with respect -- not so much  
[inaudible] Maui and the jobs that Maui has to offer.  
There were some concerns about that.  
 Second, there is the idea that there is again  
reiterate what Mr. Starr said about coming up with a  
plan, a payment plan over a certain period of time  
would be more suitable instead of a one-shot deal.  
Also, the consumer index increase over a period of  
time is also to them a concern also because within  
five, ten years you also have a giant increase if you  
at up a 2 or 3 percent increase over a period of four  
or five or six years. So that also was a concern.  
And another comment was made with respect to  
being a little bit more innovative in our ways of  
trying to get other entities, private developers,  
other state agencies, members of government to try to  
look at cost factors with regards to source  
development. Some place like Molokai which can fall  
in an economic criteria and meet those considerations  
with the rule development corporation might have an  
opportunity to get grants to help support increases in  
sources and stuff like that. But there needs to be  
other alternatives and the concern was we need to be a  
little bit more innovative in ways of not having an  
increase in the fee like that. I think that take a  
heavy toll. 

CHAIRMAN RICE: Okay. Mike?  

MR. NOBRIGA: Amongst the testimony that was  
presented, there were three major points that we  
should address, first point being to amend the October  
31, 2001 effective date, to move that to perhaps  
suggested language "upon approval by the council" or  
somehow have another sunset provision of maybe January  
1st, 2002 or something similar to that. I propose  
that at this time for discussion. 

CHAIRMAN RICE: Mr. Craddick is typing "the  
rules shall become effective 10 days after posting in  
the County Clerk's office after filing." Does that  
sound good to everybody? Okay.  

MR. NOBRIGA: Second, if I may continue,  
Mr. Chairman, second point was to identify what  
Consumer Price Index would be followed. And I believe  
it was a suggestion that we identify Hawaii State  
Consumer Price Index. 

MR. FUKUSHIMA: If I may, Mr. Chairman, I  
believe we have one for Hawaii. I'm not sure. 

MR. NOBRIGA: Is it state or Hawaii? 

MR. FUKUSHIMA: The State of Hawaii. I'm not  
sure if they have one for Honolulu. I'm quite sure  
they don't have one for Maui. So I would suggest that  
we use the Consumer Price Index for the State of  
Hawaii. 

CHAIRMAN RICE: Okay. Do you have some  
information? I don't want to get into -- 

MR. MEYER: I teach economics at MCC. They  
have the Honolulu -- there is an index in Honolulu,  
Consumer Price Index, by the federal government for  
the City of Honolulu. It's not a statewide index. 

CHAIRMAN RICE: How's that? It's published by  
the federal government, though. Thank you.  

MR. QUINN: There is also a water and sewer  
CPI portion, national index. I don't know -- this is  
for the board's information. 

CHAIRMAN RICE: I thought the testimony was  
kind of the Consumer Price Index should be relevant to  
the state.  

MR. HIRANAGA: Is there any historical data  
which shows whether the Honolulu urban CPI is usually  
greater than or less than the all urban CPI? 

CHAIRMAN RICE: I don't know.  
 
MR. MEYER: It goes up and down and probably  
below it sometimes. Over the long term, it stays very  
consistent to federal. Sometimes it's below and  
sometimes it's above.  

MR. FUKUSHIMA: It's the Bureau of Labor  
statistics, if I'm not mistaken. 

MR. MEYER: That's correct.  

MR. NOBRIGA: The last point being that we  
should include language -- maybe not so much within  
the rule itself, but as a proviso indicating if it is  
the board's intent to recognize applicant's denied  
service in the Upcountry area that have been listed on  
a priority list from 1989 to say the end of this year,  
and present the board's intent to somehow assist these  
applicants through credits or some sort so that they  
would not be unjustly discriminated with the new fees.  
It may have to be dealt with in another rule separate  
from this document. 

CHAIRMAN RICE: I'm glad you're here then.  

MR. NOBRIGA: But that is my main three -- 

MR. FUKUSHIMA: I think it would be  
appropriate to incorporate in the rule, if I may,  
Mr. Chairman, there was another provision that I  
wanted to include in this. I do not believe it's a  
substantive change and it would not necessitate an  
additional public hearing, but I believe it would be  
appropriate if we put language in here as required by  
state statute relating to the refund of these fees if  
they're not used within a five-year period. And I  
believe it's appropriate to have that included in the  
rule for consistency with state statute -- I think  
it's 4615. 

MR. CRADDICK: And the entrance if we're going  
to do that. 

MR. FUKUSHIMA: Yes. 

CHAIRMAN RICE: So we don't have actually have  
to draft that language here. If the concept everybody  
agrees with that, we can go ahead and get counsel to  
do that. Okay. Kent?  

MR. HIRANAGA: Clarification. If someone  
reserves a meter and fails to actually have it  
installed in five years, we're going to refund the  
reservation fee? 

MR. FUKUSHIMA: No. That's only -- this would  
relate to people that have paid the fee and the County  
does not -- if the department does not use that money  
for source development projects, that money would be  
returned. My understanding, from speaking to the  
fiscal officer, is generally we do not have that  
problem. That money comes in, it is expended within  
the requisite five-year period. But I believe that  
the impact fee statute requires that refund provisions  
be included in any impact fee legislation.  

MR. HIRANAGA: The application of the  
development fee is for the island of Maui or for the  
specific geographical location where that meter was  
taken? So if you paid for a meter in Haiku, that that  
fee would have to be used in Haiku or --  

CHAIRMAN RICE: I don't think so. The  
application of the fees are for us to determine for  
Maui County. 

MR. FUKUSHIMA: They are county-wide fees and  
everybody pays the same thing, so I believe that's how  
our consultants have determined payment should be  
applied. 

CHAIRMAN RICE: I think over time it evens  
out. Jonathan? 

MR. STARR: I was wondering if counsel could  
come up with some wording that would allow the people  
who have been waiting for meters and not been able to  
get them for reasons not under their own control to be  
given one chance at getting a meter at the old rate --  
at the current existing rate. And then if they were  
not able to take the meter at that time, they would  
lose that special ability and that their opportunity  
to get it would come when the water is being made  
available. Say we went down the meter rule, you know,  
the meter list and we came to a certain person, if  
they were ready to take their meter then they could  
get it at the existing rate. If they couldn't, then  
when their turn came around again, they would be  
paying the new rate. 

CHAIRMAN RICE: Right. But we're talking  
about people on the list, not anybody in Maui County. 

MR. STARR: No. People who have been  
prevented from getting a meter for reasons beyond  
their own. 

CHAIRMAN RICE: Right. 

MR. TAGORDA: Well, if that is the policy that  
this board wishes to adopt, we could certainly come up  
with the language that would cover that policy. 

CHAIRMAN RICE: It would seem to me that it  
would fit in the rule under Exception 1688. And I  
think it's important and Board Member Starr is  
suggesting that it be for a definitive time, after  
which time somebody would come -- right -- 

MR. STARR: Well, they would get that one  
chance. If the chance came tomorrow or if the chance  
came a year from now. 

CHAIRMAN RICE: Once they passed it by -- 
 
MR. STARR: Yeah. In other words, it would  
come go to the person and say okay, we finally have  
source adequacy; are you ready to take your meter? 

MR. FUKUSHIMA: Does the member have any idea  
how long -- 

MR. STARR: You've been using 60 days, so  
maybe they would have 60 days. 

MR. CRADDICK: To do what? 

MR. STARR: To accept their meter at the old  
price.  

MR. NOBRIGA: You want to add that into this  
rule now? 

CHAIRMAN RICE: We're talking about the  
concept and then he can write the verbiage. But  
that's what you brought up. Isn't that what you  
brought up?  

MR. NOBRIGA: It's what I brought up, but I  
was assuming we were going to try and deal with it  
another day. But if you want to incorporate -- I  
would be very in favor of incorporating it at one time  
within this rule. It's just I think there is quite a  
bit of discussion that needs to take place, though.  

MR. STARR: Is there a way that the chair of  
our rules committee could work with corp counsel to  
come up with the final verbiage and -- I don't know  
how we can get it back so we don't have to come back  
to the board, but I would be happy to see it done as  
part of this rule.  

MR. FUKUSHIMA: If I may, and I can appreciate  
the member's desire to fast track this, but we would  
suggest that rather than do anything in a hasty  
fashion that I can work with the chair of the Rules  
Committee to develop language, but I want to make sure  
that that language is satisfactory to the rest of the  
board and just working with one member doesn't allow  
me to determine whether it is what the rest of the  
board wants. And I think it would be better to come  
back to the board if that's the language that this  
board wants to do, or a provision like that inserted  
in this proposed rule. 

CHAIRMAN RICE: Go ahead, David. 

MR. CRADDICK: I would not recommend something  
like that because tomorrow the list is going to jump  
from 800 to 3,000 if you do something like that,  
trying to key in to this waiver of the fee. And what  
I would say is you just make the effective date six  
months after the board starts going through the list  
and then there is not going to be any rush to try and  
get on the end of the list to avoid paying it because  
those people aren't on the list right now and you're  
mainly trying to deal with people who have been  
sitting there a long time and in that six months'  
time, you're certainly going to take care of those  
people. And ones that come on later, they get the new  
fee. So you can deal with it right here under the  
effective date and you just say that the effective  
date for people on the Upcountry system will be six  
months after the board starts going through the  
priority list. Or some other time, whatever time you  
pick. Pick a time. But don't make it open-ended  
because then everybody is going to jump on so they can  
tie in to the waiver of the fee.  

MR. STARR: I have a comment. I wouldn't like  
to see that because there are some people who have  
been on the list a long time who have multiple meters  
who we're probably not going to be able to serve in  
this first round. And out of fairness to them, I feel  
that, you know, I would rather see the mechanism where  
they're locked in assuming they can accept the meters  
when it's available to them. And it may not be six  
months, you know, there are people who have waited for  
numerous large meters. 

CHAIRMAN RICE: Then we phrase the list as of  
-- 

MR. STARR: Yeah, we would have to have a  
cut-off date, which I think even that date could be -- 

CHAIRMAN RICE: But I think the director's  
point is well taken because tomorrow there will be  
3,000 names on the list and that won't be right. 

MR. STARR: But I think that's an item that  
could be retroactive. 

MR. TAGORDA: Well, that's precisely why we  
made the effective date October 31st which in effect,  
considering the time it's going to take the council  
and the mayor to consider and hopefully approve this,  
that it wouldn't affect the retroactive by two or  
three months. The idea was to avoid a rush to the  
department applying for meters in the Upcountry area.  
That was the reason for it. It was a very good  
reason. 

CHAIRMAN RICE: Yeah, but it didn't sound like  
that might fly even if it was a good reason. Yes,  
Howard.  

MR. NAKAMURA: I think there is a couple of  
different issues here. I agree with the director and  
others that we want to avoid a rush of people signing  
up and getting on the list just to protect the old  
rate. At the same time, I think that there seems to  
be a feeling that the board wants to try to at least  
acknowledge those people who have been waiting  
patiently and I think the suggestion that the list  
could be frozen as of a certain date is one way to  
deal with that.  
 As a policy matter, the board would have to  
understand that the revenue that is being foregone is  
fairly substantial. But if we agree that that's fair,  
I think we do need to at least take steps to either  
freeze the list or somehow use a mechanism that would  
stop an onrush of people just signing up for the sake  
of protecting the old rate. 

CHAIRMAN RICE: Jonathan?  

MR. STARR: Yeah, I feel that the list should  
be frozen for this purpose as of today.  

CHAIRMAN RICE: And I can buy that because I  
think that there has been an inequity that's existed  
because of that list and this is -- the lost revenue  
notwithstanding, this is a fair quid pro quo for that.  
So I'm not worried about the revenue. And if we're  
all willing to say the list is frozen as of today,  
then we can write in the language that provides those  
people on the list a meter at the old fee and with the  
provisions that Board Member Starr provided. Kent, go  
ahead.  

MR. HIRANAGA: My understanding is there was  
one legal notice published in the Maui News on  
November 2nd, 1994, if you wish to be placed upon the  
list; is that correct? 

MR. CRADDICK: Yes. 

MR. TAGORDA: Was there any criteria to  
determine if you get on the list or can anyone say I  
want to be on the list as long as you own property in  
the Upcountry area? 

MR. CRADDICK: I'm not certain we've made any  
determination whether they own any property at the  
time they ask to get on the list. You're nodding your  
head yes, you know that they do own some property?  

MR. CHANG: We have to accept their request by  
letter. There was a formal request made to the  
department, so with that in hand we just put them on  
the list. 

CHAIRMAN RICE: Yeah, but that didn't  
necessarily indicate they owned property. 

MR. CRADDICK: We have tax map keys -- 

CHAIRMAN RICE: Well, they may have provided  
it, but it wasn't a requirement.  

MR. CHANG: By making a request, they would  
have to put a TMK. 

MR. CRADDICK: So it may be the land is keyed  
into it.  

MR. HIRANAGA: The people on the list are  
primarily people who want to upsize the meter? 

MR. CRADDICK: Correct. 

MR. TAGORDA: Who the lot was created after  
1993? Subdivided after 1993. 

MR. CRADDICK: Yes. 

MR. TAGORDA: Or there is inadequate  
distribution or transmission through their property. 

MR. CRADDICK: That has never been a criteria  
for denying because they can fix that up if they want  
to. They can get a meter -- 

MR. RICE: There could be people on that list  
who the reason they haven't gotten their meter is  
because of inadequate transmission to the distribution  
system. 

MR. CRADDICK: No, not necessarily. If they  
can get a meter now and the line were inadequate, they  
wouldn't be on the list. If the line were inadequate  
and they could get a meter right now, subject to  
having a line adequate, and they have chosen not to  
make the line adequate, then of course they don't have  
the meter and they're sitting out there off the list. 

MR. HIRANAGA: There is only two categories of  
people on the list: People who want to upsize their  
meter or people who have created lots after 1992. 

MR. CRADDICK: No, I believe there is ones on  
there that may want the first meter, too. 

MR. HIRANAGA: But if they have an adequate  
distribution in front of their property, all they have  
to do is go to the window there and pay $33.50 and  
they will get their meter. 

MR. CRADDICK: That's true. 

MR. HIRANAGA: Nobody has informed them that  
they can do that? 

MR. CRADDICK: No, no, I'm pretty sure those  
ones have come in. If they can, they have. 

MR. HIRANAGA: So there should be only two  
categories of people. 

MR. NOBRIGA: Only one category. Only locals  
stay on the list. 

MR. HIRANAGA: People who want to upsize their  
meters or who created lots after 1993. 

MR. CRADDICK: That's correct.  

MR. NAKAMURA: One other comment. On that  
last line, my thought is that the rule should be  
effective upon approval rather than 10 days after  
filing, if that's acceptable language to corp counsel.  
Again, just to minimize any rushing in to try to get a  
meter within that 10-day period.  
 The second question is to Howard, if we, for  
instance, grandfather in the people on the list, is  
that a substantive enough change that we need to go  
back to public hearing? 

MR. FUKUSHIMA: I don't believe so. The test  
is there is a change and turn the proposal into an  
entirely new proposal. I don't believe it does in  
light of -- it's my opinion it does not require going  
back to public hearing, it is not a substantive  
change. 

MR. NAKAMURA: Thank you. But I would like to  
request that the rule become effective upon approval.  

CHAIRMAN RICE: Okay. Everybody good with  
that? Okay. Kent?  

MR. HIRANAGA: If this language is agreed to,  
what's the next step?  

CHAIRMAN RICE: We see a final copy and it  
goes to the mayor.  

MR. HIRANAGA: I guess my concern is this list  
has never been qualified or reviewed to determine if  
these people should be on the list or not. And you  
grandfathered them in for how long a period, 60 days  
after adoption? 

CHAIRMAN RICE: What was your language on  
that? 

MR. STARR: That they would -- when their name  
comes up, they would have 60 days to obtain their  
meter. I see a hand back there. A technical hand.  

MR. CHANG: I just wanted to have an  
opportunity to speak after you did. I needed to make  
something clear. I just wanted to have Dave ask me  
because I was planning to update the list this month  
because it's updated every six months and October is  
the date to update, so there will be more names on the  
list. 

CHAIRMAN RICE: I think the issue of list  
problems comes up -- I think that's a separate issue.  
But we want to get the fact -- I know what you're  
saying, if they're not supposed to be on the list, is  
that what you're saying?  

MR. HIRANAGA: They have no basis to be on the  
list. 

CHAIRMAN RICE: We could write that in to the  
verbiage.  

MR. HIRANAGA: I guess I'm more comfortable if  
this is handled in the committee that is scheduled for  
[inaudible] in a way we're going to be discussing it.  
I think I would prefer to just look at rates. 

CHAIRMAN RICE: This has to go together with  
rates. 

MR. CRADDICK: Well, if you're going to make  
some deferral for some people, then yeah, it has to be  
handled right here. But another issue I was going to  
bring up is let's say when you offer the meter, you're  
saying they got 60 days to be able to put the meter  
in, is that what you're saying, Jonathan? 

MR. STARR: Yeah. 

MR. CRADDICK: Okay. So all the people with  
inadequate lines, even though they have been on the  
list for a long time period of time, don't have a  
chance to put the line in and get the meter. 

CHAIRMAN RICE: I don't think that's what he  
meant. 

MR. CRADDICK: Well, that's the effect of it.  
I'm telling you that so you're aware of that.  

MR. NAKAMURA: It sounds like the present  
procedure is that you go in, you pay your meter fee,  
and then you have one year and the possibility of two  
six-month extensions. And I would assume that that  
same process would be the process in place. You go  
in, you're offered your spot on the -- your name comes  
up on the list, you're offered the opportunity, you  
still have the ability to go in, pay the fee, and then  
you have the year or two years to actually install the  
meter. I think that's what we're talking about. I  
don't want to put words in Jonathan's mouth. 

MR. STARR: Mr. Chair, may I recommend that if  
the Chair is willing to schedule a special meeting of  
the board on this matter and maybe the director's  
evaluation, you know, just two items possibly in two  
weeks after having time for us to get suggested  
wording on this. 

CHAIRMAN RICE: Whatever you guys pleasure is.  
What do you guys want to do? Do you want to see  
language and take it up again before it goes to the  
mayor? That's fine. Whatever you guys want to do. 

MR. STARR: It's got to come back to us, so.  

MR. HASHIMOTO: Isn't this going to be taken  
up by the council? 

MR. CRADDICK: Not until you send it to them.  
But every day you delay will go into the next year. 

CHAIRMAN RICE: Mike.  

MR. NOBRIGA: I prefer for us to just issue an  
intent that we want to do something to financially  
assist the people that were on the list if I can get  
the majority of the board to agree on that. I'm just  
one person. 

CHAIRMAN RICE: I think we all agree on that.  
I haven't heard any objection to putting it in there;  
it's just what we're putting in there. 

MR. NOBRIGA: What we're putting in is too  
much of a scope to have to go all the way through this  
process and get an up or down vote. I think it would  
be better for us to ask the County Council to put in  
the monies to issue the credits for these guys. Let's  
think outside the box.  

CHAIRMAN RICE: Okay. 

MR. CRADDICK: Got one and a half million in  
credits. They can do it. 

CHAIRMAN RICE: So what would you like to see?  
I think there is a general acknowledgment amongst the  
board members that we want to provide the meters to  
the people on the list at the old price -- at the  
current price. Okay. So the question then becomes as  
to how much detail we want to write into this document  
in that regard. And there is now a suggestion that it  
be less than more. And then you would have to handle  
the details in your rule? 

MR. NOBRIGA: Yeah, that's fine. 

CHAIRMAN RICE: That's what Kent wants. Kent,  
you would prefer that? 

MR. HIRANAGA: So you're going to make a  
general statement to assist people on the list  
financially? 

CHAIRMAN RICE: That's Mike's suggestion.  

MR. HIRANAGA: What are corp counsel's  
thoughts on that?  
 
MR. FUKUSHIMA: Well, when he indicates a  
general statement, I'm not sure what he means by  
general statement. I would think that you would need  
specifics as to who, for how long, how much, da, da,  
da, that you're going to be waiving. I think there  
has to be a little more particularity than a general  
statement that we're going to help out financially  
people who are already on the list. 

CHAIRMAN RICE: Mike?  

MR. NOBRIGA: All I know is when you write one  
formal business letter, on the end you can put "P.S."  
The "P.S." don't have nothing to do with the body of  
the letter. There must be a vehicle or way that we  
get the rule and you going to "P.S." on the bottom.  
Oh, County Council, how about this? That's what I  
want to see. It's one. It's not in the thing, but  
it's one P.S. 

MR. FUKUSHIMA: If it's not in the rule, it  
ain't in the rule. And it's not going to be  
effective. It's not going to be enforceable. And  
there is no point. 

MR. NOBRIGA: Then get the next rule. 

CHAIRMAN RICE: Okay. But, Mike, here's one  
of the problems that I heard last night was if the  
rule as proposed is not acceptable, i.e. it doesn't  
include any language that provides relief for the  
people on the list, then it might not pass and then  
what happens is all the rate recommendations we're  
making doesn't pass. That's the risk you run by not  
having anything in there.  
 Now, we only heard from one council member,  
but we certainly heard from enough -- almost everybody  
else that was there had the same opinion about that  
issue. And you know, it just has to be defeated by a  
simple majority in the council and then it's gone and  
we've wasted our time. So I think we need to address  
it at some level.  

MR. STARR: I also feel that probably the  
board is the one that should be kind of subsidizing  
them because we're the ones who are responsible for  
not making it adequate. So it would be hard to  
justify going to the council and expecting them to  
come up with funds for that when the council wasn't  
really involved in the system not being adequate; we  
were.  

MR. HELM: Chairman Rice, I guess that's  
driving this is what's the drop dead date that we need  
to get this to the council to meet the time limit? 

MR. CRADDICK: There is no time. It's just  
that next year is an election year and you know not  
much is going to happen.  

MR. HELM: Because I guess what I'm hearing  
here is we're spinning wheels on this matter and  
whether we need to focus on initially working with  
this on the rules committee or a special meeting so  
there is two opinions here that either it goes back to  
the Rules Committee to get work or we have a special  
meeting. Because I think we're going to end up going  
around and around with this. I don't know. 

MR. MEYER: Is the person on the list or is  
the property on the list? If the property gets sold,  
is the property still on the list? 

MR. CRADDICK: Yes. Yes, the property is  
still on the list. It doesn't run with the name, it  
runs with the property. 

CHAIRMAN RICE: Actually, I think Jonathan  
made the good suggestion. I think we've got to -- we  
ought to see a draft as we just discussed and then  
we'll meet again and look at it and finalize it and go  
from there. How about that? 

MR. CRADDICK: How many are still going to be  
around for Jonathan's meeting -- or I mean Mike's  
meeting?  

MR. HIRANAGA: It would appear to me that  
maybe after the Rules Committee meets, we could  
provide the council [inaudible]. 

CHAIRMAN RICE: He said perhaps after the  
Rules Committee meets following this, they can provide  
corp counsel with more guidance on language.  

MR. NAKAMURA: Mr. Chairman, just so the  
procedures are appropriate, I wonder if we should  
refer this proposed rule to the Rules Committee since  
they're meeting immediately hereafter and have them  
deal both with the specific wording for this and the  
special rule. 

CHAIRMAN RICE: Well, we have it in this body  
right now.  

MR. TAGORDA: Mr. Chair, may I comment? It's  
very simple, the way I see it. There is no  
substantial changes on the verbiage of this rule, it's  
only the rate increases that are really probably would  
concern the council and mayor. I think we should  
submit this as is and by that time the director or you  
probably can sit in their meeting, if you guys have  
the time, and see the changes that they want and we  
can come back right away to the board. 

MR. CRADDICK: No, no. 

CHAIRMAN RICE: I think we heard pretty  
clearly we have to make some changes in the public  
hearing and I think we've just addressed those items.  
And I don't think it's a lot to get those documents --  
the document changed to include those things. It's  
not.  
 So I would recommend that we ask corp counsel  
to get the language changed, circulate it again, and  
we call a meeting and get together, give our final  
stamp of approval and send it to the mayor.  
I do think procedurally it makes sense not to  
show up at the council and say oh, here, we're on the  
agenda, here's this rule. I think we should get it in  
their hands in advance and talk to them and determine  
if there is a need to massage it because the process  
is one where yes, no, and then you've got to come back  
again. And there is a chance -- I mean, there is a --  
procedurally, if you want to deal with procedurally,  
we could recess this meeting, keep it open until we  
come back to review the rule. But we only need six  
days to notice another meeting, so. How does that  
sound? Acceptable? Okay. That's what we'll do.  

MR. STARR: Move to adjourn. 

CHAIRMAN RICE: Let's finish up the meeting.  
There is one other item on the agenda, the update on  
water issues discussed at public meetings.  
This wasn't public meeting, but I did attend  
the partnership signing of the watershed partnership  
on Lanai recently and those people were very happy to  
have our money and work on protecting the watershed in  
Lanai. And the food was really good, so sorry you  
guys missed out.  
 Is there any other business to be brought  
before the board? Yes, Kent.  

MR. HIRANAGA: There is another agenda item,  
Division Reports.  

CHAIRMAN RICE: Sorry I missed that. Yes, go  
ahead.  

MR. HIRANAGA: Can I make a comment? Is it  
possible for us to receive this prior to the meeting  
so that if we do have comments, we could make it at  
the meeting that it's for versus a month later? 

CHAIRMAN RICE: Good suggestion.  

MR. CRADDICK: It's up to you.  

MR. HIRANAGA: It's for the month of September  
and this is October 25th. So if you gave us  
information by October 15th. 

MR. CRADDICK: We're collecting these -- last  
change in this was made yesterday. 

MR. TAGORDA: Why would you make a change for  
something that happened in September? 

MR. CRADDICK: The pumpage reports and stuff  
are as of September; not everything else. The other  
stuff is pretty much effective the date of what's on  
the letter. 

CHAIRMAN RICE: Once we decide to make the  
change, thereafter everything becomes effective from  
that date forward. So I think it is probably helpful  
to the board to have it in advance and close the  
reporting as of a certain date, October 15th. Next  
month it's November 15th and so on and so forth so we  
get caught up.  

MR. HIRANAGA: In time to review it prior to  
the meetings. 

C