BOARD OF WATER SUPPLY
COUNTY OF MAUI
SPECIAL MEETING
DEPARTMENT OF HAWAIIAN HOMELANDS WAIOHULI

 
Taken at the David K. Trask, Jr., Office Building,
2145 Kaohu Street, Room 207, Wailuku, Maui, Hawaii,
commencing at 8:30 a.m. on December 6, 2001.
 
Reported By:  Rachelle Primeaux, CSR #370
IWADO COURT REPORTERS, INC.

ATTENDANCE:
Members Present:
Peter Rice, Chair
Clark Hashimoto
Orlando Tagorda
Mike Nobriga
Howard Nakamura
Kent Hiranaga
Jonathan Starr
 
Staff Present:
Ed Kushi, Corporation Counsel
David Craddick, Director
Fran Nago, Secretary
Herb Kogasaka, Engineering
Myles Fujinaka, Engineering
George Tengan, Deputy Director
Mike Quinn, Finance
Maria Isotov, Planning
         
                   *     *    *
 
CHAIR RICE:  Good morning, everyone.  I would
like to call to order the special meeting of the Board
of Water Supply.  The date is December the 6th, 8:30
a.m., HGEA Conference Room 207.  In attendance,
Members Clark Hashimoto, Kent Hiranaga, Orlando
Tagorda, Mike Nobriga, Howard Nakamura, Corp Counsel
Ed Kushi, Director David Craddick, staff, members of
the public.
 At this time, we have a quorum, and we were
going to have public testimony.  I know there are
people here who want to give some testimony, and
there's not a list, so let's do it like this.  Start
on my left, and we'll move around the room like this,
okay.  So whoever is here outside of Akaku, anyone
want to speak here, public?
 If you would come up and state your name, I know
you'll try and keep it somewhat brief.  Let the record
show Mr. Starr is present.  Nothing has happened other
than the call to order.
 
MS. GOMES:  Members of the Board of the Water
Supply, good morning.
 
VOICES:  Good morning.
 
MS. GOMES:  My name is Napua Gomes, and I'm
Secretary to the Waiohuli Association.  Thank you for
having this special meeting to resolve the outstanding
issues regarding the subdivision Waiohuli.  On October
5th, 2001, Members of the Board of Waiohuli
Association spent the day on site with Mr. Herbert
Chang of the Department of Water Supply, Mr. Kirt
Tanaka of RT Tanaka Engineers, Mr. Clifford Jamile, RT
Tanaka Engineers' Consultant and Mr. Gerald Lee,
Mr. William Makanui of the Department of Hawaiian
Homelands as well as many others that were connected
to what we believed to be the final testing for the
water system.  Except for the Kula Kai Makai booster
pump which had an oil leak, the tests for the entire
water system was a success.
 Shortly after the testing, the Department of
Water Supply, as a condition for recommending approval
of the subdivision, wanted the Department of Hawaiian
Homelands to install a new water line from the Kula
Kai tank to the Phase VI pump in Kula Kai, the cost a
quarter of a million dollars.
 I had thought this was to be an issue sometime
in the future when the Department of Hawaiian
Homelands Kula Developments exceeds its average daily
allocation of 500,000 gallons per average day.
Reference:  The Water Credit Agreement between the
Department of Hawaiian Homelands and the Department of
Water Supply dated December 9th, 1997.
 I now understand that this is the reason why the
Department of Water Supply is not recommending
approval of the Waiohuli subdivision.  The County of
Maui blames the Department of Hawaiian Homelands of
holding up the final subdivision approval.  The
Department of Hawaiian Homelands say that it is the
County of Maui Department of Water Supply.
 In these last five months, I have learned the
meaning of patience.  I thought it came with being a
responsible parent and now a grandparent.  I have
found that it comes from dealing with people of
empowerment.  Last month, the subdivision of Waiohuli
was filled with Hawaiian people.  For the first time
in almost 16 years, they were able to see their leased
land.  People of all ages held hands, prayed and
enjoyed the simple things of life and each other.
Some lessees have passed on.  They will never share
that same experience.  Please do not deny them.
 If there is pain in my testimony, it is because
of the emotions of our people spoken through these
carefully chosen words.  It is my hope and the hope of
all the lessees of Waiohuli that the Board of Water
Supply will resolve the outstanding issues today and
that the Department of Water Supply will recommend
subdivision approval for the Waiohuli Development
promptly after this special meeting.
 Thank you for the opportunity to testify before
you.  In closing, I would sincerely like to wish you
and everyone here and their loved ones a blessed
holiday.
 
CHAIR RICE:  One second.  Any questions, Board
Members?  Okay.  Moving from my left to right.
 
MR. ARTATES:  Good morning, Mr. Chairman Rice
and Board Members.  My name is Perry Artates, Chairman
of the Board of Waiohuli Homesteaders Association.
This one development called Waiohuli Residential Lots
started back in 1989 when the lessees were awarded
these 291 one-acre lots.  In early 1998, a contract
was awarded to Kiewit Pacific Company for the value of
approximately 22 million and completed in early 1999.
 On August 16th, 2001, we the Board of Waiohuli
Homesteaders Association as well as DHHL, MECO, LUCA,
Board of Water Supply, Austin Tsutsumi & Associates,
Tanaka Engineering and the County Department
Administration Directors were called to a special
meeting at the Mayor's lounge.  Issues were discussed
regarding the procrastinating delay of Waiohuli
Development.  It has come to this day as we still wait
patiently to ask for your support, Mr. Chair and Board
Members, to move and approve the cost sharing of this
1,000 linear feet of water line.
 Kula community will benefit also, not just
Waiohuli Development.  We assumed that this 1,000
linear feet of water line may be built out in the
future, for not all lessees will be occupying their
land all at once.  This item has only come up this
year in July and was not proposed in the general
plan.  Our Mayor quoted, "I don't want to hear that
the people are not on their land in two months."  It's
been four months already and going on three years
since completion.  We should be treated the same as
any major developer who goes through the process of
occupying and developing land, not making last-minute
changes when we are so close.
 Let the lessees move on their land after 12
heartbroken years.  We have lost lessees meaning
Hawaiians of old that who probably even waited 30
years or more to build a home in Waiohuli or even
those who relocated somewhere in the mainland because
of their wait.
 We've been monitoring day by the day the issues
that were holding this project up from installation of
the flow limiter, booster pump testing, final
walk-through by County water officials, DHHL and
engineers.  The list goes on and on, and lessees
passed on and on as well.
 On November 17 and 18, 2001, DHHL staff, Austin
Tsutsumi and approximately 284 lessees certified and
located their property pins with their final plat
number.  It was a glorious day for everyone for these
lessees for the first time saw, felt and smelled the
environment of their aina.  These lessees' faces
glowed as expression of true aloha spirit were felt
amongst everyone whom were there.
 So in conclusion, Mr. Chair and Board Members,
we humbly ask for your support in moving forward with
this long awaited project so that our lessees can
fulfill their dream and lay their heads to rest in
Waiohuli.
 Mahalo nui loa for allowing me to testify on
behalf of the 284 lessees and their family.
 
CHAIR RICE:  Thank you, Perry.  Any questions
for Perry?  Thank you.
 
MR. ARTATES:  Thank you.
 
CHAIR RICE:  Good morning, Mr. Mayor.

MAYOR APANA:  Good morning, Board Chairman,
Members and Water Director.  I'm here this morning
just to give a little insight of what I know of what
has transpired.  Some months ago, the homesteaders
came to my office and said, you know, things are
getting kind of bogged down.  They wanted to know what
is going on.  They wanted some straight talk.  So we
brought everyone in the room, my department, Hawaiian
Homelands, the Water Department and this was somewhere
in about August I believe.  And we discussed some
other issues that were outstanding.  And at that
meeting, we all had the understanding, and I still
believe we have it today, that we'll do everything
possible to get these people on their lands.
 I mean the roads are there.  We did upgrades to
the County to the water system.  We did everything
possible to get us to this point.  And with just a
little finagling or a little more effort I think we
could have done it.  And somewhere along the way
because of information we gave the engineers or the
way the engineers wrote the report and some of the
understandings, we're here today because of a measly
quarter-million dollars.
 And so my office through Lance Taguchi, one of
my executives, his job is to stay on top of this and
figure out what's going on and through discussion with
him and with the Department of Hawaiian Homelands, you
know, for a quarter-million dollars, we're going to
put infrastructure into the ground that the County of
Maui will own anyway.  We have three choices.  We can
somehow work out a compromise to figure out who pays
for what and somewhere near 50/50 I think is the
proper stance.
 We can go to court and point fingers to see who
is wrong, spend a whole lot of money on lawyer fees
and other things, for a quarter-million dollars,
probably won't pencil out to be a smart decision.  Or
the third thing is we can do nothing and just pretty
much lie to our people.  That's the three options.
 I just want to say as the County of Maui, as we
look at building infrastructure, let's take, for
instance, the fire station.  Why does one town have a
fire station over another?  Because it's needed.  But
why do we spend so much money on fire stations?
Because we want to make sure that our residents have
protection.  They can reduce their fire insurance.
It's very similar in Hawaiian Homelands.  We're going
to allow people to move from wherever they are onto
Hawaiian Homelands.  And as you all know, when you do
finally get your piece of property, you finally move
on, your cost of living goes down because their
housing becomes very, very inexpensive.  And it really
gives them purchasing power.  So every time we delay,
what are we doing?  We're just asking these people to
pay more for something they shouldn't have to.  We
should get them on the lands, reduce their cost of
living, give them purchasing power, let them use their
money for education for their children, for whatever
they want, whatever they decide.
 And I think spending, I think we're squabbling
over about a quarter-million dollars total.  It's not
worth the agony to put them through that because in
the end, when you look at the financial figures, we
actually lose money the longer we wait.  So I hope
that some type of decision could be done today.  I
just want to say in closing this past year has been a
good year for the Water Department and the County.
And I think next year is going to be more exciting as
we work towards securing more of the water sources
under the County or Board of Water Supply
jurisdiction, and we can really control our future of
this County.  And that's pretty much it.
 
CHAIR RICE:  Thank you, Mr. Mayor.  Any
questions from the Board?
 
MAYOR APANA:  Okay.  Thank you very much.

CHAIR RICE:  Mr. Peters.
 
MR. PETERS:  Good morning, everybody.  My name
is Angus Peters.  I'm just here to show concern about
the Hawaiian Homelands up in Kula.  I'm one of the
lessees there, and I walked through all the testing
that Napua and Perry and everybody did in the past.
But I'm here to ask if there's any way you folks can
help us or come to some kind of agreement real quick
so we can get on the land.  We always had talks about
upcountry don't have enough water, upcountry don't
have enough water.  We always have those kind of talks
for a number of years, for the last 20 years, and they
kept on building buildings up there.  They kept on
making subdivisions, you know.
 And somehow water was still provided.  And today
the Hawaiians want to get on their land to malama the
aina.  There's a stop.  There's a holdback because of
water.  But the good thing about all these droughts in
the past, nobody died of thirst, nobody died of
thirst, yeah.  So today if you folks can help us in
any way to get on the land, please help us.  Thank
you.
 
CHAIR RICE:  All right, Mr. Peters.  Any
questions of Mr. Peters?  Question of Mr. Peters?
 
MR. STARR:  Yeah, Mr. Peters, it sounds like you
have a concern that it's lack of water that's holding
the issue up.  And I just want to assure you that
there is water for Hawaiian Homes, and that is not an
issue.  There is water for Hawaiian Homes, and it will
be made available.  So there's not -- it's not a
factor of shortage of water upcountry at all for
Hawaiian Homes.
 
MR. PETERS:  I thank you, Mr. Starr.  But I'm
just asking any way we can get on the land regardless
of water, if anybody can sign one paper.  We're trying
anything.  That's why I'm here asking, maybe begging,
I don't know, but I thank you for that, sir.
 
MR. STARR:  That's why we're here today.
 
MS. ENGLISH:  Aloha, my name is Leni Hokoana
English.  I also am a Waiohuli Hawaiian Homestead
lessee, and I probably represent one of the younger,
if not youngest, leaseholders at this point.  I put in
my application with the Department when I was first
eligible, so although I look young, I would like to
say I am getting very old.  And I know that there are
many kupuna, and I'm speaking old kupuna, who have
waited many, many years to finally get to this point
where they are able to fulfill a dream of a lifetime.
 I know that the Department of Hawaiian Homes,
the County of Maui have already provided many -- I
don't even know how many millions of dollars to put
the infrastructure in to get this close to the point
where the 300-plus lessees are able to finally build
their homes.  And like many of the prior folks have
testified, we are confronted with barrier after
barrier after barrier.
 And I would like to say that I'm hopeful that
this is the last barrier that we have before us, and
it is my understanding that to me after all the
millions of dollars have been put out, a
quarter-million dollars or whatever that cost is,
seems to be very minute to be holding up final
subdivision approval.  Christmas is upon us.  The new
year is upon us.  What a wonderful way to gift those
who have waited so long.
 And I'm not going to try to pretend to know what
the minute issues are between the Department of
Hawaiian Homes and the Department of Water Supply and
how the Board of Water interfaces or has whatever
authority to make to do whatever needs to be done to
get the final approval for the subdivision.  However,
I would like to appeal to the Board to request your
support in whatever way you can to make this possible,
approve whatever funding needs to be provided.
 I was very happy to hear that our Mayor is in
support of doing what needs to be done.  He has stated
it.  His appearance here shows his support, so again,
I appeal to the Board of Water to make the decisions
to support the final approval for our subdivision.
Mahalo.
 
CHAIR RICE:  Thank you, Leni.  Any questions?
Thank you.  Any other public testimony at this time?
Yes, ma'am.
 
MS. DAVIDSON:  Aloha kakahiaka.  I'm Kealoha K.
Davidson also known as Jo K. Davidson.  I'm here as
treasurer of the treasurer of the Waiohuli
Homesteaders Association, and I would like for the
Board to consider the Mayor's suggestion.  I think it
would be hopefully feasible for DHHL to consider and
that is all I want to say.  Have a good day and Merry
Christmas.
 
CHAIR RICE:  Questions?  Okay, thank you.
 
MR. NAONE:  Aloha, my name is Jeremiah Naone.
And I know I don't look mad, but I am.  I am pissed.
But I'm grateful for you guys for being here.  Every
Hawaiian that you see that has lost faith smiles
because that's Hawaiian.  Every Hawaiian that you hear
are smiling again, but in my heart, I feel.  You guys
know how long this has been dragging on.  You guys
know what's right.
 Do what's right if you have a Hawaiian spirit in
you.  You all come here wanting to be Hawaiian, and
that's true.  Then let's do it.  Be Hawaiian.  Don't
go back.  You guys have the energy.  You guys have the
power.  And if you guys don't, go get it.  Don't slack
off.  We need your help.  We cannot do it on our own.
We're crying.
 I might look like a criminal.  Some say I do.
But I'm going tell you this.  I'm still Hawaiian.  I
still feel.  I like cry sometime.  I can feel the
spirits coming to me and telling me, "Do it, tell
them."  You guys going be punished for this, not here,
but you guys all know where.  Every one of you will be
there, and I will stand there and tell them what you
have done.  Thank you very much.
 
CHAIR RICE:  Sir, any questions, Members of the
Board?  Thank you.
 
MR. NAONE:  You're welcome.  Aloha.
 
CHAIR RICE:  Any other public testimony?  Okay.
Mr. Craddick, Mr. Soon and Lee, would you enlighten
the Board as to the minute details that were referred
to and the issues before us, please.
 
MR. CRADDICK:  In the package that the Board
got, there's a letter from Hawaiian Homes to me.  And
the item that we're dealing with is Item Number 2 in
that letter.  And I'll just read it here.  It says,
"DHHL and DWS will equally share the cost of the
development of a new water line from Kula Kai
reservoir to the Phase VI pumping facilities,
exclusive of, but not limited to, design,
construction, securing easements to the private
property.  DHHL will design, construct and secure the
easement for the project.  DWS will grant to DHHL a
dollar-for-dollar credit for the DWS share of the cost
to be applied to offset any water system development
fee for this project.  This item is contingent upon
the approval of both the Board of Water Supply and
Hawaiian Homes Commission.  We both agreed to work
diligently and immediately in acquiring these
approvals."
 These letters were November 21st.  Today is the
6th of December, so that was as diligently as I could
get it to you.  I'll go over my letter also.  Okay.
Again, reiterating, "DHHL has offered to construct a
separate water line from the Kula Kai tank to the
Phase VI Kula Kai booster pump station subject to the
Board giving the DHHL half the cost of the line in
dollar water system development fee credits to be used
as DHHL requires.
 Resolution of this matter is needed by the DHHL
before it can allow its lessees on the land.  The cost
to the Board would be in the form of water system
development fee credits in a dollar amount to use as
they see fit.  Additionally, the DHHL will need to be
able to use the excess transmission dollar credits for
source credits."
 And just let me go over that one.  I handed out
to you, it wasn't mailed to you, but I handed out the
actual water system development fee agreement from
1977.  If you go to the item Page 4, Item 2, DHHL
water credits, and I'll skip that first paragraph
there, but the second paragraph says, "Source credits,
no source credit is given.  DHHL or the appropriate
applicant will pay the source component of the water
development fee for DHHL homesites in Maui when DHHL
or applicants request the installation of each water
meter.  No source development credit payments shall be
required by DWS in advance of applying for a water
meter."
 Then Item B goes on talking about the source and
storage credits, and then on Item C on Page 5, it
talks about these additional credits.  "DHHL shall
receive from DWS an additional 1.5 million credit as
set forth in Exhibit 4.  And if you see, Exhibit 4,
it's the booster station that we're talking about
right now.  And what they want to do is be able to --
well, it says here for increasing storage,
transmission and storage capacity beyond current and
planned DWS and future DWS and DHHL needs.  The 1.5
million credit may be used to offset the water system
development fee on a dollar-for-dollar basis and then
it says for other subdivision projects, meaning not
Waiohuli/Keokea.  And I believe they want to be able
to use these for Waiohuli/Keokea, because even if the
Board agrees to this project today, the project is not
going to be built today.
 So the credits would not be available until it's
built, so they're wanting to amend this part of the
agreement to use that 1.5 million for Waiohuli/Keokea
and include it.  I'll go on with the rest of this.
 "This matter rose out of an operational problem
with the booster pump improvements provided by the
DHHL at the Kula Kai tank."  And I'll go into those
issues there.  Number 1, "DWS staff provided
information that has been found to be inaccurate.  In
addition, the DHHL made decisions that have turned out
to be problematic in the operation of the booster
station."  And the basic issues that I see are when
someone builds onto the system, they can only be
allowed when done without detriment to existing
customers.
 "DHHL chose to locate the pump station on Board
of Water Supply land to save costs rather than locate
the pump station downstream of our pump station."
That's Phase VI pump station.
 "DHHL chose to locate the storage tank that the
booster station feeds to below the hydraulic grade
line of the transmission line.  This serves to put a
vacuum on the transmission line that the pump station
must overcome as well as providing positive pressure
so the line does not go below 40 pounds pressure.  The
transmission line friction factor provided by the DWS
was not verified and turned out to be inaccurate.  The
combined effect of the wrong friction factor and
location choices for the improvements constructed by
the DHHL resulted in a pump station that will not work
when the DHHL project is fully built out."
 We were requiring the DHHL to put in a separate
line to the booster pump station; thereby, eliminating
this demand from the DHHL's pump station with pro-rata
cost sharing according to future demands.  Now, it's
difficult to determine what those pro-rata costs will
be out in the future, and that's why in a compromise
between Ray and myself, we each decided to go to our
respective boards and present this 50/50 cost
sharing.  And then further, they came back and said
the Water Board will not have to pay out-of-pocket to
build this line, but they'll take credits for it.
 So basically, these credits I would expect would
spread over the probably 15 or so years before
everybody moves into this project.  So should the
Board be willing to accept this offer, because we
don't have an agreement sitting right in front of you
with these amendments to the existing water credit
agreement, we would ask that you give authority to the
Chairperson to sign an amendment with these features
covered.
 Number one, that they get 50 percent of the
credits for this project, and as the Mayor said, we
expect it to cost somewhere between a quarter-million
and maybe a half-million dollars, and change Item C of
the existing agreement to allow the existing
additional credits that they have to be used for the
Waiohuli/Keokea project.  And that's basically it.
 
CHAIR RICE:  Members of the Board, we had
another meeting at 9:00, so I'm going to recess this
meeting if there's no objection.
 
(Recess taken.)
 
CHAIR RICE:  Call back to order the meeting on
the Hawaiian Homelands.  Okay, Mr. Soon.

 
MR. SOON:  Chair Starr and Members of the Board
of Water Supply, thank you very much for holding this
special meeting.  I didn't come prepared to argue the
detailed differences between what we did, they did,
who said what, who said this.  I think the bottom line
is we feel that we can move on if we get people on the
land.  David and I have worked out an agreement that I
think works.  We did discuss it with the Mayor.
 I'm really here to answer any questions.  I'm
not here to dispute anything.  I will say that
everything we did along the way was in partnership
with the Board of Water Supply.  We appreciate your
support.
 
CHAIR RICE:  Mr. Starr.
 
MR. STARR:  You know, apart from the issue of
dollars, credits and all of that, what is needed to be
done on the part of the Board or Department to
expedite people being able to get onto the land?  You
know, let's put aside the issues of, you know, money
and credits and just say what can we do at this point
to get the people as expeditiously onto their property
as possible?
 
MR. SOON:  If you agree to the proposal made by
Mr. Craddick, as I understand, he will sign off on the
subdivision agreement.  That goes immediately to DLNR,
and we have already worked that side of the table.
That's really all you need to do is to vote to agree
to this compromise that we've come to.
 
MR. STARR:  To just clarify what we need is for
the Director to sign off on the subdivision approval;
is that correct?
 
MR. SOON:  That's correct.

CHAIR RICE:  Mike.
 
MR. NOBRIGA:  I need assistance with this
because I have identified six matters that are before
this body, not in any particular order, but let me go
through this list, and you guys correct me if I'm
wrong.
 First is we need to agree to the amendment of
1997 agreement.  Second is something to do with the
booster pump that, I don't know, that doesn't work
properly or something.  Three is a request of an
extension of a transmission line.  Four is agreements
to use first transmission credits for the construction
of the transmission line.  Five is approval of the
subdivision of Waiohuli, and six is the other
applicants on the Director's waiting list for meters
upcountry.
 
CHAIR RICE:  Mr. Starr.
 
MR. STARR:  Mr. Chair, I want to comment that
I'm very upset about this whole issue being before
us.  And there are two occasions in the last six
months, one was on a site inspection by Operations
Committee that went through part of the system, and
then a couple of months later where I had asked the
Director whether there was anything relating to the
Board or Department that was holding up the project.
And both times I had been told no, you know, we've
done everything, that it was simply a matter of DHHL
and their contractor and some technical matters with
the booster pump and that it wasn't involving us.  And
I'm, you know, it saddens me to find out that that was
wrong information and that we are at this point and
have been holding up the Waiohuli project and the
ability of people to get on the land.
 You know, I want to be sure that whatever
happens today we, you know, we don't hold the project
up anymore.  You know, it sounds like, you know, it
sounds like this is a good compromise, but, you know,
it may be complicated.  It may have to be written out
and dealt by the attorneys.  The Hawaiian Homes
Commission is not a fly-by-night organization that's
going to disappear.
 I feel we can, you know, work on that matter,
you know, and get the I's dotted and T's crossed, but
I just want to be sure when we leave here today, the
first act that the Director does is to sign off on the
approval of the subdivision, because we do not need to
hold Hawaiian Homes hostage.  We do not need to hold
these people hostage.  Fate has done that for much too
long as it is.
 So whatever happens today, let's separate out
the issue of their subdivision approval, because, you
know, these corrections in the system are not needed
today.  They'll be needed in a couple of years.  And,
you know, we can work on the documentation while these
people can get into their lands.
 
CHAIR RICE:  Okay.  Thank you, Mr. Starr.  Any
other comments from Members of the Board, questions?
 
MR. TAGORDA:  Mr. Chair.
 
CHAIR RICE:  Yes.
 
MR. TAGORDA:  Can I ask a question.  Why is it
that DHHL doesn't want the lessees to the land get
into the land for what reason?  Because you want the
problem to be solved first, is that what it is, the
new transmission line should be in place?
 
MR. SOON:  Like any developer, private or
public, at the end of the day, the infrastructure,
roads, water lines, et cetera, they get passed onto
the County property.  And in our case, it's a little
bit more complicated, and the bottom line is the same
thing that occurs, that doesn't occur.  We don't take
responsibility for it.  And that's what the
subdivision signed off on.
 And so if we were to get onto the land and
something were to happen, the responsibility for
anything that occurs would come back to us, would go
back to the trust.  Again, we're just asking in the
fiduciary manner that any developer does, and that is
get all of our approvals, get it all settled, get it
all finalized before we allow lessees onto the land.
 We already have some compromises in allowing
access before the subdivision was approved.  We are as
anxious as they are to get final subdivision approval
so we can permanently move on.  I don't think any of
us, none of you on the Board, certainly none us at
DHHL wants to hold this up any farther.  If you go up
there, the infrastructure is done.  We're talking
about a line off-site that we can deal with
separately.
 
MR. TAGORDA:  And I kind of listened to the
Mayor's comment, and he mentioned about the 50/50 cost
sharing of this water line.  And I kind of tend to
agree with that, but my problem is for DHHL to get
some transmission credit and dollar -- or half of what
you guys are going to spend for the transmission line;
is that right?
 
MR. SOON:  Uh-huh.
 
MR. TAGORDA:  But if the Board will probably
just compromise that we share the cost of that water
line, you folks don't --
 
MR. SOON:  No, we agree.
 
MR. TAGORDA:  You agree without the water
credits, that's what I'm talking about?
 
MR. SOON:  Without the water credits?
 
MR. TAGORDA:  Yeah.  Because if I -- I don't
want both parties to be pointing fingers.  I know
mistakes have been done in the past about this
project.  You need to correct the problem before the
Department will have to give you the final subdivision
approval.  And they cannot accept a flawed project.
That's why these thing came out.  So now because of
the water credits that you folks are asking, I have a
little bit of problem with that though.
 
CHAIR RICE:  Okay.  Mr. Craddick and Clark and Howard.
 
MR. CRADDICK:  In this situation here, this is a
compromise that I'm recommending to the Board.  Now,
they agreed that they would do a pro-rata share later
on.  The problem is determining a pro-rata share later
on, when a pump line is needed, it's argumentative
because you're, number one, you're trying to shoot for
a moving target; number two, you're doing this design
for speculative demand that you're trying to guess
what the system will require to determine that
pro-rata share.
 That speculation we're moving aside, and we're
saying let's just share it 50/50.  And they just came
back and said, hey, Water Department, you're not going
to have to take anything out of pocket.  We'll do it
all.  We just want some credits for half of it, which
is that pro-rata share.  To me, Orlando, we would have
to pay a share anyways because some of that
improvement is going to be part of our demand also.
 
MR. TAGORDA:  Okay.  To expedite the matter,
Mr. Chair, excuse me, to expedite the matter, David,
these people here, can they go in tomorrow and build
what they need to build without doing anything right
now because you won't feel the effect of that flawed
construction that's not been done?
 
MR. CRADDICK:  That's correct.
 
MR. TAGORDA:  Okay.  So --
 
MR. CRADDICK:  I don't want to say tomorrow.
 
MR. TAGORDA:  What I mean is expedite the matter.

CHAIR RICE:  I want that question answered
clearer.  That was my question.  So if we were to give
subdivision approval, the lessees could move into
their land.  And I'm assuming that whatever other
approvals you need to get, you can.  And I'm talking
about, yes, the answer to that question is question
yes?
You say yes.
You say nothing.
 
MR. CRADDICK:  Well, are you saying without
agreeing to something here?
 
CHAIR RICE:  No, no, I'm saying without doing
any other physical improvements.
 
MR. CRADDICK:  We don't have to do anything
physically today, that's correct.
 
CHAIR RICE:  That was your question?
 
MR. TAGORDA:  Yes, thank you.
 
CHAIR RICE:  Okay, Clark.
 
MR. HASHIMOTO:  My question is along the same
lines.  Can we ask corp counsel to see what needs to
be done so we can expedite because Mr. Nobriga, we
have all these issues that need to be settled.  And we
can't -- you know, we all agree that we want Hawaiian
Homes to move in.  I've been asking for the last six
months when they're going to move in.  And this is
just as frustrating for us as it is for them.
 But how can we legally do it that will expedite
the process as fast as we can so they can move in and
get approval?  We can make a motion, but will that
suffice?
 
CHAIR RICE:  Go ahead, David.
 
MR. CRADDICK:  Again, the adjustments that were
made to the booster pumping station are such that the
pump station will now operate without cavitating.  We
know 400 families are not going to move in; if I sign
the agreement today, they're not going to move in
tomorrow.  So we know that demand is not going to
suddenly jump up in the next one or two years.  So
there's no problem with them moving in and this thing
being constructed.
 But before the total build-out of this, it will
have to be constructed so as to not affect the
existing customers.  So this is an outstanding issue
that needs to be resolved where the rules require when
we approve a subdivision, it's without detriment to
existing customers.  That's what you're trying to
resolve here now is without detriment to the existing
customers.
 If you say we're going to do this agreement,
then there's no problem.  We don't have to have a
signed agreement right now today.  As Board Members
said, Hawaiian Homes is not going away.  But as long
as there's a meeting of the minds, I can certainly
sign off on that subdivision agreement.
 
CHAIR RICE:  You said without detriment to
existing customers.  You mean without detriment to
existing customers years down the road?
 
MR. CRADDICK:  No, existing customers now when
they're fully built out.
 
CHAIR RICE:  But they're not going to be fully
built out, that's what my point is.  Howard had a
question.
 
MR. NAKAMURA:  I'm just trying to understand the
sequence of events here.  If we approve this
agreement, that would then permit the Department to
grant final subdivision approval, which would then
permit Hawaiian Homes to get building permits for the
project?
 
MR. SOON:  There's a step in between, the Bureau
of Conveyances.
 
MR. NAKAMURA:  The lots have been conveyed to
the lessees already, and they're waiting to move onto
the property and start building?
 
MR. SOON:  The building permits come from the County.

MR. NAKAMURA:  Right.
 
MR. SOON:  The building permits come from the
County.  And so after your approval and LUCA's
approval is the final sign-off.  Their approval comes
to us, goes to Bureau of Conveyances, and again,
that's a couple of days at the most, comes back to
issue permits.
 
MR. NAKAMURA:  And so when will this line
actually be built?
 
MR. SOON:  Probably over the next six months.
 
MR. LEE:  It has had to be designed first.  We
have to get the easement through Haleakala Ranch, and
I expect design to be under construction within a year.
 
MR. NAKAMURA:  So if there are users, if there
are occupants on the property, people residing on the
property and the line has not yet been completed, is
there a any kind of negative to that, David?
 
MR. CRADDICK:  We don't -- with the design
that's there right now, we don't -- realistically, we
don't see -- even if 100 people moved in each of these
two years, there wouldn't be a problem.
 
MR. NAKAMURA:  Okay, thank you.
 
CHAIR RICE:  Mike.
 
MR. NOBRIGA:  So the -- let me ask Mr. Craddick
the points of Mr. Soon's letter to you of November
21st, are you saying that that is acceptable?
 
MR. CRADDICK:  Yes.
 
MR. NOBRIGA:  With no additions, the additions
to this letter, to Mr. Soon's letter?
 
MR. CRADDICK:  I don't believe there's anything
additional.  They talked about the easements, if
they're going to get the easements and things like
that.  I think the easement for the transmission line
going to Naalae Road over to Hawaiian Homes is
something, but again, I don't see that as being an
issue that would hold this up.
 
MR. NOBRIGA:  Mr. Chairman, I'm prepared to make
a motion to accept provisions of this letter.
 
CHAIR RICE:  Subject to final review by corp
counsel.
 
MR. NOBRIGA:  Yeah, all that stuff.
 
MR. HASHIMOTO:  Second.
 
CHAIR RICE:  Okay.  Now, we have a motion to
accept the proposal as submitted, and we're talking
about Mr. Craddick's proposal?
 
MR. NOBRIGA:  No, Mr. Soon's proposal.
 
MR. CRADDICK:  That's not going to cover it,
Mike, because they want to be able to use the
transmission credits additional I think for source
credits, so that has to be part of it.

CHAIR RICE:  Okay.  We have a motion and a
second to accept this, Mr. Soon's letter.
 
MR. NOBRIGA:  Yeah.
 
CHAIR RICE:  Okay, discussion.
 
MR. STARR:  Yes, Mr. Chair.  I want to be clear
that if the motion passes, that the Director will
forward his approval of subdivision on this very
date.  I would like to hear that from the Director.
Is that a yes?
 
MR. CRADDICK:  Yes.
 
CHAIR RICE:  Okay.  So your question was would
the Director upon approval of the motion sign off on
the subdivision approval, and he said yes?
 
MR. STARR:  Today.
 
CHAIR RICE:  Today, okay.  Mr. Soon, has the --
I guess one of the comments in the letter was it
needed approval by this Board and the Hawaiian Homes
Commission.  Has that been approved?
 
MR. SOON:  The -- in my discussions with the
Attorney General, I have the authority to approve
this.  The reason for the requirement that it go to
the Commission is that this is the largest project
we've ever done, 22 going on $23 million.  I have,
therefore, kept my commission informed of every
decision when it's made; however, I have told them by
phone this is a decision I have the authority and I
will make.  And if you approve this, we're approving
it.  It will be reconfirmed December 18th, but I can
almost assure you that it won't be returned.
 
CHAIR RICE:  Okay.  Well, that's a weight to
rest on your shoulders I guess.  Okay.  Now, the Board
understands we're voting on approving Mr. Soon's
letter, the terms of Mr. Soon's letter.  The Board
understands that we have not addressed the source
credit issue yet, okay, that's not part of the
motion.  Okay.  I see some hands still.  Go ahead,
Kent.
 
MR. HIRANAGA:   I just wanted to comment at a
subsequent meeting I would like to get a better
understanding as to the chain of events that led to
this situation if the Department can provide that to
us.
 
CHAIR RICE:  Mr. Craddick.
 
MR. CRADDICK:  Okay.
 
CHAIR RICE:  Mr. Starr.
 
MR. STARR:  Yeah, it's my understanding that as
soon as possible in a committee, we can do what
Mr. Hiranaga requested, and also we can deal with
whatever other issues are required regarding credits
or any other housekeeping matters related to this.
 
MR. CRADDICK:  No, no, that's not correct.  If
we're going to sign off on this subdivision and these
people are going to move in tomorrow, the existing
agreement says they have to pay the source portion of
the development fee.  I believe Hawaiian Homes wants
to credit them for that.  They cannot credit them for
that if they have no money to credit them with.  So I
believe they want to be able to amend.  That's why I
have that sentence in my letter, "Additionally, DHHL
will need to be able to use the excess transmission
dollar credits for source credits."
 That issue has to be dealt with I think right
now, otherwise, all of these guys are going to be
paying the source portion of the fee out, and I think
that's something that they want to resolve, I think.
I don't know.
 
MR. STARR:  Mr. Chair, I believe I had the
floor, Mr. Craddick, so let me continue.  It's my
understanding that we are approving that in principal
with the motion.
 
CHAIR RICE:  That's why I clarified the motion.
The motion does not state that.  The motion states
that we are approving the terms of the letter provided
by Mr. Soon to Mr. Craddick that is dated November the
21st, and unless I missed something, I don't believe
that's in there, is it?
 
MR. CRADDICK:  No.
 
CHAIR RICE:  Okay.  So I wanted to make sure
that the Board understood what they were voting on,
what the motion is, so it can be dealt with in a
second motion.  And it can be dealt with now, but
that's up to you.  Mr. Nakamura had a question.
 
MR. NAKAMURA:  I just wanted to ask Mr. Soon to
clarify this, the line will be built in the forthwith,
within a year or so, it will be started, could you
confirm that?
 
MR. SOON:  I hate dates.  I mean it keeps
pushing us back.  We fully intend, we know it's the
need of the Department and the Board of Water Supply.
We've already discussed amendments to our engineering
contracts.  Are we going to break ground in a year?  I
sure as heck hope so.  I don't know that anymore than
assuring you that we will put every effort into it.
 
MR. NAKAMURA:  That's it for me.  One comment,
Mr. Rice, in addition to that.
 
CHAIR RICE:  Go ahead.
 
MR. NAKAMURA:  I really strongly support this
motion, and I guess one of the reasons is that one of
the gentlemen testified, said we needed to look into
our hearts.  But because if we look into our minds,
it's very difficult to support this because I think we
don't have enough information as usual.  We don't have
any maps.  We don't have any background, and I think
this is clearly a case where we look at the
participants, the Department of Hawaiian Homelands and
I think we're proceeding on faith.
 But I really think that we need when we're asked
to do something like this on such short notice, you
know, we need to have more information and we need to
have a better analysis and we need to have maps and
it's real difficult, but nevertheless, I'm prepared to
support this project.
 
CHAIR RICE:  Any other questions?  Just for
point of clarification.  I did hear Mr. Soon say when
asked a question earlier that he didn't anticipate
construction of this line to start for a year, until a
year, so we heard six months, but that's not what he
said.  Again, the Board realizes the voting on this
letter, what's contained in this letter, it does not
deal with the source credit issue.  Ready for the
question.  All in favor, say aye.
 
VOICES:  Aye.
 
CHAIR RICE:  Opposed, say no.
 
(No response.)

CHAIR RICE:  Motion is carried.  Mr. Nobriga.
 
MR. NOBRIGA:  The issue of amending the water
credit agreement, I did not include that in my first
motion because I didn't feel that was needed for the
Director to sign off on approval of subdivision.  I
understand that Hawaiian Homelands would like to amend
the water agreement, water credits agreement, and I
would have no problem supporting such amendment, but I
would prefer if I saw the amendment in writing before
making a motion to approve an amendment.  I mean it's
kind of hard to approve an amendment when you don't
know what the amendment says.
 
MR. CRADDICK:  I can handle that right now.  All
it will do is delete the words "For its other
subdivision projects."  It will say, "On a
dollar-per-dollar basis for projects in the County of
Maui where the DWS system is adequate and water is
available," so that wording "For it's other
subdivision" would be deleted.  That's all.
 
MR. NOBRIGA:  What page were you on?
 
CHAIR RICE:  Mr. Soon.
 
MR. CRADDICK:  Page 5.
 
CHAIR RICE:  I have to agree with Mr. Nobriga.
It's awfully hard for us to vote on an amendment to an
agreement, existing agreement that's not been
presented and has not been reviewed by the corp
counsel.  And I think that we have put in motion what
is necessary for the lessees to get subdivision
approval, and it appears that there are other issues
that we have to work on with regard to this.
 
MR. STARR:  Mr. Chair, I don't even have a copy
of the original agreement, so I have no idea what
we're even amending.  My brain doesn't work that fast,
I'm sorry.  You know, I think -- in principal, I
think, you know, I would certainly be supportive of it
but I do want to be sure we do it in a legal and
proper way, and we can handle that in a committee.
That's a matter that another week or two won't affect,
won't affect anyone in any way assuming that the
Director does keep his word and issues a subdivision
approval today, which I just want one final
confirmation that he's going to do, David.
 
MR. CRADDICK:  Yes.
 
MR. STARR:  Say it loud.
 
MR. CRADDICK:  Yes.
 
CHAIR RICE:  Let the record show Mr. Craddick
answered in the affirmative.
 
MR. SOON:  Mr. Chair, I agree with Mr. Starr, we
can take it up at a later date.  I would request that
the Board Member asked for a detailed discussion of
the events that led to the point we're at.  We would
like to participate.  We have spent somewhere on the
order of $65 million in Maui County in the last five
years.  We expect to spend at least 20 more in the
next two years, so there's an ongoing relationship
that we would like to grow and foster based on your
understanding what we're doing right, what we're doing
wrong and our relationship with the Board, with the
Department of Water Supply as well as the Board, so if
we may have not participated in parts of the
discussion, we intend to.
 
CHAIR RICE:  Mr. Soon, I think speaking for the
Board, we would be happy to have you participate in
that discussion, so we will notify you at that point,
and so the motion is passed.  We're going to work on
the source credits, and the committee will come back
to you.  Any other issues with regard to this?
Meeting is adjourned.
 
(The meeting concluded at 9:30 a.m.)

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