BOARD OF WATER SUPPLY COUNTY OF MAUI FINANCE COMMITTEE BOARD OF WATER SUPPLY COUNTY OF MAUI FINANCE COMMITTEE MEETING Taken at the David Trask Building, Conference Room 205, Wailuku, Maui, Hawaii, commencing at 9:00 a.m. on January 9, 2002 pursuant to Notice. REPORTED BY: GLORIA T. BEDIAMOL, RMR/RPR/CSR #262 IWADO COURT REPORTERS, INC. A P P E A R A N C E S Members present: Howard Nakamura, Chair Clark Hashimoto Mike Nobriga Jonathan Starr Orlando Tagorda Peter Rice Kent Hiranaga Staff present: David Craddick, Director George Tengan, Deputy Director Mike Quinn, Fiscal Officer Herb Kogasaka, Engineering Herb Chang, Engineering Blaine Kobayashi, Corporation Counsel Fran Nago, Board Secretary Others present: Mo Kanaio Eric Fredericksen Gerald Lee Myles Fujinaka Wendy Taomoto * * * CHAIRMAN NAKAMURA: I would like to call the meeting to order. This is a meeting of the finance committee of the Board of Water Supply. It's Wednesday, January 9, 2002. We're meeting in the HGEA conference room, David K. Trask, Jr., Office Building, room 205, in Wailuku. Present this morning are committee members Peter Rice, Clark Hashimoto, Mike Nobriga, and myself, Chair Howard Nakamura. In addition, we have Board Member Jonathan Starr; George Tengan, deputy director; Mike Quinn, fiscal officer, and others that will be noted by board secretary Fran Nago. I would like to welcome you all and wish you a Happy New Year, those of you that I had not had the opportunity to do that before. There are no minutes to approve, so we'll move on to item Roman 4, Testimony From the Public. We, I guess, coincidentally, have the same situation we had at yesterday's special board meeting where we have a member of the public, Councilman Bob Carroll, who wishes to testify on an item that's on the agenda. Unfortunately, because of problems with the lift, he is not able to come to the meeting room, and so I would like to recess the meeting and reconvene downstairs for the purpose of taking Mr. Carroll's testimony, following which we'll return to room 205 and proceed with the rest of the meeting. So we'll recess until we go downstairs. (A recess was taken.) (At which time the meeting convened in the courtyard.) CHAIRMAN NAKAMURA: I would like to reconvene the meeting of the finance committee. We're in the courtyard of the HGEA office building in Wailuku. Councilman Robert Carroll would like to present testimony on an item on the agenda. We apologize for the inconvenience, Councilman. I'm sorry that it's necessary to do this, but I hope you'll understand. MR. CARROLL: I appreciate everyone coming down. For the record, I'm Robert Carroll from Hana, Maui County Council. The only thing I'd like to address this morning is the Haneoo project. A lot has been said about it. As you know, the current status of it right now -- we need that project. There's been some opposition to it. Everyone has Mr. English's letter and his rationale. However, this rationale, I don't think it holds up. The bottom line is, it's a safety issue. I could really stress it by bringing Matthew Kalalau over here. His house burned down there. We had the fire department at that time. We had one man that went and brought down the truck. The truck didn't have adequate water; everybody watched the house burn to the ground. We need to have adequate water down there. It's a safety issue. It's our people. That waterline has been inadequate since I was going to school in the '50s, and it's still inadequate. We need to serve our people. This project has gotten this far, and I would hope that the board would consider everything and put safety first and put our people down there that have been waiting -- well, I'll be conservative and say 40 years, to have the line updated. And it's been longer than that. But they have never had adequate service down there. Ever. And it's about time that it is upgraded, and it's about time that we do take care of it. And I hope that you will consider this and vote in the affirmative as for this project. Thank you. CHAIRMAN NAKAMURA: Thank you, Councilman Carroll. Does any of the committee have any questions for Councilman Carroll? Or board members? If not, thank you very much, Councilman Carroll. We apologize for the inconvenience. The meeting will be reconvened in room 205. (Whereupon the board reconvened in Room 205) CHAIRMAN NAKAMURA: We're reconvening the meeting of the finance committee of the Board of Water Supply. We're back in room 205, and we'll proceed with the agenda. At this time I would like to ask if there are any members of the public who wish to testify on any item which is either on the agenda or not on the agenda. You have the opportunity to testify now, or if you would like, you can wait until the item comes up on the agenda. However, we certainly would welcome anyone who wishes to do so at this time. MR. KANAIO: I would like to give brief testimony. CHAIRMAN NAKAMURA: Would you please state your full name and address for the record? MR. KANAIO: My name is Mo O. Kanaio, my address is HC 1 Box 66, Kula, 96790. I live in Kanaio. CHAIRMAN NAKAMURA: Thank you. MR. KANAIO: In my 31 years of residency in the Kanaio area, I have never seen the water pressure as bad as it is -- as it has been for the last several months. I have not gotten any water for two, two and a half months and the situation is the same with the Ulupalakua Ranch reservoir, which is kind of what my water depends on. After speaking to Roy Silva, the maintenance supervisor, I was told that -- their opinion is that the problem is the increased usage. That, I think, is an incorrect assessment, because recently we have been getting rain for several days at a time and people, of course, use less water when it's raining. And I have also checked the big tank at the strawberry farm and its full. So that seems to point out that the problem is not so much with the usage, but with the degradation of the line. With as little usage as there has been -- that there would be during this period, it seems like there should be something coming through and there still isn't. My request would be that the water department go out there and turn some valves off and create some back pressure and check -- I would assume they would come in the daytime when there is usage, and it might be less easy to see leaks in a situation like that; but if they created some back pressure and took a careful assessment of the line, they might find some leaks and be able to make some improvements. CHAIRMAN NAKAMURA: Okay. Any questions from members of the committee? MR. HASHIMOTO: So you said you had no pressure sometimes, or low pressure, or no water at times? MR. KANAIO: No pressure, no water. MR. HASHIMOTO: No water? MR. KANAIO: Right. MR. RICE: Does it happen at a certain time of the day? Do you notice any pattern to it? MR. KANAIO: No time of day is there any water getting to me. MR. RICE: No time. You are getting none? MR. HASHIMOTO: None. MR. KANAIO: Right, um-hm. I'm above the line, so I understand that there's a different situation there. CHAIRMAN NAKAMURA: Any other questions? Comments? Mr. Kogasaka? MR. KOGASAKA: What's the tax map key of your property that's been served? MR. KANAIO: It's parcel No. 41 in the Kanaio tax key area. I don't know it off the top of my head. Right around the Kanaio homestead area. CHAIRMAN NAKAMURA: And did you want to say anything, Mr. Deputy Director? MR. TENGAN: I was just asking Herb a question, whether he knows he has water service under an elevation agreement. MR. KANAIO: Yes, I do. MR. TENGAN: Okay. CHAIRMAN NAKAMURA: Okay. Any other questions or comments? MR. RICE: What does that mean? MR. TENGAN: When a consumer is provided service under an elevation agreement, the department doesn't guarantee or provide any guarantees as to quantity and line pressure. CHAIRMAN NAKAMURA: It's basically an acknowledgment that service may be inadequate. MR. KANAIO: I understand that. I'm hoping that some steps might be taken to improve the situation, because there are people affected besides myself. CHAIRMAN NAKAMURA: We do have a project to upgrade the transmission line from the Keokea area. I'm not sure as to the timing of that, it's in design now. And I'm not sure what the ultimate impact will be down to Kanaio, but the board is aware that there's an area that is under -- experiencing difficulties. MR. TENGAN: Mr. Chair, for the board's information, we did go out to Ulupalakua and we did some slight, small improvement in the area. What we did was we extended -- I believe it's a 4-inch line that goes up to the tank he is talking about that feeds the strawberry farm. When the strawberry farm draws water and water goes into the tank, what happens is it's basically sucking all the water at that point. What we did was we increased the line size about 400 feet beyond the strawberry farm; so when they -- when water is going to the tank that services the strawberry farm, at least it will provide an opportunity for water to flow downstream also. MR. KANAIO: I'm aware of that. But as I said, even with that tank full, it has not improved the situation. MR. TENGAN: All I'm saying is that we're not ignoring the problem. We are looking at the problem and trying to do what we can within our means to improve the situation. MR. KANAIO: I understand. CHAIRMAN NAKAMURA: Thank you, Mr. Tengan. Thank you for your testimony. MR. KANAIO: Thank you. CHAIRMAN NAKAMURA: Anyone else who wishes to testify? I know there were some people who came in late. We're taking testimony, public testimony now on any item on the agenda, or on any item that you may wish to address the committee on. Anybody wish to testify at this time? No? Okay, let's proceed with the agenda. Roman 5, we have several items. First is a progress report on the Hans Michel situation. Mr. Rice has volunteered to oversee progress on this issue. Mr. Rice, do you have anything? MR. RICE: I did meet with Hans, and I did walk the property and I went up to the intake, and I actually took pictures. That's why I brought my computer, if people want to get a feeling for the property or have not seen the intake. Intake to a layperson may connote some kind of fancy device that brings water down, but it's not. Not to say that it's not adequate, by any means. Intake is simply intake; it's where the water comes in. After the large rains, we had -- recently we had to bring the big equipment up to the intake to clear it out. I don't know if you know what happens when we have a huge rain, the rocks all come down and they fill up the intake collection area, and heavy equipment needs to go up there to clean it out. I mean big equipment. Tract equipment. It has to cross the stream several times. One of the issues with Mr. -- I don't know if you guys want to look at these pictures or not, it shows his property. But one of the issues is this hill. You have to look at it. Mike, why don't you come on around here. It's this hill. You come up the property through Lahainaluna and you come under this flume and you cross the stream once, then go up the hill, past his house, you go around, you cross the stream again. The road turns left and you go up this hill and the tract equipment has to go up here, and our pipe comes down this hill right here. And so in the previous efforts to bring the equipment up, we had to build a board structure over the pipe, as not to break it. This time they brought a load of gravel and dumped it, and effectively covered the pipe so it was safe for the tract equipment to go over. But it created a steep pitch here. This is one of the roads that he is talking about, that we promised to bring -- fill -- not fill, but -- MR. NOBRIGA: Blacktop, maybe. MR. RICE: No, not -- it's just a -- MR. NOBRIGA: Gravel? MR. RICE: Gravel, right. We go over the hill. This is the pump site and of course it was wet. And the other thing he complains about is our trucks turn around in front, which is not part of an easement, in his mind. That's another look from further back at it. So we turn around here and our easement is behind it. This is the intake. And when the heavy rains come, this fills up with rocks and we have been pushing the rocks off to the side this way and there's -- a gigantic mound is created. So in the future, I don't know where we're going to be putting all of this material that gets pushed out of the intake. But the tract vehicle comes up here and crosses the stream, and it comes on this side to clean out the intake and the pitch now, because there is so much rock that's been pulled out of this, the pitch out of the streambed is very steep. That's the actual intake, the other side of it. So we brought gravel up for the purpose of bringing our equipment up, but we have not done anything else at this point. And I know that one of the staff members talked to him, but I don't know what progress was made. CHAIRMAN NAKAMURA: Any other comments or questions from committee members or staff? Mr. Starr? MR. STARR: I just want to ask Peter, is it possible to take all of that excess rock and build a proper -- truck it over to where it's got to cross that pipe and build a -- like build a bridging out of there and then build a good turnaround with it? It just seems like you have a problem with less material there and more material over there. MR. RICE: I should have taken more pictures because the intake is way up the valley. MR. STARR: It's like an hour or something? MR. RICE: It's a good hike. It's through the woods and crosses the stream several more times. And Hans is now retired, so more he's going to be calling me. He has all kinds of ideas of how to fix the whole thing. At one point we had a swinging bridge, so that when the water was high he could still go up and check the intake. But the swinging bridge was destroyed during the heavy landslide a few years back. So there's certainly a considerable amount of money that needs to be expended there to conform with our part of the agreement. If we got a signed agreement, I guess we need to do it. We are dragging our feet. For what reason, I don't know. But outside of hiring a helicopter to bring somebody up to the intake when we need to, you got a guy sitting right there who knows the land and he knows the history of that intake and he might have some -- he has some pretty good ideas, actually. CHAIRMAN NAKAMURA: Okay. So we can depend on Peter to continue to follow up on the situation? MR. RICE: Yeah. CHAIRMAN NAKAMURA: Any other comments or questions? Let's move on. Next item is Director's 01-55. Request for additional funding for Keokea Lateral Phase I. Mr. Tengan? MR. TENGAN: I believe this is the project that was deferred back to committee by the board at the last meeting. The staff report has been prepared. There is no further information to be provided. CHAIRMAN NAKAMURA: Would someone like to summarize the staff report? MR. KOGASAKA: The contract was bid. I think it's in the previous report that the bid came out at 423,000, requesting funding for additional -- additional funding to do the entire project. This is Phase I of two phases. And the second phase is in design right now and we would like to get that out to bid as soon as we can as well. We have provided additional maps and information as to the background of the project. The reason it's going in this phase is because the design for that section along the road is completed. The second phase will -- there's a change, realign along the Cross Road down to the project, and that we hope to get out in the very near future. At this time we would like to encumber the funds so we can award the contract. CHAIRMAN NAKAMURA: Mr. Quinn? MR. QUINN: Mr. Chairman, this project was within the lump sum pipeline appropriation that the board approved for this fiscal year's budget. We anticipated, I believe, $400,000, but I think our engineering staff is requesting an additional 47,000. CHAIRMAN NAKAMURA: Thank you. And there was reference made to the fact that these are bond funds; is that correct? MR. QUINN: That's correct. CHAIRMAN NAKAMURA: The entire amount? MR. QUINN: Yes. CHAIRMAN NAKAMURA: Mr. Rice, you had a question? MR. RICE: I want to pursue that line of questioning that Mr. Starr raised earlier, I mean at the board meeting, which is, where does this line tie into what, and it looks like from this new drawing that you were tying into the 8-inch upper Kula pipeline. Is that right? MR. KOGASAKA: There's a 6-inch line that comes -- MR. RICE: I see that. And that was going to be my -- MR. KOGASAKA: Yes. And that -- yes. MR. RICE: The 6 inch is going to feed -- Phase II is another 8-inch line? MR. KOGASAKA: Yes. MR. RICE: So the 6 inch will come off the 8 inch from upper Kula and it's going to feed Phase II down to Phase I; right? MR. KOGASAKA: Yes. MR. RICE: But in effect, we're going to do -- I think what you are trying to tell us is that while we have gotten Phase I to bid, we're going to try to do Phase II as quickly behind it or concurrently so it works, because the logic of doing the bottom end first is escaping us, and that's what is one of the major questions that we had at the last meeting. MR. KOGASAKA: Yes. The original plan called for the alignment along Middle Road tank down to that 8-inch line, that dotted line that's along the -- that's X'd out. That's the alignment that we had problems in getting the right-of-way easements to. So at that point where the landowners objected, we had to sort of regroup and look at the alignment. At the same time we were also going in the direction of putting the pipeline in the roads and to avoid easements. At that point, we had gone to -- we revised our thinking and our alignment to follow the Cross Road. MR. RICE: Is the 6 inch existing? MR. KOGASAKA: Yes. MR. RICE: When we made this decision to go from obtaining easements, and what looks to be as the crow flies (sic) versus running pipe down the road, there has to be a cost issue, and while certain people may not like the fact that we want to run the line as the crow flies, we have eminent domain as an option. I'm not advocating it; I'm just saying there has to be a cost analysis that's done as to -- we would have spent X amount of dollars going through the eminent domain process and running the pipe as the crow flies versus running it down along the roads. No or yes? No? MR. KOGASAKA: I think it's to do with policies of trying to service the lot from the roads. MR. RICE: That's okay. But I think we need to know under what basis we're making these decisions so we can agree or disagree and give you direction. Now you are telling -- I'm putting words in your mouth, but what I am hearing is that it's easier to service the customers from the roads than it is to run a line down through a bunch of people's property, then have to put laterals off of it or something. MR. KOGASAKA: Yes. MR. RICE: It may make sense, I just want to understand it. MR. KOGASAKA: Yes. There are a number of meters off the line down there which would be relocated to the Middle Road section, yes. MR. RICE: What's intended completion of both phases? Because Phase I is no good without Phase II; right? MR. KOGASAKA: Right. There's a map -- MR. QUINN: There's a time line right behind that. MR. RICE: All right. Does this line on Kula highway help us with our future expansion to Ulupalakua, because I see -- does that have anything to do with the other project we talked about? MR. KOGASAKA: The upper Kula line feeds Kamaole tank which feeds the Ulupalakua area. CHAIRMAN NAKAMURA: Okay. Any other questions from members of the committee or board members? Let the record reflect that Committee Member Kent Hiranaga is in attendance. Kent? MR. HIRANAGA: Mr. Chair, I just want to note that I see the director's letter is dated January 3, 2002. I received this fax at 4:30 yesterday afternoon, and due to business and social obligations, I did not have a chance to review this before the meeting. It makes it difficult for me to render a decision when I'm being given information at this late time frame. I would urge the department to give us more time to review these documents before decisions need to be rendered. CHAIRMAN NAKAMURA: Point well taken. MR. RICE: Mr. Chairman? CHAIRMAN NAKAMURA: Yes, Mr. Rice. MR. RICE: Could I expand on that a little bit for the department not to take it wrong. When the issue comes up and you know there's a lot of work to do to prepare documentation for the board and the committee, then say so. Because I don't think the board is opposed to saying okay, what's the right amount of time, and schedule it accordingly. But if nothing is said, and we have an understanding that we require proper documentation in order to make a decision, then we will expect it at the next meeting if you don't say something. Fair enough? MR. NOBRIGA: Um-hm. CHAIRMAN NAKAMURA: Any other questions or comments? What is the pleasure of the committee on this request? MR. NOBRIGA: I would like to see the project move forward, Mr. Chairman. I think it's in the best interest of the community of that area. Although it's not going to be -- although design has nothing to do with Ulupalakua's problem, I'm sure putting in a bigger pipe in that area would greatly help everything flow through, yeah? MR. RICE: I would so move to approve the project. MR. NOBRIGA: Sorry, yeah. Second. CHAIRMAN NAKAMURA: It's been moved and seconded that the project be approved. Any further discussion? If not, all in favor say "aye." (A chorus of ayes.) MR. HIRANAGA: I would just like to inform the committee that I tend to vote against the motion just because I had not had adequate time to review the matter. It doesn't mean that I won't vote for it at the regular board meeting. CHAIRMAN NAKAMURA: Okay. Any other comments? Mr. Starr? MR. STARR: I don't get to vote. I would vote for it if I could because it's a good project. I just want to reiterate the concern that I think it's ongoing with all of us, we need to have some kind of way of prioritizing these projects rather than kind of the squeaky wheel gets the grease, fire -- put-out-the-fire type of management. I don't think we have a real rational system for prioritizing them, but that does not say that -- this is a good project, so I'm for this project, but I hope in the future we can create something. CHAIRMAN NAKAMURA: Okay. Any other questions or comments? If not, all those in favor say "aye." (A chorus of ayes.) Opposed "nay." (No response.) Committee vote is in favor, and Mr. Hiranaga dissented. I think it's a point well taken, that, number one, I hope that the staff will move ahead expeditiously on Phase II so we don't have a situation where Phase I is going to be sitting there unused for more than the schedule calls for, approximately maybe eight or nine months. So please take that into consideration. I think you should also take into consideration Mr. Hiranaga's comments about the timeliness of reports, and Mr. Rice's comments about the need to consider all alternatives. I know in the past, eminent domain is always a difficult thing to do; but if there are good reasons to do it and there are some very strong cost benefits to do it, I don't think you should hesitate to at least present it to the board as an alternative. Let's move on to item C, Director's 01-56. Mr. Rice's favorite project, the Paukukalo water system. Mr. Tengan? MR. TENGAN: Mr. Chair, this project, as you know, is in the Paukukalo area. Originally, when we let out the contract to do this work, we didn't anticipate, I guess, so many archaeological sites in the project area. After a while, we kind of decided that maybe the remainder of the work should be done in-house to deal at the least cost to the department. This project is to improve Lilihua Street. It consists of about 440 feet of waterline and service laterals to service 12 meters. The cost -- the estimated cost of the project will be about $100,000. It should come from the pipeline replacement budget. CHAIRMAN NAKAMURA: Mr. Quinn? MR. QUINN: Mr. Chairman, that project also was anticipated and included in the lump sum pipeline appropriation for this fiscal year, and that amount was the one that was anticipated as $100,000. CHAIRMAN NAKAMURA: Okay, thank you. Any questions? Mr. Rice? MR. RICE: Might as well; right? CHAIRMAN NAKAMURA: Might as well, it's your favorite project. MR. RICE: My favorite project. Let me back up, George, because we decided to do this project in-house because we had a contractor under contract. We were unsure about how many burials we might find, and we were paying him, and we said let's not pay him to wait. So we ended the contract and we decided it would be easier to do it in-house; right? Is that correct? MR. TENGAN: I believe so. MR. RICE: Now, that means that we still have -- we're still unsure of how many burials we might find. And if I remember correctly, what happens is, when we find one, the project stops and we incur additional costs. And remember, you came in for a change order at the time and as we investigated the request, we found out that the change order was rather open because we didn't know what the cost of mitigating the burials would be. And we wanted to do the right thing above all. So I'm questioning the hundred thousand dollars, because we already know there's a lot of burials there, and so if we were to find no burials, maybe the hundred thousand would be the right number. Now that I've been around for a little while I can caution you so you don't end up coming back to the board and saying oh, but we need another $250,000 because we found all of these burials that we need to mitigate. That's the concern I have, and not concern to complete the project, but a concern that the board understand the complete potential cost. Which, I think -- you guys tell me if I'm wrong -- but from everything you told me before, it's going to be higher than this; right? MR. TENGAN: I guess this is our best estimate as to what the project would cost. To say that it -- to be safe and say that we need $200,000 so we wouldn't have to come back to the board, what would happen in this situation is it would tie up the additional hundred thousand dollars for other projects. So my recommendation would be to go with our best estimate. MR. RICE: Does the estimate include any provision for any mitigation? MR. TENGAN: I don't know exactly what is included. MR. KOGASAKA: We have Eric Fredericksen, contractor to the archaeological -- MR. FREDERICKSEN: Morning, folks, Happy New Year. I'm Eric Fredericksen. As you all know, Paukukalo is very, very complex. This Lilihua Street, just to give you folks an idea, we found five burials in a very small area kind of near the second L in Lilihua, around in that spot. Some of them -- let's see, there were two -- this is going by memory, I apologize, I don't have everything in mind. But there were two burials, and then there was one that had been previously disturbed, and then there was probably another burial that had been previously disturbed; but there was just a little portion of it, and the rest was going under the road. And then there was one other one that we weren't sure about, but the burial council said, "Look, please don't disturb any more." So we went with the burial council's request. So five in a relatively small area, probably the length of the room, maybe a little less than that. From an archaeological point of view, that's not -- that is a good indication there are more burials there. And there's no way to say hey, there's going to be a lot more or a few more. In qualitative terms, and I stress it's qualitative, it's not quantitative because we don't have the complete picture for Kanai Street, which is the makai-most street. I'm very pleased to hear that street is no longer going to be -- at least it's been tabled, because it's incredibly complex. The site down there is about a thousand years old. The one on Lilihua is -- I think it was mid to late precontact, kind of like 1400's on. But very significant sites. We don't know what the extent of them is. I'm sure the sites go under people's houses. Just because the street is there doesn't mean -- there's obviously a lot there. I would hope that we'll get lucky, but I can't say that there's not going to be any burials there. We did make some allowances for burials and, quite frankly, I can't remember how many burials we were anticipating, but I mean, it was basically just pulling something out of the sky. This street, if I had to choose two -- I mean, between it and Kanai Street, I would prefer going down Lilihua Street, just because there seems to be -- there seemed to be, I mean, qualitatively fewer burials. That's not to say there's not very many. There's a lot. It's about the length of the table, where we had five finds. I don't want to give a rosy picture of everything. MR. RICE: You're not. MR. FREDERICKSEN: I think the -- what we structured kind of our proposal on was realistic. There could be -- it could get kind of crazy. I don't know, and I'm not an engineer or anything, but it might be possible to get -- that's a big advantage in doing the predigging, which is what the department is proposing to do. You can find the areas that need to be avoided up front, instead of having a whole construction crew out there and closing things down and all of that. But it is kind of like trying to thread a needle. MR. RICE: What do we do, reroute the pipe as we find -- MR. KOGASAKA: We would predig -- we have the -- MR. FREDERICKSEN: A county crew out. MR. KOGASAKA: We have the information on this ground penetrated radar, and that's the initial places we want to predig and see if that is clear or not. Depending on the finding on that, we will look at the alignment, if it needs to be adjusted at all. Or we need to regroup and look at something else here. But we won't know until we make an attempt to investigate the most likely areas first, before we go in, and then we would want to do an exploratory trenching along the alignment before we decide to put in a pipeline. And at that point, we would have a pretty clear view of what the alignment will be like. At this point, we can't predict -- MR. RICE: Yeah, I know. I understand. That's why I'm just wondering -- at least we said, based on our best estimates, we're going to provide for five mitigations in the cost and at least we know we have addressed it. If we're going to do that, the other thing I suggested at the time was that we get a contract for -- not to exceed -- per mitigation from somebody, so it's not open-ended at the time we find one. So we know if it's five, it's this much money. If it ends up being ten, it's this much money. At least we know there's a max to that. That was suggested by I think the lady on the burial council who was at one of the hearings last year. But the other question that I have is, does it make sense to -- how deep are we putting the line? MR. KOGASAKA: 3 feet. MR. RICE: Where is the old line? 18 inches or something; right? Does it make sense to not dig at 3 feet? Why don't we put it in a shallower trench? Maybe it won't last as long, but you don't get into the mitigation thing. We already know it's -- MR. FREDERICKSEN: Can I say something? MR. RICE: Sure. MR. FREDERICKSEN: That's a good point. From an archaeological point of view, I would really recommend it. I'm not an engineer, so I can't speak to that. But the thing that you would have if you did, like, go on the old -- I don't know what you call it -- footprint of the existing pipeline, you'd probably -- the trench I'm assuming would need to be wider than whatever the original thing was. You could -- worse case scenario, when they dug the first time, hit something or just missed something, you could still get burials. We had some burials quite shallow. But from an archaeological point of view, if it's feasible, I would certainly recommend doing a -- pursuing that if it's possible. Like I said, I'm not an engineer. MR. RICE: But I need to know what the engineering consequences of that are. Then we could -- MR. KOGASAKA: Well, that's one of the considerations, is to replace the pipe along the present alignment if we can -- if we have to. MR. RICE: But why don't we do it? Why don't we just say okay, we know there are burials there. There's probably no doubt in anyone's mind in this room that there are burials there. We're in a very delicate place and you are talking about the street below being worse, why don't we just say we don't want to mess with burials, and put the pipe on top? If it has to be replaced in 20 years instead of 40 years, we plan for that. There's a cost to that, but there's also a cost in mitigating the burial. And I think that's the kind of thinking that I think we need to do and we might say no, it doesn't work. Okay, then we do it the other way. Or yeah, it makes sense, then let's do it that way. I'm not championing a certain way to go; I'm just suggesting that there are alternatives if we thought about them and analyzed them and we say it doesn't work or it works. MR. KOGASAKA: Yes. That is one of the considerations that we had, and that was something we wanted to further explore. The section that we are looking at, the pavements are cut and removed on that section to do some exploratory digging on that; and if that doesn't work out over there, then certainly one of the alternatives was to go to the existing alignment. Again, we're thinking 3 feet would be the depth that we were considering. MR. RICE: Can some engineering person tell me what the problem would be to putting it in a shallower trench? The life of the pipe? MR. CHANG: Assuming it's 18 -- Herb Chang, engineering. Assuming it's 18 inches, we normally put it -- we'll bring it up to -- traffic loading may be a problem. But if the life expectancy is lower, you could budget it. You also have problems with the service laterals -- sometimes only a couple of inches over. MR. RICE: That's good information. We just need to know. MR. QUINN: What's the risk of putting it where the existing line is? I don't know, could we do that? CHAIRMAN NAKAMURA: Can I ask people to speak one at a time and ask to be recognized? We're going to have a hard time keeping a record. Mr. Quinn? MR. QUINN: I'm not an engineer, I'm just curious as to what the risk of putting it in the existing line, if that would solve any problems? I know that's one of the alternatives. CHAIRMAN NAKAMURA: Mr. Kogasaka? MR. KOGASAKA: That is one of the alternatives that we would consider next, yes. Again, we were initially looking at a 3-foot cover. We could consider going to a shallower trench. We would also need to -- it may not be a problem but we may need to get the approvals of the Department of Public Works, whose road we would be doing the construction in. They have rules that require 3-foot cover. MR. RICE: All right. I want to make sure, George, you understand that I'm not saying you need to do it this way, it's just an idea. I'm just asking for an explanation. All the right answers are that it's too shallow, we have load issues on top. Fine, then we go can forward. MR. TENGAN: One thing that has not been mentioned, I would think that a 3-foot cover that we're looking at is part of our engineering construction standards, and we wouldn't want to deviate from the standards. Because one thing it will do is it will create a double standard within our community. We'll tell the customer when you put in a line you got to have a 3-foot cover. But when the department goes in, 18 inches is okay. That creates a problem too. MR. RICE: I think you ought to have that in the back of your mind all the time; but in the case where we're dealing with a specific problem like burials -- MR. TENGAN: Understood. But I guess what we got to do is make sure that we cannot provide that 3-inch (sic) cover in that proposed alignment before we just go in and put the line in where it currently exists with only an 18-inch cover. We have to look at that proposed alignment. MR. RICE: If the existing alignment is under the road, I probably would not be in favor of 18 inches. CHAIRMAN NAKAMURA: My understanding of the project is, as Herb indicated, the first step would be to do some test excavations in areas that you consider to have potentially high probability of burials; and if that is positive, then you would proceed to try to excavate the entire alignment before you actually look at ways of installing or how you are going to install the pipeline. Is that right? MR. KOGASAKA: Yes. CHAIRMAN NAKAMURA: I guess my suggestion is to proceed with the project but that the staff report back to the board or the committee at each step, number one, what are the results of the test excavations, and then what are the results of excavating the entire length of the line. And at that point if it looks like you are going to encounter substantial problems, then I think we need to look at the kind of alternatives that Mr. Rice is suggesting. So if the action of the committee and the board is to move ahead, I don't think the department should take it as a green light to just forge ahead. I think this is a project that requires constant feedback with the board and the committee. MR. RICE: I would so move, Mr. Chairman. MR. NOBRIGA: Second. CHAIRMAN NAKAMURA: Any other discussion or comments? If not, all those in favor say "aye." (A chorus of ayes.) All those opposed? (No response.) Motion is carried. Let's move on to item D, Director's 01-57. This is a request from the Department of Hawaiian Home Lands for revision of the water credit agreement. Is there someone here from the department? MR. LEE: Good morning and Happy New Year, members of the Board of Water Supply. My name is Gerald Lee. I'm representing the Department of Hawaiian Home Lands. The department would like the board, as well as the Department of Water, to allow the Department of Hawaiian Home Lands to use the water credits from the water credit agreement of December 9, 1997, which I have a copy here, to be used to offset the source component of the water system development fee for the Waiohuli Kula resident lot subdivision. MR. RICE: Is that part of the whole project? MR. LEE: For the whole project. Actually, there's about 320 lots. CHAIRMAN NAKAMURA: I think many of the members of the committee and the board are relatively new and a lot of this happened prior to us being on the board. I wonder if you could give us some background and some history. MR. LEE: Well, this was during Mayor Linda Lingle's time. I personally worked on this water credit agreement with David Craddick and Gary Zakian, of corporation counsel at that time. This water credit was a result of the -- from the department improving the transmission component of the lower Kula water system. What happened was at that time the flow was 2500 GPM and our project had improved it to -- the design is based on 4200 and because of our improving the system, this water credit was developed. It amounts to a little over one and half million dollars of water credits to be used on projects within the county where there is water. If there's no water, we can't use it. CHAIRMAN NAKAMURA: Any questions or comments from members of the committee? MR. RICE: I just lost my train of thought. One second. CHAIRMAN NAKAMURA: While you are thinking, if I could follow up. Have any of the credits been used to date? MR. LEE: No, we have not used any yet. And actually, this original was a MOU, it was a three-party MOU. The County of Maui was one of the parties, Department of Water was one, Department of Hawaiian Home Lands was the third party. But the MOU is part of the water credit agreement and this agreement is strictly between the Department of Hawaiian Home Lands and the Department of Water. CHAIRMAN NAKAMURA: One other question. It seems to me it's a little bit unusual to try to apply credits for transmission and storage to source, especially in an area such as Upcountry where we do have a source problem. In the history of the project, what has the department done relative to source in terms -- have you done any source work at all? MR. LEE: Well, we have a well drilled below the subdivision. As to it's use, I don't know. But I understand It looks good. In fact, Director David Craddick went to take a look at it and we had the pumping certification back in October, I believe -- November. And I have not checked as to what is the yield for that, but I understand it's favorable. CHAIRMAN NAKAMURA: What elevation is that? MR. LEE: It's about -- I don't know the exact elevation, to be honest with you, but it's about 1500 to 2,000 feet below our subdivision. MR. RICE: You don't mean 1500 to 2,000 feet elevation below. You mean -- MR. LEE: Feet below. The distance below our subdivision. MR. RICE: You know what elevation -- he wanted to know what elevation it's at. MR. STARR: It was 1700, yeah? MR. CHANG: I would like to mention that that was for the next phase of the Kula -- this well was for the next phase of the project, not for this current phase. MR. LEE: It's not for the next phase, but we're looking at a source and we're looking at the various options. One was where they drilled the well, and we're looking at possibly doing another well close to Kula Highway. Further up. But we ran out of money, so I don't know when we'll be drilling the next well for -- MR. HASHIMOTO: Is this well in the Hawaiian Homes property? MR. LEE: Hawaiian Home Lands, right. MR. HASHIMOTO: Will the water be used exclusively for the DHHL? MR. LEE: I can't speak for the chair. I have no idea. MR. RICE: Mr. Chair? CHAIRMAN NAKAMURA: Yes, Mr. Starr. MR. STARR: The well is a test well, a monitoring well drilled by USGS using the rig, the test hole drilling rig that the board has a one-third share in. The well filled with that rig can never be used for a production well under federal regulations. It's simply for testing and can later become a long-term monitor well. I believe it was in the 1700-foot elevation. I believe we found water where it was expected. MR. RICE: That's their test well, or is it our joint test well? MR. STARR: Yeah, they apparently got permission from the various counties to participate to use the rig to drill that well. And it was actually out of sequence, we drilled in Molokai, and then it was suppose to go to Kauai, and before it went from Molokai to Kauai, it came and drilled the hole for them. They were paying the cost, the operational cost to USGS. MR. RICE: That was done in order to know, then they could actually then seek a permit and drill a real well. My question is, the intention is you would own the well? MR. LEE: That I would not know. CHAIRMAN NAKAMURA: Is there an expectation that these source credits are going to be utilized in the near future? MR. LEE: This agreement here covers the entire Kula area as well as Keokea. We will be using it for the Keokea project. Not the credit. But this agreement includes Keokea. We will be provided 500,000 gallons of water per average day. Which would cover the current subdivision and if there's additional lots in Keokea. CHAIRMAN NAKAMURA: Maybe the director can clarify for me, but what is the basis of the set aside of a half million gallons for Department of Hawaiian Home Lands? Is that exclusive of the source credit issue or do they have an ability to get 500,000 gallons for which the expectation is that they would pay the source assessment? MR. TENGAN: I believe it's the latter, whereby the availability of the 500,000 gallons for the project, and I'm not aware that the source portion of the water system development fee was intended to be waived at the time the agreement was entered into. MR. LEE: May I speak? CHAIRMAN NAKAMURA: Yes, please. MR. LEE: The agreement excludes the source. We have to pay the source. But the transmission and storage component we satisfy, so we don't have to pay that. But we're only required to pay the source component for whatever developed that falls within the 500,000 gallons. MR. RICE: Mr. Chairman? CHAIRMAN NAKAMURA: Yes. MR. RICE: I believe, wasn't the 500,000 gallons an estimate of what would be needed for the full build out of the 320? MR. LEE: No, it's more than the 320. MR. TENGAN: It was initially to get the project started. MR. RICE: It was. It's pretty clear in here that the source credits were excluded, but the reason we're having this discussion, isn't it because of the problems we encountered with the -- MR. LEE: This is because of that transmission main -- that the department wanted to put in between Kula Kai tank and the -- MR. RICE: And the reason we're talking is because you agreed to put that in, in exchange for some credits? MR. LEE: The thing is, since we're fronting the money for the entire project and it's a 50/50 split between the Department of Water and the Department of Hawaiian Home Lands, that we had asked that the Department of Water's share, that we be given dollar-for-dollar credit to be used for water development fee. MR. RICE: Would you be willing to go with maybe 50 percent source credit? Some compromise? So is that palatable to anybody? CHAIRMAN NAKAMURA: Before I answer that, can I ask one more question. You are asking for this source credit to be from that as a result of the agreement that we approved a couple of meetings ago; but there was also this agreement that applied to storage and transmission that was entered into in 1997; right? Which totaled something like a million and a half. MR. LEE: Approximately a million and a half. CHAIRMAN NAKAMURA: Okay. And the portion we're talking about for what was recently approved was -- what was the amount of that? MR. LEE: Actually, we had asked to use this water credit agreement, the credits from this water credit agreement to be used for the source component for the subdivision. Because according to Mr. Craddick, he said we cannot use the new transmission main project for their share of -- Department of Water's share of the cost to be used for the source component for this subdivision here. So because we can't use it, we had asked if we could use the credit from this here, this water credit agreement to be used for the source component. CHAIRMAN NAKAMURA: What's the total cost of this new project? MR. LEE: The new project is estimated at about a third of a million dollars. CHAIRMAN NAKAMURA: A third of a million. MR. LEE: And the county share would be roughly about 150,000, plus or minus. In my discussion with David Craddick, he said it can be done. So when we wrote the letter back to the Department of Water, saying we want to use the credit dollar for dollar to be used for this project, for the Kula resident project, before we met at the last board meeting, he said we can't use it now. Because it's -- since we can't use it, we'll request that we can -- if we could use the water credits from this agreement to be used for the source component. CHAIRMAN NAKAMURA: I guess my comment is that I personally don't have a problem with looking at using the county's share of that new project and opening the issue of source credit on that; but I really have a reluctance to go back and look at this old agreement and apply the source credits to the old agreement. Somehow it doesn't seem appropriate. And I'm just wondering what is -- do you know what the reason is that the director stated that that can't be done? MR. TENGAN: I'm not aware. CHAIRMAN NAKAMURA: Any other questions or comments? Mr. Starr? MR. STARR: This is a transmission improvement. It should be -- the credit should go for transmission. MR. LEE: Let me go back a little further. When we computed this water credit agreement, we had two computations, basically. Instead of a million and a half, it was much greater than this. And if it's -- it was agreed that we went to the lesser amount and to be used for the water development fee credit and not restricted to transmission. That's how this agreement came about. Otherwise the figure would have been much higher. CHAIRMAN NAKAMURA: Mr. Nobriga? MR. NOBRIGA: I remember that the discussion that we're having today is part of the special meeting that was conducted, I don't remember the date, but I know there was a special meeting where we looked at the DHHL's request to obtain final subdivision approval from the department. I think there was one other item noticed on the agenda. I would suggest that we obtain the transcript of that meeting for our review before we can -- before we make final decision on this matter. CHAIRMAN NAKAMURA: The chair also feels that we are probably lacking information; that there is probably some additional material that we need to be at least provided with or understand better again, because of the fact that most of us don't have this history. And so we have not received any real recommendation for the department. And the chair's recommendation would be that we defer this matter pending further analysis and background on the part of the staff. Are there any objections to that? MR. NOBRIGA: No objection. MR. HASHIMOTO: No objection. CHAIRMAN NAKAMURA: I don't think it's that we are objecting or that we're necessarily saying that this is not a good idea. It's just that we don't understand it. I don't think it's anybody's fault, it's just the way it is. MR. LEE: Actually, my concern at this time here before the board is, I understand the board has approved the increase in the water development fee, and if the mayor and the council approves it, then the new rates are going to go into effect. As a result, it will impact upon this project here. If it's deferred, probably this decision will be made after the new rates go into effect. And you people know the rates are quite high, based on the new rates. The increase, the source is 1.72 percent higher. So you jump from a $750 source component to $2,040. So it's almost three times the amount. That's my concern. CHAIRMAN NAKAMURA: I guess the concern that we have is that we do have a source problem and we need to address the source problem in order to get the resources we need to look at that assessment. It's not an assessment that's applied only to the department, but it's applied to everyone, and I think there's a question of equity. I can appreciate the need and desire to try to help the beneficiaries, but we need to look at the total picture. MR. LEE: May I ask you one question? You did mention that you have no objection as to use of the Department of Water share of the transmission line. Am I correct? CHAIRMAN NAKAMURA: I said, personally I would -- that's something I would consider. But that's not what's before us. MR. LEE: I understand that. CHAIRMAN NAKAMURA: I don't understand what the reason was that was not -- cannot be considered, and it's probably something that we would want to look at. MR. RICE: Mr. Chairman? CHAIRMAN NAKAMURA: Mr. Rice. MR. RICE: Did the required approvals get done for the subdivision approval? Did the director sign the appropriate documents? MR. LEE: Yes, he signed the letter. MR. RICE: People can start -- MR. LEE: It's not quite that simple, we have another problem. The Department of Land and Natural Resources threw in a monkey wrench and they wanted additional things to be done. MR. RICE: That's outside of us. MR. LEE: That's outside of you guys. MR. RICE: I honestly don't think, Mr. Chairman, that our deferral of this issue in getting up to speed is going to delay the decision before the fee. Although there's no way that I think we should be defending the fee. It's a real cost. The fee increase we're asking for in the water development fee side is a real cost, it represents the real cost to date. I'm not ashamed of it, it's not like we're trying to flee somebody, it's a large increase, but it's the real cost. Move to defer. CHAIRMAN NAKAMURA: Motion to defer. MR. HASHIMOTO: Second. CHAIRMAN NAKAMURA: Moved and seconded. Any further discussions? If not, all in favor say "aye." (A chorus of ayes.) Opposed? (No response.) Motion is carried. So we'll probably take this up again at our next committee meeting, which will be in early February. We'll let you know. I think there may be some specific questions that we might want to have addressed prior to that time. If not -- the department -- at least to our department. MR. LEE: Okay, thank you. CHAIRMAN NAKAMURA: I appreciate your time. Let's move on to item E, Director's 01-53. This is a request for design of -- authorization of funds for design of Makena Road waterline improvement. This is an item that was deferred from a prior committee meeting. Mr. Deputy Director? MR. TENGAN: Mr. Chair, I guess the staff prepared additional information for the board members, and I'll have Herb go over the additional information. MR. KOGASAKA: A request for 55,000 for a design contract for 3,000 feet of pipeline -- 3,200 feet, I'm sorry, the estimated cost is -- it's a rough estimate of $640,000. The existing water services are 11 meters on the line fed by a two-inch and an inch-and-a-half drisco line. In the past two years, there's been noted there was 41 waterline breaks that we had to repair. There's a participation agreement to put in the 2-inch line at the time. Perhaps you can expand on that. THE COURT REPORTER: Okay, who are you? And can you come up here, I cannot hear you. MR. RICE: If you are going to speak, come up here to make it easier. MR. FUJINAKA: I'm Myles Fujinaka. I'm going by memory on this one, but some years back there were a number of people down in Makena who wanted water service and we only had one -- had, at that time, one small pipeline going down there, so we were refusing issuing water services. And the board wanted to make a water service available to new service holders. So there was this plan that we would install this 2-inch pipeline, it was drisco pipe. All the people at that time who wanted water service were given a onetime chance to request water service. They had to sign an agreement; they would accept the pressure that was available through that new pipeline and they all shared in the cost of installation of that pipeline. MR. RICE: The department paid nothing? MR. FUJINAKA: No. CHAIRMAN NAKAMURA: Any questions or comments? Mr. Rice? MR. RICE: Mike, was this on our list of projects that was presented for this year's budget? MR. QUINN: Yes, it was. MR. RICE: It was? MR. QUINN: We appropriated $55,000. MR. RICE: For the design? MR. QUINN: For the design. CHAIRMAN NAKAMURA: We also had in there the amount to participate in this prior -- the improvements that is upstream of that, if you will, the Sonny Vick (phonetic) subdivision improvement. Was that also in this year's pipeline replacement budget? MR. QUINN: Which project was that? CHAIRMAN NAKAMURA: We approved a -- a couple of meetings ago -- several meetings ago -- participation in this 8-inch line. That's on Exhibit A. Isn't that right, Mr. Kogasaka? MR. KOGASAKA: Yes. MR. QUINN: What's the name of that project? MR. KOGASAKA: Sonny Vick project. MR. STARR: That's in Makena. Sonny Vick. MR. QUINN: Apparently we included that in the increase of the size of the mainline, $200,000 was appropriated. CHAIRMAN NAKAMURA: That was a separate project? MR. QUINN: Yes. CHAIRMAN NAKAMURA: And this is basically the end of the line; is that right? This drisco line, is that -- in other words, we have no services beyond here? MR. FUJINAKA: No. CHAIRMAN NAKAMURA: That's the end of the line? MR. FUJINAKA: Yes. CHAIRMAN NAKAMURA: Any questions? Comments? Mr. Starr? MR. STARR: There are houses continuing from there all the way up the road. How do they get fed water? MR. FUJINAKA: I believe that's the last house. MR. STARR: No. Most of the houses are further along. MS. TAOMOTO: I'm Wendy Taomoto, department staff. Are you talking about after the Sonny Vick subdivision? Or are you talking about at the very end of our system? MR. STARR: There are houses continuing along there. MS. TAOMOTO: Past Sonny Vick's subdivision? After Sonny Vick's subdivision is where we calculated the 11 water services. MR. HASHIMOTO: After Sonny Vick's. MS. TAOMOTO: Yes, after Sonny Vick's. Affecting the project in front you is 11 services. Sonny Vick's, I don't know how many services that is taking care of. But this particular project involves 11 services. MR. HASHIMOTO: This one with the drisco right now. MS. TAOMOTO: Yeah. At the end of the map it shows the end of the project where the last meter is at for Joe Sugarman (phonetic). MR. RICE: The representation that this service is 11 meters is wrong because it services everybody from here -- MS. TAOMOTO: No. The 11 meters is -- like on the next tax map key, Exhibit B shows 11 services, and I circled -- in the circles is the No. 1 corresponding to the table on the first page of where the parcel is located. MR. RICE: Okay. MS. TAOMOTO: The last parcel is parcel 94, which is on page 2 of Exhibit B. It's an inset, but that's the end of the service. That 94 corresponds to the first Exhibit A, the end of the Makena Road project, that parcel you see where the waterline is. And all of the parcels that this Makena Road waterline would service, that we're putting in, have that agreement that he just -- that Myles just spoke about, except one of -- the one listed as No. 1 for Alfred Aruda, because his meter predated the agreement. That's the only reason why. CHAIRMAN NAKAMURA: If I can clarify this in my own mind, all of these people had no services, except Mr. Aruda, until the department gave them this onetime opportunity to participate in this drisco line; and on that basis, the department gave them all meters and now -- and they signed the agreements to the effect that they recognized the service was substandard. They all executed those agreements. And now the recommendation is that the department, in effect, expend $600,000 to provide all of these people with the standard-urban type water system. That's basically what we're saying; right? MS. TAOMOTO: I guess the staff -- or the department felt that it would be requested because of the number of breaks, which is 41 over two years, that the department's maintenance staff is going probably out on overtime to -- after hours to fix this 2-inch drisco line. But it's a previous board action that caused this waterline or this agreement that they signed, that they looked at. I guess these owners came up previously requesting water service. CHAIRMAN NAKAMURA: Mr. Starr? MR. STARR: I think to spend $630,000 per house, and they are all multimillion dollar houses, that's a kind of charity that our board, unfortunately, I don't think we can afford that. I think that perhaps these owners could be encouraged to chip in and replace the line out of their own pocket. We could put our resources where more property owners would benefit. CHAIRMAN NAKAMURA: Okay. Any other -- MR. RICE: This agreement to participate in construction of water system improvements, which is dated the 26th of December 01, did we review that? CHAIRMAN NAKAMURA: This is the Sonny Vick improvement. I think that brings -- MR. RICE: How does that affect this? Isn't that part of this? Is that an offsetting cost to this 8-inch line? No? CHAIRMAN NAKAMURA: No. That was the agreement, and correct me if I'm wrong, that was the agreement whereby, on this exhibit where it says proposed 8-inch Sonny Vick subdivision, that was the agreement by which the board participated in the increase of that line from 4 inches to 8 inches; is that right? And the board did approve that. MR. RICE: Yeah, now I get it. So we have a 2-inch line feeding an 8-inch line? MS. TAOMOTO: No, the other way around. MR. RICE: We want to go this way? MS. TAOMOTO: The source is coming from the north side of Sonny Vick's. MR. RICE: Now I understand why. It was confusing to me. Now we have set a precedent for someone who was at the end of the line contributing to improvement. CHAIRMAN NAKAMURA: Right. MR. RICE: So wouldn't it be unfair to Sonny Vick now that we said okay, we're going this way and we extended the line for you and you chipped in some amount of money, what percentage of the total cost was Sonny Vick paying, and now we're going to do it out here for 11 more people for 600,000. I don't think that's fair. If I was Sonny Vick, I would be in here with a hammer banging on the table. MR. HASHIMOTO: What was in the agreement that the 11 homeowners signed? You mentioned it, but the repair and everything else was going to be -- MR. FUJINAKA: I don't think it said anything else about the maintenance. MS. TAOMOTO: The agreement is attached as Exhibit D, I believe. I put the word "sample" on it because I did not attach all 11, but they are all the same. It's just -- MR. RICE: I think the board might consider some similar participation, but I don't know how we can justify tagging Sonny Vick and letting everybody else skate. I don't think that's fair. MS. TAOMOTO: Just for your information, just in case you were wondering, Sonny Vick's subdivision, the bids did come in and the board's portion of the lowest bid is under the amount of 67,840, which you had approved. So they can proceed. We're not the ones who are going to stop them, because you approved enough. CHAIRMAN NAKAMURA: Mr. Kogasaka? MR. RICE: Sounds like a deal. MR. KOGASAKA: I believe that Sonny Vick's subdivision requirement was to increase the line size and that's what he is proceeding to do. And our participation is to increase it to the county standards. CHAIRMAN NAKAMURA: Right. He had to approve it for 4 inches and we participated to increase it to 8 inches; right? MR. KOGASAKA: Yes. MR. RICE: All we're saying is that that's -- I think that's a fair way to go. Why are we going to then pay a hundred percent of the cost for extending the line? I just can't -- MR. KOGASAKA: I guess our alternative is to wait for somebody else to come along to subdivide; or otherwise, put more demand on the system so that they can increase the line size and we participate in that as we go along. We also have the maintenance cost that we are incurring at a higher frequency. CHAIRMAN NAKAMURA: Mr. Rice? MR. RICE: An engineering question. If the line servicing those 11 lots past Sonny Vick was not drisco, it was 2 inch but not drisco, is it adequate for the 11? MR. FUJINAKA: I did not do a study. Off the top of my head, I would say no, it's not adequate. MR. RICE: I'm not holding you to it. What would the right size for those -- would it be 4? Why would -- would it have to be 8? I guess that's my question. MS. TAOMOTO: The only reason that the department recommends an 8 inch, if you approve this project, is for fire protection. If you notice, the last fire hydrant that exists today is the one on the north side of Sonny Vick's, and fronting Sonny Vick's there's nothing. And he is putting in fire hydrants up to the end of his project. So there's no fire protection from Sonny Vick's all the way to the end of our existing system. That's why it's an 8 inch, for fire protection reasons. CHAIRMAN NAKAMURA: Mr. Hashimoto? MR. HASHIMOTO: Would the water department be liable if there's a fire? MS. TAOMOTO: The agreement that the 11 people -- is holding the department harmless. MR. HASHIMOTO: Would that hold up in court? I don't know. MR. RICE: That's your answer. MR. HASHIMOTO: I guess one of the other concerns the water department or Wendy had was, because of the 40 breaks and all the overtime, what's the cost benefit ratio -- how much would it cost per year or the last two years? What was the cost of repairing? MS. TAOMOTO: I have no idea. But if you need that additional information, we can get it to you. CHAIRMAN NAKAMURA: Mr. Hiranaga? Then Mr. Nobriga and followed by Mr. Quinn. MR. HIRANAGA: Are there any other parcels that would benefit with the improvement thereby allowing them to receive meters? Are there people on the waiting list also that have reserved meters in anticipation of this upgrade? MR. FUJINAKA: We have not been getting any more requests for water service. But there are other parcels. MS. TAOMOTO: There are other parcels. All other parcels that you see on the tax map key. MR. HIRANAGA: My other question is, is there a way to upgrade the above ground system in order to produce the number of -- my other concern would be, if you were to build an underground system, what are the probabilities of encountering archaeologically sensitive sites that would increase the construction cost? MS. TAOMOTO: Staff hasn't requested a review by the Department of Land and Natural Resources for an archaeological impact, but we would -- we could proceed with that prior to you approving the design, if that's an option. And so that you know, the archaeological -- it takes awhile. Honestly, when I ask for a review, it takes three to six months to get a letter making a recommendation as to whether there would be historical sites or not. And the real requirements, they might not be able to say until we hire an archaeologist. I can get that, it would take six months, though. CHAIRMAN NAKAMURA: Okay. Mr. Nobriga? MR. NOBRIGA: Question for corporation counsel. In reviewing this Makena temporary water service agreement dated 25th of February 1993, page 2, item 6, it says, The applicant must pay all costs for obtaining water service, all costs for making the connection to the permanent water system upon permanent installation of an adequate water system and any other water system development fee applicable at that time. Being as Sonny Vick's project has upgraded the entire project to adequacy and changed the permanentness of the installation, could we still exercise No. 6? It is a sample. Pardee get the two smallest itty-bitty places in the thing. Pro rata, you know what I mean? I'm not an attorney, but it looks like a good fricking (sic) cover-everything clause over there. MR. RICE: They probably will argue that it applied to the time they signed it and that's what they already spent the money on. MR. NOBRIGA: Because it was for a temporary meter. MR. RICE: But it was hooked permanent somewhere, at the time. MR. NOBRIGA: The benefits of our project would provide permanent water meters. MR. NOBRIGA: They only signed temporary water service meter -- you know what I mean? It says they agree that they are not going to have water if not going to have water. If get water, they -- no more water, too bad. They know that. They cannot put pumps; they cannot increase the water pressure, etc. MR. RICE: Mr. Chairman? CHAIRMAN NAKAMURA: Yes. MR. RICE: Wendy, do you know what the zoning of all those properties is? MS. TAOMOTO: Unfortunately, zoning was a problem for me. I had requested the zoning from the staff, the county staff, but it's -- I was not able to obtain it in the short time that I had. I did get it for the Hamoa project, which was the next one, but not this one. MR. FUJINAKA: I don't know if they are the same, but Sonny Vick's was zoned ag. MS. TAOMOTO: I think it may be ag. MR. STARR: Or conservation. CHAIRMAN NAKAMURA: Mr. Quinn was going to say something. MR. QUINN: I just noted that one of these parties did not sign the indemnification agreement. MS. TAOMOTO: That's what I said earlier, is that he had obtained service prior to the participation of the other ten. MR. QUINN: My overall concern is, I know there's a cost benefit, but I just want to make sure that -- I guess eventually we're going to have to look at health and safety issues when we look at our CIP projects, other than just cost benefit. Noting that that one person did not sign this agreement, I don't know if there's any liability with that one person. MS. TAOMOTO: On your question on the agreement on that item No. 6 that you asked corp counsel -- Mike asked corp counsel, I think after talking to Myles just now, the cost for obtaining water service I think would mean the water service lateral cost and the water system development fee applicable at that time. Not necessarily the waterline. Just the lateral -- you know, when you get a water meter, you normally pay for lateral. I think that's what it means. But corp counsel can refute that. CHAIRMAN NAKAMURA: Mr. Starr? MR. STARR: I know some people who are -- actually bought into a proposed subdivision just passed us. And I know they have been sitting and waiting right now. CHAIRMAN NAKAMURA: Mr. Hiranaga? MR. HIRANAGA: I would suggest that the department explore a way to upgrade the existing above ground system to minimize or try to mitigate a number of breaks. But I find it difficult at this time to justify the requested expenditures. CHAIRMAN NAKAMURA: Mr. Rice? MR. RICE: Just not to drag this on, Mr. Chairman. Is there any dwelling units on Aruda's property? He is the one without the agreement. It's 81 acres. I'm just wondering if it was vacant land. Just to deal with your question. If it's vacant land, I think it might be an acceptable risk. MR. NOBRIGA: Looking at Exhibit B, get choke little lines in there. MR. RICE: I can't read that. You can answer that. Mr. Chairman, I think there seems to be general consensus to move to deny the request. CHAIRMAN NAKAMURA: It's been moved to deny. MR. HASHIMOTO: Second. CHAIRMAN NAKAMURA: So moved and seconded. Any further discussion? If not, all those in favor of the motion? (A chorus of ayes.) Opposed? (No response.) Motion to recommend denial is passed. Committee will accept a recommendation to the board. MR. RICE: Mr. Chairman, might I suggest to the staff that should the people or peoples referred to by Mr. Starr who are listed in this -- are inquiring further that they might be told that we would look favorably on some participation similar to that provided by Mr. Vick. CHAIRMAN NAKAMURA: And that if the staff wishes to explore Mr. Hiranaga's suggestion for some other kinds of improvements which would minimize the line breaks, we would also consider that. Okay. I'm sorry, I keep forgetting about you. (A recess was taken.) CHAIRMAN NAKAMURA: Meeting is back in session. Finance committee is back in session. We're on item F, Director's 01-53. This was to request approval for funding. This is a pipeline replacement project. This is for the construction of the Haneoo Street waterline in Hana. Mr. Deputy Director? MR. TENGAN: I believe additional information has been given to the board. I'll turn it over to Herb. CHAIRMAN NAKAMURA: Before you start, Herb, we have a letter from Kalani English. Have the members of the committee received this? You have. Pass it around. I'm sorry, Herb, please proceed. MR. KOGASAKA: The Haneoo water replacement was designed by Wilson Okamoto -- contracted to Wilson Okamoto to design, and he's essentially completed the major portion of the design work. He needs to get approvals from public works, I believe. There are 36 existing water meters on that line. There were 28 breaks or so, on that section in the past two years. The other thing is, we have a cost estimate that comes out to $950,000. CHAIRMAN NAKAMURA: Okay. Any questions from members of the committee or the board? Mr. Starr? MR. STARR: I would like to know when we approved the design on this. I don't remember that. MS. TAOMOTO: The contract for design on the letter is dated June 9, 1999. Approved fiscal year 1998, '99. CHAIRMAN NAKAMURA: Any other questions? I have a question. This improvement ties back into the system along Hana Highway, and that Hana Highway line is an 8-inch line? MR. KOGASAKA: It's a 12-inch line. CHAIRMAN NAKAMURA: It's a 12-inch line that comes from -- MR. KOGASAKA: I'm sorry -- CHAIRMAN NAKAMURA: I see there's -- MS. TAOMOTO: It's an 8-inch line. MR. HASHIMOTO: It looks like an 8 inch. MS. TAOMOTO: Exhibit C. CHAIRMAN NAKAMURA: There's a storage tank up mauka? MR. KOGASAKA: And a well. CHAIRMAN NAKAMURA: Storage tank and a well. MR. KOGASAKA: Yes. CHAIRMAN NAKAMURA: Which is basically directly above the intersection? MR. KOGASAKA: Yes. CHAIRMAN NAKAMURA: And there's a 12-inch line that comes down, and then there's an 8-inch line along Hana Highway? Does this 8-inch line also go back towards Hana, or does it go out towards Kipahulu? MR. KOGASAKA: It goes out towards Kipahulu at this time, and then ends at -- it's 8 inch to Kakio Road, and then there's a smaller line that goes on beyond there, a 4 inch that goes all the way to Hanahuli (phonetic). CHAIRMAN NAKAMURA: But there's a question that Mr. English had about the system looping or not looping. So it doesn't loop back to Hana Highway, then? MS. TAOMOTO: The reason that the proposed project doesn't loop back to Hana Highway is that there is some dead space where Haneoo Road does not exist. It's a state land. It's not technically part of the road. It physically is there, but if you look on the tax map key, it's part of the state -- MR. STARR: It's where the old airport was. MS. TAOMOTO: Yeah. And we have no services. Right now, as far as I know, I have not been told that there is any type of federal regulation that mandated to loop the system. CHAIRMAN NAKAMURA: Mr. Starr? MR. STARR: I know there's a whole number of residences further along on Haneoo Road that are serviced by the system. Including Mr. English's family's property. This project is strange because it dead-ends right at where a new subdivision is about to occur, and the subdividers have signed a private water system agreement saying that they are going to develop their own private water system. And now I understand it's pressure from the subdivider to pushing the project to occur and it's going to dead-end right at their subdivision. So basically we're giving a gift to the new subdivision. I do know a few people who live along this road that is in my neighborhood and none of them really want to see that happen. The existing people along that road. It's to service a subdivision that has signed a private water system agreement. CHAIRMAN NAKAMURA: The subdivision you referred to, Jonathan, the agreement refers to two lots. Is that, as far as you know, is that two large lots that's potentially to be subdivided further? MR. STARR: No. They are doing subdividing further and they are doing Waiululai (phonetic) Beach Cottages. MS. TAOMOTO: It's the Loko Nui subdivision. MR. HASHIMOTO: It's not in here; is it? MS. TAOMOTO: It is. MR. RICE: Is it the modification of subdivision requirements agreement? MS. TAOMOTO: Yes. Exhibit D. MR. STARR: Hana Beachfront Associates. MS. TAOMOTO: On the last page of that exhibit is a map I attached which is not part of the agreement, but it shows the subdivision relative to Haneoo Road. The last page of the exhibit, D. MR. HASHIMOTO: This is at the end of the line. MS. TAOMOTO: The line would end right where the subdivision begins. The reason why the line ends where the subdivision begins is that's where our existing system ends. It has nothing to do on staff's part with the subdivision. In fact, staff did not know -- this staff did not know about the subdivision until your last committee meeting when Jonathan Starr brought up the subdivision, then I researched it, then I found the subdivision. In terms of staff knowing about it, who is in charge of the design, I had no knowledge of it until the last board meeting. Then I researched and found it. MR. STARR: So the other houses -- on other side, then? MS. TAOMOTO: I'm not aware of that. MR. STARR: There's about 20 houses along here. MS. TAOMOTO: They are not serviced from the Haneoo waterline that our maintenance system calls Haneoo waterline. They must be serviced the other way. MR. STARR: From this side? MS. TAOMOTO: Yeah. CHAIRMAN NAKAMURA: Wendy, do many of these services also have agreements regarding the adequacy of the system? MS. TAOMOTO: I believe a bunch of them have inadequate fire protection agreements due to the building permit triggered an inadequate fire protection agreement. But they don't have that type of agreement that Makena Road had. It's just a standard inadequate fire protection agreement. MR. RICE: Mr. Chairman? CHAIRMAN NAKAMURA: Mr. Rice. MR. RICE: What's the difference between the Makena Road and the standard? MS. TAOMOTO: The Makena Road agreement for participation -- agreement was set up so the owners would pay for it. MR. RICE: Otherwise it's the same? MS. TAOMOTO: I have the agreement -- no, wait, let me see. MR. QUINN: Mr. Chair, I notice in the agreement there is an indemnification clause similar to that respect. MR. RICE: It's not a big deal, Wendy. It's just a curiosity. CHAIRMAN NAKAMURA: Mr. English's letter makes reference to being a member of Haneoo Village, and that my property is affected by reported indemnification agreements which were required by the county water department. I'm just wondering what kind of indemnification agreements he is referring to. MS. TAOMOTO: Unfortunately, I got the letter right before this meeting, but I was able to print those agreements and I can circulate it. There are three agreements. One was signed in 1985; one was signed in 1987; and one was signed in 1991. None by Mr. Kalani English, but I think a Marie English. CHAIRMAN NAKAMURA: And they basically say what? MS. TAOMOTO: Inadequate fire protection agreement, and all it says is it's relative to a building permit being requested, the applicants' acknowledge that the department's public system is not capable of providing adequate fire protection. The department will recommend approval of the application with full execution of this agreement. The indemnification hold harmless clause. And then this agreement shall run with the land and shall bind and constitute notice to all subsequent grantees, etc., for as long as existing water system does not meet with the fire -- with the department's requirements and standards for fire protection. CHAIRMAN NAKAMURA: The proposed improvements are in accordance with the department's standards, then? MS. TAOMOTO: The department's proposed upgrade to 8 inch is fire protection. CHAIRMAN NAKAMURA: May the record reflect Mr. Craddick's arrival. Mr. Rice? MR. RICE: Pursuing my line earlier of questioning. So is it safe to say that in order to have adequate fire protection, we need an 8-inch line, nothing smaller, from an engineering standpoint? MR. KOGASAKA: For the -- MS. TAOMOTO: Fire protection. MR. KOGASAKA: This is residential? MR. RICE: Residential. MR. KOGASAKA: Yes. For residential, a thousand GPM, we would need an 8-inch line. MR. RICE: I think we're noting that Mr. Kalani English is opposed to the project. That people have indemnity -- have signed indemnity agreements with the department and are satisfied with the service that they are getting at this point; is that right? That's what he's saying. MR. HASHIMOTO: Do all of them have agreements or just those three? MS. TAOMOTO: Other parcels have agreements. MR. KOGASAKA: We have not checked it yet. MS. TAOMOTO: I checked the agreements, but I was told to leave that out. All the listing of inadequate fire protection. I did research it, but it's not in there. CHAIRMAN NAKAMURA: Were there a significant number that had agreements? MR. HASHIMOTO: This is 36. MS. TAOMOTO: Yes, a significant. I think more than half. CHAIRMAN NAKAMURA: Peter, you were -- MR. RICE: I want to address the testimony that we received in the very beginning as to the safety problems that are there. And then we're kind of hearing opposing testimony here now, that the people are not worried about the safety issue. I guess outside of the development, that would be the only issue we should address, I think. CHAIRMAN NAKAMURA: Mr. Starr? MR. STARR: I note some of the people spend time at their houses on both sides of the line there, and there is good pressure and good water there now. I don't think there's complaints about the quality of service. MR. RICE: What about the fire and the house that burned down? MR. STARR: I don't think that was there. I think that was some place else in Hana. MS. TAOMOTO: I know the maintenance -- head of our maintenance in Hana said a house burned down on Haneoo a few years back. I don't know the details of it and unfortunately he was on vacation so I could not get more information about it to put in the staff report. But he did say something about a house burnt down. CHAIRMAN NAKAMURA: I think Councilman Carroll's testimony was that there was a home on that road that did burn. MS. NAGO: He mentioned Matthew, and I believe he said Kalalau. MS. TAOMOTO: Let me see if he has a water meter. There was a Kalalau who has a water meter there. MR. RICE: It would be interesting to know whether Mr. Kalalau had an indemnity agreement. MR. HASHIMOTO: His name is not here. MR. RICE: I don't see his name on the list. MS. TAOMOTO: I know he came up as a service holder or he leases one of these. These are the landowners. The service holders aren't listed. CHAIRMAN NAKAMURA: Any other questions or comments? MR. RICE: It's a residential subdivision? MR. HIRANAGA: Rural. MR. RICE: Rural. CHAIRMAN NAKAMURA: Mr. Hiranaga? MR. HIRANAGA: I guess being rurally zoned and the fact that it is out in Hana, which I'm not familiar with this particular road, if the department feels strongly about this request, and there are people on this road that feel strongly about this request, I would urge them to provide us additional information that would be persuasive in that direction. The previous agenda item where the properties were agricultural zoned land and it was approximately $60,000 per service, where this is more like 25,000. It's in a rural area. I guess, again, repeating myself, if the department feels strongly enough about it, they should provide additional information that would be more persuasive. First it's just a statement that this is a health and safety issue and that there have been breaks in the system noted in the past two years. MR. RICE: I would also, Mr. Chairman, like to say that if the developer at the end of the loop wants water, that we basically said that we're willing to listen to participation. But we're talking about a million dollars for 34 users. If we're going to say that everywhere we got 2-inch drisco that we have to replace it with 8 inch because there's a health and safety issue, let's put those items on the top of our capital improvements list and see how much money we're talking about. I would wager to think it's a lot of money. We would then prioritize those people should we make a decision that that's where we want to spend all the money. I agree with Board Member Hiranaga. CHAIRMAN NAKAMURA: Another question. I notice there's quite a bit of cost involved in the laterals. In one case a lateral is $26,000. What is the reason for that? MS. TAOMOTO: Where are you? CHAIRMAN NAKAMURA: I'm looking at the bid breakdown or the cost estimate breakdown on page 204. There's a five-eighths inch lateral, 26,000. MS. TAOMOTO: Each. 26 each. A thousand dollars. CHAIRMAN NAKAMURA: Okay, I'm sorry. MS. TAOMOTO: One more thing about the project that you need to be aware of, I guess, is the cost is a little high, and the reason for that is that the -- speaking to the maintenance again, because they're familiar with the area, and underneath the roadway it's rock. And based on their experience of the construction in that general area, it's going to need a hoe -- to put in the waterline. It might be more than 900,000. But that's our engineer's best estimate. It's rock right below the roadway. CHAIRMAN NAKAMURA: Okay. What's the pleasure of the committee? Mr. Hiranaga has requested additional information. MR. HIRANAGA: If the department wishes to pursue this matter. MR. RICE: Do we defer, subject to additional information? MS. NAGO: What's the additional information? MS. TAOMOTO: Exactly, what is the additional information? MR. RICE: Additional arguments to persuade us to spend the money for 950,000. At this point, it's going to be denied. It's going nowhere. MR. HIRANAGA: Based on the information provided, I'm inclined to vote to deny the request. But if the department feels strongly about the request, we're providing them an opportunity to provide additional information that will change my position. If there are homeowners that feel strongly about it, give them an opportunity to appear to testify for the need of it. MR. RICE: Testimony was exactly the opposite. It's not needed. MR. HIRANAGA: There was one letter submitted by Councilman Carroll that was for it, and one letter from Senator English that was against it. MR. HASHIMOTO: English lives there, or his parents live there. CHAIRMAN NAKAMURA: That's interesting. MR. HASHIMOTO: It would carry more weight, I would think. MR. RICE: Which would lend me to think there's some developer issue here. And in my opinion -- in our opinion, I thought we shared at the last issue was if we got one guy to participate and other guys want it, then they should participate. MR. HASHIMOTO: They should. MR. RICE: It's not fair to the other people. CHAIRMAN NAKAMURA: Perhaps there should be some contact made with that individual to see if there is interest in participating. What's the pleasure? MS. TAOMOTO: Could I -- Myles, when the subdivision was processed, the interest was asked and denied because they did come up with that agreement that I attached as an exhibit, where the board approved a private water system based on a catchment system for both fire protection and domestic use. So it seems like there was some kind of talks and from that evolved an agreement, which is a private water system agreement. MR. RICE: It's existing. If that's what they want, that's fine. MS. TAOMOTO: I'm just saying it seems like there was talks about what -- MR. RICE: You are saying it's already taken place? MS. TAOMOTO: Kind of. MR. RICE: They may have changed their mind. MR. HASHIMOTO: They thought the line was going in. CHAIRMAN NAKAMURA: What's the pleasure of the committee? MR. NOBRIGA: Move to deny the request. MR. HASHIMOTO: Second. CHAIRMAN NAKAMURA: Motion to deny is so moved and seconded. Discussion? Mr. Hiranaga? MR. HIRANAGA: I'm curious to receive an opinion from the department if they feel strongly about the request or not. Because I have not heard either way, if they are satisfied with the intent of the motion to deny or unhappy about it. CHAIRMAN NAKAMURA: Mr. Craddick, you arrived just at the right time. MR. CRADDICK: I feel I tried at the beginning, when we were doing the budget, to get the board to understand this was a high cost, relatively few-people-affected project. I believe I gave testimony to that effect when we were deliberating on the budget. I don't have any problem with deferring this, because your thing to try to bring back more information, the job, I believe, is bid; isn't it? Oh, it's not bid. So I guess there's time to bring back more information. But I myself believe there's probably other projects where you would get more people that benefit than this particular area. MR. HIRANAGA: If the department feels no need to provide additional information, that's fine with me. MR. CRADDICK: We can still find out if people are willing to participate. That would obviously change our decision to a recommendation to the board. But in the meantime, let us go on with the other projects. And we're both in sync on that. CHAIRMAN NAKAMURA: You said that this project has not gone out to bid yet? MR. CRADDICK: No. CHAIRMAN NAKAMURA: So the motion is to deny authorizing the expenditure of funds for this particular project. Any further discussion? If not, all in favor say "aye." (A chorus of ayes.) Opposed? (No response.) Motion is carried. The committee will recommend that the board not authorize the expenditure of funds. However, the project is still on the list and if the department wishes to pursue it further and come back to the board, I think that's your prerogative. Okay, we have one more item on the agenda and that is a status report on the source development project. Mr. Craddick or Mr. Deputy Director? Mr. Craddick, I suppose. MR. CRADDICK: I guess the plans are about 80 percent complete. We would expect probably to be able to go to bid sometime in February on this project. I see Wendy looking at me real quick. I'll be pushing it to get it out in that amount of time. We do have the letter from the state, which will be on the board's agenda for this next month. If it's not going to slow the project down, then -- I mean, we can always use more money coming in for developing wells. CHAIRMAN NAKAMURA: Any questions on the well project? Mr. Rice? MR. RICE: So the request by the state to drill an exploratory well doesn't necessarily affect our well, we have permission; right? MR. CRADDICK: Yes. As long as they could step in and just fund it and it didn't slow our process in going out to bid or anything like that, then if we had money to do another well Upcountry, that would be great. I realize they do want some money for water for projects in Central Maui. I know there is some additions to Maui Community College and another school they are talking about building. In fact, if we go ahead with the East Maui plan, they have plenty of credits in there anyways, to the tune of $7 million. So they may not have to do this anyways, but it's in the state budget and something they wanted to do. Because the commission asked me, and at that time back last year in January, I said, Hey, this is where we need a well, and they somehow got the legislature to appropriate the money for it. CHAIRMAN NAKAMURA: Mr. Rice? MR. RICE: Continuing on this, we all know that Maui Land & Pine also received a permit from the state water resource management to drill a well. How close is that to this well? Is that why the state wants to drill an exploratory well? MR. CRADDICK: I wouldn't say that's why the state wants to do it. Is this Maui Land & Pine's well here? I guess on page 42 the package has a drawing there. It's that big dot that says Pookela well that's outside our fenced area. MR. RICE: Here? MR. CRADDICK: No. The big dot. That's Maui Land & Pine's. Ours is the small dot inside the fence, with the arrow pointing to it. MR. NOBRIGA: Exploratory well. MR. RICE: I have been contacted by Maui Land & Pine because they have this well permit and I have indicated to them that it's our preference that we drill a well in this area, and they seem to be accommodating and not drilling their well. Which I think is a good sign. But if we could think along the lines of getting them to drill a second well at the appropriate place Upcountry, that might be a good strategy for us to get a second well. And I think they would be willing to do that. They were inquiring as to whether we would consider working with them at Pookela, and I said no, I think we want to drill our well there. And they basically acquiesced to that comment. And I think there's an opportunity for us to get a second well, and I think we ought to pursue that with them. CHAIRMAN NAKAMURA: Okay. I think that -- MR. RICE: And I think we should proceed expeditiously. Wendy, I know you have a lot of work and it's not a reflection on you, but I think the board and the community is anxious. MS. TAOMOTO: I have a comment. It was brought up with Herb Kogasaka -- by Herb Kogasaka to me, if the state funds are involved, there might be a need to do an environmental assessment which would slow the project down approximately three months. As it is now, without the state funding, we were advised by our consultants, Fukunaga, that an environmental assessment was not required, based on their talks with the Office of Environmental Quality Control. So if state funds are involved, it's still an unanswered question whether an environmental assessment would need to be prepared in order to receive the state funds. MR. RICE: We were not anticipating state funds; were we? CHAIRMAN NAKAMURA: We were not. MS. TAOMOTO: This is the attached letter. CHAIRMAN NAKAMURA: It seems to me that in the interest of expediting the source development, that we want to proceed on our own. I think that's the direction that the board has established. And if Maui Land & Pine wants to drill another well and if the state wants to drill another well, so much the better. But I think in the interest of getting this done, we need to move -- my feeling is that we need to move ahead. MR. STARR: I had been concerned that I'd see in April -- an April date in the staff report, and I was very happy to hear the director say February. And I just want to compliment the staff on being able to save that time and do it expeditiously. CHAIRMAN NAKAMURA: Wendy is a little skeptical. MS. TAOMOTO: The only reason why I had put an April date, if you look, the construction plans are only 20 percent complete; the specifications are 80 percent complete. So I have not even received the construction plans or the specifications for review at all, and nor are they complete. So I'm just saying that optimistic -- we can be optimistic about a February date, but being I have not received anything to date -- MR. STARR: Can you have someone call them every morning? That works really good. MS. TAOMOTO: I've called. MR. RICE: I'm sure we'll be able to find you some assistance on that. MR. STARR: I'll call them every morning. MR. RICE: I think there's an engineer who might be able to assist with the review. CHAIRMAN NAKAMURA: Any other questions or comments on Upcountry source development? Elliot, you have been so quiet, you have nothing to say on Upcountry source development? MS. KRASH: I'm pleased to hear this discussion. Thank you all. CHAIRMAN NAKAMURA: Anything else? MR. RICE: Yes. CHAIRMAN NAKAMURA: Mr. Rice? MR. RICE: I want to tell the staff that I think they did a great job in getting a lot of information to us. It takes nothing away from the comment made by Kent about the timeliness, but I think that we appreciate that. All the information helped us greatly today in some of our decisions. And as I said, if you need a certain amount of time to prepare the info, tell us and we'll be happy to schedule the meetings according to that. But if you don't tell us, we'll expect the info is there at the time of the meeting. CHAIRMAN NAKAMURA: Mr. Nobriga? MR. NOBRIGA: Concerning item 1, progress report, wouldn't it be advisable that we take an action of some kind, either to instruct the department to prepare financial estimates for us to complete this project versus this leaving Chairman Rice to keep -- MR. RICE: I think that's a good suggestion, Mr. Chairman. I think we need to note a financial impact of -- we have an agreement, we're -- if Mr. Michel wanted to go be a bum, he could try to force it, so we ought to know what it would cost us to do what we said we would do originally. MR. NOBRIGA: Especially now that he is retired. He was calling me for a long time. CHAIRMAN NAKAMURA: If it's agreeable to members of the committee, we'll include that in the committee report and request that the department come up with a plan and an estimate to complete our obligations to Mr. Michel. Is that agreeable to members of the committee? MR. HASHIMOTO: Yes. CHAIRMAN NAKAMURA: Anything else to come before the committee? If not, thank you for your patience. The meeting is adjourned. (The proceedings were concluded at 11:20 a.m.) IWADO COURT REPORTERS, INC.
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