BOARD OF WATER SUPPLY
COUNTY OF MAUI
REGULAR BOARD MEETING
Held at the Kahului Shopping Center, 65 West Ka'ahumanu Avenue,
Unit 29, Kahului, Maui, Hawaii, commencing at 9:00 a.m., on
Wednesday, November 27, 2002.
REPORTED BY: JEANNETTE W. IWADO, RPR/CSR #135
IWADO COURT REPORTERS, INC.
A T T E N D A N C E
CHAIRPERSON: PETER RICE
VICE CHAIR: MICHAEL NOBRIGA
Board Members: CLARK HASHIMOTO
KENT HIRANAGA
HOWARD NAKAMURA
GINNY PARSONS
JONATHAN STARR
MICHAEL VICTORINO
DIRECTOR: DAVID CRADDICK
DEPUTY DIRECTOR: GEORGE TENGAN
DEPUTY CORPORATION COUNSEL: EDWARD KUSHI, JR.
BOARD SECRETARY: CATHY HOWARD
FISCAL OFFICER: HOLLY PERDIDO
ENGINEERING: HERBERT KOGASAKA
PAUL SEITZ
ALAN MURATA
IWADO COURT REPORTERS, INC.
TRANSCRIPT OF PROCEEDINGS
BOARD OF WATER SUPPLY
WEDNESDAY, NOVEMBER 27, 2002.
HEARINGS OFFICER: Good morning, everyone. I'd
like to call to order the meeting of the Board of Water Supply,
County of Maui. It's Wednesday, November 27, 9:00 am. We are
in the Kahului Shopping Center. Before I start, pagers and
cell phones on off or silent, please.
We have a quorum present. Members present, Kent
Hiranaga, Clark Hashimoto, Jonathan Starr, Howard Nakamura,
Ginny Parsons, Mike Victorino, myself, Peter Rice, Director
David Craddick. And I didn't notice there's no Corp Counsel,
I'm sorry.
Let's move along. We have approval of the minutes.
We have the regular meeting of October 8th and the special
meeting of October 15th has been included in your packet.
MR. VICTORINO: Mr. Chairman, move to approve the
minutes of the October 8, 2002, and our special meeting on
October 15, 2002.
MR. STARR: Second.
CHAIRMAN RICE: Moved and seconded to accept the
minutes, place them on file for 30 days pending review. If no
comments, that they be filed. Any discussion to the motion?
All in favor say "aye."
(A chorus of ayes).
Opposed say "nay."
(None).
Motion is carried.
At this point in the meeting we have testimony from
the public. As I have done in the past, if you would like to
testify at the beginning of the meeting on any item that's on
the agenda, we will hear that public testimony. If you would
rather testify at the point of the meeting where we discuss
your particular topic, we will also open up the meeting for a
brief period before that. Mr. Victorino?
MR. VICTORINO: Nothing.
CHAIRMAN RICE: Testimony. The first name I have is
Anders Lyons.
MR. LYONS: I'd like to testify at the time of our
matter.
CHAIRMAN RICE: Okay, Anders. And I have
Mr. DePonte. I'm sorry, I'm not very good at reading this.
Oh, Miss Ruth, I'm sorry, I couldn't read it. Ruth?
MS. DePONTE: I'd like to testify when it comes up.
CHAIRMAN RICE: Edwin Misaki.
MR. MISAKI: I'd like to testify on East Molokai.
CHAIRMAN RICE: And Roger Sussman.
MR. SUSSMAN: I'll go later, at the time.
CHAIRMAN RICE: All right. I see that Corp Counsel
is here, so we will take -- drag our feet a little bit here as
he gets set up. Mr. Kushi, we have approved the minutes and we
have talked to the people about public testimony, all of which
-- a late arrival, the well-regarded Isaac Hall.
Okay, anybody else who would like to give any public
testimony at this time before we start on the agenda? Mr.
Craddick?
MR. CRADDICK: The people from Molokai wanted to be
moved up because they have got to catch a plane back.
CHAIRMAN RICE: Yeah, they're going to be pretty
quick here. I think we will take care of it. What time is
your plane? (Inaudible) We should be able to handle that.
Okay, hearing and seeing nobody wishing to testify,
then we will move on to Director's Reports. The first one is
02-43 regarding proposal for a cooperative study between USGS
and the County of Maui groundwater. Mr. Craddick?
MR. CRADDICK: Okay, on this item we previously
received a proposal from USGS. I believe the Board has had a
chance to look over that. In our budget is $100,000. The
proposal will need $180,000 for this fiscal year, which won't
end until October, or I guess the end of September, 2003 for
the federal government. So it's a little bit longer than our
budget. But they expect to, I guess, need that amount of money
this year.
And on the designation issue I guess the Water
Commission did not designate. One of the things they wanted to
see is that this was in place within, I believe it was, 60 or
90 days, George? 60 days I'm getting. And one other item I'd
just caution you on is the peer review of this work. The Water
Commission would like to work with us on it and be able to
provide comments. And however you word that peer review
portion of it, I think that needs to be well understood that,
you know, assumptions without a real basis for those
assumptions would probably not be acceptable in the model.
CHAIRMAN RICE: Mr. Starr?
MR. STARR: First of all, I believe that what's
required of us is $150,000. That their $30,000 is expected to
be matching that. I'd like to request clarification from
Mr. Tribble on the first year, the first year budget
requirement.
CHAIRMAN RICE: Yeah, come up here. Why don't you
come up. The budget, why don't you come up.
MR. TRIBBLE: Thank you. For the record, my name is
Gordon Tribble. I'm the District Chief of the U.S. Geological
Survey in Hawaii. The question is the budget for the proposed
groundwater remodeling effort. As we sent the proposal into
the Board, the funding for this year was to be $180,000 total,
of which $30,000 would be covered by federal funds. The
remaining $150,000 would come from local sources.
MR. STARR: I understand that this is on a federal,
a federal year, is that correct?
MR. TRIBBLE: That's correct. One of the details
that we need to work on, though, is the timetable for this was
predicated starting in October. Obviously we have slipped past
that, so there would be some slippage in the following years,
if you would, on the timetable. The scope would remain the
same, but the whole schedule would be offset perhaps by six
months or so.
CHAIRMAN RICE: Hold on a second. There are folding
chairs right there, folks. If you folks would let these people
have seats. Okay, go ahead.
MR. STARR: What I'm trying to ascertain is we have
$100,000 in our budget for this fiscal year, which would end
on, I guess, the end of June. And I'm trying to ascertain
whether that is sufficient for the period between the
initiation of the project and the end of June, or whether we
would need to put more funds into it for that period. It
sounds like not.
MR. TRIBBLE: That's correct, presuming that we
would at this point probably start at the -- halfway through
our fiscal year, which would be March.
CHAIRMAN RICE: I think it's important we begin the
process. Any other questions? Mr. Nakamura.
MR. NAKAMURA: I have one question. The project
includes funding through the year 2007 ultimately, is that
correct?
MR. TRIBBLE: That's correct.
MR. NAKAMURA: So are you asking the Board to make a
commitment to continue to fund this project for the next five
years, or are you just asking for funding for the first year?
MR. TRIBBLE: Ideally it would be most efficient in
terms of the paperwork to have a funding agreement that covers
the full scope. I understand that there's some timetable
issues that may make that difficult. What I would ask for now
is an expression of commitment that we don't go two years into
this project and then stop, because the value of doing that is
pretty minimal. It's either we either do the project or you
don't do the project. So there would be a tremendous waste of
money on all sides and a lot of effort wasted if two years into
the project the funding was terminated.
MR. NAKAMURA: Mr. Corporation Counsel, what is the
limitations that the Board has for something like this?
MR. KUSHI: Yes, Mr. Chair, Board Member Nakamura,
as in all County agencies we can only commit to what the budget
states. Your budget is based on a fiscal year basis. I
believe you have allocated some funds for this fiscal year.
However, I believe in the proposed contract itself it does say,
it does mention, it does have some language in that the future
years are subject to funding. Is that correct?
MR. TRIBBLE: Yes, the language is such that the
continuation of the project is subject to the availability of
funds by both parties. So it's not an unrealistic scenario
that my budget could be cut, and so then we would have to think
about how to scale back. Similarly --
CHAIRMAN RICE: I think we -- it would be the
Chair's preference that we proceed with this item, and that
given the questionable nature of this Board, that we resolve to
recommend to whoever the future authority is that they continue
with this project, and I think that's something that is --
MR. VICTORINO: Mr. Chair, are you saying that then
we are now recommending just for the one year and the $100,000
that Member Starr has mentioned that because of the start dates
and probably starting in March of 2003, and our true fiscal
year completes in 2003 June. So then we're really asking for
$100,000 that already is in the budget. So what action do we
need to take, because it's already in the budget? That's my
question at this point.
CHAIRMAN RICE: Traditionally, even though it's in
the budget, the Board takes the action to approve the
expenditure.
MR. VICTORINO: So in other words, the motion would
be set up to approve the $100,000 to get this project started.
Am I correct, Mr. Starr?
MR. STARR: If I were phrasing the motion it would
be to approve the proposal by the USGS to proceed with the
model and utilizing the $100,000 of funds that's already in
this year's budget.
MR. VICTORINO: So would you like to make that into
a motion?
MR. STARR: Sure. I would like -- I have one last
question before I proceed, and that is it's -- I would hope
that possibly some additional funding might be available on the
federal side, and if that's the case, I'm hoping that that
would allow the co-operator side to be reduced accordingly. Is
that assumption -- is that assumption reasonable?
MR. TRIBBLE: Yes. It's my intent to bring as much
federal project funds as possible. And one of the reasons we
have been able to put more in the following years is that I've
started withdrawing funds from lower priority projects that
have been ongoing.
MR. STARR: With that being the case, I'd like to
move that the Board approve and participate in the proposal for
numerical water modeling for the head and shoulders area of
Maui in accordance with the October 2 proposal from the USGS.
And that the funding of $100,000 that's already in our budget
for this fiscal year be used for the initial co-operator
portion.
MR. VICTORINO: Second.
CHAIRMAN RICE: It has been moved and seconded. Do
you understand the motion? All in favor say "aye."
(A chorus of ayes).
Opposed say "nay."
(None).
The motion is carried, unanimous.
The next item on the agenda is approval --
MR. CRADDICK: That was just $100,000 now?
CHAIRMAN RICE: That's what's the budget, approve
the proposal and authorize the expenditure from this year's
budget.
Okay, the next item is the East Maui Watershed
Protection Agreement. Anders. Could we have Edwin come up
also? I think we can handle both. Also Edwin is your item D
on the agenda, that's East Maui -- East Molokai Watershed
Partnership contract for the Nature Conservancy.
MR. LYONS: Thank you. My name is Anders Lyons, I'm
director of the Maui programs for the Nature Conservancy. I
have a very brief statement. I just want to thank the
Department of Water Supply, David Craddick and his staff, for
the incredible support that they have shown us in the last
several years in our watershed protection efforts, and the
concurrent support that we have felt from this Board.
We are very, very appreciative of your support of
our watershed protection, and we thank you wholeheartedly and
deeply for that commitment to our watershed. Thank you.
MR. MISAKI: I'm Ed Misaki from Molokai. I'm the
director of the Nature Conservancy there. I also want to add to
Ander's appreciation of the Board of Water Supply and the
Department of Water Supply for providing funds for Molokai. I
have handed out a summary of the things we've done this past
year, and we were able to do this because of the Board of Water
Supply, your contribution, and we were able to match that with
some government funding, federal funding also. So it really
helps in attracting other funding to do the work on Molokai.
I am here to answer any questions you may have on
our request for $25,000 for the fiscal year '03. Thank you.
CHAIRMAN RICE: Mr. Craddick?
MR. CRADDICK: I don't have any additional comments
there. The money is budgeted.
CHAIRMAN RICE: The monies are budgeted. I might
note for the record, Board Members, that the East Maui request
is via a five-year agreement, and I believe Mr. Kushi has
indicated that we can approve funding for the current budget
year. I know Anders was attempting to create a situation where
he didn't have to come back every year, but we have only
authorization for one budget year of funding. Any comments by
the Board Members?
MR. VICTORINO: Mr. Chair, are we going to accept on
these?
CHAIRMAN RICE: Yes, we'll have two motions.
MR. VICTORINO: So there will be two motions, one
will be for the East Maui and the other one will be for the
Molokai watershed?
CHAIRMAN RICE: Yes.
MR. VICTORINO: May I ask the other question I have
is what is the funding allocated this year? Is it $100,000,
Mr. Craddick, for this year? What do we have allocated this
year?
MR. CRADDICK: Yes, that's correct.
MR. VICTORINO: It's $100,000 for this year. So our
motion would have to incorporate that for the fiscal year
2003?
MR. CRADDICK: Yes.
MR. VICTORINO: Mr. Starr, I think you have some
questions.
MR. STARR: I'm certainly in favor of the project.
My question to you, though, is with the current funding how are
you doing in terms of progress of keeping feral animals, feral
ungulates, and also invasive species such as Miconia under
control? Are you winning the battle or losing the battle or
breaking even or something else?
MR. LYONS: Well, I mean it's a simple question, but
it's a complex answer. Watershed protection is a long-term
project. A native ecosystem is a dynamic environment, and it
requires a long-term commitment towards management. Are we
making headway on undulates? For sure, absolutely. I mean,
for example, last year we removed 14 pigs out of our preserve,
and that's way down from ten years ago when we were removing
about 100 a year.
So absolutely there's progress, progress on Miconia
mapping, there's progress on outreach in the community, letting
them know the important support that this Board is providing
for watershed protection. Yes, there's progress, but it's
long-term.
CHAIRMAN RICE: Any other questions? Mr.
Victorino.
MR. VICTORINO: I want to make the motion to approve
the East Maui Watershed Protection Agreement with the Nature
Conservatory with the funding for 2002-2003 for $100,000.
MR. NAKAMURA: Second.
CHAIRMAN RICE: Moved and seconded to approve the
request. All in favor say "aye."
(A chorus of ayes).
Opposed say "nay."
(None).
The motion is carried. Molokai?
MR. VICTORINO: I move that we approve the Molokai
Watershed Project for the -- I'm sorry, I don't have the amount
in front of me.
CHAIRMAN RICE: $25,000.
MR. VICTORINO: For $25,000.
MR. NAKAMURA: Second.
CHAIRMAN RICE: Okay, moved and seconded to approve
the request for East Molokai Watershed Partnership contract.
Discussion? All in favor say "aye."
(A chorus of ayes).
Opposed say "nay."
(None).
The motion is carried. Thank you, gentlemen.
MR. LYONS: Thank you very much for your support,
thank you.
CHAIRMAN RICE: Okay, back to item C, report
regarding the request from Kawela Plantation Homeowners
Association. Mr. Craddick?
MR. CRADDICK: I believe there are some people here
from Molokai.
CHAIRMAN RICE: There's no request. Is there anyone
here from Molokai who wants to say anything on this issue?
Yes, sir. If you do, please slide over and pass the
gentleman the mike, please. State your name for the record.
MR. ANOS: I'm Arvel Anos and I represent Kawela
Plantation Homeowners Association. This is Mark Martie, he's
also with me, and we thank you for having us here and we
appreciate whatever we can exchange.
CHAIRMAN RICE: Mr. Craddick?
MR. CRADDICK: Okay, we've reviewed the maps and
drawings of this sent to us, and aside from their water system,
the property, watershed property also is one of the better
sites for drilling for an exploratory well for additional
backup sources for Kaunakakai. So a joint effort with them I
think would be advantageous to the department. And our
recommendation is to continue this process with the group. The
problems that the system has we feel are manageable.
CHAIRMAN RICE: So it would be your opinion that the
department prepare a document for the Board's approval that
would -- that would be subject to their approval, I guess. So
no action is needed other than authorization to proceed?
MR. CRADDICK: Yes.
CHAIRMAN RICE: Any questions or comments, Board
Members? Mr. Starr.
MR. STARR: Yeah, just what would that action to
authorization to proceed be?
CHAIRMAN RICE: I believe the authorization is to
proceed to bring back a contract for the Board's approval.
MR. CRADDICK: That's correct.
CHAIRMAN RICE: Mr. Victorino?
MR. VICTORINO: So we don't have to take any
immediate action, it's just a matter of passing it on?
CHAIRMAN RICE: Yes. No objections? Then that's so
ordered.
Okay, item E, request approval to award contracts,
amend the 2003 budget for additional funds for water system
development fee, and issue Notice to Proceed for East Maui
Water Transmission Project. Mr. Craddick?
MR. CRADDICK: Okay, this project here is the phase
1-A and B of the East Maui Transmission Project. We have the
low bidder on the contract here from 1994, Coluccio. We have a
letter from their bonding company that says the original bond
is still in force and effect. We have a letter from the state
that the monies are still encumbered. And the department has
been put on notice that the state funds would lapse in December
should we decide not to move forward. Both contracts would
complete the first phase of the East Maui plan.
You have got all the various footages of pipe in
there and the sizes. The difference between the low bidder and
the second bidder in 1994 was $334,000. Our engineer's
estimate at the time was $7.2 million.
At this time should the job be awarded, we would
expect it to be subject to a request for delay of award
charges. And we have negotiated a number with them, and that
is an additional $1.48 million, or 3.21 percent per year for
eight and a half years, totalling 27.3 percent increase in the
contract amount.
The 27.3 percent was arrived at by using the
Engineering News Record Construction Index from April 1994 to
November 2002, which is 21.6 percent, or about 2.5 percent per
year. And to that we have added a Hawaii freight and labor
factor of two-thirds of one percent per year for a total of 5.7
percent added to that 21, which is how we get the total of 27.3
percent. The contract amount with this change would be $6.9
million, so still less than the engineer's estimate in 1994.
Now, there are also some things that we have talked
with them about doing which the Board, when they approved the
supplemental EIS, didn't want to do. But we have checked with
OEQC whether downsizing the scope of the project would require
a new EIS, and the answer to that was no, it would not. So the
Board could downsize the pipe feeding the tank on Baldwin
Avenue to 24-inch. And as I told you before, it would reduce
the amount of water, total amount of water that could come in
to 9 million gallons instead of the envisioned 10 million
gallons.
If we did that, they would buy so many feet of our
pipe for $240,000, and other deducted amounts would reduce the
contract to $6,276,538. And again, that's with not including
the $240,000 that would be paid to us for materials.
So going forward with this option, the Board would
have to amend the budget with $856,691 additional funds from
the water system development fee in order to give notice to
proceed, knowing that that is what the cost increase would be
if we go ahead. Should the Board not want to reduce the line
size nor utilize the scope change alternatives, the budget
amendment request would be for $1,480,153.
And my evaluation of the issues surrounding the
wisdom of giving notice to proceed on this contract involves
understanding the nuances from probable additional delays due
to legal challenges to the EM Plan Supplemental EIS. Should
the jobs not be given notice to proceed, additional delay
charges can be negotiated before notice to proceed if we are
able to hold on to the state funds.
The other scenario is, should we give notice to
proceed using presently available state funds and the job has
to be shut down due to legal challenges, we would have to
negotiate additional delay costs with the contract in place,
and then we suggest some -- if you want to go this way, some
mitigation issues. And one is that we limit notice to proceed
to the purchase of materials only, subject to seeing what the
issues are in a legal challenge, if any.
And we have actually already talked with them about
using the same process for any further delays of the job, and
they have said they're agreeable to that. And in this matter
we would not be subject to them mobilizing for the job and then
demobilizing again after we have given them notice to proceed.
The staff recommendation for this matter is to award
the contracts now and give notice to proceed limited to
material purchase only, and the contractor agrees now to
limiting future increases to the Engineers News Record
Construction Cost Index with the Hawaii freight and labor
increases of two-thirds of one percent, and utilize the scope
additives -- let's see, you don't have those scope additives in
here, do you? Yes, you do, they are on page -- let's see.
It's not numbered here.
Oh, no, it is, 166. One is to change the pipe size
from 36 to 24 from the Cane Haul Road to Baldwin Avenue. One
is changing the butterfly valves to 36-inch resilient seat gate
valves, and eliminating the 16-inch line on phase B. And
either eliminating that totally or using some portion of it to
change the 12-inch portion of line on Baldwin Avenue to a
36-inch line.
CHAIRMAN RICE: Mr. Victorino?
MR. CRADDICK: I'm not totally finished.
CHAIRMAN RICE: Oh, you're not finished.
MR. CRADDICK: In discussions with future people that
may be somewhat in charge of this, the feeling was that the
36-inch line probably should remain in place because in any
case, the water is going to be needed in the future, whether we
develop it in this portion right here or not. The problem with
that is if you're thinking about doing future portions then
there's an argument that you are parcelling. So anyway, I will
leave that for what it's worth. There is, I think, the
consensus that the water needs to be developed and the decision
for whether the EIS is adequate or not adequate. It seems like
a decision can't be made on whether that's good until they
review those documents. And they would defer to this group
here on whether the EIS documents are sufficient or not.
CHAIRMAN RICE: Okay, Mr. Victorino?
MR. VICTORINO: Okay. Just to summarize what you
have just gone through, and you have gone through a long
dissertation, what you're recommending is approval of this with
all the limitations with the contractor who this is going to be
awarded to, based upon some increases in cost and all that
factored in?
MR. CRADDICK: Yes. But keeping in mind now,
keeping in mind the decision on the 36-inch line, that is one
where the recommendation from future people is that we proceed
with the 36-inch line, not going down to 24. So I don't
totally disagree with that, but I guess because of one thing
that I haven't listed down in here, and what I told you at the
meeting when we were discussing the EIS, is that the wisdom of
putting all your eggs in one basket in this day and age after
9-11 probably obviously was not discussed during the
preparation of this EIS, and it is a factor.
So if a future project were to do another line, I
think you're just that much more secure being able to get the
water to the top. There's not one line that somebody can take
out and all that water is lost.
MR. VICTORINO: Well, let me continue. You kind of
cut me off in the question, but that's fine. The second part
of my question was basically this. If we approve this as
stated, whether you go 24-inch, 36-inch, whatever options we
have with the contractor, how does this -- if the next group of
people coming behind of us or the new administration, being
that I want to see this approved so that we do not handcuff
them in any way, they can make their own decisions in whatever
manner they want to move on this whole issue. And knowing
legal challenges are around the corner, does that $4 million
from the state, would that be incorporated with this or do we
have to somehow lose that going in another direction?
MR. CRADDICK: Once the contract is signed,
currently right now today the monies are encumbered. That's
all I can say on that. You know, if you wait, whether we lose
that or not, I can't say.
MR. VICTORINO: But there's a strong possibility?
MR. CRADDICK: That's the wording that we've gotten.
CHAIRMAN RICE: Mr. Starr?
MR. STARR: I personally believe that it would be
folly to issue a $7 million contract for a pipeline that may
never get built, that in most likelihood will not get built for
the next ten years when we go through the litigation. All we
do when we do that is to give the contractor a very good
justification to generate enormous extras and have the ability
to sue us if, as is most likely the thing is delayed for a long
period of time or never transpires in its current form.
It really seems a much more reasonable alternative
to wait until the outcome of litigation is finalized, or at
least is on the horizon, and then proceed with actually buying
the materials and proceeding with the project. You know, we
have all seen what happens when projects are contracted and
materials are bought and then they sit stockpiled and the
project gets delayed or doesn't happen, and that's not a good
sight, and it's not something I feel we should subject the --
as David said, the future people.
I'm not quite sure what he's referring to by the
future people, but I wouldn't want to saddle them with $7
million worth of pipe that probably won't enter the ground for
many, many, many years, and a contractor that has a right to
sue them and create all kinds of trouble. I think we should
leave this for the future people when they -- when the future
litigation gets settled, if it does, and if at that point the
future people decide to proceed with drilling wells in East
Maui in lieu of other solutions to the water problem.
CHAIRMAN RICE: Mr. Craddick?
MR. CRADDICK: That's why we sat and negotiated with
them what any future increases will be. If they want to speak
for themselves, we are not open to any lawsuits. We have
already negotiated what the future increases will be, and we
will use the same methodology that we've used to calculate the
fee to date, which is using the Engineer News Record, which is
a published record nationwide available to anybody, and adding
that two-thirds of one percent factor for Hawaii freight and
additional labor cost here in Hawaii. So it is not open-ended
in any way, shape or form. And I don't know if your contractor
would like to speak.
CHAIRMAN RICE: Miss Parsons?
MR. PARSONS: I move to accept the Director's
request in full as stated. I make a motion.
CHAIRMAN RICE: Is there a second?
MR. VICTORINO: Second.
CHAIRMAN RICE: Okay, moved and seconded to accept
the Director's recommendation. I think that ought to be
clarified. The Director's recommendation was --
MR. CRADDICK: To issue a limited notice to proceed
to purchase materials only, accept the scope changes A, B, C as
listed on page 166, with the proviso that the notice to proceed
be with agreement that any future increases be limited to the
methodology used to calculate the increases to date.
CHAIRMAN RICE: Discussion? Yes, Mr. Nakamura.
MR. NAKAMURA: Mr. Chairman, just for the record, I
am going to recuse myself on this, but I would like to say that
I have some very serious reservations about the procedure.
CHAIRMAN RICE: Mr. Kushi?
MR. KUSHI: Public testimony, if any.
CHAIRMAN RICE: Is there any -- Kent, Board Member
Hiranaga.
MR. HIRANAGA: Just for my understanding, when we
have award charges, that's basically an inflation adjustment
because of the passage of time?
MR. CRADDICK: That's correct.
MR. HIRANAGA: And if the motion to proceed is
approved, you would actually expend funds to purchase materials
or would you just delay the purchase of the materials and still
give notice to proceed?
MR. CRADDICK: If you just gave notice to proceed
and did nothing to start the contract, then I would not
recommend that, because then you would be subject to a
cancellation of the job charge, and having done nothing.
MR. HIRANAGA: Prior to construction of the
pipeline, you would have to negotiate the location of the
pipeline, correct?
MR. CRADDICK: No.
MR. HIRANAGA: And acquire easements. Or has the
line, the location of the line been determined in the fact that
you have got -- you have rights of ways through all of the
properties that it impacts?
MR. CRADDICK: Sunnyside Road, there's some debate
on who owns that road, whether -- obviously it's not a road to
County standards, but it's been a public right-of-way for many,
many years. The Cane Haul Road is subject to easements with
A&B, but that has already been basically agreed to under the
amendment that the Board had with A&B some number of years
ago.
CHAIRMAN RICE: Okay, let the record show that
written testimony was submitted this morning by Isaac Hall
regarding this issue.
MR. CRADDICK: No, that's for Hamakuapoko Wells.
CHAIRMAN RICE: Oh, it is, sorry. Any other public
testimony before we take --
MR. COLUCCIO: Can I speak for a minute?
CHAIRMAN RICE: Yes, Mr. Coluccio.
MR. COLUCCIO: My name is Frank Coluccio. I just
wanted to say that I tend to take a little bit of issue in the
event that -- which was spoken in the words that we're trying
to set up for any kind of litigation as such. We have been
wanting to do this job for over eight and a half years. We
looked forward to it for the longest time. We have kept in
contact with Mr. Craddick's staff on a pretty regular basis
over the course of the last eight and a half years. And we
would just like to get in and build you that project.
And you guys need to make use of that $4 million
before you lose it, or when this project does eventually come
to fruition, the prices will be extravagant -- they will be,
you know, instead of 6, 7, you are looking at probably 10 or
12. If you are talking 15 years, 10 years, it could be up to
$20 million for a project of this scope.
So you're getting, as Mr. Craddick said, the price
even with the escalation charges and the full-blown scope of
the project, we are still lower than what the engineer's
estimate was nine years ago. And you guys have got the $4
million coming from the state.
MR. CRADDICK: It's actually $5 million.
MR. COLUCCIO: Five. So I do just take issue with
the -- we're not the type of contractor that looks for
lawsuits. We just want to do work and try to keep our
customers happy.
CHAIRMAN RICE: Mr. Starr?
MR. STARR: Yeah, I did not mean to imply that you
are in any way litigious or whether you were acting in any
other way than in good faith. And I believe, you know, to the
bottom of my heart that you are a good faith contractor trying
to do the right thing. At this point I feel sympathetic with
you because you did enter into a contract in good faith a long
time, and the County has not been able to do its part.
But I do want to be very clear on this, what this
contract is for. This is the pipeline for the implant for the
East Maui Water Development Plan that will run a 36-inch
pipeline from Paia across to the Hamakuapoko Wells and further
east.
MR. CRADDICK: That's not correct. The scope, as
the motion said, reduces that to 24-inch.
MR. STARR: I did not -- I did not hear that. I
think that before we vote on that we should be very clear about
what we're approving.
MR. CRADDICK: That's point A, which I said point A
on page 166, which envisions installing 24-inch ductile iron
pipe in lieu of 36-inch.
MR. STARR: I mean I feel it's a rather cavalier way
that we're handling a change in pipeline for the implant. I
don't know, it seems like we should be a little more thoughtful
about this, you know. I, for one, am not clear what size pipe
we're laying. But irregardless of that, and any of the things
that are being put before us without any real review, it is my
belief that it will be many, many years before any of this will
actually be put in the ground.
If it's not, you know, if we go another eight years
and then it's not put in the ground, then I think that we've
harmed the contractor even further, you know, and that was what
I was trying to -- trying to comment on. But we should be
clear that by doing this we're actually going ahead with the
East Maui Water Development Plan, and I don't think we're
really going to be able to really proceed with it. I think
we're just backing ourselves in a corner, and I don't
understand what size pipe we're laying, where, or what the
justification or what the flow is.
I don't know if the other Board Members are much
more technically aware than I am, but I feel like we've got a
shell game going and we are approving a shell game with, you
know, in a lame-duck manner. I feel this is wrong and it may
not come back to haunt us, but it will come back to haunt the
citizens of Maui. So I, for one, will be voting against and
feel that the Board is making a serious mistake by proceeding
here.
The one thing it will do is it will create, make the
litigation happen a lot faster. It will probably mean that,
you know, within a very short period there will be filings for
injunction and stop-work orders and all of that. I wish
Mr. Hall was still here. Is Mr. Hall still in the room?
Because he came and served us with a paper that's on a very
similar matter regarding Hamakuapoko Wells. I am sure if he
had been aware of this he would be serving us on this matter as
well.
MR. PARSONS: Mr. Chair, can you call for the vote
please?
CHAIRMAN RICE: Okay, all in favor say "aye."
MR. HIRANAGA: Mr. Chair, I think there was a
question as to what the motion is. Are we adjusting the size
of the pipeline or not?
MR. VICTORINO: It's one of the recommendations.
MR. CRADDICK: That's one of the items. I'm saying
go ahead with the changes A, B and C as itemized on page 166,
which will reduce the amount of water that we can bring in from
the East Maui Development Plan from 9 million -- or from 10
million gallons to 9 million gallons.
MR. HIRANAGA: The recommendation I see is the last
paragraph of his memo does not say to reduce the pipeline. I
just want a clarification of what I'm voting on.
MR. CRADDICK: No, it says utilize the scope
additives A, B and C. The scope additives A, B and C are
listed on page 166.
MR. HIRANAGA: I just wanted clarification.
MR. VICTORINO: Mr. Chair, before we call for the
question, I want to make one thing perfectly clear. The people
of Maui do deserve water and need to have the water moved
around in certain areas. I want to ensure that the East Maui
people are not being abused or taken advantage of, and that's
why many of my recommendations have been stated in this
manner.
I have lived here many, many years. My family have
deep roots here. I tend to say litigation is there because
people want to make it a part of our life. Then it has to
happen. But I refuse to step back every time somebody says
there's litigation on the horizon, not to proceed. This is my
home, my family's home and the homes of many of us for many
years to come, and I want to see us ensure that the next
administration, whether I have personal feelings or not, has
the opportunity to move on these things and not be losing state
monies or other areas of income that can help us proceed in
making Maui a better place.
MR. HIRANAGA: Mr. Chair, may I say something?
CHAIRMAN RICE: Yes.
MR. HIRANAGA: Now that I understand that the
recommendation is for the reduction in pipe size from 36 to 24,
I just wanted to inform the Board, based upon that issue, I
will be voting against the motion.
MR. CRADDICK: May I change my recommendation to the
board then?
CHAIRMAN RICE: We have a motion and a second on the
floor.
MR. PARSONS: I will amend my motion. I took it --
I apologize that I read the book before the rest of you did.
What I saw was the Director making a suggestion on how to move
forward with this, and if the Director would like to amend his
recommendation I will be glad to amend my motion. I just think
we need to give -- I agree totally with Mr. Victorino, I think
we need to give the next administration as much ammunition as
they need to go forward. And if they determine that they don't
want it, then they can make that decision and they can override
us. They will have that ability to do it. There is no reason
that we shouldn't move forward for this for the people of East
Maui.
MR. STARR: Point of order. Mr. Corp Counsel, are
you awake?
MR. PARSONS: Don't be insulting, Jonathan, okay.
You don't need to be insulting.
MR. STARR: Okay. The maker of the motion is making
an amendment to their own motion. Is that in order?
CHAIRMAN RICE: Excuse me. I was going to offer to
the maker of the motion that they withdraw their motion and
then withdraw the second.
MR. KUSHI: You can withdraw it.
MR. PARSONS: I will withdraw the motion.
CHAIRMAN RICE: Does the second accept that?
MR. VICTORINO: Yes. For the sake of conversation
purposes, I withdraw my second.
CHAIRMAN RICE: Here we go, we're back to square
one. Mr. Craddick?
MR. CRADDICK: I'd like to change my recommendation
to go with the 36-inch line in Schedule A, and not accept the
deductive amount of the $394-some thousand dollars and go with
the 36-inch line. And I will say, you know, the future
administration concurs with that method of going ahead, too.
CHAIRMAN RICE: Mr. Kushi?
MR. KUSHI: Mr. Chair, because the motion was
withdrawn, the second was withdrawn, I would suggest, before
you entertain any further motions, please call for public
testimony. If there's none, close the public testimony on this
agenda item.
CHAIRMAN RICE: Counsel recommended that there be
another period of public testimony. So given the Director's
recommendation has changed, is anyone -- sorry?
UNIDENTIFIED VOICE: Would you use the microphone,
because I can't hear you clearly back here.
CHAIRMAN RICE: Okay, at this point is there any
other public testimony? Hearing and seeing, seeing and hearing
none, I will close testimony. Okay.
MR. PARSONS: I move to take the Director's
recommendations as stated and amended for the 36-inch pipeline
project for East Maui with B, C -- B, C and D, and move
forward.
MR. CRADDICK: I'm not recommending D.
MR. PARSONS: B and C.
CHAIRMAN RICE: There's a motion on the floor.
MR. VICTORINO: I second.
CHAIRMAN RICE: Okay, moved and seconded to approve
the request to award contracts as recommended by the developer,
I mean by the Director with his recommended -- with his
recommendations amended to include the 36-inch pipe and not the
24-inch pipe. Okay, discussion?
MR. VICTORINO: Mr. Chair, I would still support the
item, even though I am a little upset that the reduction in
pipelines to ensure that East Maui is not regged (phonetic) of
all their water. But I will still support just to give the new
administration an opportunity to make decisions in that area.
I will still support the motion. But I am still appalled at
the fact that I really think East Maui people need some
assurances that we are not going out there just to grab water
and leave them high and dry in the future.
CHAIRMAN RICE: Okay, any other discussion? All in
favor of the motion say "aye."
(A chorus of ayes).
Opposed say "nay."
MR. STARR: Nay.
CHAIRMAN RICE: Let the record show there's one
nay. The motion is carried.
MR. NAKAMURA: Let the record show I recused myself.
CHAIRMAN RICE: There's an abstain, recusement by
Mr. Nakamura.
CHAIRMAN RICE: Director's Report 02-51.
MR. CRADDICK: On this item there is a previous
agreement to build a water tank with Kulamalu and yourself, and
the percentage that we took and the percentage that the
developer took, the developer now wants to change, they want to
pay for more of the project. And because we have already paid
them some of the money, my recommendation would be to go along
with this, let them reimburse us for storage that they need
that we have already paid for, with the four percent interest
charge on that money.
They have agreed to do that, and they should be able
to move forward. And we will be reimbursed with -- how much
money, Herb, was being reimbursed?
CHAIRMAN RICE: 396.
MR. HASHIMOTO: $396,000, page 213.
MR. CRADDICK: That's correct.
CHAIRMAN RICE: Board Members?
MR. VICTORINO: Question.
CHAIRMAN RICE: Yes.
MR. VICTORINO: Being that they're going to
reimburse us this $396,000, is that what you're saying, David?
MR. CRADDICK: Yes.
MR. VICTORINO: Is there any other provisos that
were mandated with this reimbursement, such as shares,
percentage of water usage?
MR. CRADDICK: Yes, they get a larger percentage of
the tank.
MR. VICTORINO: And that percentage is? Just so
that everybody is clear on it.
CHAIRMAN RICE: 37.1 percent.
MR. VICTORINO: Is that the percentage?
MR. CRADDICK: That's what the percentage ends up
being.
MR. VICTORINO: I just wanted to make sure that was
clear, because I'm in favor of this. I just wanted to make
sure the percentages were all clarified.
CHAIRMAN RICE: Okay. Mr. Nakamura?
MR. NAKAMURA: Mr. Director, I assume that when we
went into this agreement that there was some public purpose for
the Board agreeing to purchase the degree of storage that it
did. In what way has the public purpose changed to the extent
that you now suggest that we sell a portion of the storage
back?
MR. CRADDICK: What has changed is that the
development project originally envisioned building another tank
just above where the Kamehameha Schools is for a large housing
development. Because that housing development is not being
built, that tank over there is not needed. And because it's
too close to Kamehameha Schools in order to be of any use to
them, Kamehameha School needs the storage back at the tank.
And Kamehameha Schools already has their meter. We wouldn't be
able to charge them an additional charge for their meter.
So if Kulamalu provides that storage to them and
reimburses us the money, we will get additional funds for that
additional storage that they need. And our participation in
the tank was mainly to take state funds and build storage for
King Kekaulike School, and then any additional storage we had
was just for future development. So if this is the future
development, Kamehameha Schools, then that's what it is.
CHAIRMAN RICE: Okay, Mr. Starr?
MR. CRADDICK: It's mainly a need to relocate the
storage from just above Kamehameha Schools to a higher
elevation.
MR. NAKAMURA: So just to follow up, you are
recommending approval, and you are basically telling us that
you don't see any disadvantage to the public interest by
approving this?
MR. CRADDICK: That's correct, yes.
CHAIRMAN RICE: Mr. Starr?
MR. STARR: Yeah, I have a couple of concerns with
this. One is, you know, this tank is on a completely separate
system from Kamehameha Schools.
MR. CRADDICK: No, it's not, it feeds Kamehameha
Schools currently. The tank currently feeds Kamehameha Schools
and it is on the same system as Kamehameha Schools.
MR. STARR: This is -- you are talking about the
tank?
MR. CRADDICK: The tank is above the polo field
right above King Kekaulike School back in the trees there.
MR. STARR: Oh, okay. You are not talking about
Kaupakalua?
MR. CRADDICK: No.
MR. STARR: Okay, that eases one of my concerns.
The other is just will the remaining portion that we have, will
that be sufficient for other development in the community by
other citizens? I know that we are about to start issuing
water meters in the Kula area and, you know, in issuing those
water meters we will be collecting storage, transmission, and
source fees. I want to be sure that we are not going to have
to stop issuing meters to people who have been on the Upcountry
waiting list because we run out of storage because we have sold
the storage that we had that we were going to use for those
people. How much storage capacity excess will we be left with
in that area after we do this?
MR. CRADDICK: I am not 100 percent positive I can
answer that totally. But the only other properties that need
meters in the area are what was the old Malama Pacific property
just above Pukalani. There's two pieces of land there where we
had an old tank. Those properties would be able to be served
from this tank. I know Maui Land and Pine is trying to get
some rezoning request, but they had always planned to do a tank
lower down anyway, so that would not necessarily be taking any
storage out of this tank here.
MR. STARR: How much capacity do we have left? I am
not talking about the other developers in the region, I am
talking about I just want to be sure that there's some decent
amount left for the people who would be wanting the one, two or
three meters in that neighborhood.
MR. CRADDICK: There is, there's no doubt about
that.
MR. VICTORINO: Mr. Chair?
CHAIRMAN RICE: Yes, Mr. Victorino.
MR. VICTORINO: Unless there's more questions, I
feel very comfortable with the overall statements, and I'd like
to make a motion to approve the recommendation from the
Director to I guess relinquish to 37.1 percent the usage of the
550,000 gallon capacity, and also accept the payment of
$396,577.54 cents from the developer as an exchange for the
percent of changes of our agreement.
MR. PARSONS: I second.
CHAIRMAN RICE: It's moved and seconded. Any other
discussion? All in favor say "aye."
(A chorus of ayes).
Opposed say "nay."
(None).
Motion is carried, it's unanimous. We will take a
one minute break.
(Whereupon a brief recess was had).
CHAIRMAN RICE: Back in order. Director's Report
02-52, budget amendment for large scale scanner. Who is going
to do it?
MR. KOGASAKA: The department is requesting a
supplemental fund for purchase of a large scale scanner, and
this is to replace an existing scanner that is not functioning
any more. The intent was that when the scanner gave us
problems this was in August of 2001. We were trying to, trying
to repair the existing scanner. And after working with the
supplier and with the updates of our computer, we were not able
to accomplish this.
Initially we had wanted to put this on our equipment
budget on the 2002-2003 budget, but we opted to try to repair
the existing scanner that we had and tried to use that to make
it last another couple of years, but we have not been
successful in doing that. I think rather than to pursue this
avenue of approach, I think it would be better if we can
replace it.
CHAIRMAN RICE: Questions, Board Members? Miss
Parsons?
MR. PARSONS: George (sic), is this the state of the
art for you, these scanners at this point?
MR. KOGASAKA: Yes. It's the one we're looking to
purchase, yes. It's an updated one. Actually, the old scanner
is no longer available. They're selling products to improve
that product.
MR. VICTORINO: Mr. Chair?
CHAIRMAN RICE: One second, Mike. The request is
for $12,000. Can you orient me to where the -- how the $12,000
relates to the bids that we see on page 256? Am I missing
something?
MR. KOGASAKA: It included the base amount plus the
$8,800, plus the one year warranty, shipping and handling
costs.
CHAIRMAN RICE: Let me check my math. Which scanner
are you recommending?
MR. KOGASAKA: Graphtec.
CHAIRMAN RICE: The Graphtec, $8,800. Comes with a
one year warranty, plus shipping. Shipping is $4,000? I don't
get it.
MR. VICTORINO: George (sic), excuse me.
Mr. Chair. Are you doing the one year or the two year
warranty? Is that inclusive of that $12,000? Because you say
one here, but down below I see here, "Cost to change from
1-year to 2-year return-to-factory warranty is $1,995."
MR. KOGASAKA: Yes, I'm looking at the two year.
MR. VICTORINO: The two year, that's what you're
recommending? Okay, so I think that's what we're trying to
get, is where the $12,000 comes about.
CHAIRMAN RICE: Okay, I see. You're saying so we
pay them another $2,000 to extend the warranty from one year to
two year?
MR. KOGASAKA: Yes.
CHAIRMAN RICE: I want to be in that business.
MR. CRADDICK: All the computer companies, that's
the major scam going on, I figure. Even Microsoft.
CHAIRMAN RICE: So the recommendation from staff is
we need to have the two year warranty, it's worth $2,000
bucks? And $2,000 then for shipping, or thereabouts.
MR. KOGASAKA: The shipping is $500 plus tax.
CHAIRMAN RICE: Okay. It may be a little bit
higher. Go ahead, Mike.
MR. VICTORINO: Okay, just so that we get this all
clear, George (sic). We are looking at the Graphtec one, which
is $8,800, right?
MR. KOGASAKA: Yes, that's right.
MR. VICTORINO: And then you're also recommending an
additional $1,995 for the two year return to factory warranty?
MR. KOGASAKA: Yes.
MR. VICTORINO: And then was shipping included with
this, or the $500 is an additional to that?
MR. KOGASAKA: It's added to that, shipping and tax
is added to that.
MR. VICTORINO: You need to add the tax to that?
MR. KOGASAKA: That's right. It's an approximation
that would include everything.
MR. VICTORINO: Just so we get that clear,
Mr. Chair, okay.
MR. KOGASAKA: I think a rough estimate of the
shipping is around $500 and the tax I don't have it written
down over here. I made an estimate of that as well.
MR. VICTORINO: That should be around $360, $400,
something like that.
MR. KOGASAKA: Yes, it's $11,680.
CHAIRMAN RICE: Mr. Nakamura?
MR. NAKAMURA: Mr. Chairman, I move to approve the
request.
MR. VICTORINO: Seconded.
CHAIRMAN RICE: Moved and seconded. All in favor
say "aye."
(A chorus of ayes).
Opposed say "nay."
(None).
Motion approved.
Supplemental budget for meter inventory. Who's
going to do that, Holly? I missed that $200,000 item. I'm
sorry, go ahead.
MS. PERDIDO: What we're requesting is an additional
fund of $200,000 to purchase additional meters. And currently
how we have always been budgeting in the past is the meters we
budget for are pretty much installed within a year. We still
have a few more of the meter replacement program to get done.
And we have this year the Hawaiian Homes. To finish up the
Hawaiian Homes project would take out what we currently have in
stock. So we would be low on stock for this year.
So when we were speaking with the Director we came
up with if we budget $200,000 purchase, if you see on the back
of the sheet how many meters, and that would give us a stock
that would hold us not just year-by-year like we've been doing.
CHAIRMAN RICE: So what's our normal stock?
MS. PERDIDO: We usually budget about $200,000.
This past year we also purchased some construction meters with
backflow preventers on them, and those were like a test. And
in the future we are going to budget for more of those also.
But our current stock we usually have, I think this year we
purchased about 1,100.
CHAIRMAN RICE: And people pay for these
meters, correct?
MS. PERDIDO: Correct.
CHAIRMAN RICE: So isn't this like a wash account?
MS. PERDIDO: Well, actually -- here, David.
MR. CRADDICK: The fee they pay, the water
development fee does not pay for the meter. The meter comes
out of the normal funds, operating funds. And because we're
going through the meter list or expect to go through the meter
list, we know there's going to be a lot, an unusually high
demand for meters this year.
But you're right, the total big bottom line number
to the Board of Water Supply will, for instance, if people take
all these meters we will be getting well over $6 million in
fees.
CHAIRMAN RICE: So I guess I heard you say something
I want to clarify. These meters will carry us more than a
year?
MS. PERDIDO: They will help finish up this year,
which we're having an increase in meter installations this
year, and then should carry us through part of next year, we're
hoping, so that we don't have -- we have stock that we can
continue installing and not have a backlog like we did in June
of this year. We ran out of meters, in other words.
CHAIRMAN RICE: Mr. Victorino?
MR. VICTORINO: I move to approve this additional
appropriation.
MR. PARSONS: Second.
CHAIRMAN RICE: Moved and seconded. Any
discussion? All in favor say "aye."
(A chorus of ayes).
Opposed say "nay."
(None).
Motion is carried, approved.
Now we are on the issue that most everyone must be
here for, Ulumalu-Peahi. Mr. Craddick, why don't -- we have
public testimony here regarding this issue, so why don't we
hear it, okay. Let's start with, I got written testimony from
Margaret Koebke. I'm sorry if I pronounced your name wrong.
Is Margaret here, not here? Written testimony. Let the record
-- Margaret, do you want to speak or are you just submitting
your testimony? Okay, let the record show we have received
testimony. Roger Sussman.
MR. SUSSMAN: I defer for that.
CHAIRMAN RICE: Roger is going to defer for now.
Mary Murphy? I am going to close public testimony when we
start into this, so I'm going to close -- I am not going to
keep a dialogue going here.
MR. SUSSMAN: For other people who have not put in
that paper --
CHAIRMAN RICE: Mary is next, and that's all the
testimony. Okay, Mary, come up. Anyone who speaks come up
here to this empty seat next to the stenographer, get the mike.
MS. MURPHY: My name is Mary Murphy. How many
people here are from the Maui Ranch Estates? I'd like to see.
Raise your hands. All right, you can see there are many of us
concerned about this issue. I am a homeowner there, I have
been in the Maui Ranch Estates for over seven years. My house
was one of the first built there 29 years ago.
First of all, I'd look to say I think that the
developer should be held responsible for this. When developers
come in, make their money, skip town and leave people 20 years
later with a water system that's so shabby we have to replace
it, it's not right. And how many other developments -- you
know how many have been going in the last five years. How many
more people are going to be in this situation 20 years down the
road, same as us.
You know, I don't believe you people have any
jurisdiction over this, but I think it's very important for the
public to see what's going on here. Look at our situation. I
only found out a few weeks ago that we were to be paying for
new water meters. It was my understanding, and Nan Powell made
it very clear to me several years ago, that everything was
included in the personal loans we were taking out. I believe
it was something like $7,000. She assured me the new water
meters were covered in that amount and we would not be paying
anything else.
I'm a single mother, I'm an artist, I make baskets,
I wholesale, I retail a couple times a month under the banyan
tree. I have a 17-year-old daughter. Last year when she
turned 16 I made her go out and get a job and get a car because
I barely make it month-to-month, and I don't have any extra
money to be paying for a new water meter. This new extra
burden of a personal loan is enough to take on. I can't afford
it. So I am shocked and appalled, and I don't understand why
we should have to pay for a new water meter.
The figure thrown at me was $4,850 or $4,890. Why?
We are not consuming any more water. All we are doing is going
from a master meter to individual meters. We are paying for
the installation, and I believe when you get new water meters
-- Jo Anne Johnson has been speaking with me about this --
when you get a new water meter you are paying for the
installation. Besides the actual meter itself, you're paying
for the installation. That's covered. Nan Powell got that
loan, $1.4 million plus the other grants, so why should we have
to pay for new water meters?
It's not fair. There's no common sense in this, I
don't understand it. I don't know where that reasoning came
from, that we should pay at the new rate, apparently from what
I understand. Not the old rate, but the new rate which went
into effect last summer. It's not fair, it's just not fair.
And also there's the question about the credits.
Apparently we're supposed to pay, the information I have is
that next Tuesday we are supposed to come up with $4,890 or
else go to the bottom of the water list. It doesn't make
sense. Have I got some facts wrong? You looked like you wanted
to ask me something. Okay.
MR. VICTORINO: I do want to ask you something, but
not yet. Okay.
MS. MURPHY: Okay, our president knows a lot more
than I do. I've just been living there, and all this just came
to light to me a few weeks ago, and I'm shocked. And that's
why all of us are here. It's not fair. What are our credits
due then? We shouldn't have to pay the full amount. The feds
and the grants that we've gotten, plus our personal loans, is
paying for this. But the main thing I'll reiterate again, why
are we paying for new water meters? We are not taking any more
water. It's just changing from the master meter to the
individual meters, and this doesn't make any sense to me.
I would like to see some common sense prevail in
this, because this is not fair to us owners. And if we are to
pay something, that a reasonable payment schedule be put into
place. Because a lot of us I believe are in the situation as I
am, we get by month-to-month. We don't have a lot of money
sitting around that we can just pull out and pay for a new
water meter. So at least some kind of reasonable payment
schedule and the credits, whatever they are. I do not know if
it's you people that decide on the credits. Okay, that's all I
have to say.
CHAIRMAN RICE: Mr. Victorino, I know you have a
question.
MR. VICTORINO: Now I'm afraid to ask the question.
MS. MURPHY: Watch out.
MR. VICTORINO: She seems the type that would bite
my head off if I ask the wrong question. If I do, I apologize.
You mentioned a lot about the master meter, the grant, the $1
million something dollars.
MS. MURPHY: $1.4 million.
MR. VICTORINO: Plus you all put in a $7,000 loan,
you all went out and got a $7,000 loan.
MS. MURPHY: Correct.
MR. VICTORINO: Now, all that money went to the
original system, is that where that money went??
MS. MURPHY: This new system, it is being built
currently. I have seen the trucks for almost the last month.
It is going in now.
MR. VICTORINO: It's all incorporated for the new
system.
MS. MURPHY: Yes.
MR. VICTORINO: So now I understand, David, we're
coming up short and that's why this is occurring?
MR. CRADDICK: No.
MR. VICTORINO: Try to update me on that.
MR. CRADDICK: Okay, the water system development
fee basically says when you turn in a large meter you can
reduce the size to whatever size you want. Any additional
meters you get you have to pay for. They have already paid for
source or storage, so that's not included in the analysis. I
believe Mr. Pennington gives a correct analysis there under C
on his amounts. Those are, as near as I can tell, correct.
And we have chosen not to, well, we are not debating those
numbers here, but that's what it comes out to.
We have actually worked it in both scenarios, one
with the old fee and one with the new fee. And you allow the
50 percent reimbursement to go towards the project. If it's
the new fees the additional amount they have to come up with is
$240,287. If we use the old fee with the reimbursement it
comes to $34,547, and both those numbers are divided by 81.
MR. VICTORINO: And who would decide on this old fee
or new fee?
MR. CRADDICK: You would.
MR. VICTORINO: We would, okay.
CHAIRMAN RICE: Questions for Mary, please, and then
we will get to the Director.
MR. PARSONS: Mary, how long has this litigation
been going on?
MS. MURPHY: That we have been working on it for
getting the grants and the money?
MS. PARSONS: Right.
MS. MURPHY: Approximately ten years. I recall Nan
Powell telling me -- I moved in over seven years ago and she
told me she had been working several years at that time on
getting the grants, because we had been cited by the EPA for
substandard water because the developer put in such a crappy
water system that it has holes everywhere in the water. It's
breaking all the time. So this is a project ten years in the
making.
We have had the federal money since 1999, and
because of delays or whatever we just got the order to start
work this summer. This is not our fault, we have been working
on it. We should have precedence, we should have some kind of
an exemption. I really don't think that we should fall under
the new rules because we are already existing. We are not
taking any more water from the county, it's just changing from
the master meter to the individual meters, which we are paying
for.
MR. PARSONS: Would you say it would be fair to say
that you should be grandfathered in to at least the old rates
because this has been going on for so long?
MS. MURPHY: Certainly.
CHAIRMAN RICE: Okay, thank you, Mary. Actually, I
thought it would be easier to have the testifiers come, but as
they're raising questions I think for the benefit of the new
members of the Board, Mr. Craddick needs to explain the history
of this project. This is a private development with a private
water system that went bad. It's not a Board of Water Supply
development.
MR. CRADDICK: Okay, I will give you a little
history on this system. I guess originally this property was
subdivided around 1969 or 1970 or so, and we did collect the
storage fees for it and never provided any storage for them.
Subsequent to that, somewhere around 1990 they got the County
to pay a $400,000 improvement to move their meter off of -- by
Henry's junkyard across the gulch closer to their property.
After that project was done, I guess the idea behind
that project was to try to reduce some of the pressure within
the subdivision, but it really didn't do that. What this
project now is doing is it's using Rural Utility Services
funds, which is Department of Agriculture funds. They have a
program to upgrade substandard systems in rural areas where the
level of income is reduced.
And this particular area, a HUD survey was done and
they found out that the average income was around $36,000 per
year in the Ulumalu-Peahi area. Keep in mind this project is
not just Maui Ranch Estates, it's outside of there on Ulumalu
Road also.
Anyway, the process of getting the Rural Utility
Services was more association driven than it was driven from
our side. But in the course of things the Rural Utility
Services said they will not fund a program if the water system
is not turned over to a responsible party, public agency, to
operate and maintain the system once it's built. That's where
we came into the picture. And we also came into the picture
now that we have to provide storage for the project. That's
why we're kicking in the $500,000 that we're kicking in, to
actually get it to where we've got fire flow storage to supply
their project.
Anyway, they somehow, because of the low income,
were able to get the maximum grant amount, which is 75 percent
of the project in grant funds. They do have a loan for
$295,000 that they are required to reimburse. All of the
project, other than what we're doing, is related to
distribution lines. It is not related to source, it's not
related to storage, it's not related to transmission lines.
But in our rules it is a subdivision. In our rules we are
allowed to do a 50 percent reimbursement.
The federal government has said that they will allow
the 50 percent reimbursement that goes to them to go towards
this group to reduce their costs. That's the only commitment
we have so far. And those are the two numbers that you look at
there on page 268. You can see what it is with what the
remainder is. It has to be paid per person if the new fees are
charged, which is $240,000, and that's divided by 81
participants in the program. And if you use the old fees, it's
$34,000.
And then I guess there's another issue raised.
They're asking if they can use the payment plan from the new
rules, which would allow some people to probably come up with,
-- well, they would be able to come up with less than $400 in
order to go forward.
Now, obviously with the Board passing this Upcountry
meter rule and the December 3rd deadline, in any case, even if
you don't make a decision in their favor on the meter cost, if
you can at least extend the time that this can be worked out
with them, maybe for another 30 days, because for whatever
reason they feel that they have been caught off guard. I think
it's like anybody in the community, the rules get published and
things like that, and they don't know whether it applies to
them. But the community has been informed with the publication
of the rules and things like that what is required.
But that's basically the project, where we are
today. The job has been awarded, it's moving forward, but
there is still this fee issue. When the project gets done and
actually applies for a meter this won't kick in for a long
time. But because the Upcountry meter rule passed and set, all
of these lots without meters have until December 3rd to apply
for them. That is what has precipitated this matter coming
before the Board right now.
CHAIRMAN RICE: Do you want to keep your -- write
your questions down. Let's hear the rest of the public
testimony. Okay, Davis?
MS. KAHAKAUWILA: Me and my mom together.
CHAIRMAN RICE: Okay, come forward.
MS. KAHAKAUWILA: My full name is Davis Kahakauwila
Cortez.
MS. SANTOS: And I'm Barbara Santos.
MS. KAHAKAUWILA: I bought my place 15 years ago.
And by the way, I am not doing a statement as a fool, okay.
CHAIRMAN RICE: You are not doing a what?
MS. KAHAKAUWILA: I am not doing a statement as a
fool, okay, as some of my members have told me. I just want
you to know I have been with Nan for awhile, and I was also one
of the meter girls that read the meters. At the time what Mr.
Craddick just said about them moving it from Herman's over to
Ulumalu dirt road, yes, it is true, they did move it to help
the water pressure and everything.
At the meantime, I feel as a homeowner for 15 years,
for me and my children and my mom that the cost of the meter is
very high. On the promissory note that we had in the beginning
it was a little over $3,000, and the forms that I have they
want over $6,000 if we are a non-member, and if we are, it's
like $4,890 if you are a member.
I feel as a single parent, again, okay, trying my
best, I feel that that is a really high cost. And for all the
rest of the homeowners there that is very high for all of us to
just come up with the money by the 3rd. And they told me in
your office that I had to come up with that money with the
check on that day, and I don't have that money. If I don't,
you folks are going to shut us all off or what? That's what I
needed to know also.
And on the behalf of all the people in Upcountry, I
think the Board should really look into this a little bit
better for all of us and all of our future and our children and
on customer service.
Mom, your turn.
MS. SANTOS: Thank you. Okay, my pet peeve
basically is our meters are not broken. Why do we have to get
a brand new one at a high cost when ours are working fine?
What is the basic reason for changing a meter, does anybody
have an answer for me?
As it is, I know our lines are lousy, I know they're
plastic, I know I've seen her on the side of the road fixing
somebody's broken pipe in front of the other peoples' yards.
And I know eventually those pipes will have to be changed. But
why water meters change when they're working fine? Is there
any reason for that?
CHAIRMAN RICE: Make your testimony. This isn't
question and answer, okay.
MS. KAHAKAUWILA: And on my mom's behalf, our water
meters were bought by ourselves. I paid for my own and had
them installed, and the service came through Maui Ranch
Estates. I do know at the time when Nan did the paperwork and
all that it was a very big challenge for her, and I really
appreciate her work, what she has done for us. But we need
help, and our cost is just a little bit too high for us. And I
think everybody should understand we're all human, okay. Thank
you.
CHAIRMAN RICE: Questions, Board Members? Thank
you. Okay, Roger?
MR. SUSSMAN: My name is Roger Sussman, I live on
Kalipu Place on Maui Ranch Estates. I've lived there since
July 2000. And this has all come as a great shock to me, I
found out about this about two weeks ago. We got something in
the mail that there was going to be all this fee.
When we acquired the house in the summer of 2000,
one of the significant, perhaps the only significant disclosure
was that there was a loan for our part of the improved water
system that was coming up, and that was offered in addition to
the beauty, you know, the other attractions of the house, that
the value of the purchase that we were making was -- it was an
important aspect of the value, was the fact that all of this
had been approved. The approved water system in terms of
health issues for the community, because it was considered
substandard, and also for fire safety.
And that this was something that was already
accomplished, that the only thing that we had to do was to do
our part of the loan, which I believe was $3,000 or a little
bit more, and it was spread out over many years. But other
than that, everything was included, pre-established.
And now in the mail two weeks ago we get this notice
that we're going to have to come up with $5,000 additional.
And I've learned a lot this morning. It makes no sense to me
that we should have to come up with these fees. So that's my
testimony. I also have been asked by one of my neighbors,
Mr. Ken Pinsky of Waipulani Road to say basically what I've
just said, and also I want to second also what Mary said. And
what Ken expressed to me, I feel a little uncomfortable being a
proxy, but he asked me to express basically what I've just said
and also what Mary said. Thank you.
CHAIRMAN RICE: Questions for Mr. Sussman? Thank
you, Roger.
Anyone else want to speak who has not given their
name?
MR. PENNINGTON: Okay, my name is Rich Pennington.
I'm the president of the Maui Ranch Estates Homeowners
Association. You have a copy of a correspondence that I wrote
that came along with the Director's Report. I'd like to
further state that, you know, it is a low-income area, that's
been certified. Most of the people in the area are unable to
come up with meter fees and the water source development fees.
Everybody is a little confused over whether they're paying
$6,000 for a meter, or what that's for.
We have been working with the RDUS on possible
future funding. I think that's part of David's note as well.
We'd like to get an extension of time, possibly 60 to 90 days.
As we all know, the government doesn't work overnight. I think
that will afford us a lot of opportunity to meet the deadlines
that you have got, if we can extend them for Maui Ranch
Estates, this Ulumalu-Peahi water system.
We've all been working very hard. We lost Natalie
Powell in the process, she died of cancer. She was our
spokesman down at this Board over the years. And it's fairly
new to most of us, so forgive us if we're not within the
guidelines. We respectfully request an additional time to
comply.
CHAIRMAN RICE: Questions for Mr. Pennington? Mr.
Starr.
MR. STARR: Yes, Mr. Pennington. If the Board were
to make and approve the motion that would -- and I am not even
sure if it's legal for us to do so, we'd have to ask Corp
Counsel. But to go by the old rates and to utilize the new
payment terms, if someone wants to avail themselves of those
payment terms, and also to extend the deadline by say 30 days,
do you think that would be a fair solution that would allow
most of the people to have some solace in this?
MR. PENNINGTON: We've looked at David's report on
the water credits and whatnot, and I think the association can
probably come up with the funds out of the coffers, the
remaining approximately $35,000 worth of funds out of those
coffers. Whether the people can reimburse the association or
not is our problem at that point. But I believe that would be
a viable solution for us.
CHAIRMAN RICE: Mr. Nakamura?
MR. NAKAMURA: I was going to ask basically the same
question. You are asking for an extension of time to apply for
the meters, that's your request at this point, that that
deadline be extended?
MR. PENNINGTON: Well, Mr. Nakamura, there are
several things that are at issue, at least within our
association. Part of the issue is how much are the fees going
to be and what's the participant's cost of each of those.
Because the project was extended several times out of our
control, the federal funds were available in 1999, and we all
know it takes time to do good things. We feel like we should
fall under the old fee rules, and that would afford us an
opportunity to comply.
The 30 days is to try -- we have a lot of absentee
owners. The Board could fill out the paperwork and write a
single check. I don't know how that works. But we still have
a lot of people to collect, there's 81 participants in the
system.
CHAIRMAN RICE: Mr. Victorino?
MR. VICTORINO: No, my question is for David, so I
will wait until you're done.
CHAIRMAN RICE: Clark?
MR. HASHIMOTO: So what is the exact amount that
each member, each of the, any one of the homeowners are asking,
being asked by the water supply to pay at this time? What is
the amount?
MR. PENNINGTON: It's my understanding that since
most of the members have paid water storage fees in the late
'60's, early 70's, whenever the subdivision was conceived at,
the old fees less the water source development fee would be
around $2,350. I have not confirmed that. There may be some
tacked on for water meter installation. I think David's, Mr.
Craddick's report showed $2,350 plus $70 for installation.
MR. CRADDICK: About $430 for each of the 81 people.
MR. PENNINGTON: Yes, the total amount. But if we
apply the construction credits, or the off-site credits,
rather, the total amount for all 81 occupants would be
$34,547.50.
CHAIRMAN RICE: Richard, question for you. The
issue here, because we did all this with Natalie, and this has
been at least for the several years I have been on the Board,
this has been on the agenda regularly. Is it -- are you
surprised that there is a charge for a meter fee or is it that
you're charged the new fee versus the old fee? That's one
question.
MR. PENNINGTON: Okay, I think a little of both.
And unfortunately, a lot of the members didn't come down to the
Board meeting, so we relied on Natalie's expertise. We were
under the assumption, because there was two 2-inch meters, and
we were using no additional water, if you read the regs, since
we are not using any additional water we didn't think there
would be a fee.
But, you know, let's set that part aside and then go
to the next part of the question. Because this was approved so
long ago and it's taken so many delay turns, the old fees I
think, given the credits, is more than acceptable. I think
it's something we can handle.
CHAIRMAN RICE: Okay, because I seem to remember
pointedly reminding Natalie that there would be a meter fee.
But be that as it may, if we acknowledge that that was not the
main issue, but the fee is the main issue, I think maybe the
Board can work something.
MR. VICTORINO: Are we done with the discussion and
public testimony, because I do have a few legal questions. But
anyway, go ahead.
CHAIRMAN RICE: We're finished with Richard. Thank
you, Richard. Any other testimony? Lucienne, do you live in
this project?
MS. DeNAIE: Well, I've managed property there for
about five years. Who do I turn this in to?
CHAIRMAN RICE: Right here.
MS. DeNAIE: Good morning. My name is Lucienne
DeNaie, and I was a property manager back in the earlier part
of the '90's, up until about the year 2000, and one of the
properties that I managed was in this area. I managed several
other properties in the Makawao area as well, and had the
chance to compare just what the level of service and level of
price for the water was.
And I would just like to use this opportunity to
say, although no one here is responsible for the situation that
the folks are facing from this development, that it's a really
good opportunity to avoid this situation in the future.
Because, you know, what happened here is a group of people have
been left holding the bag, because County approvals were made
without much oversight, and the Board of Water Supply didn't
have much to say about whether a system would meet their
standards or not.
So I think it's a good opportunity here to see that
we want to avoid this in the future and we don't want to -- we
want to carefully scrutinize projects that propose the same
thing and tell us the same thing is going to be okay, because
30 years later is where the cows come home to graze here.
So these folks basically have been paying taxes for
30 years on their property. Most of the people who bought
here, it was very affordable when they bought, so they're lower
income people, as they've said. They've also paid
higher-than-average fees for their water for all of this time.
I used to pay the water bills for all of these
different properties that I managed, and the one in Maui Ranch
Estates I was astounded, these people used less water because
it rains there a lot, but they paid a much, much higher water
bill. This is because they had a condominium-type meter, plus
they had to pay fees to the private water association. So, you
know, these folks have been paying higher rates all along,
everybody that lives there, for a lower rate of service. The
water service was terrible there. My tenants were always
calling and complaining. And there were just certain hours of
the day where you didn't even have water. And anybody here who
lives there can testify to that. That was just a fact of life
right here in the USA.
And when the notice was circulated that the system
was going to be upgraded, the property owner that I represented
was under the impression that if he put in his $5,000, which he
was hard-pressed to come up with, and we debated back and forth
wasn't there anything that I could do, could I go to the
County, and this and that. Could I go to Nan. He was under the
impression that that was like the basic fee to cover
everything.
So I just want to reiterate that folks really
weren't aware that there was going to be a meter fee on top of
this. Now maybe it was clear to Nan and she didn't make it
clear to other people. But the general impression when the
notices went by, and I read them too as the property manager,
was that basically this was it: You paid your $5,000 and you
were going to be working in cooperation with this federal grant
and the county to get, you know, the decent system that
everybody else who lived in Haiku had.
So I just want to conclude by saying that I would
definitely support this Board. You know, I am not a resident
there, but I have many friends who are, in extending the
deadline so that a reasonable solution could be worked out and
people aren't left on the bottom of the water meter list. To
consider payment schedules, because people are low income
genuinely. And to evaluate carefully what level of meter rates
are really appropriate since folks have really worked on this
for years to try to get their system in the loop.
And it's really no fault of theirs that now the
meter fees are higher. And I understand that the meter fees
need to be higher, but these are good tax-paying people who
have been supporting our county for 30 years. Thank you.
CHAIRMAN RICE: Any questions? I have one
statement. You know, maybe your intention wasn't to do this,
but I resent any implication that these people paid for
something that they didn't get through this Board, a private
water system. They bought into it, and when you buy property
it's your duty and the duty of the seller to let you know what
you're buying. This Board, since I have been on it, has been
working to help the people.
MS. DeNAIE: That was my first statement.
CHAIRMAN RICE: And I don't want that to be
misunderstood here. And I don't want it to come out that
people didn't get something that they deserved because of this
tax implication.
MS. DeNAIE: No, my first statement was that no one
here is responsible for this situation.
CHAIRMAN RICE: But, but, but. I resent the buts
because they don't relate to this Board, and they don't relate
to the actions taken by this Board for the last two years.
MS. DeNAIE: I understand that. This Board has been
very supportive in bringing this system up to compliance and so
forth. I'm just speaking to, you know, the human side of it,
because that was my experience in trying to manage this
property where people barely got water and paid higher rates
than people living in other places in Haiku that I managed.
CHAIRMAN RICE: Well, we are very human here. We
don't need to have any implications, that's my point.
MS. DeNAIE: Well, I apologize if you felt this was
criticizing your actions. That was not my intention. My
intention was just to deliver some information about what it
was like just being a property owner over the last ten years
there, and what they've had to deal with. And hopefully that
they can find, you know, redress through the actions of this
Board today. Thank you.
CHAIRMAN RICE: Mr. Victorino? We're done. Any
other public testimony?
MR. VIERRA: My name is Brian Vierra. I have lived
on the property for like 14 years now. The thing that what
everybody said is fine, and it all has to do with the history
of the project and everything. The guys, the contractor is
actually working on the system now as we speak, and they're
just doing what they have got to do.
Before this meeting we had another meeting which was
supposedly with the County and the developer. Now, that was to
open up the floor for any questions they had for anybody. But
prior to that meeting we had another meeting which all of a
sudden gave us this $4,700 raise in what we were supposed to
pay, additional to what we had agreed to.
I'm a plumber, I have been a plumber for
20-something years. Installing meters and stuff like that,
I've helped guys from the County do it and everything. The
developer is running the pipeline, he's doing the tap, he's
coming up to our property, he's installing the box that the
meter goes into, he's doing the check valve and the normal
shut-off. So now for $4,700 for one meter, just the meter, is
my only question. I understand it's not question and answer,
but my thing is one meter doesn't cost $4,700.
What I guess I'm asking, everybody is asking for
extensions to try to, you know, make everything clearer, which
is okay. But my whole question is, don't we just pay for the
meter? That's all that's being supplied to us by the County to
bring it up to County standards. We are doing everything
physically possible, financially possible to bring the whole
system up to a County standard so it can be taken over, other
than the grey area, which is just put the meter inside of the
box.
So if it can be dropped down to whatever the meter
cost is, and for the workers to come in, take out our old
meters, put in the new meters, that's fine. I think everybody
would agree to paying for it that way. But like Mary said
earlier, the $4,700 would work out to like as if it was a new
installation where the guys from the County would come dig up
the street, run the new meter in, the shutoffs and everything,
where that's not actually happening. We're paying for that
through this federal grant.
So at the last meeting we had that's what I
considered the grey areas. Where we came to bring all the
water and everything there, and the only exchange was our meter
for your meter. So whether it's the old fee, new fee, it think
it should just be the charge of the meter and the amount of
time. I've changed them several different times over a period
of 20 years. It takes about 10 minutes to knock one out and
put another one in.
I think that's what we need to be charged for, you
know, not as if it was a brand new installation happening to a
ductile line, running a service into the house or onto the
property, and then it's the owner's from there. That's pretty
much the bottom line on my part.
CHAIRMAN RICE: Questions? Thank you, Mr. Vierra.
Any other public testimony?
MR. CRADDICK: I wish we had meetings like this when
we were trying to get everybody to sign the loan documents.
CHAIRMAN RICE: State your name for the record.
MR. TESTER: Monty Tester. Monty Tester. I've sort
of taken over the duties since Nan passed away. I have been
elected as the secretary-treasurer. And I wanted to support
Rich's comments on the requesting an extension for the deadline
for submitting the form for meter reservation, if possible, to
help out our community. And also if you could help us with a
fee reduction. And also with paying the fee in installments,
if possible. That's really all I have to say. I'm just
requesting your help in our situation here. Thank you very
much.
CHAIRMAN RICE: Thank you, Monty. Are there
questions for Monty?
MR. VICTORINO: If we -- I guess in this I still
want to go on as soon as we're finished. In your case,
Mr. Tester, you feel if we can A, extend it, B, go back
probably to the old rates to be fair, kind of grandfather you
folks in, and thirdly, some kind of amortization of the
payment, or some kind of payment schedule, that many of you out
there would be acceptable to this, then I think we would be
able to accommodate most of you, if not all of you. I see a
lot of nods. I hope that means you like me. Okay, thank you.
CHAIRMAN RICE: Okay, thank you, Marty. Sorry,
Monty. Monty, sorry. Monty Hall.
MR. STARR: I have a question for you, Monty, and
also Richard. This is a point of concern for me that, you
know, I feel that this issue, I think we can deal with it
today. But there's another issue, and I just want to be sure
now that this community is here that it's clear and it's been
taken care of. And that is, the last time this project had
been before the Board, and this was, if I remember, about six
months or so ago, there was another issue with the project
where it turned out that when the bids had come in for doing
the work as originally proposed the bids were a lot higher than
the money that was available to do it. That includes the $1.4
million and all of that. And so at that point it's my
recollection that the Director had recommended that the scope
of work be reduced.
MR. TESTER: That's true.
MR. STARR: And that took out a dedicated storage
component, instead using the Kaupakalua tank and some other
pipe work. And at that point it was not 100 percent clear that
hydraulically it was going to provide the pressure all the way
up to the top-most portion of the area. And I know that there
was a public meeting scheduled, which unfortunately I didn't
get notice of until earlier the day of the public meeting. So
I don't know if that meeting, you know, if people attended that
public meeting and if this was discussed.
But I just wanted to clarify, you know, with the
community here that there is an understanding and a confidence
that the project as it's being done will satisfy the needs of
the communitY, and whether you have had a full disclosure and
understanding of the current scope of work. And that's to you
and also to Richard as representatives of the association.
MR. TESTER: Yeah, I'm pretty sure, yeah, I attended
the meeting and it was disclosed that there would still be some
lower pressures at the upper lots. I live on an upper-most
lot, which has fluctuating water pressure. And with the tank
not going in, it substantially reduced the pressure at the
upper lots. But since we should have a larger pipeline, we
should have more volume of water and not as much of a
fluctuation anyway in pressure. So I understand that. I'm
happy with that, and I'm sure a lot of other people support me
on that.
CHAIRMAN RICE: Okay. Richard?
MR. PENNINGTON: Yes, Mr. Starr, there was a
meeting, and that was one of the items that was discussed quite
at length. We have a tank at the top of North Lanikai or it's
actually South Lanikai, and we have taken pressure readings on
that tank with a memory-type gauge. And typically we will get
as high as 40 pounds on that end of the system, and that's even
through our system.
Our largest problem up there is a lack of volume
because of the deterioration on the inside of the pipes. We
just don't get the volume of water through the pipes that we
need. Of course they leak, they break, they do all kinds of
things. But we believe that the pressure is going to be more
than what we currently have by leaps and bounds, okay.
CHAIRMAN RICE: Thank you.
MR. PENNINGTON: Thank you.
MR. TESTER: Thank you very much.
CHAIRMAN RICE: Okay, any other public testimony?
Hearing and seeing none, I close public testimony on this
issue.
Mr. Victorino, you wanted to ask the Director some
questions?
MR. VICTORINO: Definitely. Before I make a motion,
I'd like to ask between Corp Counsel and our Director, Mr.
Craddick, the legalities A. Before I go into the legalities, I
want the public to hear this, because in the past -- and I have
been on this Board only nine months -- but other private
systems have come to us for approval or other systems or
subdivisions want private systems for their development, to
skate around some of our codes and policies that are set by the
Board and other entities in the governmental system. And this
is a classic example of developers skating around, leaving you
holding the bag, and coming back to the County of Maui and the
Board of Water Supply to correct the problem.
I have no qualms in doing that. You deserve it like
any other subdivision. But it's something that the public has
to know and buyer beware when you get into a private system
this could occur again, and we are not always going to have the
ability to make corrections, okay. So I empathize with you, I
feel that you have been the victim of this whole scenario and
that we're here to help you correct the problem.
Now, the legal issue I have with you, Corp Counsel,
and Mr. Craddick, if we are to A, ask for an extension would
that be legal? An extension, Mr. Craddick?
MR. CRADDICK: First of all, the rules allow that.
But as I heard Mr. Pennington's testimony that should you
decide to apply the old fees the association will pay the
entire amount. And I have confirmed with him they will pay the
entire amount by December 3rd, which would not necessitate any
extension of time.
MR. VICTORINO: Thank you. You answered my second
question because I was going to ask you can we also ask for
grandfathering of the old fees for this particular situation,
is that allowable?
MR. CRADDICK: The rule allows you to do it.
MR. VICTORINO: Mr. Starr did state that earlier,
Member Starr asked that, about legalities, so I wanted to make
sure that we don't go ahead and be improper in our motion and
then all of a sudden get zapped someplace else.
MR. CRADDICK: If you look on page 269 of I guess
Mr. Pennington, a letter from Mr. Pennington, they go over the
water system development fee 16-8-8(e), which is the standards
that have to be met in order to allow a change in the rules.
And his analysis there, he goes over it pretty clearly. It is
not something that would be applicable to everybody. The
financial impact seems to be about a $200,000 difference
between paying the new fee and the old fee. So again, like I
said, I don't contest any of the items that he's given in
there.
MR. VICTORINO: You don't contest that. Okay, then
the last question, and I think maybe this is a moot question
because I was going to put this as part of the motion, but if
-- Mr. Pennington, I guess the question goes to you. If the
association is able to pay the $34,547.50 of funds that is the
50 percent reimbursement, if the association is capable of
paying that in its entirety and then somehow work that out with
your association members, then I don't think I would have to go
for some kind of payment plan or installment plan because the
people would be taken care of. So am I correct in saying that
you could do it if we accept that part?
MR. PENNINGTON: That's correct. We believe we have
money in the coffers to cover that entire amount. It will put
us a little at risk for any future breaks, but we will handle
those as they come up, if they come up.
MR. VICTORINO: I guess looking at the audience out
there, which is a lot of members, would that be acceptable to
you? Instead of an installment plan through us, to work it
through your association.
Mr. Chair, unless there's other discussion, I'd like
to make a motion, because I think I've clarified all the
points.
CHAIRMAN RICE: Kent has a question. Mr. Hiranaga?
MR. HIRANAGA: I'm waiting for an opportunity for
discussion. I'd like to say something.
CHAIRMAN RICE: Now?
MR. HIRANAGA: Before a motion is made.
CHAIRMAN RICE: Go ahead. Before a motion is made.
MR. HIRANAGA: When is the 50 percent reimbursement
applied, is it after the meters are hooked up or is it -- the
monies have to be paid then you get a reimbursement
subsequently?
MR. CRADDICK: That's correct. In order to apply it
up front, that I guess also is going to have to be looked at.
But the rules do allow the Board to modify the subdivision
requirements.
MR. HIRANAGA: So in your report to the Board you're
saying under the old rule each meter would cost $2350 plus $70.
MR. CRADDICK: Well, that's minusing one thousand
dollars for storage, which was already paid back in 1969.
MR. HIRANAGA: Under the new rule it would be 49
plus 7?
MR. CRADDICK: And that is, yes, that's correct.
And let me go back a little bit here to make something real,
real crystal clear. This is, in general, the people inside
Maui Ranch Estates. There are people outside of Maui Ranch
Estates that are hooking up to this project. They did not pay
the storage fee. They would have to pay the full storage fee.
And -- well, never mind. That answers your question.
MR. HIRANAGA: So now you are talking about a $400
payment, but it's not really a $400 payment, it's $2350 plus
$70 payment which will net to $400 once the reimbursement is
received.
MR. CRADDICK: Yes.
MR. HIRANAGA: So it's not that the association
would have to pay $400 before the end of the year.
MR. CRADDICK: No, no. That $70 could be deferred
until the meter is actually put in.
MR. HIRANAGA: The $2350 is under the old rule;
under the new rules, $4890.
MR. CRADDICK: That's correct.
MR. HIRANAGA: This system is currently under
construction.
MR. CRADDICK: Yes.
MR. HIRANAGA: When is the completion projected?
MR. CRADDICK: July next year.
MR. HIRANAGA: So at this point the Board, unless
they're going to waive the $2350, that's what's owed under the
old rule.
MR. CRADDICK: Yes.
MR. HIRANAGA: By December 3rd.
MR. CRADDICK: Yes.
MR. HIRANAGA: The new rule would be $4890.
MR. CRADDICK: Yes.
MR. HIRANAGA: And eventually they would get a
reimbursement of approximately $2,000. Under the new rule they
would get a $2,000 reimbursement. So their net would be $3,000
for the meter under the new rule.
MR. CRADDICK: Try that again.
MR. HIRANAGA: I'm sorry, if they paid the $4890,
eventually they would get a 58 percent reimbursement, which
would be about $2500 they would be paying for the meter under
the new rule, net reimbursement.
MR. CRADDICK: Yes.
MR. HIRANAGA: And how long for the reimbursement?
MR. CRADDICK: The 50 percent reimbursement?
MR. HIRANAGA: Yes.
MR. CRADDICK: That's spread over five years. But I
think they're also asking if that can be applied up front.
MR. HIRANAGA: Who is asking?
MR. CRADDICK: They are. He says -- I think it's
the last comment there in his letter.
MR. HIRANAGA: The reimbursement comes from where?
MR. CRADDICK: It comes from our normal operating
fund. That's where all the reimbursements come from. In this
case here it would just be a reduced water system development
fee that they're paying now, and I guess over the years we
would have to take from our 50 percent reserve fund and pay
into the water system development fund as the five years go
by.
MR. HIRANAGA: Thank you.
CHAIRMAN RICE: Mr. Nakamura?
MR. NAKAMURA: David, just to clarify, so the
project is under construction right now. The scope of the
project is to install transmission line, distribution lines and
also lateral, service laterals, and the meter box?
MR. CRADDICK: No transmission lines, mainly
distribution lines. That's all.
MR. NAKAMURA: Service laterals.
MR. CRADDICK: Service laterals.
MR. NAKAMURA: And the meter box?
MR. CRADDICK: Yes, with the meter box.
MR. NAKAMURA: And what is the total cost of the
project, approximately?
MR. CRADDICK: It's about $2.3 million. It's about
$2.3 million.
MR. NAKAMURA: And what is -- at this point what is
the participation of the Board financially, how much money are
we putting into it?
MR. CRADDICK: $500,000.
MR. NAKAMURA: $500,000.
CHAIRMAN RICE: Plus a guarantee.
MR. CRADDICK: Plus the guarantee on the loan.
MR. NAKAMURA: And then they have two master meters
right now?
MR. CRADDICK: Yes, that's correct.
MR. NAKAMURA: So in the process of computing this