County of Maui Water Supply


                                                                      
BOARD OF WATER SUPPLY COUNTY OF MAUI SPECIAL MEETING
Held at the Kahului Shopping Center, Kahului, Maui, Hawaii, commencing at 1:00 p.m. on August 11, 2003. REPORTED BY: LYNANN NICELY, RPR/RMR/CSR #354 IWADO COURT REPORTERS, INC. A P P E A R A N C E S CHAIRMAN: KENT M. HIRANAGA VICE CHAIRMAN: MICHAEL P. VICTORINO BOARD MEMBERS: STACY HELM CRIVELLO KENNETH M. OKAMURA DOROTHY R. PYLE SALLY RAISBECK GINNY PARSONS MIKE NOBRIGA DEPUTY CORPORATION COUNSEL: EDWARD KUSHI, JR., ESQ. DIRECTOR: GEORGE TENGAN BOARD SECRETARY: CATHY HOWARD IWADO COURT REPORTERS, INC. CHAIRPERSON HIRANAGA: I would like to call the meeting to order, please. Thank you. There are a couple of people we're waiting for at the moment, so we're going to go into a recess until those couple of people show up and I just wanted to call the meeting to order. Thank you. (Brief recess.) CHAIRPERSON HIRANAGA: I would like to call the meeting back to order. Let the record note Ken Okamura, Sally Raisbeck, Clark Hashimoto, Stacy Crivello, Ginny Parsons, Mike Nobriga, and myself are in attendance. And we have some requests for public testimony. We'll start with Ron Sturtz. MR. STURTZ: Board members, my name is Ron Sturtz and I'm here today sitting as the president of Maui Tomorrow Foundation. And our goal is we're involved in land use planning and community design, responsible growth, and preservation of groundwater supplies. I see myself today as a resource to you. I'm not proffering any specific recommendation to a plan of action, but simply to fill you in since many of you were not here during some of the events that have transpired in the last several years impacting on this situation. There is some information that I've provided to you. One thing that came to my attention was under Old Business, Item B, Central Maui Joint Venture. One of the things that you need to be determining is not only where the water comes from but how it gets distributed and when and whether there are priorities in distribution. And one of the things which keeps coming up is reference to the old joint venture agreement, the Central Maui Source Development that has taken in July 1975 and what water rights may or may not stem from that agreement. Because that has a rather large impact on our water needs and so I think it's important for you to know and make a determination and have your counsel advise you as to what the impact of that agreement is. You may or may not be aware that that agreement was the subject of litigation a couple years ago and [inaudible] by the board at that time to do a subsequent -- THE REPORTER: Something is wrong with the microphone. [Adjustments made to microphone.] MR. STURTZ: The Central Maui Source Agreement has been the subject of litigation before this board and before the courts and there is some question is there any moral responsibility that rises from that agreement or legal responsibility. I would like to point out what I consider to be the most relevant section, which is paragraph 10 of that agreement on page three which says that the agreement expires on the earlier of two events and one of those is December 31, 1999. The bottom line, very simply, is that that agreement seems to have expired by its own terms several years ago, four years ago. That's paragraph number 10. Almost four years ago. The question comes then what do we do now to impact our water supplies for the entire central corridor. It's more than a South Maui issue; it's Kahului, Wailuku, Paia, Wailea, Makena, Kihei, Maalaea, and where do we find additional water sources to the Iao Aquifer. It's very clear that between the North Waihee wells and the Iao Aquifer itself wells, that we appear to be exceeding our allowable capacity and that seems to have been the trigger for the state to step in. I would like to encourage the board to look at other water sources rather than try and delve further into the Iao Aquifer wells, and also to look very carefully and to ask your counsel to give you a proper legal interpretation of the Central Maui Source Development Agreement so that it doesn't detour your evaluation in inappropriate directions. Thank you very much. CHAIRPERSON HIRANAGA: Thank you. Questions for Mr. Sturtz? Yes, Ginny. MS. PARSONS: Ron, do you recognize the Memorandum of Understanding concerning the settlement of water and related issues in -- I guess it was dated in 2000. It's in memorandum to the paragraph 5, Central Maui Source Joint Venture. It's on the website, on the Department of Water Supply website. MR. STURTZ: What's the date of that, please? MS. PARSONS: I believe it's in 2000. MR. STURTZ: There's a March 12, 2001 memorandum, in effort to settle the water rights. Is that the one you're referring to? MS. PARSONS: I don't see the dates of the signatures. 2000. April 13th, 2000. MR. STURTZ: I don't have that document in front of me. MS. PARSONS: It's on the website. It basically states that the Board of Water Supply acknowledges that there is unmet obligations in the Central Maui Source Joint Venture and they are going to continue negotiations on the settlement. MR. STURTZ: That was the agreement with Alexander & Baldwin, A&B? MS. PARSONS: Uh-huh. And the board. MR. STURTZ: There was some -- in what way would you like me to respond to that? I'm aware that it exists. But there is some -- as I say, we're dealing in an area of law and I would regard heartily recommend that you consult with your legal counsel on this point because it is not a clear case that this document is the appropriate interpretation of what the law is and whether it's legal or binding. So that's all I'm suggesting. And you do have counsel sitting at the table and I think it's important that you consult with them. And I know this is slated for executive session, but I wanted to alert you to raise these questions when you're in executive session. MS. PARSONS: I just wanted to see if you were aware of this document because you didn't bring that up. MR. STURTZ: As you may have noticed, I haven't reviewed it. MS. PARSONS: Okay. CHAIRPERSON HIRANAGA: Any other questions for Mr. Sturtz? Thank you. MR. STURTZ: Thank you very much. CHAIRPERSON HIRANAGA: Jim Smith. MR. SMITH: Chairperson, members of the Board of Water Supply, my name is Jim Smith. I'm a resident of Haiku. And I'm sensitive to what I'll describe as the integrity of our political system and what I see is occurring is a destruction of that integrity. And what I see this board as being, I think this board is being victimized by a lack of understanding of how important a role you play in preserving public integrity. The Haleakala Times published a commentary and in that commentary a political activist claimed that the mayor could not see certain things and then admonished the mayor and then told the mayor that he should enact a moratorium on the reservation of water for Iao. The mayor publicly declared a moratorium that the administration would not be issuing reservations. Where is the official act by this board advising the mayor of this course of action -- of any course of action? I've seen none. It says to me this is a campaign gesture. It says to me there is no public duty, no public or official act involved. It's an exhibition of power that does not exist in our system that corrupts and that's what's occurring. You have before you a letter dated October 5th which says nothing about a moratorium. It says nothing about a person being denied access to water. Subsequent to that proclamation, another proclamation was made that somebody else who had a large subdivision would be getting water. Now, if I had a piece of land and I got a building permit and by your rules I am required to pay a fee for a water meter and you told me no and then I read the proclamation that somebody else is going to get, then I am losing confidence in government, and trust, because my trust is in its integrity, not the zeal of a leader. Now, you have before you a complicated issue and you have recommendations. It would seem to me that there has been action without your advice by the mayor's office. So what would advice do now to the mayor's office? Validate? I don't think that's appropriate. So I think any advice that you make should be to the council because if there is no power in the executive branch for that, and this board has lost its power to make rules, then the charter provides that it is the council that assigns power when no power is identifiable. That's the way integrity is preserved. So I would ask you to take this matter very seriously. The Iao rule, the management rule, it would seem, has been trumped by the declaration. I mean, you have one thing you can do now that there is a declaration and that is to reach an independent judgment of its merit and whether or not there should be declared a caution or whatever. But all of that has been negated by this wonderful exposition pleasing a certain segment of a political spectrum, to the damaging of everyone else. So I would ask you to investigate this matter, to produce any request for advice that you received prior to the proclamation, and to -- don't fall into the trap of the 1992 board who when I sued them argued that it only was a public release and not a rule except for the fact that there were exemptions to this proclamation which made it a rule. In addition, it applies generally governmental power that affects citizens and that's either got to be in our political system a rule or a statute or a charter provision, and none of those are present in this circumstance. Thank you very much. CHAIRPERSON HIRANAGA: Questions for Jim. Yes, Sally. MS. RAISBECK: Jim, I have the greatest respect for your dedication to the Sunshine Law, for your dedication to proper process. And the reason we have the Sunshine Law, the reason we have proper process is for the protection of the public. We are in an extreme situation here. Since the charter change, the board is in a strange unknown position. The council and the mayor are also -- have not clarified who has the power to act. It's simply that this board has felt by the charter we did not have power to act. And some members of the board have even felt we didn't have the power to even give advice unless we were asked. And generally people have been too busy to ask us. Generally we have not come forward with advice or considered important issues that ought to be considered about water. You reference a letter October 5th -- MR. SMITH: August 5th. It's the one listed on your agenda from the director. MS. RAISBECK: Oh, the director's report. Okay. MR. SMITH: What is your question? MS. RAISBECK: My question is this: Would you be willing to write a letter to the board, not just complaining about action without rules but rather specifying what you see as the proper route by which this board can get proper rules? We've had an opinion from our corp counsel that first the council has to pass an enabling ordinance and then some body who is given rule-making authority can make some rules. Until that happens, all the important parts of our rules are in limbo because they reference the board's power which we know we don't have anymore. MR. SMITH: That may be simple. That may not need a letter. It may just need a reading of the charter that says specifically "perform such other duties and functions as shall be prescribed by law." Now, your rules were adopted by the board and they were approved by the mayor and they were approved by the council. Those rules have the force and effect of law. No one has nullified those rules. Those rules are in effect until they are replaced. You cannot have a void protecting the public interest by rule and allow someone to rule by their stomach or their intent. That creates courtesy, but it doesn't create equality. So you have in this charter -- now, from my perspective, the majesty of this document has to be respected and that respect must be demonstrated by all quarters. That means the mayor must err on the side of seeking advice, not on the side of performing for a political elite. That's what it means. It also means that this board is not governed by a corporation counsel or by some ambivalence that is created by unclear thinking. It has a specific duty and it has protection -- I mean, it has a function to protect integrity. And that is the function that was missing in '92 and abused throughout and caused great suspicion upcountry and now is spreading out to the rest of the island. Now, this board needs to be tough and committed to the notion that no quarter will be lost in defending its authority and duty which is to advise. MS. RAISBECK: Can I ask you to write a letter with specifically your views as to the route we can follow to have rules that recognize the advisory capacity of the board and redistribute the power to other bodies. Can I ask you for a letter like that? MR. SMITH: Member Raisbeck, I'm flattered by your request. And if I have time -- MS. RAISBECK: Thank you. MR. SMITH: -- I'll give it some thought. MS. RAISBECK: Thanks very much. CHAIRPERSON HIRANAGA: Any other questions for Jim? Thank you. Because we have a number of people signed up to provide public testimony, I would like to request that each testifier try to limit their comments to five minutes. The next person shall be Douglas Ing. MR. ING: Good afternoon, Mr. Chairman and members of the board. My name is Douglas Ing and I'm here to speak to the board on behalf of the Central Maui Joint Venture group and I'm authorized to represent them here today in connection with Item VI(B) on your agenda this afternoon. The joint venture was formed many years ago in 1975 to develop water source which was then dedicated to the county. They spent approximately I'm told $2.8 million developing a water source and subsequently dedicating those wells and facility to the county. In exchange, the county was to set aside and provide upon request a fractional portion of the water developed to the members of the joint venture and as I'm sure you're aware, those fractional portions are set forth in the joint venture agreement. It is clearly our position that while the document as referred to by this gentleman here that paragraph 10 does say that the joint venture ends on December 31st, 1999, the obligations that flow from the agreement do not end. And in fact, even since December 1999, the joint venture has continued to operate simply because it has not received the benefits of the bargain as it related to the development of the water many, many years ago. So it is our position that the joint venture has a legal right to the water and the allotment and upon request that water should be available to them. I'm not sure whether there will be any action taken today. I just note that it is noted on the agenda, we weren't certain, and below that there is a reference to executive session. But I think the joint venture wanted to present this testimony to the board so that the board was aware of the position of the joint venture as it related to the agreement, joint venture agreement, and the county's obligations under the agreement. Thank you very much. I'll be happy to respond to questions. CHAIRPERSON HIRANAGA: Questions for Mr. Ing? Yes, Ginny. MS. PARSONS: Since the designation, Mr. Ing, have you had any conversations with the administration regarding the credits that may be owed or due, including the department itself? MR. ING: I have not personally had conversations with the department. I am, however, familiar with the MOU that it refers to earlier and I have seen that and read that. I was aware that it was being negotiated at the time. Ever since and even prior to December 1999, the joint venture members, through their executive committee which is now chaired by Mr. Roy Figueroa, have worked and are trying to work with the county to resolve a few outstanding issues, namely the entitlement, if you will, of the amount of water that should be available to them pursuant to this agreement. So there have been many discussions I know between members of the joint venture executive committee and the administration and prior administrations. MS. PARSONS: Do you have a list or can a list be provided of the amount of credits that you've used around the different developments -- the joint venture has used in different developments and how they have been credited and do we have -- have you discussed the amount of credits that you think are due with your books to their books or to the department's books so that we can see where we are as far as owed credits? I mean, it's obvious to me from the last meetings that we had with the director that there are credits out there. We probably -- that would be an agreement we would all make that there are credits out there, but how many and how are they derived as what's left. MR. ING: I don't know whether I can provide you that information -- I know I can't do it today. But as far as the credits are concerned, I know there were enormous efforts during the time Mr. Craddick was here to determine the amount of water that was being drawn down by the various members of the joint venture from time to time. And from the joint venture side, I don't believe they have meters that could calculate, but that the county had the meters and that there indeed were readings taken from time to time that would be able to educate us on exactly what was drawn down. There were various discussions which led up to that MOU talking about the amount of water that should be available or the total amount of credit that should be given to the joint venture. And that ranged somewhere in the eight to nine to ten million dollar -- 10 million gallon per day figure. But as far as credits, other than that, I am personally not aware of it, but members of the joint venture executive committee may be and I'll be happy to get that information. MS. PARSONS: Would you check with them -- maybe what we should do is have an open meeting, a public open meeting that everybody could see what development has used what, so we can see how the credits started and how they moved and how they have moved down and to where we are today and make this an open meeting instead of these closed door committee negotiations. Would you be willing to take that back and ask them if that's a possibility? MR. ING: I could, but without discussing that with them, I could not respond to that because I don't know how they would choose to respond. MS. PARSONS: That would seem to me like the very best thing to do for the public to see what credits have used. And then we could find out from the department what they're using to evaluate the credits with, too, as well, because it seems to be the question that's up in the air. MR. ING: Generally these kinds of records are subject to the Public Information Records Act so it would be -- it should be available to the public. MS. PARSONS: Okay. CHAIRPERSON HIRANAGA: Any other questions for Mr. Ing? MS. RAISBECK: Yes, thank you. Mr. Ing, Jonathan Starr was a member of this board for a number of years and I believe he participated as a member of the committee or the team that conducted negotiations. And are you aware that he has said that no credits are owed the joint venture; in fact, they have half a million gallons more than they would be owed and there are unmet -- some members of the venture got more than their share and others got less. So are you aware of his position on this? He's certainly made it many times. MR. ING: I'm sorry, I'm not aware of that -0- his position on those issues. I did not directly participate in those negotiations. MS. RAISBECK: He just came in. Yeah, if I could, I know there were extensive negotiations in executive sessions of committees that were not even posted, both before that April 13th, 2000 Memorandum of Understanding and afterwards. And in fact, there was one -- there is minutes on the Board of Water Supply website for one meeting of the negotiation committee held in September 2000, I believe, that refers to two previous meetings on July 9th, I think, or June 9th or July 9th, and another one later, the 24th. Could we also get a list from the joint venture of all the meetings with the board -- any members of the board, and I believe Dorvin Leis was on the negotiating committee even when he wasn't a member of the board, of all the meetings that took place both before and after that attempted to settle this. And I believe there was also an attorney hired by the board to conduct a meeting -- not to conduct a mediation, to present the board's side of an official mediation. And I don't remember the name of the mediator. But we would also like to have the meetings -- when meetings took place about mediation and what the result of that mediation effort was. Could we get a list of meetings? MR. ING: I will try. I do know that there was a mediator involved and typically the mediator would meet with one group and then with the other group. And whether that was the process that was utilized for purposes of this negotiation, I'm not sure. I do know that there was a mediator involved, however, so there may be meetings that we were not aware of between the mediator and the county Board of Water Supply. MS. RAISBECK: I think it would be very helpful to know the history of the negotiations which I believe were extremely extensive and expensive at the time. MR. ING: I'll try to get that for you. MS. RAISBECK: Thank you. CHAIRPERSON HIRANAGA: Any other questions for Mr. Ing? Thank you. MAYOR ARAKAWA: I would just like to ask that -- I get to be a member of the board -- of all the boards, as mayor. But I would just like to ask for clarification for everybody else, would like you to explain that this administration has not negotiated the joint venture issues at all since we've been in office. So please clarify that. MR. ING: I'm not aware that this administration has negotiated with the joint venture with respect to what do you call it the allotment of the total credits. I do know that there has been ongoing communication with the members of the Department of Water Supply on that issue. MAYOR ARAKAWA: Thank you. CHAIRPERSON HIRANAGA: Thank you, Mr. Ing. Next testifier is Councilman Wayne Nishiki. MR. NISHIKI: Before I start my testimony, I would just like to alert you that I've got two testimonies. I think you have a July 28th legal memo directed to the Honorable Danny Mateo from your legal advisor, Ed Kushi. The cover letter is July 28th. I'm also passing you out the Department of Water Supply, the new charter amendments. And then I want to testify on two items, the joint venture and also the Iao Aquifer. I just feel that, number one, the area of the joint venture -- I'm just going to read from one document and maybe you can ask your legal attorney to give you some interpretation if after speaking to Mr. McDougal -- Doug McDougal -- that was involved in the negotiation, if this condition was germane. And where I'm going to quote now is Condition 10, which says, "The term of this joint venture shall be until the joint venture has water sources adding to 19 million gallons additional water to the Board of Water Supply system in the Central Maui located in the study area and the Board of Water Supply has accepted the dedication of the water sources on or before December 31, 1999, whichever date occurs earlier." And then my understanding is once that date comes, then bang, it's pau. "Thank you for the opportunity to testify on the following item listed on today's meeting agenda: Central Maui Joint Venture - Legal Issues Regarding Joint Venture Agreement. "I offer this testimony in my capacity as an individual Council member. As Chair of the Council's Planning and Land Use Committee, I have a particular interest in County water issues because of their relevance to the Council's deliberation on land use matters. "May I request your consideration of the following. The Board of Water Supply is a critically important body. But it is important for everyone in county government to remember that the board's new role, pursuant to the Charter amendment approved by the electorate last fall, is advisory. Charter Section 8-11.2 states in part: "The Board of Water Supply shall act as advisor to the director of the Department of Water Supply, the mayor and the council. In all matters concerning the county's water system.". The Board no longer has the power to initiate legally effective rules establishing policy for the Department of Water Supply. The Department of Water Supply, like most county agencies, is now subject to the Council's legislative oversight. "Because the Board of Water Supply lacks the authority to take any legally effective action on this agenda item today, I question the need to convene in executive session. Please note that the Sunshine Law mandates that executive session be strictly limited to deliberations that must occur in private, and that the body seeking to convene in executive session shall make a finding in open session of the specific need for privacy. The usual presumption is that government business shall be conducted in the open. The justification for privacy in this instance is unclear. "The Council has been repeatedly advised that the Central Maui Joint Venture agreement has expired. If the Administration seeks to reconstitute the agreement, it must do so pursuant to Council policy." And I'm glad to hear the mayor say today that he has not in any way dealt with the Central Maui Joint Venture. "May I respectfully seek the board's consideration in asking the Administration why this item has been placed on the meeting agenda today. "Sincerely, Wayne Nishiki." I want to ask you to turn to the July 28th legal opinion by Ed Kushi, Jr., if you have it in front of you. I can wait a while. And ask you to turn to page six. And the question asked of Mr. Kushi -- and unfortunately, or fortunately, the opinion is before you. And the question asked was, "Clarify whether the council already has the authority to enact ordinances that would establish Department of Water Supply policy, or whether it must grant itself rule-making authority." And the answer that your legal and my legal advisor gives, "As the county's legislative body, the council has the authority and the power to enact ordinances "deemed necessary to protect health, life, and property and to preserve the order and security of the county and its inhabitants on any subject or matter." "As of December 5, 2002, such legislative authority and power extends to matters relating to the management, control, operation, preservation and protection of the county water works and the establishment and adjustment of rates and charges for furnishing water." And then he gives, for example, the council could amend the Maui County Code by adopting a new chapter or chapters relating to this management, control, operation, preservation, or protection of the county water works. This we have not done yet, as Sally has stated. I'm going to move on to the other subject matter that I have some concern with and it has to do with testimony regarding possible action regarding the designation of the Iao Aquifer. "Thank you for the opportunity to testify on the following item listed on today's meeting agenda: Discussion and possible action regarding the designation of the Iao Aquifer. "I offer this testimony again as an individual Council member. As Chair of the Council's Planning and Land Use Committee, I have a particular interest in the County water issues because of their relevance to the Council's deliberations on land use matters. "May I request your consideration of the following. The Board of Water Supply is a critically important body. But it is important for everyone in County government to remember that the board's new role pursuant to Charter amendment approved by the electorate last fall is advisory. Charter Section 8-11.2 starts in part, "The Board of Water Supply shall act as advisor to the director of the Department of Water Supply, the mayor, and the council in all matters concerning the county water system." The board no longer has the power to initiate legally effective rules establishing policy for the Department of Water Supply. The Department of Water Supply, like most county agencies, is now subject to the Council's legislative oversight. "The Director of Water Supply has the clear authority under the charter to manage the Department of Water Supply and the county's water system. But his management authority -- like that of all government managers -- must be exercised in furtherance of duly enacted policy. However meritorious a particular management decision might otherwise be, if it is not in the furtherance of established policy, it is not proper or appropriate. The Council now has legislative policy-making authority over the Department of Water Supply. The Director's decisions must be consistent with Council-established policy. "Effective July 21, 2003, the Commission on Water Resources Management designated Iao Aquifer a state groundwater management area. In response, on July 29, 2003, the County of Maui Public Information Office issued a press release in which the Mayor announced that the Department of Water Supply had ceased issuing water meter reservations. There may be merit to this action. But there are serious questions as to whether appropriate procedures have been followed. "Other than the press release" -- which I have put in the back of this release -- "there is apparently no documentation of the director's action. Therefore, it is unclear what action has actually taken place. Furthermore, there is no indication of the legal authority for the action. There has also been no communication to the Council. The press release pointedly avoided any reference to the Council, while contending that the county strategy would be developed in concert with the Board of Water Supply. Please also note that the Director's correspondence dated August 5, 2003, to the Board of Water Supply, does not acknowledge the action referenced in the July 29th press release. "Page 4 of the Director's August 5th correspondence lists "Actions for Consideration." There appears to be an assumption that the Board of Water Supply still retains the authority to take legally effective action. See, for example, the third listed item, C, entitled, "Establish an Interim Availability Policy and Allocation Pending Completion of the Water Use and Development Plan." Any such policies should actually be proposed to the Council" -- and you should ask Mr. Kushi for this advice. "I am concerned that the administration may be under the false impression that it can make water decisions without reference to any specific legal authority for those decisions. In apparent contradiction of the policy announced on July 29th press release, according to the Maui News article anyway, the Mayor has promised water to a developer. I am not aware of the supposed authority for such an action. "My primary concern is that the county's water system, an obviously precious public trust, be effectively managed. For that to happen, the Council's legislative prerogatives must be respected. If the Director of Water Supply and the Mayor believe that certain action is necessary for which clear legal authority is lacking, may I respectfully suggest that they simply request the Council to enact an ordinance providing the necessary authority. I'm certain that other Council members" -- but you need to ask them -- "would join me in being swiftly willing to take prompt action to ensure that necessary policies are considered and enacted." Thank you for this time. And I will only answer questions that I feel I can understand and have any expertise in. I will not pretend to play your legal counsel. Any questions? CHAIRPERSON HIRANAGA: Questions for Councilman Nishiki? Yes, Ginny. MS. PARSONS: Thank you, because I agree with you, with exactly what you said. CHAIRPERSON HIRANAGA: Can you speak up, please. MS. PARSONS: I agree with what you said. Thank you very much. I have one question for you, going back to the joint venture, that was something you were passionate about. And I know everybody keeps reading this December 1999 end date. And when I've read over this agreement, and I've read it over numerous times, I can't find where it ends the amounts due. For instance, if I write a contract with my business with someone and I've installed their sun room, they still owe me the balance of the amount when I'm finished the completion, the installing of their sun room, they still owe me the balance due. The contract's over at that point because I've done my job and I've installed it and they have their product, but there are always -- there is always 10 percent at the end of the contract that's due upon completion. Now, that's kind of what I look at, and I can't find in here anywhere -- and if you've seen it -- where it says that the credits don't continue on. I can understand, you know, some of the issues in here might be over at a certain point, but we've carried on negotiations for some reason and it seems to me it must have something to do with the credits. MR. NISHIKI: As I stated, you need to look at this contract. You need to ask Mr. Kushi or Mr. McDougal. And it was mentioned earlier in testimony from Sally that one of your ex-board members was involved in those negotiations via Mr. McDougal. And so I cannot give you that expertise, that legal authority. The only thing that I can read from, and I ask you to go read from Condition 10. And I think it is pretty clear here that it says, you know, when December 1st, 1999 comes about, that is the cut-off date and you know what, it's all over and let's move on. So, I'm sure that being that the big boy from Sable today, Mr. Ing, is here and Roy Figueroa is here, they want to try to move you people into, you know, opening up this. And I would ask that you ask Mr. Kushi there, and again I think Alan will have a big part, and this Council, you know, you want to raise the casket again and that's fine, but, you know, I don't work for them, so thank God that, you know, I can say what I say today to you. I hope that you people also work for, you know, whatever has come out. And sometimes people don't want to accept that. And I can understand, you know. Because whatever was told to them by the administration, I have no idea. But obviously it's not acceptable. That's all I can say. Any other questions? CHAIRPERSON HIRANAGA: Any other questions? Sally. MS. RAISBECK: Wayne, I understand your concern about there has not yet been a clear definition acceptable to all parties of what now under the new system is the prerogative of the mayor, what now is the prerogative of the Council. And certainly this board is not going to be the one to decide that. I had thought before I came, before I knew there were going to be so many high powered people here today, I had thought of asking the board to -- when we give advice, we can give advice to and direct it to the mayor, the council, the director, all at one time, and if it's advice that advances the welfare of the community, then it's up to you guys to duke it out about who has the legal authority to do things. But the way I see it is this board has to worry about the real substantive issues about do we have enough water, where are we going to get the water, and who's going to get the limited amount of water. So if we issued advice that simply said to the mayor, the council, and the director, this is what we think ought to be done, do you think that is something this board could do? MR. NISHIKI: Ask Junior. He's the one that issues the legal opinion. I'm serious. You know, Junior is on the seat today -- which is good. I mean, that's your legal opinion. I don't want to inject anything that is nonsense. That's really being honest. And you know, as I said, I don't know if you should even have the ability to go into executive session today. I think ask everything in open session. MS. RAISBECK: Thank you. CHAIRPERSON HIRANAGA: Any further questions? Thank you. Mr. Dale Parsons. MR. PARSONS: Thank you, Mr. Chair and board members. I'm here today because I maintain that the designation of the Iao Aquifer was not inevitable. I believe it came about because of mismanagement that has occurred since the turnover of the Department of Water Supply to the current administration. Soon after David Craddick left the department, measures he initiated to properly balance the levels of water used from the aquifer were apparently ignored. Designation is here. And there are many of us out here who believe that it's not a mere coincidence the key players in this administration have supported designation for a number of years. Now they're trying to make it look like they have the situation under control and the bottom line is they just have no plan. They have had plenty of time to come up with a plan to keep us out of designation. They knew eight months ago that there was a problem. But either through incompetence or a pre-meditated act, they ignored the problem. Early on, the administration told the council to keep their hands off the water department, that they were in control. But they really did nothing. And now they want to scramble for ways to clean up the mess, like using surface water. It may sound reasonable, but all we can add to the system immediately is about a million and a half gallons a day and any more will require expensive new treatment plans that will probably need environmental impact statements and maybe even the use of surface water may require the addition of those chemicals that we have Upcountry right now. Another of their ideas is desalinization plants, but these are energy inefficient, costly, and many, many years in the future, if ever. Something needs to be done now. If the administration was truly interested in supplying water for its citizens and if allowing designation was not an act of deliberate indifference to stop further development, they would already be acting upon the numerous proposals from local developers. The quickest and most efficient way to add water is for private developers to dig new wells outside of the Iao Aquifer and dedicate them to the county. Developers have been making or trying to make offers to dig these wells since early this year, but the proposals have fallen on deaf ears. Private wells approved by the state and dedicated to the county can quickly increase the flow of water into the central valley and relieve the pressure on the aquifer. And why haven't the offers been considered? Well, your guess is as good as mine. But remember this, making the calls are administration highers up that see our water woes as a way to stop building on the island and it's apparent they're ignorant of the consequences of using water as their trump card. It's dangerous for our economy, it's dangerous for the welfare of our systems, and based on state law it just might be illegal and lead to expensive and needless lawsuits against the county. I leave with you one final thought. If this was a private company and it lost control of one of its most valuable assets, managers at the highest level of the company would be fired. Saying "I didn't realize this was going to happen" or blaming it on the previous management are not justifiable excuses for not doing your job. Mahalo. CHAIRPERSON HIRANAGA: Questions for Mr. Parsons? Thank you. Next testifier is Lucienne deNaie. MS. DeNAIE: I too have a little background information here. Aloha, everyone, Chairman Hiranaga, and members of the board. This is quite a historic meeting here. It seems we're covering a lot of ground. Well, what I'm passing around to you is the history of the Central Maui Aquifer. And I thought you might benefit. The large packet contains some excerpts from the environmental impact statement that was accepted in 1975 and it's a massive sort of thing and there weren't a lot of environmental impact statements done in those early days, but this one was very thorough, some people put some time into it. It covered only the transmission pipeline, did not cover the wells. And what I have passed out to you are a series of comments that were offered by the University of Hawaii Environmental Center. They are the top four pages or so. And there only about five or six folks that submitted comments about this plan that had anything of any real substance to say. The Environmental Center was among them, Life of the Land, which challenged the EIS, was among them, and the Army Corps of Engineers. But the Army Corps and the Environmental Center both made one point that was very strong, they said you know, this doesn't really talk about any of the stream sources here or the groundwater sources here or the effect on any streams -- and actually Fish and Wildlife said the same thing -- and, you know, we're wondering about that, and by the way there are a number of other things that really you should address. One of the main points that was made by the Environmental Center was that, gee, it appears that if you are going to need X amount of water by the year 2000, that you're really not going to reasonably have that amount of water with this plan and that maybe you should reconsider how your community plans are promising hookups to folks because that could maybe save the day. The director of the water department at that time, a Mr. Muriyama, wrote an extremely thoughtful supply, which is also included in your packet, and really looked at all of the points that were made. And I just feel that you folks, as dedicated members of the water board, would benefit from seeing that the questions that you're dealing with today were all raised 27 years ago. And this is one of my points. These are not new questions. We are grappling with the same sense of what do we do with our water supply. For your information, there were moratoriums in 1979 and 1982. In 1973 until 1975, the county had to go and beg Wailuku Agribusiness for water from Shaft 33, which it now uses as a water source, because there just wasn't water available. So for those who feel that this is something that's just, you know, happened on someone's watch and boy, isn't it terrible, I think that the more considered conclusion is this is a problem we've needed to really get a comprehensive solution to for a long time and I feel that we're actually stumbling in that direction right now, but we need more information about more sources. I heard reference on the previous speaker about the fastest way to get water is to work through private development. This could have some merit. It does so happen that there are two private wells immediately outside the Iao Aquifer that each have a million gallon a day capacity. They belong to Maui Lani and they have been tested, they have good potable water. It is possible that we need to spread our pumping by looking at sources that are already on line and do not even have to go through the process of drilling new wells. But investigations need to be made, information needs to be out here. One of the things I passed out to you is from this little booklet. An excellent conference was held in 1986. This is all kind of on the theme of maybe we don't need to reinvent the wheel. Everybody on Maui who was interested in Maui participated in it. It was sponsored by the Chamber of Commerce, Maui Pacific Institute, Maui Economic Development Board, and Maui Electric. And the one page that I excerpted is from a consultant who actually helped work on this EIS. He worked -- he was supplied with a company called CH2M Hill, his name is Robert Chuck. And he had worked for the State Department of Water and Land Use before that and done extensive surveys of water in the Maui area. And I think it will give you a little perspective to read his summary. He's talking about the area of Oahu that was eventually designated as a water management area, the first water management area in the state, and why that designation was needed. And for those who feel that designation means that we will have no more growth, I have to point out that Oahu was the first area designated and I think most of us realize it has grown quite a bit since 1987. It was first declared a Special Management Area under laws before the State Water Code in '79 and then officially designated in '87 when the State Water Code was implemented. Obviously there has been very sufficient growth there to fuel an economy, but there has been a very different management approach. They are having water problems because they didn't take the advice that was offered by Mr. Chuck, which is conservation, conservation, conservation. Conservation is not just encouraging people to turn off their taps. Conservation is using nonpotable water for nonpotable sources, is limiting your use of potable water to where it's really needed, and many of those suggestions were also made in this report at the end by a very knowledgeable consultant. At any rate, to just skip along here, I know we're all short on time, I want to make a couple of key points. One is that the amount of water that is available from a source is something that is still being studied in terms of our aquifers. I noticed in the staff report -- which was very excellent, I thought that the staff did a very good job of trying to put together some understandable facts and figures so that the board would be prepared to make decisions and give the advice that really in all true nature is needed. We don't expect the mayor to pour over documents about water. He is, I'm sure, interested in hearing what you folks do in your research and come up with working with the staff of the Board of Water Supply. But one of the things that we need to look at is when we assign a sustainable yield, we need to see how that is based. I notice that for the Waihee Aquifer that we're still referring to the 8 MGD sustainable yield. Now, we do hope that some day we have a wellfield that takes advantage of that and I know the department is working towards that, but some of you were not at the meeting about a year and a half ago when Mr. John Mink stated very clearly and he states also in the EIS for the Haiku wells in the final edition, that as we are pumping right now with the wells that we currently have drilled by the Department of Water Supply, our sustainable yield should be no more than 4 MGD from Waihee. If we do expand outward past Malahia, then we will have to see if there is a additional capacity of significant another 4 MGD. But there is very few wells in that area right now and to tell you the truth, I have had private discussions with private well owners there that say that when they pump their wells which are in the Malahia subdivision, they're private wells, at a more significant level, that they notice rising chlorides. So we really need the information that's going to come with our head and shoulders model. I think that that is going to be very, very valuable. The second point I would like to make is about the Central Maui Joint Venture agreement. And I happened to be present at the meeting where the Memorandum of Understanding with A&B was signed and I and a number of other people really wanted to testify to exactly that provision and we were not allowed to testify. We were told we could testify after the agreement was signed. That being signed, that seemed a very important procedure, most of us had concerns that although there was not specific language that water was owed, there was an illusion to the fact that it was. And this is something that does not seem imminently verifiable. I look back in the records and it seemed in 1994 the Department of Water Supply was asked to prepare a report on exactly what Board Member Parsons requested: The amount of hookups that were actually out at that time. They promised a report within six months. Well, it's almost 2004 and we're still guessing a little bit, but that does need to be resolved. At the Board of Water Supply meeting in 2001 where this was discussed, Director Craddick brought up that because of the different sizes of the meters and no one quite knew if a 5/8ths-inch meter was reserved and maybe a 1/8th meter was given out, that it was a little hard to pinpoint. But my point is that it appears to me in reading the contract that what these folks actually funded -- and that might be a more significant pursuit of our time -- was three wells. The little chart on the top of your packet shows the county well system. You'll see there is about 13 sources there. And the three wells that the joint venture funded are the wells that are labeled the Waihee wells, 1, 2 and 3. My understanding was that by reading the EIS, it was recommended that a whole field of wells be stretched across the Iao Aquifer between the existing Waiehu Terrace wells and the Waihee River, which is the boundary of the aquifer area. For whatever reason, that didn't happen and instead three wells were installed very near each other. Because of that, the chlorides levels on one of those wells is very high and so only two of them are used. So what I would like this board to consider in its deliberations is actually this $2 million or $2.8 million dollars that was put forward by the joint venture partnership funded not the whole county water system. It funded these three wells. And you may need to look and see if they did expect to get the 19 million gallons out of these three wells, I don't think that that was realistic. The capacity of those wells when they went on line was expected to be 13 million gallons, and it proved to be maybe around 8. So I think we may be looking at a situation where everyone took a gamble and it didn't pay off. And whether or not anyone is owed -- CHAIRPERSON HIRANAGA: Ms. DeNaie, could you please wrap up? MS. DeNAIE: I'm wrapping up. Depends on whether or not that gamble is seen to be guaranteed or not. I did not know that the language in the contract that guaranteed a specific amount. And so I would advise your attorney to consider that. Thank you very much. CHAIRPERSON HIRANAGA: Questions for Ms. DeNaie? Yes, Sally. MS. RAISBECK: Lucienne, you're doing a report on a study that former Mayor Apana commissioned, I believe, you're doing a study of all the [inaudible] in all aquifers; is that correct? MS. DeNAIE: Yes, there is a report being prepared which just collates information from a wide variety, about 30 different documents, about water that is being used out of different aquifers, water that was historically used, water that -- estimates of water availability from a variety of sources, information like that. Q. Are you aware of any amounts from the -- that are being pumped from the private wells in the part of the North Waihee aquifer that the county has not -- does not have any -- I mean the Mendes well and the Kent Smith wells, do you have any numbers on what is being pumped from them? A. I do. I have exact numbers. Mendes does not report, but the folks at the Malahia subdivision do. It's very likely they pump about 20 thousand gallons a day. And there are also some wells along the river mouth there, the Moreno wells, and Mr. Moreno has applied for some new wells. CHAIRPERSON HIRANAGA: Excuse me. Ginny? We'll lose quorum if you walk out. MS. DeNAIE: There is a small amount of pumping that is going on in that section, but it's not heavy pumping, in answer to your question. CHAIRPERSON HIRANAGA: Any other questions? Thank you. Next testifier is John Varel. MR. VAREL: Thank you. My name is John Varel. Thank you, board, chairperson, mayor. My reason for being here is as a private citizen, I bought a thousand acres behind Waihee, a large parcel of the macadamia nut farm that Wailuku Ag used to farm. I and my neighbor have about 1550 acres there under agricultural production and we would like to keep it that way. We can't and have not been granted any water and don't feel appropriate to ask the county for ag water, although we have under the circumstances sitting on top of the Waihee aquifer, we know what the repercussions might be, whether it's a large amount or a small amount. However, in the acquisition, I was told by the president of Wailuku Ag that water was not a problem for the county nor for ourselves as individual farmers, we have a mere 50 million gallons crossing my property daily that should be no problem for future expansion and development as well as agricultural need. However, I don't see any of that going into the aquifers except those two ditches that I've witnessed it running right into the ocean, excess water. I have a kuleana ditch that borders my property that takes care of the dear taro farmers, but God forbid any other farmer tap into that line, even though it's on my land. The Spreckels ditch and Waihee ditch continue to flow water, continue to erode, and none of that water is going back into the aquifers down below. And so I believe that surface water is a major issue here or is going to be because if there is 50 million gallons being channeled through those two ditches, I can only assume it's coming from the surface, not from the aquifer below. God forbid it's being pumped up to be surface and then run through those ditches. We are wasting a lot of water on this island. I still do believe we are. Having said that, those two ditches are I think an endless source of water that need to be addressed and the forest reserve on which my property borders and the back end of Waihee Valley, the river running there, is water source that I have on my property. If we're going to have surface water as -- and I believe as an old farmer, now a businessman with four successful businesses on the Mainland, there has to be a balance between all of this. One aquifer is not separated from another by some mysterious hidden wall under the ground, and nor does the surface water, the 50 million purported gallons that cross my property, if they were allowed to be back in to the streams of which they have been deferred for many, many years, I would think that common sense would tell us that some of that, if not all of that, would, one, either help the agricultural needs, and number two, go into the aquifers to replenish those. At this point, none of it is, to my knowledge. As an agricultural farmer trying to -- I have no source of water at that point, no means by which to feed the 1500 acres that I am now managing and operating and picking mac nuts on. I would encourage the board to remember that we're not all developers on this island and that we do need some of that water for agricultural purposes, riparian or a channelling of the ditch water already that's been channeled by somebody else. So I would encourage the board to remember those of us. Every other parcel in Waihee is either in escrow or has been sold to a developer. If you want -- I would like to see personally that more of our land stay in the agricultural, the beauty and the reason that people come to this fine island, and that we not have it all one subdivision backed up to another one, so that there has to be some balance, remembering the farmer, remembering the needs that we so adroitly need and care for, as well as the balance of what the citizens of Maui need. And I think both of them can be gotten from surface water in combination with what we need to do in drilling. Thank you. Questions? CHAIRPERSON HIRANAGA: Questions for Mr. Varel? MR. HASHIMOTO: You have no available water for the 1500 acres that you bought? MR. VAREL: No, sir. MR. HASHIMOTO: Is that what you're saying? MR. VAREL: We can go into negotiation with Wailuku Ag, but we have chosen not to. And we have, but the pricing would have been better for us to buy through the county. So we've elected not to at this point. CHAIRPERSON HIRANAGA: Ginny. MS. PARSONS: So when you brought your property, was the water withheld from you by Wailuku Ag? MR. VAREL: No water was sold with the land. MS. PARSONS: Well, they can't withhold. I mean, if you read McBryde and Lapoone, that can't happen. MR. VAREL: We understand and we're taking action -- we are moving forward on several steps, including a well site that I sold to the Central Maui group and now -- I didn't realize that the contract was -- had ended in '99, so we have a well site that has also been sold to a group that wasn't even in existence at the time I sold it to them. So I understand. But it's a bigger issue. I have the state -- I think -- I do not in any way, shape, or form believe that we as a private citizen should be the claws in the cat fight between the state and the county and 50 million gallons of water flowing across our land. That's not my point or issue here. Yes, could we have negotiated. I don't know of any others that have negotiated without it being a separate contract. I know of none that I know of. MS. PARSONS: I understand. But if it is an issue -- are you asking that the county take a look at this issue that the water was withheld from your property? MR. VAREL: No, I'm not looking for personal assistance in my legal matter. I'm more concerned as a private citizen that the riparian water rights, the surface water rights are there for all of us, not a select few, or not those that can afford to buy it. MS. PARSONS: Absolutely. MR. VAREL: Period. That was my only comment. CHAIRPERSON HIRANAGA: Any other questions? Next testifier is Jonathan Starr. (Brief recess.) CHAIRPERSON HIRANAGA: I would like to call the meeting back to order. Next testifier is Jonathan Starr. MR. STARR: Good afternoon. My name is Jonathan Starr. I'm here as a private citizen and as a customer of your fine product, though I see it's in short supply today. The water shortage meets the water board. Anyway, I would like to begin by, first of all, complimenting the mayor and his administration as well as Director Tengan, and by association the board, for finally creating this discussion. And I don't think this is a matter that anyone is really happy to have the realization that there are serious water issues and shortages. But I think that it's years overdue in having this discussion and having all these players in one room and being able to talk about Central Maui water. And I think that the designation issue, that was inevitable. I think that by stopping -- issuing reservations, I think that that's for the first time a recognition of the problem. And until you recognize a problem, you can't deal with it. So I think that really we should all look at the bright side that for now there is the opportunity to create some solutions. And frankly, I envy you guys who are on the board who are in a position to use your wisdom and help to guide the policies here. There certainly are problems. There are certainly solutions, too. And I think that it's a time for surface water to start to enter the Central Maui system. Though it's a little bit more complicated than it seems, I do think that a deal should be struck with Brewer and those entities, but I think that ultimately to make that work the county will probably have to follow the practice of eminent domain because there are quite a number of different people, different entities that believe they own that water. Brewer and Wailuku Ag and other -- the other companies that preceded it, have been selling those water rights for at least 80 years that I'm aware of and there are all kinds of contracts out there that may be illegal, but people believe that they have bought that water and own it and just by having control of the forest and control of the ditches may not be enough because people will still believe that they own that water and that may or may not be the case. But eminent domain will certainly -- is certainly one way to divorce rights that are not legal from the process. I recently was house shopping in the Wailuku-Waihee area and I looked at three different properties that were on the ditches. And all three of them, one of the selling points was this has rights to ditch water. And the previous people have been watering, you know, their acre or two-acre or half-acre of orchids or papayas or whatever they were growing there with water from the ditches. And you have a right, if you buy this, to that water. And in all three cases I said can you show me documentation and they said well, we'll work on getting them. And I doubt such stuff exists, but still, many people believe that they exist. So that will create an issue. Whether they actually own that issue or not, if people believe it, the county is going to have to deal with it before it can be diverted into treatment plants and used. And also, some of that water should go back to stream restoration. Now, probably a quicker fix would be something that we discussed on the board a couple of years ago and that would be to, first of all, tie the upcountry and central systems together, which would immediately end any problems with a drought affecting one system and not the other. It would suddenly make the upcountry system as adequate as the central system. It would also get rid of -- enable operationally to deal with the lead and copper problem in a more effective way because by mixing groundwater in with the surface water going upcountry and taking some surface water down, it would be able to dilute the acidity upcountry and keep that to where the orthophosphate -- phosphoric acid or anything else need not be added. It would operationally save a lot of money because water likes to flow downhill. When it's really wet, water is very plentiful in the ditch system and not much of it is getting used upcountry. At those times water could be put through Memcor microfiltration units and put into the central system and the central system would be more than adequate with that. And then in dry periods when the ditch gets cut back, then the wells could be cycled a lot harder because they have been pumping less when there is a lot of water coming through the ditch system. One of the previous testifiers mentioned the Memorandum of Understanding with A&B. And my -- the thing that I recall most about that was that the county regained an additional 4 MGD of water at Kamole Weir when which is unused from EMI. And so there is 4 MGD of unused water at Kamole Weir that can be used most of the time, not all the time when the ditch is dry, but most of the time that water can be used. It would be a relatively easy thing to do to build -- put in some Memcor units at Kamole Weir and then put that water into the central system. And since that water is already the county's by agreement, that could be done relatively easily. So I request that those options be looked at. And tying the two systems together I think would alleviate a lot of operational concerns. North Waihee is not the immediate answer. And I was very surprised to read in the material published for this meeting that there was more water available currently for North Waihee. Now, the only -- the southern portion of North Waihee aquifer has been developed. The northern portion, I know that there are plans to eventually drill some wells up there, but they're years away from functionality. On top of that, the only research that's been done there, the only memo I've ever seen regarding that is in the staff report to the Water Commission in 1997 when they were discussing designation at that time. And the Water Commission staff, in consultation with USGS hydrogeologists, said that they don't expect to get more than half a million gallons per well north of there because of the subsurface conditions. So the southern half of North Waihee, which is where we have wells now, we're currently pumping in excess of 6 MGD. The 12-month moving average is I think four and a half MGD. And I would like to read to you from the only water planning document that's been accepted by the water board that discusses Central Maui sources for the last 10 years, and this is the Final Supplemental Environmental Impact Statement for the East Maui water development plan that was accepted by this board last September and it was prepared by John Mink of Mink & Yuen and it talks about different sources for Central Maui. And I would like to read from page 69 of this FSEIM plan. This is item 12.1.3, "Source: North Waihee. Status: The average allowable yield of 4 MGD is for the region between Waihee Valley and Makamakole Valley. It should not be exceeded even when the Kupaa well is added to the system. Currently about 4 MGD is sent to the Central Maui system from four North Waihee wells -- North Waihee 1 and 2 and Kanoa 1 and 2. Another well, Kupaa, is not yet connected to the network. Total allowable average yield when all wells are on line will be approximately 4 MGD, potential yield. An average production of 4 MGD from the North Waihee aquifer between Waihee Stream and Makamakaole will be fully developed. Constraints: No more than 4 MGD can be expected from the North Waihee project, although the entire North Waihee aquifer system, which extends from Waihee Valley to Kahakaloa, has a sustainable yield of 8 MGD." Now, those are the strongest words in this entire document. And Mr. Mink, who has been the geologist for the county for 30 years or so, is mincing no -- he's not mincing words when he says that 4 MGD is the most we should be taking out of there. However, right now we're taking six. So there is not another two to take from there, folks. And we should realize this and be willing to admit that. And I think that now this is being discussed, perhaps we can head toward a solution. But the solution is not in North Waihee. We know that. Just a couple of words regarding the Central Maui Source Joint Venture. I'm the only person in the room who participated in those negotiations on the side of the water board and the county and I'll be happy to serve as a resource if this issue does come up again. And I don't think it should come up again. I think that where it was left was that there was certainly a feeling on the part of the negotiating team that no water was owed and that there was not going -- there was no merit that we would be sued by the joint venturers. And there is quite a number of reasons for this, I'll be happy to explain them at length at any point. But just, you know, one or two brief things is that the joint venture agreement talked about the Drilled Wells Protocol which was an additional document. And that Drilled Wells Protocol, which was the basis for the joint venture water production well plan, was not followed. The joint venture did not do what they said they were supposed to do. They were supposed to go in and drill a set of two wells, starting in the location where they did drill wells, and then go half a mile and drill another two and another half a mile and drill another two. So at each of those sites they were going to drill one well that was a production well and one well that was a back-up well. And that is the way you're supposed to go about developing water. And unfortunately, at that time the sustainable yield expectations of Iao Aquifer and Waihee were reduced and there were other arguments I understand within the joint venture about whatever. So instead of drilling these two wells here and then half a mile another two and so on, they drilled the first two and later added a third to that same location. And where at that location there was only supposed to be one production well working, they drilled three wells and then they came in and claimed that because the wells, two 4-million gallon and one 5-million gallon pump capacity wells, totaled 13, that they were owed 13 million gallons a day. And that's bogus. I mean, in reality, they should only get -- they should have only gotten production from one well, but, you know, it's -- to give them the benefit of the doubt, in all the calculations they were given the production of two wells which when rated for peaking factors turns out to be less than 6 MGD. It also -- on another basis, those wells have never produced an average of more than 5.5 million gallons a day in any given year. Last year it was about 5.4 MGD was the 12-month moving average of their production. And the utilization so far by joint venture has been close to 6 MGD. So they have received more water in meters than they actually provided. When I've heard it said that -- CHAIRPERSON HIRANAGA: Can you complete your -- MR. STARR: I'll conclude quickly, yes. I've heard it said that they both built a pipeline, so something is owed to them. That's not true. The transmission line agreement is a completely separate agreement. They put money forward and built a large pipeline that fed Kihei and Wailea. They were paid back every penny for that pipeline. And by 10 years ago, they had been paid back in full. So they should not be using the fact that they built the pipeline as an issue. Anyway, I hope that this issue was dead, it should stay said, it's been dead for a while, and hopefully it will never come alive again. And if it does come alive, I'll certainly be happy to be here and plead the people's case. Good luck to you guys and solve our water problems. Aloha. CHAIRPERSON HIRANAGA: Any questions for Jonathan? Yes, Ginny. MS. PARSONS: Jonathan, when you were referring to the Waihee well and you said we were pumping 4 million, did you see the spreadsheet, the weekly spreadsheet that took us up to designation where we were pumping over 6? MR. STARR: Yeah. MS. PARSONS: And the week before that, it was almost 6, it was 58.94. And the week before that, it was 48.84. I mean, what you're saying, I'm agreeing with what you're saying, but we were way over it at the time of designation. MR. STARR: Well, yes, we were over that. But the 12-month moving average, which I would have to say should be the arbiter -- MS. PARSONS: It was six something. MR. STARR: Well, I think -- MS. PARSONS: At the time of designation, it was 6. MR. STARR: Okay. Yeah, it's certainly exceeding 4. And whether 4 should be the real number, I'm not sure. The real number should be 3.6 because you should rate the sustainable yield by a little to give some head space and provide some water for private users. But in any case, we're certainly well over 4, so we can't allocate more water from that source and I think we're in agreement there. MS. PARSONS: I see. And this was for the mayor as well, I had a real problem with the idea that we were going to be giving out more water when we don't have enough to deal with in Waihee and this is the point that he's making, I just want to make sure you understood, we were at six something when we designated. And we don't know right now what it's going to be coming up in the future. And if we had a drought, we have nothing left either, so. MR. STARR: I agree with that. I own a lot of property in Central Maui, I'm a developer, and I certainly don't want to -- I certainly would like to see meters be able to be issued because I'm going to need some myself. But when we don't have the water, I think that we have to do what has to be done and it's going to be difficult for all of us. CHAIRPERSON HIRANAGA: Thank you, Jonathan. Is there anyone else who wishes to provide public testimony at this time? MS. ANDERSON: My name is Michelle Anderson, I'm executive assistant to Council Member Wayne Nishiki. I'm speaking on my own behalf. I'm sorry, I'm not prepared to testify. I just -- from what I've heard, I feel compelled to say a few words. And one is that nobody owns the water in the state of Hawaii. The water is a public resource. It's owned by the public. And it's managed through a public trust by the state for the people. Wailuku Agriculture does not have water to sell. They don't own the water. The water was for their use for their agricultural purposes, which no longer exists. The correct way to allocate the water is under the State Water Code, there is a provision for instream flow standards and that's how the water should be reallocated, not through private sale to the county. And I think the Supreme Court decision in the Waiahole-Waikane case reaffirms that. And I do know that the State Land Use Commission follows that Supreme Court decision in their deliberations on district boundary amendments and any petitions that come before them. And I would hope that the county would also start following that decision. Thank you. CHAIRPERSON HIRANAGA: Questions? Thank you. MR. SHEPHERD: My name is Glen Shepherd. I have nothing particular to reveal, but I point out and appeal to you people that there be no executive sessions. This is a public trust. All people should be privy to all the information, whether it's good, bad, or indifferent, and we should know what's going on, especially when it's considered that people involved in previous deliberations and agreements, that now we are in a more critical position, then by golly we should know about it. Thank you. CHAIRPERSON HIRANAGA: Any questions for Mr. Shepherd? Anyone else wishes to provide testimony? At this time I would like to call upon Mayor Arakawa. MAYOR ARAKAWA: Thank you very much. What we were going to do, we were going to be part of the administration proposal, so we would have some discussion with you while the water department is making presentations. There are a lot of things that we need to discuss. Now, contrary to popular opinion, we need to inform you of a lot of things that we've been researching so that we can do the evaluation based on some facts and not just, you know, all these things that have been floating as rumors. So we're going to be trying today to inform you of a lot of the things that we've been gathering. Also, if our lawyers insist on an executive session, the reason for it they will make clear, but some of these things we need to negotiate and if we're going to be doing negotiations we don't want to be able to run afoul of what our lawyers' advice is. But the basic purpose for us being here today is to be able to try and now give you the information that we've been researching for the last four months. As the mayor, I feel that if we're going to be discussing, we need to have the best information that's possible. We don't fly off the handle with half truths and innuendos and be able to make assumptions based on smoke and mirrors. And hopefully after the discussion today, you'll have a lot better understanding of what we're looking at from the water perspective. But I'll make a presentation as part of the water department. CHAIRPERSON HIRANAGA: Okay. Thank you. George, do you have a presentation now? MS. KRAFTSOW: As you I'm sure are all aware, we're discussing the Central Maui system which is the blue area. This is a breakdown from the 2002 annual report. You can see that even though the north area has the most surfaces, the south area uses the most water. And this breakdown between aqua, green, and pink also equates to the community plan regions that are served by that system. These are our Central Maui sources. There is also the Iao treatment plant which is now shown here because it would be right on top of Wailuku shaft. We're currently at present using on the order of 24.447 MGD. That includes ground and surface water. As you know, the Iao Aquifer was recently designated. The criteria for designation listed here are in your handouts, but just to make them easier to see, I've done it this way. Whether an increase in water use or authorized plan use may cause the maximum withdrawal from the groundwater management area to exceed -- the maximum rate of withdrawal, which is the sustainable yield. Number two, whether there is an actual or threatened water quality degradation as determined by the Department of Health. Number three, whether regulation is necessary to preserve diminishing groundwater supply for future needs as evidenced by excessively declining groundwater levels. Number four, whether the rates times spacial patterns or depths of existing withdrawals of groundwater are endangering the stability for optimum development of the groundwater body due to upconing of saltwater. Whether the chlorides content of existing wells are increasing to levels which may materially reduce the value of their existing use. Whether excessive preventable waste of water is occurring. Whether serious disputes respecting the use of groundwater resources are occurring. And whether water development projects that have received federal, state, or county approval may result in the opinion of the commission in any one of the above conditions. Designation proceedings are not new. They have been ongoing since 1986. The most recent designation proceedings were decided in November of 2002. And in that decision, the commission set four triggers for designation: Two for Iao, one for Waihee, one was a milestone trigger that would affect both. For Iao, they determined that they would designate if pumpage exceeded 90 percent of sustainable yield or 18 million gallons, or if the midpoint of the transition zone at the Waiehu Deep Monitor Well rose above 680 feet. For Waihee, they decided that Waihee Aquifer would be designated if the MAV of the water level at Kanoa test hole dropped below 6 feet. Using their initial benchmark -- I just had a phone call after this was sent out to you, in the staff report it says it's at 7.24 feet. The most recent MAV according to the phone call was at 7.25 feet, so that's good news. It appears that Waihee Aquifer is holding up fine. And the milestone for both aquifers was to get a contract going for a numerical model for the Iao and Waihee systems within 60 days of the November 20th decision, which was met. As you're aware, based on those triggers we exceeded 18 MGD on a MAV basis in June of 2003 and so that's why we were designated. So what happens now is that all existing users have one year to apply for existing use. Each application must demonstrate that seven criteria can be met. Essentially that it can be accommodated, that it's reasonable and beneficial, and so on. I won't go into them because you have it in your handout. This is a lengthy process. Most small domestic users are exempted. We'll also have to submit a shortage plan and the State Water Commission may or may not find our existing Iao shortage plan adequate for this purpose. There were, as of the November findings of fact, 48 wells, tunnels and observation wells in the Iao Aquifer shown here. Since that time, an additional 4, using a total of about 160,000 gallons, were approved. At the time of the findings, non-DWS pumpage from the aquifer was about 400,000 gallons a day. So that would make about 560,000 in non-DWS pumpage. All of those wells and users will have to apply within one year for existing use permits. We use about 10 existing wells in one tunnel in the Iao Aquifer, and in addition two new wells are proposed or in progress actually for the purposes of distribution and withdrawal. But since we can apply for these by wellfield, we'll probably be able to submit for just five to seven "existing water use" applications, depending upon the strategy of what's the best way to go. In the meantime, because of redundancy standards, you can see that we have quite a bit more installed capacity than what the regulations allow us to use. And even so, the roughly 46 million gallons a day in installed capacity is less than we need by standards. So looking at what we can really use, this is getting to the point of water reservations. We assume 90 percent of the Iao sustainable yield which is 18 million gallons, 90 percent of Waihee which is 7.2 million gallons. The Iao Tunnel, which is shown here as 1.2 MGD; the median flow is actually 1.4, but the mean flow minus one standard deviation is 1.25, so we didn't count it as any more than 1.2. And the Iao treatment plant we assumed 0.6. Now, that plant actually has a higher capacity, it's more than 1.2. But the agreement that we have to use the water from that ditch stipulates that we won't withdraw any more than 300,000 gallons when ditch flow condition are quite low. So we rounded that down to be conservative and come up with a total of about 27 million gallons total available capacity on that system, accounting for all regulations. Now, compared to that, here is what we're using, this is the June 30th numbers. I got the July numbers today, but I don't have them in this presentation. Iao was over ninety percent at 18.63. In the report I got today, it's come back down under 18 in Iao. We were using 4.536 in Waihee. Iao Tunnel, that's just -- it's just whatever flows. So we had been getting -- we've been pretty lucky, getting 1.359. And the Iao treatment plant, our MAV was 0.489. So our total moving average withdrawals were about 24.447. In addition, water meter reservations received prior to the date of designation totaled about 565,000 gallons per day as shown here. So then the total in use of reserved is the bottom number there, 25.012. So now we get to calculating remaining water capacity. And this is why we stopped giving out reservations. With 27 million gallons available in total and 25.012 used, the remaining supply theoretically would be about 1.98, almost 2 million. We did a tally and I should say that all of these numbers are still estimates -- we're still not 100 percent comfortable with them, but we looked at all the subdivisions pending, and that totalled about 1.953 MGD if they were all built out. Some of those move much more slowly than others. Now, some of those -- a subtotal which I have in a different color there because it's still part of the 1.953, have bonded their improvements, which means they made an agreement and they have put down a bond and they have started to build. And then there are some others that are no longer on the pending list but we know they're not completely built and that was about another .143. So depending whether you subtract bonded and pending or whether you subtract subdivisions, all subdivisions, we came up with a range of -0.108 to 0.035 to 1.122 million gallons remaining available, which meant that there was no way that we could guarantee that somebody who took a reservation today and might expect to receive service two years from now could necessarily be guaranteed that water. And so we made a recommendation to stop accepting water meter reservations. In addition, there are discretionary approvals in which people come to the planning department and request approval of a project district or change in zoning for a proposed project or an SMA or those kinds of projects and we have a total water use represented by these of about 8.47 MGD, of which about 3.76 were told that they might have to develop their own source. Now, that's Central Maui and this is South Maui. Those projects can take 20 years to build out or they can come much more quickly. So they may not be asking for water during the immediate time frame of concern, but we like to track them anyway. Looking at just the demand trends, they indicate consumption roughly in the range of 29 or 30 by the year 2020, and 34 or 35 by the year 2030. Now, that's a smaller range than we would use for the Water Use & Development Plan, but that's just to give you a ballpark figure. So you can see how things are changing. The map on the left is the old land use and you can see all the mac nut and cane in there. And then on the right you see the proposed projects in virtually the same areas. So looking at that, we have to consider what we're going to do about it. I should also mention that if we were to build out the community plan, if it were to be built out it would represent more than 60 million gallons per day of use. MS. RAISBECK: I didn't hear that number. MS. KRAFTSOW: If the community plan were to be built out, it would represent more than 60 million gallons a day of water use. That's including all three Central Maui community plan areas. So we've been preparing -- we have a table of options that we've been preparing. Different people are working on different projects. There are several source options on the table to meet our source needs and we've been looking at the yield and time frame and costs and impacts of those and we'll be doing more of that. Many of these have already been discussed and raised today. I'm not going to go into this too much more. But I wanted to -- before I get into what our best options are, I just wanted to back step a little bit. I know this is a kind of a rap you've heard before about the mountains and the forest and everything, but it does affect our source choices, so I just want to backtrack and say that as you probably already know, despite that the fact that Hawaii is in the middle of the ocean, it's actually in a fairly arid area with rainfall in the open ocean only 25 to 30 inches per year, and yet Puu Kukui receives an average of 355 inches per year. And the reason that Hawaii is so water rich is what happens when the wind converges on the mountains. The northeasterly trade winds gain moisture and warmth as they flow across the ocean. They reach the islands and they are deflected upslope, cooling as they rise and causing the moisture to condense. And meanwhile, high elevation cool winds traveling from the northeast also subside towards the ocean surface and that subsiding air blocks the rise of the trades up the mountains and that creates a thing known as the trade inversion, which is a layer of warmer air between 4,800 and 7,000 feet. So when the moisture laden air rises up the mountains and is held down by the inversion layer, this convergence leads to the condensation and release of moisture which would just go run off if it weren't for the forests which collect and store the water and provide abundant surface area to help capture the water. And all of that results in a precipitation pattern that looks like this. You can see the blue and purple areas have the highest rainfall. And now I get back to source. It will come as no surprise then that if you look at an aquifer map of the island, the richest aquifers are on the northeast side, by and large, 48,96, 48,31. You can see that we eventually -- that's where the water is in terms of groundwater and that's also, as you can see by the ditch patterns that were built years and years ago, that that's where the surface water -- the most surface water is to be found. So these patterns will dictate where we go for new source. One more thing before coming back to new development options, I'm not going to go into much into conservation today, but that is very much a part of our plan. This graph estimates half a million gallons per day saved out of the Central system with existing conservation measures, not counting reclaimed water use which is another 4 or 5 million gallons a day, I think. These are based on average estimates for fixture counts that we've given out. More compelling is the reduction in unaccounted for water that's been achieved from measures such as automated metering and detection and repair and preventative maintenance. And this is based on a data set that our consultant claimed to make sure that the pumpage and the billing actually were reflecting the same exact period instead of offset by as much as four months. Okay. With all that said now, here are our major source development options. The Iao tank site well and Waikapu well are only for distribution of withdrawals to improve the pattern of withdrawals from within Iao Aquifer, which is something that the State Water Commission does want us to do. In terms of groundwater development, the Camp Maluhia well -- well, the Kupaa wells will be done soon and the Camp Maluhia well will bring us into the northern half of that aquifer and then subsequently the Waiolai and Waiolena wells. It would also be possible to have another well such as a private developer developing a well in the north half of the aquifer. To bring East Maui water over, we are stalled on that, but I think we might be able to bring Hamakuapoko water soon. Desalinization is an option that is also being discussed, or temporary use of existing wells. I think Lucienne brought up that possibility that's been on the table, too. And then surface water development. We could develop new surface water, put in an intake, or we could develop high level water that is -- that is currently distributed to runoff and not groundwater. Or we could take water from the existing ditch systems. Now, I want to go in a little bit further to why we are seriously looking at surface water. The left column of this slide shows the sustainable yield for the nearest aquifers that we could use to serve this system of groundwater. The right column reduces the sustainable yields to 90 percent. And the far right reduces the two on the east even further. The reason that I did that is because John Mink in the 1990 State Water Resources Protection Plan said that the sustainable yield estimates for the Paia and Haiku aquifers were pre-irrigation estimates and he suggested in the Water Resources Protection Plan -- in the text of that plan that a more conservative estimate for use until a better water budget is achieved would be 4 million and 15 million respectively. So just to be cautious, I reduced that. And you can see that at 90 percent of sustainable yield or less, if that were to occur, with an anticipated community plan buildout of over 60 million gallons, sooner or later we're going to need some surface water. I should stress that even though all these numbers are estimates, they're clear enough that they point a direction. Desalinization of brackish aquifers could help, but in the brackish aquifers that we have the for the most part quantities wouldn't be high enough to solve a problem like this. Ocean water could be desalinated in quantities like this. I think that that is being investigated by the mayor's office. This is a schematic of a portion of our Central Maui system with the costs of serving water in different elevations and areas showing. And I don't actually unfortunately have on here the main thing I wanted to show which is the cost of the Iao treatment plant because at the time this was put together, we didn't have a year of data there. But I can tell you the costs of some other similar plants, the cost of the Lahainaluna area, the Lahaina treatment plant, which is the same kind of treatment plant for fresh water, is 51 cents per thousand gallons. And Upcountry it runs from $1.43 to $1.71, but that's because part of the pumping up is included in that. So it looks like if you consider the costs and ease of use and the quantities that we need, it does all point to the need for surface water. And the use of already developed ditch water, if we can obtain it, is also likely to have less environmental impact than the development of any kind of new source, be it groundwater, surface water, or desalinization with its brine disposal issues. So despite environmental challenges and the fact that environmental challenges exist to all of these issues, that seems like a good option from that perspective, too. So now the question is can we get the ditch water and if so, where can we get it. This slide shows our systems. I don't know if it's showing up. The aqua, the very, very light aqua we can kind of see, are the ditches, and the dark blue is our Central Maui pipelines. So you can see that it would be feasible from an engineering perspective to get water from either the Waihee ditch systems or the Koolau ditch systems. From USGS report -- one of the USGS reports estimates that there were nine small ditches in the Waihee area, but only six are still in use. The Spreckels and Waihee ditch are the two major ones and they divert an average of about 40 MGD from the Waihee River and from tunnels that are driven into the valley walls above the streams. About 6 million comes from the Waiehu stream, two forks, and then the Nanania and Waikapu ditch carry another 18. The [inaudible] ditch is no longer in service. And Everett ditch, I don't know if that's in service or not, but it used to carry something like 3. This is from the 1990 State Water Resources Protection Plan, also estimates a total of about somewhere between 55 and 65 MGD, depending on how much flow in Spreckels came down from Waihee. And more recently, Wailuku Agribusiness reported average flows of 63.24 MGD in its entire water collection system. And this data comes from a report prepared for the Wailuku Sugar Company in 1978 and it evaluates 23 years of continuous data from 1955 to 1977. And average, total average flows are estimated at 59.88. But on one of the sources that they list there is the Wailuku pump, so taking that out it estimates at 48.12. So we're looking at a total flow through those ditches on the order of 50 or 60 million gallons. And from the east side, the total flows are about 164 million gallons. So both of those have the quantity we need and probably would be cost effective and less environmentally damaging to use than any of the other options, which is why we're seriously considering surface water. And at this point I'll stop and just take any board input. Thank you. MAYOR ARAKAWA: If you're not going to break, again, what we wanted to do is present some of the numbers we've been able to dig up in order to present you a more accurate description of what is happening with the water situation. But as you can tell, and I don't think this is something that's a secret to anybody in our community that's been here for any period of time, we are running into trouble by taking water exclusively out of the Iao aquifer system the way we're doing it and some of the ditch systems. So the numbers that we're working with are very restricted. Now, whether it happened today, tomorrow, or next year, we're going to run into a problem. And it's time that we also looked at what the lead times are in order to be able to get some of the corrections because no matter what anybody else may think, you can't make the corrections overnight. We can't just say we want a new treatment plant, plop it down today. Those concerns are that have been raised that it takes