BOARD OF WATER SUPPLY
County of Maui
Regular Meeting
Thursday, January 25, 2007
9:00 a.m.
Committee Room, Office of Council Services
Kalana o Maui
200 South High Street, Room 707
Wailuku, HI  96793




		I. Call to Order

		Chair Kenneth Okamura called the January 25, 2007 Board of Water Supply meeting to order 
		at 9:05 a.m.

		II. Attendance

		Board Members Present:		Also Present:

		Marion Haller			Jeffrey K. Eng, Acting Director
		Carl Holmberg			Eric Yamashige, Deputy Director
		Ginny Parsons			Edward Kushi, Jr., Deputy Corporation Counsel
		Michael Howden			Alva Nakamura, Engineering Program Manager
		Scott Luck			Paul Seitz, Water Treatment Plant Manager
        	Kuilauokalani Lester		Holly Perdido, Fiscal Program Manager
		Vice Chair Lee Aldridge		Ellen Kraftsow, Planning Program Manager
		Chair Kenneth Okamura		Alan Murata, staff engineer
						Gaye Hayashida, Commission Support Clerk

		Others:

		Jane Lovell, Deputy Corporation Counsel
		Council Member Michael Victorino
		Ann Hajnosz, Project Manager for R. W. Beck
		Carl Freedman, consultant for the WUDP
        	Avery Chumbley, President, Wailuku Water Co.
		Kim Willenbrink, Legislative Analyst, Water Resources Committee

		III. Announcements

		A. Introduction of Jeffrey K. Eng, Acting Director, Department of Water Supply.

		Mr. Eng expressed his appreciation in being here and stated that he is very fortunate in 
		having the staff that he has and having the support from Corporation Counsel.  He also 
		thanked the Board Members for their commitment and efforts.

		IV. Approval of Minutes

		A. December 21, 2006 Meeting

		Motion:	By Member Michael Howden to approve the minutes of December 21, 2006.

		Second:	By Vice Chair Lee Aldridge

		Discussion:	None.

		Vote:		Ayes – Unanimous.  Motion carried.

		V. Testimony from the Public

		A. Council Member Michael Victorino.

		Council Member Victorino stated that he will try to attend as many meetings as possible 
		and Kim Willenbrink will be at all the meetings, as well as one of his EA’s if he cannot 
		attend.  He further stated that they want to bring a closer working relationship between 
		the Board and the Council.   

		The Council will be working on the rules, water conservation plan, water use and development 
		plan and they will be calling on the Board for input.  On behalf of Chair Anderson and 
		himself, he thanked the Board for all their efforts.  

		VI. Unfinished Business

		A. Discussion and Update on Ordinance 3321, Regulation of Permits and Water Use, which 
		requires private, non-governmental parties to report withdrawals and diversions of water, 
		and to regulate the construction of private, non-governmental water systems.

		The Chair asked if there are any questions the Board has for the staff regarding the 
		material/reports that the department distributed.  

		Member Howden asked the Department if they consider the reports are thorough and accurate.

		Deputy Corporation Counsel Jane Lovell stated that the Department in November or early 
		December of last year asked the Department of Corporation Counsel to look into precisely 
		this question.   So they have been working with the Water Department staff to make sure the 
		county has all the reports in an easily accessed format.  Her department suggested that a 
		data base be created so that they would not have to rummage through stacks of paper.  They 
		have also consulted with the Commission on Water Resource Management in Honolulu, which 
		gets similar and sometimes identical reports, to find out how they manage the data.   

		Ms. Lovell stated that she has recommended that the County invest in the same data base 
		that the Commission uses so that not only could we manage the data better and determine 
		easily whether all entities who need to report have been reporting but also to compare 
		the reports to the County versus the reports to the State.  This would help in determining 
		whether the data is accurate.  

		The ultimate goal is to start requesting that the reporting entities, who are not reporting 
		sufficient data or not reporting everything that is required of them under the ordinance, 
		to bring their reports into compliance.  If that does not happen or if the County determines 
		there are inaccuracies then, if necessary, we could move to enforcement.  

		Vice Chair Aldridge asked, who is required to report?  Does this (handout) represent all 
		of the individuals that might have water wells?  

		Ms. Lovell replied that this represents the largest users. 

		Vice Chair Aldridge asked, if all users who have their own wells are also supposed to 
		report to the Commission?  

		Ms. Lovell stated that it is generally anyone who must report to the state, must also 
		report to the County.  

		Vice Chair Aldridge stated that he added up the figures from those who reported, it is 
		over a billion gallons a day for these nine users.  That is 40 to 50 times greater than 
		the Department of Water Supply’s sources.  It is a tremendous amount of water.  

		Ms. Lovell stated that former Director Tengan was of the view that these reporting entities 
		should provide more thorough reports and if necessary the department would issue notices 
		of violation.  The former director believed that the County should initially concentrate 
		on the largest users.  

		Member Holmberg asked if it was possible to know the physical location of where these wells 
		and diversions are.  

		Ms. Lovell stated that the State does keep records of where all the wells are but because 
		of national security concerns we are not supposed to post accurate or detailed locations 
		on any government website.  

		Member Parsons asked, what kind of testing do they have to perform on the surface water 
		that they supply for ag?  Is there any kind of protocol they have to go through?  

		Paul Seitz stated that he did not believe there was any kind of requirement.  

		Member Howden stated that because there have been considerable public questions on the 
		accuracies of these figures; he believes this is something the Board should continue to 
		look at.  

		Member Holmberg asked if any of these private entities are licensed or do they need to be 
		licensed with the State PUC?  

		Ms. Lovell stated that if you are a purveyor of water directly or indirectly to the 
		consuming public, you should be regulated by the PUC, but there are exemptions for 
		agriculture.  
  
		VII. Communications

		A. COM 06-21	Janelle and Michael Fernandez requesting a water meter for 946 Makani 
		Road, tmk (2) 2-3-033-009.

		At this time Michael Fernandez read from his hand-out.  

		In order to subdivide their lot on Makani Road in 1995, his parents had to get a water 
		meter as part of the subdivision process.  Their application for a meter was denied due 
		to a drought.  They were informed that they would be put on a list and notified when a 
		meter would be available.  

		When he checked with the Department, there was no record under his name.    So in August 
		of 2003 Michael and Janelle re-applied to put their names on the priority list.  Since 
		then they spoke to Alan (staff engineer) who found their original application (March 21, 
		1995 Drought Water Service Request).  

		According to notes made by the applicant’s sister-in-law, as of 4/4/95 their names were put 
		on a list and were to be notified when a meter becomes available per Arnold (former staff 
		engineer).  So they waited for their water meter.  Now they are being denied one because 
		the Department claims they had ample time to apply for one.

		Member Parsons asked can the right of reliance on anything be terminated by Board or by 
		rule?  Ms. Lovell stated that this is not a matter on which she would advise the Department.  
		The facts are very, very important to the legal conclusion.  This is not a question that 
		she would care to just answer off the top of her head.  She understands that there are a 
		lot of issues with the rule and the list but she has never been asked to address any of 
		those issues.

		Acting Director Jeffrey Eng stated that he has acknowledged the staff report denying the 
		meter at this time.  It may take an additional investigation if more facts come out.  He 
		pointed out his confusion due to the different parcel numbers referred to in the various 
		reports and correspondence.  

		Janelle Fernandez stated that it should be 09.  

		Member Parsons stated that all these parcels belong to the Fernandez’s.

		Michael Fernandez stated that parcel 215 did not exist at the time of application in 1995.  
		The meter was intended to be used for this second lot.

		Member Parsons stated that the Fernandez’s wanted to get a meter but there was a drought 
		going on.  It was such a fiasco when this list was being put together.  The list is a mess.  
		She further stated that she believes that the Fernandez’s did apply for a meter and the 
		60-day rule that was put into affect is not sufficient, and so the Board has to have some 
		leniency in looking at this.  

		Janelle Fernandez stated that in a previous meeting they were told that the denials of 
		these applications were pulled and this is how the department came up with the list.  But 
		somehow their denial was overlooked.

		Member Howden suggested that the Department look at this matter again and if there is 
		sufficient evidence that they applied, then the Department should give them the meter.

		Alva Nakamura stated that in terms of the request for a water meter, the staff tries to 
		apply the rules as consistently as possible to insure that every applicant is handled in 
		the same way.  There are instances where there might be some uniqueness in certain situations.  

		In this case, the subdivision was approved in July 1995.  They had from July 1995 until 
		December 3, 2002 to apply for a meter but they didn’t.  If we were to grant them a meter, 
		this will open the flood gates for other people in similar situations.  How the Board rules 
		on this will impact a lot of other people and he urged caution in issuing a meter. 

		Member Howden stated that failure to apply for a meter when the Fernandez’s understood that 
		they had previously applied is a mitigating circumstance and would not be applicable to 
		others who had subdivision approval and simply did not apply for meters.  

		Motion:	By Member Howden to defer to another month with the understanding that Alva 
		Nakamura will look more into the details of this and if the family has more information to 
		share with him that they would do so.

		Second:	By Member Parsons

		Discussion:	Member Parsons stated she doesn’t believe the Board needs to defer the matter.  
		The Board’s advice should be if in fact this (denial of March 21, 1995 Drought Water Service 
		Request form) has been used in the past, that to please reconsider the matter and see what 
		the Department can do.  

		Member Howden asked to amend his motion to instruct Alva (Nakamura) if he sees that an 
		injustice has been done to recommend issuing a meter.

		The Chair stated that it has been moved and seconded that the Board leave it to the 
		engineering staff to determine if the denials in the past have been grounds for granting 
		a meter and that the department should apply the same procedure for the Fernandez case.

		Vote:	Unanimous.  Motion carried.

		V. Testimony from the Public – Continued

		E. Robert Karpovich

		Mr. Karpovich gave testimony concerning the Coalition to Protect East Maui Water Resources 
		v. the Board of Water Supply.  

		The issue is regarding the installation of a 36-inch water transmission line, Phase I of 
		the East Maui Development Plan.  This would have transmitted over 10 million gallons a day 
		from the Haiku region to Central Maui.  Contracts for installation of pipes were issued 
		before an environmental impact statement was approved.  

		All plans to develop water in East Maui were dropped by the previous administration due to 
		an inadequate environmental impact statement.  Subsequently, the Council decided to abandon 
		the Hamakuapoko wells, but the previous mayor activated these contracts.

		Now we have a 36-inch pipe being installed which has no use.  It cannot be used for East 
		Maui and it cannot be used for the Hamakuapoko wells.

		The pipe is extremely oversized and he has no idea why the previous administration ordered 
		these contracts activated last May when they knew that there is no possible use for the pipe.
	
		Deputy Corporation Counsel Edward Kushi interjected and stated that this is an agenda item 
		and it is a pending litigation item.  He cautioned the Board on what they say.

		VIII. Director’s Report

		A. None.

		IX. Other Business

		A. Verbal Update on Pookela Well.

		Alva Nakamura informed the Board that Pookela is 99.9% complete.  There are just a few 
		items that need to be done such as the latch on double doors for the motor control room 
		has to be adjusted, the chlorination room equipment has to be tested, and other minor items.  
		Assuming that these will be done, then they will be able to begin the final tests of the 
		well followed by the 2-day test where the water will be pumped directly into the tank.  The 
		Department has received conditional approval by the State Department of Health to do this 
		and the Water Commission has given their approval. 

		The motor control center has been rewired and tested.  It is now complete.  The SCADA 
		(Supervisory Control And Data Acquisition) System has been rewired and is completed.  

		Member Haller asked if it is true that there is supposed to be an additional 5 million 
		gallons to be taken out of the ditch and treated at the Kamole Weir this year.  She would 
		like an update on this also.

		Paul Seitz stated that as far as the status of the Kamole Water Treatment Facility, the 
		Department is currently running a 28-day pilot test as we speak for the new PVDF membranes.  
		If everything goes ok and with the approval of the Department of Health, the Department has 
		a proposal in the CIP Budget for a $1.5 million retrofit of that plant.  They would change 
		the existing 8 filters from the polypropylene membranes to the PVDF membranes, giving that 
		plant a maximum capacity of 10 million gallon range though the maximum amount is dependent 
		on the water quality at any given time.  

		The Department already has the proposal in hand from U.S. Filter and the funds would be 
		available July 1st.  The retrofit of the membrane units would take about a month, but the 
		feed pumping system would take longer.  He would guess that it would take anywhere between 
		6 months to a year to get it designed and completed.  

		B. Discussion regarding Design and Projected Uses/Users of the Dual Line.

		Member Howden stated that there is no real connection between the Department and the 
		engineering on Oahu.  He wonders how much input the Department has in the design process.  

		Alan Murata stated that the Department gets into the picture once the plans are drawn up 
		and ready for bidding.  Since the Department will be maintaining and operating the system, 
		they review it to see if this is something they can work with.  A lot of their comments do 
		not get incorporated into the final design and the things they ask for don’t get inserted 
		into the contract because there is no money.   

		The Department does not seek any community input because they don’t get involved until it 
		is out for bid and ready for construction.  The Department has no authority to tell the 
		State what to do.  

		Member Howden stated that there are elements of the design that really need to be addressed 
		and be responsive to community concerns.

		Mr. Murata stated that as far as the alignment and size, these were determined back in the 
		early 90’s.  It’s pretty much a done deal.

		Member Howden stated that it would be a problem if it is a done deal and would appreciate 
		it if the Board had some understanding of that waterline and if there is more outreach to 
		the Kula Community Association and Hawaiian Homestead.  The last 2 segments of that line 
		need to be addressed.

		Acting Director Eng stated that the Department shares Member Howden’s concerns and plans 
		to get more involved.  There will be an opportunity to set up a meeting with Brian Kau of 
		the Department of Ag.  

		Vice Chair Aldridge asked for a thumbnail sketch of what this project consists of.  

		Mr. Murata stated that it starts out by the Olinda Treatment Plant where it is tapped into 
		well water supply line.  The first 2 phases are complete which takes it out to the Omaopio 
		area.  Phase 3 is in construction which takes it out to Crater Road.  There are a couple 
		of more phases out to bid.  Phase 5 is currently under design which takes it out to the 
		Waipoli area.  

		There are 2 distribution laterals.  The first one parallels Kimo Drive and is on Haleakala 
		Ranch property which takes it down to the Lower Kula Highway.  The second lateral is the 
		Pulehuiki lateral, which is out to bid right now, and that would bring it down Hapapa Road, 
		parallel to Pulehuiki Road.  

		This is all non-potable water that comes from the Kahakapao Reservoir.  

		The State has contracted this out to the NRCS and private engineers to do the design.  

		Member Howden stated that perhaps at the next meeting the Board could get an update if it 
		is convenient for the Department.  

		Acting Director Eng stated that he will see what the Department can do.

		C. Discussion and Update regarding Na Wai Eha.

		Deputy Corporation Counsel Jane Lovell stated that Na Wai Eha refers to the four great 
		waters, Iao, Waikapu, Waihee, and Waiehu Streams.  There are a lot of things going on 
		involving those streams.  Hui O Na Wai Eha has instigated some litigation and proceedings 
		in the Water Commission.

		Chair Okamura asked for a general overview of the situation.

		Ms. Lovell stated that Hui O Na Wai Eha is a Maui group which has engaged the environmental 
		public interest law firm, Earth Justice to represent it in several matters involving water 
		resources.  

		On June 25, 2004, Earth Justice on behalf of Hui O Na Wai Eha and Maui Tomorrow filed a 
		petition with the Commission on Water Resource Management to amend the interim in-stream 
		flow standards for the Waihee, north and south Waiehu, Iao and Waikapu streams.  Within 
		the last 6 months, the County intervened in that action.  So far nothing has happened.  
		The petition has languished at the commission for a couple of years.  Now a contested case 
		has been established and a hearings officer has been appointed but we do not have a specific 
		hearing date.  The petition to amend the interim in-stream flow will be addressed after 
		another complaint filed by Hui O Na Wai Eha.  That one alleges that Wailuku Water Company 
		and HC&S are wasting water taken from those streams.  That is a citizen’s complaint for 
		waste and was filed with the Commission on Water Resource Management in the fall of 2004.  

		Now there is a contested case and the County has been granted intervenor status.  This case 
		is going forward and hearing has been set for early May.  At the end of that hearing the 
		hearings officer will make recommended findings of fact and conclusions of law to a full 
		Water Commission, which will then meet and consider whether to adopt the hearings officer’s 
		recommendations or whether to modify it.  The central issue is whether there is waste of 
		water.  

		Earth Justice has petitioned the Water Commission to designate these surface waters in the 
		Iao aquifer area as a surface water designation area.  The Iao aquifer has already been 
		designated as a groundwater management area.  The State has taken over control of the 
		groundwater sources in that area and anyone who wants to withdraw groundwater has to apply 
		for a water use permit.   

		The Commission is required to consult with the County to see what its position is.  So 
		letters from the CWRM were issued to the mayor and to former Director Tengan soliciting 
		their views.  Both responded in December stating that because there were controversies 
		over these streams that the criteria for surface water designation have been met.  Similar 
		letters have been sent to Acting Director Eng and Mayor Tavares and both have responded 
		in similar fashion.  

		Member Howden asked if the public trust doctrine is a question in this and who has a right 
		to the waters?  

		Ms. Lovell stated that she believes that the Waihole Ditch case established that the public 
		trust doctrine applies to all of the waters of the state and all the waters of the state 
		are held in trust by the state for the benefit of the people.  She doesn’t think that the 
		existence of that doctrine is at issue.  

		Member Howden asked, then how does a private entity sell public waters?  Wailuku Water 
		Company sells water that is held in trust.  

		Ms. Lovell stated that is a much more complex legal issue and would be happy at some other 
		time to discuss this in executive session on the County’s take on this.  She does not want 
		to discuss this in public session because it goes to the heart of matters that are in 
		litigation in which the County is a party.

		D. Discussion and Update regarding EMI Water Agreement and Amendments and In the Matter of 
		the Contested Case Hearing Regarding Water Licenses at Honomanu, Keanae, Nahiku and Huelo Maui.  

		Ms. Lovell gave a brief update on matters that are public record.  If the Board had questions 
		on the County’s strategies, or legal liabilities and duties then she would ask for an 
		executive session.  

		EMI and A&B came before the Board of Land and Natural Resources some years ago seeking renewal 
		of water licenses in East Maui.  These licenses allowed them to divert stream water on lands 
		that belong to the State.  They requested rather lengthy extensions of these water leases.  
		Then, the contested case came, where several people felt that these water licenses were not 
		appropriate.  The County became an intervenor because the County is a recipient of water from 
		the EMI ditch system.  

		An order was issued by the first circuit court that the BLNR should do an environmental impact 
		statement before entering into any leases.  But that court order allowed the diversions to 
		continue until such time as the board could complete the appropriate environmental review.

		At that point, taro growers and other farmers in East Maui who were concerned that they were 
		not getting enough water to grow their crops, asked for interim relief.  That is the request 
		interim relief that resulted in evidentiary hearings.  But the County’s principle issue was 
		the amount of water the County gets from the ditch system and the County did not take a 
		strong position one way or the other on the merits of either EMI’s case or the various 
		farmers.  Judge McConnell issued an order in which he recommended certain interim relief.  
		He determined that there should be a monitor appointed to make sure that the awai’s were 
		kept clear.  He also recommended that any taro grower who needed water for lo’i that were 
		not in existence at the time of his order could apply and additional water could be put 
		into the stream to allow at least 50,000 gallons per day.  

		He was only allowed as a hearings officer to make a recommendation.  All the parties gave 
		their comments, exceptions to his order.  Then there was a final argument that was held 
		before the full Board of Land and Natural Resources on September 1st.  Since then no one 
		has heard anything from the board.  

		Member Howden recommended that this Board should consider a resolution to be forwarded to 
		the Water Commission to get with it.

		Ms. Lovell clarified that it is not the Commission on Water Resource Management; it is 
		actually the full board of Land and Natural Resources.

		Ms. Lovell asked that before this Board does anything they should hear more about the 
		litigation and some of the concerns that the County’s lawyers have over the availability 
		of surface water from East Maui for Upcountry Maui.

		She further stated that the Arakawa administration took the public position that 30 years 
		was too long for any water leases and would not support a water license of public resource.  
		By the same token, the County has not been in the position of being able to judge the bona 
		fides of all the claims that are made on the water whether by EMI or by individuals. 

		Member Holmberg suggested that if the rest of the Board has any interest in forwarding a 
		resolution to the BLNR or the Commission, that we need to know where we stand and asked 
		to go into executive session for a few minutes.

		Mr. Kushi stated that if the Board is going to consider a resolution it has to be on the 
		agenda.  You can talk about it but you cannot take any action until you post it for the 
		next meeting.

		Member Howden stated that it might be more appropriate to give Ms. Lovell and Mr. Kushi 
		time to prepare for it.

		E. Discussion and Update regarding The Coalition to Protect East Maui Water Resources, 
		et al. v. The Board of Water Supply.  

		Ms. Lovell stated that the original case brought by the Coalition to Protect East Maui 
		Water Resources and certain individuals was filed in 1993.  It challenged the adequacy of 
		an environmental impact statement (EIS) which was issued for the East Maui Plan.  The East 
		Maui Plan was a series of 10 wells which were to be drilled to supplement the water supply 
		in Central Maui.  But there was litigation that was filed almost immediately and went on 
		for some time.  In 1998 there was an order issued that allowed the use of water from the 
		2 Hamakuapoko wells for Upcountry during periods of drought.  Between the times that a 
		supplemental EIS was issued and when a second lawsuit was filed in 2003 that challenged 
		the legal adequacy of that supplemental EIS, a 36-inch pipe was ordered and paid for by 
		State money and was on its way to Maui.

		During 2003 there were settlement discussions which resulted in an agreement between the 
		County and the parties who were challenging the legal adequacy of the supplemental EIS.  
		Under that agreement, the 2 Hamakuapoko wells and all the associated pipe and transmission 
		lines were deemed to have an adequate EIS.  The County in turn agreed not to go beyond 
		those 2 wells to do the rest of the plan without doing another EIS or at least updating 
		the ones that have already been done.  The agreement also specifically allowed the use of 
		the 36-inch pipe which all parties recognized was larger than necessary.  

		Then negotiations had to start with the contractor who was hired years earlier over delay 
		damages and loss of profit and his waiting time.  So while it appears to members of the 
		public as if this contract to lay the pipe started in response to the ordinance that was 
		passed banning the use of the Hamakuapoko wells, in fact it took some time between the 
		end of 2003 and when construction could actually start.  

		In December the County received a letter from attorney Isaac Hall demanding that the County 
		immediately stop work on the pipeline because the ordinance had been passed that Hamakuapoko 
		wells could not be used.  Corporation Counsel responded and pointed out some of the 
		difficulties in stopping work on the pipeline and the financial penalties that would ensue 
		if that happened, while acknowledging that the pipeline could not be used to carry water 
		from the Hamakuapoko wells to serve the public as long as the ordinance banning the use of 
		Hamakuapoko water for human consumption was enforced.  A second letter was issued by Mr. 
		Hall on December 20th stating that he would go in for a temporary restraining order (TRO) 
		if the County did not immediately stop work.  She responded to his letter by indicating that 
		she would be happy to sit down and discuss things further with Mr. Hall when she returns on 
		December 28th.  But while she was gone he filed papers in court seeking a TRO and permanent 
		injunction to halt construction.  

		They went to court on January 7th and at that time the court declined to enter a TRO or a 
		preliminary injunction.  Again, the County made representations to the court and all parties 
		that the pipeline would not be used to bring water from the Hamakuapoko wells until such 
		time the ordinance is changed, but there were serious financial considerations to the point 
		where the former water director felt that the financial consequences of stopping work 
		abruptly exceeded the financial consequences of merely finishing up the project.  The pipe 
		was paid for, the contractor is being paid by the State and, if they stopped, the County 
		would have to pay the money back to the State.  Based on this evidence, the court did not 
		order the County to stop.  

		Ms. Lovell stated that she is working with Mr. Hall on the language of an order from that 
		hearing.  Whether the pipeline can be tested, and if so, how, is still a matter to be 
		discussed between Mr. Hall, his clients, herself and water supply engineers.  

		Member Parsons stated that the contracts were signed November 20, 2002.  Jerry Wells appears 
		to have or was placed in the position of appearing to have notarized the documents, however 
		they are not originals.  They are both the same.  In addition to that it appears that the 
		contractor was not put into a position where he would lose money.  That was agreed upon in 
		November 29th 2002 as well.  She stated that she has a problem with spending $7 million of 
		taxpayers’ money whether it is from the State or the County.  This is a violation of an 
		ordinance that was passed and wants an investigation on this entire project.  

		Ms. Lovell stated that the contract was before the Arakawa administration in 2002.  The $7 
		million has been spent.  If we stopped today, we cannot save that money.  

		Member Parsons asked Ms. Lovell if she reviewed the notary to see if it is legitimate on 
		both.  Has she reviewed the signature of Mr. Craddick on this?  Does she know when the pipe 
		was actually ordered?  

		Ms. Lovell replied that no, she has not reviewed Mr. Craddick’s signature and she has not 
		reviewed Ms. Wells’ signature.  Ms. Wells has been a valued employee of the County for 35 
		plus years, and she seriously doubts that Ms. Wells would notarize something that was not 
		legitimate.  

		F. Discussion regarding Proposed Rate Design presented by Ann Hajnosz, R. W. Beck.

		A copy of a letter dated January 15, 2007 to Acting Director Jeffrey Eng was mailed to 
		Board Members.  This letter showed Rate Option 2 with modifications as suggested by the 
		Board at their December 2006 meeting.  

		At this time Ms. Hajnosz gave a slide presentation on Rate Design Options 2A and 2B.    

		The purpose of this is to get Board feedback on Rate Options 2A and 2B, and which option 
		should be proposed to the Mayor.  

		Rate Option 2A is a modification Rate Option 2 based on the recommendations of the Board.  
		The general class rates are the same as the single family rates except the third and 
		fourth tier usage is increased.  The ag rates remain the same except for the third tier 
		rate which is charged only for cost of power.  Non-potable rate is also only charged for 
		cost of power.  

		The bill impacts for Rate Option 2A shows a lot of usage in the fourth block of general 
		service rates.  In fact, 83% of general service consumption would be in the 4th block.  A 
		majority of users are currently on the third block, but when the 4th block was added it 
		meant that all the revenue that we were getting from the first, second and third block 
		for single family and general service did not need to be quite so high.  It basically 
		diluted the conservation effects for the single family customer.  

		Typically, we would like to see the highest rate at a maximum percentage of somewhere around 
		15%.  That is the conservation block.  To have this high of a level in the 4th is not 
		recommended.  

		Future adjustments to the 3rd block of ag rates and non-potable rate are going to be tied 
		to power costs.  When power costs go up then ag rates go up.  

		Rate Option 2B takes Rate Option 2 without adding a 4th block under general services.  It 
		also reduces the ag rates and non-potable rate.  

		The bill impacts show some pretty significant rate impacts to high users in the single 
		family class.  On the general service side, the rate impacts are more in line with the 
		overall 18% increase.  

		Motion:	By Vice Chair Aldridge to propose Rate Option 2b in the interest of time.  This 
		is a step in the right direction even if it isn’t a complete one.

		Second:	By Member Lester

		Discussion:	None.

		Vote:	Unanimous.  Motion carried.

		G. Discussion/possible action regarding Water Supply Rules (WR-1) and the Board’s written 
		response to the Maui County Council Water Resources Committee.

		The Chair stated that he spoke to Michelle Anderson, Chair of the Council’s Water Resources 
		Committee.  She told him the Board could take a couple months.  She wanted to see if there 
		were some glaring things the Board could present to her by February 2, 2007.  

		Mr. Kushi stated the Upcountry Water Meter Rules are in the Water Supply Rules (W-1).  Now 
		would be the time to change it through Council action if the Board wants to.  He stated 
		that getting engineering staff’s input in this is vital.

		Mr. Kushi suggested establishing a sub-committee of less than a quorum to review this matter.  

		The Chair asked for volunteers for this sub-committee to meet in the next couple of weeks.  
		The following members volunteered:  Kenneth Okamura, Carl Holmberg, Marion Haller and Lee 
		Aldridge.

		Chair Okamura will draft a letter to Michelle Anderson, Water Resources chair, to ask for 
		an extension.  He will contact former board members Sally Raisbeck and Ralph Johansen to 
		see if they can attend.

		H. Discussion on areas of interest or concern regarding the County's water system that the 
		board would like to focus and make recommendations for the coming year.

			1. Dual Line – request Department of Ag staff to explain to the Board on how they 
			designed the system.  

			2. Na Wai Eha – possibly going into executive session.  

			3. EMI – executive session. 

			4. Set policy for requests for meter.  

			5. Board of Water Supply Rules (of Procedure).  

			6. Maintenance of Upcountry Water Meter List.  

			7. A better understanding of new developers’ contribute to infrastructure.  

			8. Clear communication to the Department.  

			9. More discussion on ground water resources and their preservation.  

			10. Invitation to Robin Knox to give a short presentation on ground water resources.  

			11. Providing for succession of qualified DWS employees.  

			12. Manpower and staffing shortages.  

			13. Address water quality issues.

		I. Receipt of Board Member request for agenda items to be placed on future agendas.

		X. Division Reports

		XI. Adjournment

		The January 25, 2007 Board of Water Supply meeting was adjourned at 12:50 p.m.


							Prepared and submitted by:



							__________________________________
							Gaye Hayashida
							Commission Support Clerk



		Approved on: _______________________