BOARD OF WATER SUPPLY COUNTY OF MAUI SPECIAL MEETING Taken at the David Trask Building, Conference Room 207, Wailuku, Maui, Hawaii, commencing at 9:00 a.m. on August 25, 1999 pursuant to Notice. REPORTED BY: GLORIA T. TAVARES, RPR/CSR #262 ATTENDANCE - Board of Water Supply Meeting, August 25, 1999 Members present: Bob Takitani, Chair Clark Hashimoto Mike Nobriga Elmer Cravalho Orlando Tagorda Jonathan Starr Staff present: David Craddick, Director George Tengan, Deputy Director Mike Quinn, Fiscal Officer Gary Zakian, Deputy Corporation Counsel Ellen Kraftsow, Planning Douglas MacDougal, Attorney for CMSJV Dorvin Leis, Member of CMSJV negotiating team Others present; Terryl Vencl Peter Stolle Diana Correa Harry Eager Jim Smith Mark Vaught IWADO COURT REPORTERS, INC. BOARD OF WATER SUPPLY SPECIAL MEETING CHAIRMAN TAKITANI: Good morning. I would like to call the Board of Water Supply, County of Maui special meeting to order. It's Wednesday August 25, 1999, 9:05 a.m. The meeting is in the HGEA conference room, David K. Trask, Jr., Office Building, room 207. In attendance we have board members Clark Hashimoto, Jonathan Starr, Mike Nobriga, Elmer Cravalho, and myself, Bob Takitani. We have staff members director David Craddick, board secretary Fran Nago, Corporation Counsel Gary Zakian. We have a lead attorney for the CMSJV, Doug MacDougal; Mike Quinn, fiscal officer; Dorvin Leis, member of the CMSJV negotiating team; Ellen Kraftsow, planning; George Tengan, deputy director; recording secretary, Gloria. Fran, would you like to introduce the audience? MS. NAGO: We have Terryl Vencl, Peter Stolle, Diana Correa (phonetic), Harry Eager, Jim Smith, and Mark Vaught in the back. CHAIRMAN TAKITANI: Good morning. We have a very full agenda here. So we would like to move on. We would like to get testimony from the public, since we may not be able to get you all assembled here again. I believe Mr. Smith would like to testify on Director's Report 99-31 and 99-33. Mr. Smith? MR. SMITH: Chairman Takitani, members of the Maui County Board of Water Supply. My name is Jim Smith, and I am a citizen of Maui County and a resident of Haiku. I have two concerns. One is with your agenda. I have a little experience with agendas. Currently, I have a suit pending before the second circuit, which will hopefully be settled soon, concerning enforcement of HRS 92. I note and ask you to note that this agenda says "amended" agenda. In 1989, Judge Richard Komo issued the declaratory -- a permanent declaratory judgment which states that HRS 92 must be strictly construed. What strictly construed means, all errors in favor of the language. In 1992, the board -- and that was naming the Board of Water Supply members at that time in '89. In 1992, Judge Komo issued an order noticing automatic substitution of that declaratory judgment to then sitting board members. In other words, he identified that the Board of Water Supply are subject in perpetuity to its order as it relates to certain matters. In 1995, this may seem a digression but it is not. The administration announced that it was applying a different method of government to the way Maui County was to be run. That involved moving away from regulation and focusing on results. I bear this in mind and ask you to bear this in mind as I make reference to HRS 92. HRS 92-7 at subparagraph D says, No board shall change the agenda once filed by adding items thereto without two-thirds recorded vote of all members to which the board is entitled. So my first question to you is: Who amended this agenda? Now, my second point would be that I would ask you to look at enforcement section, which is 92-12, which states that any person may commence a lawsuit and it also provides that the action may be nullified. That transpires from this illegal act. If there's a showing of willful violation, HRS 92-15 states that willful violation is, in fact, a misdemeanor. We have a history of nullification of legislative mandates related to the Sunshine Law. And this is a manifestation of that, and it occurs over time. So I would ask you, first, with regard to my first statement, to recognize that, in fact, the law must apply to you as board members as well as to the director and adjourn this meeting. And notice it properly. That would be my first request. Before I continue to the next, I would ask the board to respond, as the next testimony may not be necessary. CHAIRMAN TAKITANI: David, you want to respond? MR. CRADDICK: Do you have what the posting requirements is for an agenda? MR. SMITH: If someone needs a copy of the statute, I have it here. MR. ZAKIAN: My stuff is in my car from last night. MR. CRADDICK: Anyways, I think we know of six days before the meeting; right? Is that correct? MR. SMITH: I ask you to consider the language which says, No board shall change the agenda once filed. My question is: What does the word "amended" mean? Has there been an agenda filed with the clerk that has thus been amended? That's the question. If the answer is yes, you failed to comply with this provision. If it's no, then I'll move on to my next testimony. CHAIRMAN TAKITANI: Fran, what's the amendment that was filed? MS. NAGO: There's this agenda that Jim has and it was filed at the clerk's office August 12th at 3:26. MR. CRADDICK: The item that was added is Director's Report 99-43, request permission to abolish the water works operation training officer's position. CHAIRMAN TAKITANI: That was filed in sufficient time? MR. CRADDICK: Yes. CHAIRMAN TAKITANI: Mr. Zakian will proceed to try to give us a little guidance. MR. ZAKIAN: I have it. Do you want me to speak now? CHAIRMAN TAKITANI: Could you respond to him? MR. ZAKIAN: HRS 92-7, Subsection D, which I believe Mr. Smith is referring to, reads as follows -- I believe Mr. Smith has only read the first two lines of this particular provision. The rest may be instructed as well. The whole Section D reads, No board shall change the agenda once filed by adding items thereto without a two-thirds recorded vote of all members to which the board is entitled, provided that no items shall be added to the agenda if it's of reasonably major importance; and action thereon by the board will affect the significant number of persons. Items of reasonably major importance not decided at a scheduled meeting shall be considered only at a meeting continued to a reasonable day and time. The way I read this is, the agenda does have the ability to be changed provided certain criteria are met. One is, as you've got in front of you now, you need a two-thirds recorded vote of all members to which the board is entitled, which would be six in this board's case. It's a nine member board. In the second set of criteria what you need to consider is an item cannot be added to the agenda, one, if it is of reasonably major importance; and number 2, action on that item by the board will affect a significant number of persons. So three things you need, a two-thirds vote by the board, it cannot be of reasonably major importance, and action on the item cannot affect the significant number of persons. If those are met, then you can go ahead and add the item to the agenda. CHAIRMAN TAKITANI: Jonathan? MR. STARR: Mr. Chair, I happen to agree with Mr. Smith's reading of this. In fact, I was sitting scratching my head on this yesterday when I noticed that there was an item that had been added. I'm not sure what the proper action should be. My feeling is that if we do proceed with this meeting, we should not take action on this item that was added. Perhaps that might be a fair way of dealing with this. I think we should certainly allow this to be a lesson for us to follow so that we're properly in compliance with this Section 92 in the future. CHAIRMAN TAKITANI: Mr. Smith? MR. SMITH: If I may respond. We're dealing with a systematic problem here. This is not an isolated "woops" mistake, first of all. Second of all, I would ask you to consider the permanent injunction which requires strict construction of the statutes of the Sunshine Law. Secondly, I ask you to look at the semicolon following that first part of the sentence and it would indicate "and," as well. And in other words, to say that this means either this circumstance or that circumstance, is a very liberal construction, from my perspective. And given the nature of the changes that have occurred with regard to this notion of interpretation, this notion of discretionary authorities entering into a contract that says this systematic change that needs to be corrected and as reflected throughout our community as relying upon courtesy, instead of courtesy of a director or a mayor, instead of the clear, simple language. It's very clear. Once it's filed, it's filed. Now, there's a method for amending, and it has not been done. Now, what your question is, do we proceed? I would say no. What's the big deal? Do we proceed and write our own law? Do we proceed and then amend the state statute by adopting Mr. Zakian's liberal interpretation? Or do we honor the process and say, you know what, we're not going to reward this type of unlawful conduct, we're not even going to condone it. Because we want the standard to shift back. I'm asking you to shift the standard back to the people and not the interpretation of an attorney. Thank you. CHAIRMAN TAKITANI: Mr. Craddick? MR. CRADDICK: I'm going to take it that Jim Smith is confused by the word "amended" up here. This is a properly noticed agenda whether it had the word "amended" on top of it or not. I believe what he's talking about is once the agenda is properly filed, during the meeting time that the board decides, oh, we're going to add a new item on during the meeting. There's no question that is improper. But this is a properly noticed agenda. We could have left the word "amended" right off the top, we could have had the two agendas filed, we could have opened the one meeting, closed it, and then opened this meeting and we would be properly noticed. Now, again, I have no objection to deferring the item to another meeting if that's the pleasure of the board. But the item was put on there because of some pending issues with the water board. It would affect one position which is unfilled, so that it actually affects no people. Anyways, that's all I have to say. Our understanding is that this is a properly noticed agenda. It doesn't need the word "amended" at the top. MR. CRAVALHO: Mr. Chairman. CHAIRMAN TAKITANI: Yes, Mr. Cravalho. MR. CRAVALHO: This is an example of precisely what I have been saying all the way through. The director takes it upon himself to do whatever he feels like, and then offers some kind of explanation thereafter. The presence of the word "amended" is part of the entire agenda. One cannot proceed to extract whatever one wishes to extract. The law appears to be very clear. If we have to err, we err, as I've said before, Mr. Chairman, on the side of caution. If an amendment is appropriate, then two-thirds vote of the board, which has not taken place, we can retroactively or in hindsight say that we want to remove a word because it doesn't meet with the conditions that we are faced with today. That means that any time under any circumstance anybody can look at any provision of the agenda and remove whatever he doesn't like. Well, that defeats the very, very purpose and the very essence of the agenda and it defeats the purpose and the essence of the Sunshine Law and it defeats the entire intent. Now, I don't think we should become part of this, and I think it's a better part of valor if we say, hey, let's not even look at that particular item and agree with the director with respect to that. But separate and distinct from that, again, I urge as strongly as I can that we adhere to the requirements of the law. And we adhere to the requirements of the rules and regulations. No one, and more specifically the director, is not above the provision of the law, and he is not above the rules and regulations. And to attempt to extract what is considered to be unnecessarily wrong, to find six votes where you have only five here and even if all five voted for the addition, it would not pass. I don't think you would even get three. CHAIRMAN TAKITANI: Thank you, Mr. Cravalho. The chair believes that we have tried very hard with Mr. Cravalho's insistence on being procedurally correct. We want to do that. And I believe that there probably, hopefully, is a consensus here that we strike that item that has been added to the agenda from our agenda, which is item F, Director's Report 99-43, from the agenda and continue. Because we have a number of items that are very significant, and we had a meeting last night in Kula and there are people here regarding the Central Maui Source Joint Venture. We need to go on with the rest of our meeting. But I certainly hear what Mr. Smith is saying, and this board will do everything within its power to be in conformity to the laws. MR. STARR: Mr. Chair, a point of information. I would ask counsel, to my understanding, there was a properly noticed agenda that did meet all our requirements. And subsequent to that, an amended agenda was attempted to be noticed but not through the proper procedure. So I would believe that if we declare the amended agenda to be not valuable, then we would still have the original filed agenda which does not have that one item still intact. So I request counsel to let us know. MR. ZAKIAN: I would concur with that. The two provisions of HRS 92 that are directly applicable in this particular case. First of all, Section 92-11 entitled "voidability," it states, Any final action taken in violation of Sections 92-3, which relates to the open meetings, the giving of public testimony, and Section 92-7, which is what Mr. Smith is raising now, dealing with the notice of filing of the agendas, and things of that nature. It says, Final action shall be voidable upon proof of willful violation. A suit to void any final action shall be commenced within 90 days of the action. I think your approach is in accordance with the law. If the board were to take action on the item that was added, the remedy would be for someone to go to court, file suit, seek to have that action on that particular item voided. The court can entertain that, grant it or not grant it as it I believe you are accurate, Fran, just to verify this, there was an original agenda filed that did not have the additional item on it. MS. NAGO: That's correct. MR. ZAKIAN: Was that agenda ever rescinded or meaning cancelled, or anything, to your knowledge? MS. NAGO: No. I filed that agenda, and then about a day or two later. I'm sorry, I don't have that -- that agenda is back in my office. MR. STARR: Clark has one. MS. NAGO: You have -- I went back up and then I filed this. MR. ZAKIAN: What I would advise, given the remedy that's available, which is to void final action taken on an added item, if you proceed under the original agenda or as you may proceed under the, quote, amended agenda and delete that added item. It would be proceeding in conformity with the Sunshine Law, because you would be excising the added item from the agenda. You would not take any final action on it and you could proceed under the -- MR. CRAVALHO: I so move to excise that particular item so we can proceed. CHAIRMAN TAKITANI: Moved by Elmer Cravalho that we excise the item added, Director's Report 99-43, from the agenda. Seconded by Mike Nobriga. All in favor signify by saying "aye." (A chorus of ayes.) Those who oppose signify by saying "nay." (No response.) The ayes have it. The item is deleted from the agenda, 99-43. MR. SMITH: What just happened? Am I correct in understanding what you've done is you've taken up the original agenda, in essence? You really struck the amended agenda, not a particular item? MR. ZAKIAN: One, the board is proceeding under the originally filed agenda. The other alternative we looked at is this amended agenda is entirely the same as the original agenda with the addition of item 4-F, Director's Report 99-43. So with the excision of Director's Report 99-43 from the amended agenda, you essentially have in front of you the original agenda. So the bottom line is this item is not here for you to take final action on. MR. STARR: Mr. Chair, I would like to offer the original agenda, which Mr. Hashimoto was smart enough to bring, to any members of the public that might want to view it. CHAIRMAN TAKITANI: Thank you. Mr. Smith, you'll be given three minutes to continue your testimony. MR. SMITH: I'm grateful for the time you've given me. I'm going to address item D and E under Section 4, discussion/possible action. It's very interesting because I think there's a connection between the process here. If you'll look at these items, it's my belief that these items would not be before this board if the Kula rule were in effect. That's my belief. Which takes us back to the finding of 1992 in which the board found an inadequacy. The problem with that finding, and I know this because I took this matter to circuit court, and the finding was determined to be invalid. The problem with that finding was, in fact, the action section, which, in essence, is a discretionary authority given to any director, not only David Craddick but any director, by the public attorney, at that time, John Rapazs. What we have now is public attorneys facilitating a different method of government. Which, in essence, is not an old method in which an individual has the power, has complete discretion. That's what we're dealing with. So when you take the Kula rule and as a board you decide not to repeal it, which, in essence, satisfies the idea that there's still a need for a rule, and you simply let it expire and you don't replace it, then you have problems and somebody has to step forward and do the right thing, and the director did. And that happened simply because the public attorneys, my belief is, and the notion that we needed a different method of government, that's what I believe. It may not be true. But given this, that finding is fact, that finding of inadequacy exists. So to me, you are, in essence, the public force here, with regard to what happens to water Upcountry, because you found these findings of fact. There are problems with that fact because language is inserted to make it completely ambiguous. But still, you found there was an inadequacy and history proves it out, which, to me, puts the authority in this board to enter into any agreements that will, in fact, be. So these agreements and the fact that you are asked to approve amendments, I think unquestionably shows that you are in control. Why would you have to amend the contract and not have any authority over the contract? That's contradiction. So to me, if you decide to amend these contracts, what, in essence, you are going to do is, you are going to jump on the bandwagon of discretionary power without really considering that. Though I don't think it's possible with your board. I would like you to consider the Kula rule for a moment and what it did. It managed growth in Kula. All it did was reduce maybe 12 to 15 percent growth as compared to Haiku. If you look at your 1998 report, you'll find that upper Kula had an issuance of -- Makawao -- no, let me say upper Kula had an issuance of 38 water meters. Now, that was a problem in '78. How do you get water up that high across the Kula highway? That was the reason the Kula rule first was inaugurated from my study. It may not be a reason. In Haiku, I was a member of the CAC, Haiku Community Plan Advisory Committee, there were 33 meters for the whole community plan district. There were more meters issued in upper Kula than the whole of the Haiku community plan. That's what you get when you have government by discretion instead of public policy. That's what's occurring now. And it's no fault of the director. It's a fault of the board that zealously and cowardly refused to extend the Kula rule. That's my feeling. The point, though, of today's meeting is a request to approve an amendment to an agreement. And for you to act on that agreement, or to your requesting to amend that agreement validates the premise that you have the authority or why even bother you. And it's also about the premise that, in fact, you are in control. I would simply ask you do what your hearts desire and your brains dictate. Thank you very much. CHAIRMAN TAKITANI: Thank you, Mr. Smith. Is there any other testimony to be submitted? If not, we'll move on to item 4, discussion and possible action on A. Discussion regarding legal issues and negotiations relating to the Central Maui Source Joint Venture mediation. David, would you like to give a start-up introduction of Mr. MacDougal? MR. CRADDICK: Doug MacDougal has been working with the board in this matter since we started the negotiations back in the early part of this year. Doug MacDougal previously worked with us on the north Waihe'e purchase and had some dealings with some of the agreements on the Central Maui Source Joint Venture. The board felt he was capable in assisting them and ultimately hired him to assist in this negotiation. And we have had a number of mediation meetings. We have some more scheduled for later on this week. He is here to go into those and will give an update to the board on that. MR. MAC DOUGAL: What I would like to do is take you through three basic areas. One is -- MR. ZAKIAN: Mr. Chair, since we're getting into the nitty-gritty of negotiations and stuff, I recommend the board go into executive session. MR. STARR: Mr. Chair, I would like to request -- I don't know what Mr. MacDougal's schedule is. I know we have a number of members of the public that are here for other agenda items. I really hate to inconvenience them after having come down here to be involved with the process on those and ask them to step away from the meeting for an extended period of time while we go into executive session. If Mr. MacDougal's schedule allows, I would request that we deal with some of the other issues first before we go into executive session. CHAIRMAN TAKITANI: Mr. Craddick? MR. CRADDICK: I guess the problem is because of the way the agenda was filed, that party left and was coming back later. So I mean, everybody has had the opportunity to give the public testimony. I don't know if they again want to open that for more public testimony. CHAIRMAN TAKITANI: I believe all of these items are very much interconnected. The CMSJV is an integral part of the problem with the Dowling project and so we need to be moving, even though there's a large amount of people here, I think we need to be devoting a significant amount of time to this. And Mr. MacDougal has kindly come here at our invitation. So we would like to move on with this item if we can, and because I think when we get into the other items, they will be linked to this and it will be difficult to get a decision on some of these items that they are here for. If we can ask them to come back in, possibly in the afternoon, it probably would be more beneficial. MR. STARR: Can we at least get some background and general information on what the negotiations regarding the CMSJV are, while we're still in open session so we have the benefit of whatever we don't need to discuss? CHAIRMAN TAKITANI: Doug, would you be able to give a brief summary of the water law, the appropriate water laws that may be applicable to this situation and also relate to the Kulamalu and the public policy that Mr. Cravalho had been talking -- MR. CRAVALHO: Mr. Chairman, in order to expedite matters, the three items that are supposedly up for action today, as far as I'm concerned at this moment, it will not pass. Because I'm going to vote no on all three. Therefore, you do not have five votes. So it's not going to expedite anything if we do not proceed or whatever the case is. It's not going to pass, as far as I'm concerned. I'm voting no on all three at this time. MR. CRADDICK: Other board members will be coming to the meeting later on. MR. CRAVALHO: Mr. Chairman, I prefaced my remark by saying "at this time." With respect to other board members who may be coming, Mr. Chairman, we again wish to start to be highly technical. I can raise questions with respect to potential conflicts of interest and assignments of waters, which I believe the director is aware of. Which would then preclude certain members of the board from possibly participating. You know and I know. CHAIRMAN TAKITANI: All things being considered then, I think if Mr. MacDougal can present some of the items in open session regarding water law, etc., that may be applicable, then after that we can dismiss to executive session. Will you do that? MR. MAC DOUGAL: I'm flexible, and I can respond anyway. The only constraint I have is with respect to the mediation, is our confidentiality agreement. But I would be happy to talk about -- as I understand, some of you had questions about Hawaiian -- sort of principles of Hawaiian surface water law and groundwater law, and I could go into whatever length or remedy you care to have me go into. Did you want me to talk about what has been happening at the mediation session in terms of the number of sessions or structure? Or do you want me to just talk about water law? CHAIRMAN TAKITANI: Generally, water law. And I think the perpetuity of granting of credits, etc., has caused some concern and that is the public policy that we are most trying to resolve, in our minds. MR. MAC DOUGAL: I think that's interesting because the source joint venture agreement of 1975 was premised, I believe, on the notion that the Iao aquifer had a great deal of water. Perhaps anywhere from 40 to 60 million gallons per day that could be tapped and allocated almost indefinitely to serve all conceivable needs on the island of Maui. We think it was with that premise that the source JV entered into the agreement. Since then, the sustainable yield of that aquifer has been determined to be more like 20 million gallons a day. Actually, a third of some of the very early projections. And in addition to that, I guess one of the reasons that led to that, that finding, was the fact that the head of the aquifer was declining, and I guess I can use this as kind of a stepping stone to get into some more basic principles. One thing that's interesting and very unique about Hawaiian aquifers is the fact that they are essentially, within this rock, freshwater bubbles, so to speak, suspended on a denser saltwater. There's the Gysbend Heinsberg principle, which states that this bubble is approximately in a ratio of 40 to 1. One part of it being above seawater, and 40 parts being below. If you had to look at it as a bubble floating on this water, but most of it would be underwater, about 40 parts to the 1. And if you tap a well down into that aquifer, and you go near the bottom, if you go all the way through the bubble, you'll draw saltwater. If you withdraw into the aquifer, you are going to pull freshwater. There's a point called the transition zone where the freshwater starts getting salty. Somewhere between purely freshwater and purely saltwater in this transition zone, there's a line that is basically half and half. And that's usually regarding as the lower limit of this aquifer. So that if that lower limit, and they can do this by sampling the amount of salt as you go in various depths that the salinity level of that line appears to be rising, that's a sign that this bubble is contracting, getting smaller. And for every 40 feet that it rises, the head above the seawater table is going to drop 1 foot, because of that ratio that I indicated. And in the Iao aquifer, I noticed that there has been an overall drop, I think it was from one period of time in the '80s, about 8 feet of top head, which would indicate, multiply that by 40, is 320 feet that has come up from the bottom. Which is a lot of feet. And it shows rather dramatically that there has been a stress imposed on that aquifer that is required, which has generated a lot of tension both from the water commission at the state level and this board. And as a result of that, the State Water Commission has been considering sort of threatening designation of that aquifer and the water management area for the water code. As you may know, Hawaii's law is essentially divided into two kinds of regions. There's the areas under the water code that are designated water management areas, which is kind of like the state declaring martial law on your aquifer or region, whatever it may be. It can be there's flexibility in the code, the water management area, can be a groundwater management area or surface water management area or both. And in this state, only certain regions, mostly on Oahu, Molokai, groundwater -- and Molokai groundwater has been declared water management area 9. And the rest of the state operates under what we might call the common law of water developed independently of the, you might say, the permitting authority of the water commission with respect to water use. What I mean by that is, once a water management area is declared, then any use of water, surface or ground, in that management area, can only occur with a permit from the water commission. Right now the Iao aquifer is not subject to that authority, and so the use of water, even though you may have to get a well permit and so forth, the use of the water is not presently subject to water commission approval on the state level. So their threat to designate the Iao aquifer as a water management area is essentially a threat to require any use to get a permit through them. One of the conditions that is imposed upon all permits to use groundwater is that it is subject to the correlative rights of others, finding ways of surfing across the issues here. The law of surface water in this state has been very extensively litigated and developed. The law of groundwater in this state, by contrast, has been much less developed. There's a line of cases, and I would be -- I'm going to hand out some things which you are free to read at your leisure or not read, but I thought it might be useful. The original cases on surface water use start from about 1867 with Pat v. Bailey (phonetic). In this article, which I authored for a Hawaiian law seminar some years ago, it goes into some of the old cases which developed notions of basically two kinds of water rights: ancient rights and prescriptive rights. Surface water rights originally were, when I say "ancient rights," sometimes known, at least in the old cases, as just that. People were not using the term "impertinent rights" back then. And these ancient rights essentially were what was done before. What was old-time custom. The evidence that was used to develop that law was usually konaiki (sic) testimony -- kamaaina testimony. That testimony would tend to show that so-and-so used the water for so many years and this is how we get it. And once that was established, that was the right. In other words, the custom was the right. In effect, it was quite, I think, quite a nice system. At the end of this article, you will see what I describe as the underlying principles of decision in the early cases. I broke it down into four basic rules. The rule of noninjury, that means if you are not harming a third person, then maybe a change might be allowed. These are essentially rules that are imposed on the old system of custom. The rule of quantity means if a quantity of water remains the same, despite a change of use, then it's probably all right, you are not taking more than was your ancient right. The rule of sufficiency means if an amount of water is manifestly inadequate or excessive, then the court might take that into consideration. If you don't need all the water you want, it's involved in the modern rule of nonwaste. The fourth rule I call the rule of nonuser. Which means if you are not using it anymore, chances are you are going to lose it because of the desire not to hang on to unused rights. I think it was kind of a beautiful system, the old system of Hawaiian water rights. That began to change in the 1890s when they started getting into and developing the prescriptive rights to water, which basically meant if you could use water -- if you used water for 20 years or more, that would trump the ancient right. It's kind of like adverse possession. That, essentially, that type of rule allowed a lot of the sugar companies to assert legal claims to water that they had been using over the years unofficially, the prescriptive rights. Of course there were issues that everybody know what was going on, maybe it was permissive, that sort of thing. The fact of the matter is, a lot of the old ancient rights were lost and became trumped by these prescriptive rights that the court enforced. Then, toward the end of -- well, I guess the end of the century on into the early teen years and 20 years, the court goes off -- again, we're talking about surface water here. Many, many cases in the case law, and they are very interesting to read and it's a great resource for Hawaiian history, if anybody is interested in doing that. I had a lot of fun doing this. You go into the phase Carter v. Territory, Territory v. Gay, where they start saying there's another principle. It's not just ancient rights, not just prescriptive rights, but there's riparian rights. That means if you live along the bank of the stream, then you have the right to use the water in the stream. And that gave you a reasonable right to the use of that water. And then the court started talking about, well, what about -- okay, that's normal water, what about floodwaters and freshwaters and surplus waters. I'm not going to dwell on these because ultimately all of those distinctions were abolished in the McBride case in 1973. I think you should all probably read McBride. It's an interesting case and truly a landmark case in the State of Hawaii. It and the Rapoon (phonetic) case, which came after it, are probably the two principal surface water cases that affect the present law of surface water. That and the 1978 amendment to the constitution, the Kuleana Act of 1850, which I'll mention, and the water code are the basic elements that define current surface water law. The McBride case was essentially a classic case of upstream user diverting water, downstream user getting hurt. The McBride -- I mean the Rapoon case, that follows a similar pattern. Upstream, Gay and Robinson are diverting water out of the Hanapepe stream. Downstream, McBride not getting enough water. They complained. An old case of Territory v. Gay, back in the teens that I mentioned, appeared to give Gay and Robinson the so-called "normal surplus waters" of the Hanapepe stream and they relied on that case. The McBride case, which was a 1973 opinion of the Hawaii Supreme Court, Justice Abe was the judge, we examined the entire premise upon which parties were arguing and in the lower court. Number one, it really involved, I would say, four basic principles. Ownership, it discussed ownership. It discussed riparian principles, pertinent principles, and prescriptive rights. As to ownership, the court said the great Mahele did not, in effect, allow -- there was nothing in the great Mahele or the land commission that came after -- that transferred surface water rights away from the sovereign. They were held in the sovereign. It was part of the so-called "sovereign prerogative." The power of the land commission did not extend so far as to convey title to surface water. Keep this in mind, all these things, because I have been referring to this context when we talk about groundwater. Moreover, the Kuleana Act of 1850, which is a key act, and its now essentially codified in Section 7-1 of the Hawaii Revised Statutes. That act basically said that the tenants of ahupuaa would have certain rights. That in these big grants of ahupuaa during the Mahele, the rights of the native tenants were preserved. And the Kuleana Act seeks to define what those rights entailed. Of interest, particularly here, are references in the acts of the people's right to drinking and running water. Drinking water and running water. And the statement that the springs and the running water shall be free to all. So the court looked at that language and said that sounds like in 1850, they were codifying riparian law, principles. They were saying if you lived -- if you have access to a stream, you have the right to use water in the stream. Although don't forget, this is in the context of kuleanas which may or may not abut a stream. Although most surround streams. The state, as the successor to the territory of Hawaii, was the owner of the ahupuaa in Hanapepe and he had owned all the surface waters in question. So with one stroke, the Supreme Court said no more issues of who owns the surplus, normal daily surplus, who owns storm and pressured waters. It's irrelevant. The State of Hawaii owns it. End of discussion. With that opinion, the court abolished the doctrine of prescriptive rights that had grown up since the late 1800s and said there are no longer -- how can you have a prescriptive right on something that belongs to the State of Hawaii. The distinction between normal surplus waters and storm and pressured waters was abolished. It overruled Carter v. Territory, which was the original case that set all of this up. It recognized formally the doctrine of riparian rights. It quantified the appurtenant rights. Here, when we talk about appurtenant rights, we're talking about the right that a taro lo'i had to water, based upon its usage at the time of the great Mahele. The court made the further -- in addition to kind of restating refining, redefining appurtenant rights, stating, and this is probably what this holding is most known for, other than the fact that ownership is in the state and prescriptive rights are abolished, that you cannot transfer water from lands that have appurtenant rights. It is pertinent to those lands and no other lands. So that any attempt by the Gay and Robinson to transfer the waters that are based on appurtenant rights out of the watershed to Kula lands, were invalid, couldn't do it. If your kuleana had water for taro use in about 1849, and you don't have the water to it now, that doesn't matter, you still have appurtenant rights to that. Subject to something I will say in a minute about it, about Rapoon. The measure of that right is how much it took to grow taro. So that was the landmark case and it touched off a good quarter of the century of litigation, which people, needless to say, did not take kindly to some of this. Other people rejoiced. Depends on your perspective. The basic argument was that the Supreme Court affected a taking of property without compensation by declaring rights that had been supposedly adjudicated in Territory v. Gay, defined in Carter v. Territory, and abolishing them and saying the state now owned them. It was like condemnation. They went to the U.S. District Court. District court agreed that Judge Pence issued a blazing opinion. And that went up to the ninth circuit, and then the ninth circuit said, well, we have a lot of questions on this, and we need to ask the Supreme Court. And there's a procedure for doing this, it's called certifying questions to the state Supreme Court. So they asked the state Supreme Court for answers to questions, and what is commonly called McBride to a Robinson Two, because when they -- when McBride challenged it, they filed a new suit in federal district court. It became known as Robinson v. Ariyoshi. That was often called Robinson One; and when the Supreme Court responded to these questions, that's been called Robinson Two. A lot of interesting commentary in there. A lot of questions about to what extent certifying questions constitutes judicial precedent. But the court basically reaffirmed everything that McBride said. It did say that the public trust doctrine applies in Hawaii. A lot of people point to Robinson Two as that's the source of the modern public trust doctrine in Hawaii. And then, I don't want to -- I could go on for a day and a half on the litigation on this, but I don't think it's particularly relevant to the essential water issues we're talking about. Suffice it to say that McBride stands, it was reaffirmed in the Rapoon decision, which was in 1982. Background of Rapoon was that, again, you had kind of an upstream entity. In this case, it was really the Board of Water Supply in Honolulu tapping into that water in dikes and pulling the water out for municipal uses. The dike water was the source of Rapoon's stream water. The allegation was that the withdrawal by the BWS was causing low water in the stream and a lot of lithium rock and other problems for Rapoon's taro. BWS said, well, wait a minute, we purchased the appurtenant rights of all you guys that are suing us. We bought those. Because when the original owners sold way back when, they reserved those appurtenant rights in their deeds, then those people sold them to the BWS. The BWS thought: This is a slam dunk, we bought those rights. How can the guys we bought the rights from complain? Well, the Supreme Court said you cannot sever appurtenant rights. You can't do that. If you reserve them, you will extinguish them. Reaffirm the McBride ruling on the appurtenant rights. These kuleanas that the native tenants had at various ahupuaa, which had water to grow taro, which is really in this day the highest legal right you can have to water. The measure of those appurtenant rights was deemed to be the presumption applied. That is, if you are presently using it for taro growing, the amount of water you need presently to do it will be presumed to be the amount that was used back in 1949. If you can't prove it, look to see what you are doing today, that's good enough. You don't need a high standard of proof. Obviously, by making the standard too high, they could end up eliminating anybody's ability to prove anything. It reaffirmed riparian rights that were pronounced in the McBride case. It went a step further and said if you are a downstream owner of land and you are suing an upstream owner for some use, you can only do that if you have experienced actual harm to yourself. In other words, don't just be bringing suits on legal theories. If your water is actually hurting you, if your lack of water is hurting you, then you have a cause of action upstream against somebody's unreasonable use of water. I mentioned already, I think, the measure of it is the reasonable use. And they said the traditional taro growing was a reasonable use. Traditional taro growing methods. Even though they may not be the most efficient. At least before that court, there was no evidence to suggest that it was unreasonable. I guess the final point in Rapoon, which is often overlooked, is the court's reaffirmation of what is known as the public use doctrine. There the Board of Water Supply had actually hooked a lot of users in to this water that was coming out of the stream, coming out of the dike. The court said you cannot enjoin that. Once it's hooked in for municipal/public use, it is, in effect, vested that you could have an action for damages for the wrongful deprivation of a downstream riparian owner's use. But you can't, in effect, unhook municipal customers to give them the water back. So those two cases, McBride and Rapoon, laid down the modern principles of pertinent rights attached to kuleanas, riparian rights which applied to lands abutting streams. Natural streams, not artificial ditches. Other, I guess, importantly -- there's this whole notion of traditional and customary rights. The Kuleana Act of 1850 basically reaffirmed those. They did not just talk about streams and springs are free. They talked about what you could gather, how you could get access to your kuleana. And that act, together with Article 12, Section 7 of the amended constitution of 1978, amendment to the constitution, which reaffirmed the traditional and customary rights, formed the basis for a lot of the present Hawaiian rights today. The fact -- Kalipi case, all the cases involving getting your kuleana, getting water for kuleanas, getting gathering rights, traditional and customary gathering rights. Some of those rights have not yet been fully defined and will undoubtedly be the subject of discussion and litigation down the road. Groundwater rights, by contrast, is not as interesting. And I say that only because there is not a whole lot on the books. There's one case. Part of that groundwater wasn't discovered in Hawaii until long after the great Mahele. Although everybody can see springs. The City Mill case of 1929 is really the case on groundwater in Hawaii. And it forms the third of this trilogy of cases: McBride, Rapoon, and then there's City Mill. And there are lots of ways one could devise a legal regime for managing the use of groundwater. It could resemble prescription or what might be called prior appropriation, where if you get there first, it's yours. Or it could be based on principles of reasonable use. That is, if I'm using a reasonable amount of water for whatever purpose, whether it's a steel mill, a car wash, or a farm, then nobody can touch me. The only inquiry is, is my use reasonable. There's another way. This is the one that City Mill adopted. That is, if there are a lot of people that could potentially use groundwater, not only now but in the future, then we should try to make it so that we all have some water roughly proportionate to what we need but not an absolute amount that can't ever change. That became known, from the language of City Mill, as the doctrine of correlative rights. Which is essentially -- the word "correlative" has to do with relating your use to other users. So that if all people are using the aquifer that overlie the aquifer, then their uses have to all take each other into account. Useful sharing. That's the essence of correlative right. It's sharing. They didn't say, unlike McBride, because McBride was still in the future, they said you had an absolute property interest in your share. They didn't say you had an absolute right to whatever water you wanted. They said you had a correlative share. That's kind of a fluid term. But your ownership interest in that correlative share is a protectable property interest. So that you can invest in it and transfer it and do what you need to do with it. Although I should say that City Mill left many, many questions unanswered. It did not, for example, distinguish between overliers and exporters. By that I mean, if you could draw -- geology doesn't admit such fine recision, but if you could draw a nice little circle over the aquifer and say these are the overliers, should they have priority in their correlative sharing over people who put a well in and export? It has not been determined yet. In California, the rule is, which has kind of an odd mix of riparian prior appropriation doctrines, they say that -- they do have correlative rights. They say that the overlier has priority over the exporter if there's a shortage. If there's not enough water, who gets the cutback first. They will say the exporter. The other question is, how do you measure correlative rights? Is it, I own twelve acres over the aquifer and I have a small farm, perhaps. But over here, Bob owns only one acre, therefore I get twelve and he gets one. Even though his use might be more intense, does that mean he gets more water? It's not settled yet. Obviously, the big landowners claim that's a great rule. And there is some justification for that. Because if you have a lot of land, you usually have a lot of uses on that land. A lot of farms and so forth. And so with some justification, that argument has been encouraged. Should it be based on the type of use? Should there be some sort of -- again, we're talking about if water is scarce and somebody has to give it up, how do you measure what is given up exactly? These questions have not been answered. But correlative rights remains the law in this state and the water code -- now I'm coming full circle back to 1987, in response to the amended constitution of 1978, the legislature enacted the water code. All of these background principles of law still apply. There's just this regulatory overlay. So when you are in a water management area, and the water commission is parcelling out permits, it is doing so with reference to this background of City Mill, that there is some correlative rights to that underlying aquifer. And all of its permits are subject to correlative rights. This creates a lot of issues. I mean, the more you think about it, the more you think, wow, this is unresolved. For example, suppose you get a permit which is essentially perpetual but it's reviewed every 20 years, and you just built a -- you just had -- you just laid out a farm and you have -- you use that water for irrigation, or you are a municipality or a Board of Water Supply and you have a permit and that permit says subject to correlative rights. And you are hooking in people as you must do or you're planting your crops and you have invested a reliance on this, suppose years later the population expands or other competing uses come into the picture and wanting water from the aquifer, what does it mean subject to the correlative rights of others? Can somebody come in and say: I'm an overlier, I want water, and you can't deny me of that, you can't deny that water to me. The response may be: Well, wait, we cannot unhook customers. We can't dry up irrigated land. What are we going to do? We don't know what subject to correlative rights to others mean. Those issues are alive today. The Waihole ditch case, some of these arguments are being made to the Hawaii Supreme Court. And a lot of people who have read McBride, Robinson, Rapoon, are saying, oh boy, wait until they get their mitts on correlative rights. They talk about surface water in two cases, City Mill, which is kind of old now, a lot of unanswered questions, long opinions which was raising questions left and right. Is this an opportunity for the court to completely address and revamp, revisit groundwater law. For example, are they going to simply declare that all groundwater belongs to the State of Hawaii. City Mill overruled, who knows. It has made some people nervous. I don't know how much detail you want me to go into Waihole ditch. I know I have been going on here and I appreciate the audience. MR. STARR: That's great. CHAIRMAN TAKITANI: I think that gives us a good background. Why don't we take a break. We'll be back at 10:30, and then we'll proceed. (A recess was taken.) CHAIRMAN TAKITANI: We want to resume after our recess. Mr. MacDougal will recap his presentation and summarize. MR. MAC DOUGAL: Sure. I think these issues are important for the board because the board deals with both surface water sources and groundwater sources and will be dealing with those. And some of the issues that come up on surface water will undoubtedly involve a lot of the points we talked about. And in groundwater, likewise, especially with some of the Iao aquifer wells and so forth. The principal focus of what we're shortly going to be talking about, which is the Central Maui source development agreement, is arguably much more of a dispute on contract rights than water rights. And I think it's probably best to just, at least for the present, to see it as a contract dispute. Because really what the parties are claiming, and I'm just going to briefly talk about what the agreement is, and then any substantive discussion on it, I think we'll need to go into executive session. MR. ZAKIAN: Mr. Chair, if anybody needs a copy of the source joint venture, we have extra copies. Second, I did speak privately with Mr. MacDougal, there may be issues that are properly reserved for executive session. So bear that in mind. As Mr. MacDougal goes through, he may have specific questions related to the source joint mediation that he can fully expand on in executive session. Does anybody need a copy? MR. MAC DOUGAL: With that agreement that was entered into in 1975, between the, I would call them the principal landowners, potential hotel developers, and the board. The agreement itself is fairly straightforward. The parties agreed, and when I say "the parties," I mean the joint venturers among themselves agree. The board didn't agree to be a joint venturer. This agreement is really among people who created a joint venture, and then the board signed an annex to the back of it agreeing to certain things and subject to certain things. So it's important to realize that basically this source development and agreement is an agreement that created a joint venture among private parties. And those private parties agreed to hire consultants, look for water, develop water, and what is known as the Central Maui study area. Basically, it's -- I'm going to call it Central Maui Iao aquifer area -- to construct transmission lines and they entered into a separate agreement for the actual mechanics of constructing the transmission lines and paying for them. Once they had found a place to develop water, they would then construct wells, they would then dedicate these wells to the BWS, subject to the BWS's construction standards for dedication. And they would allow the BWS to use the water that was developed until they needed it. The plan was to develop 19 million gallons per day, or MGD, for the Board of Water Supply. The parties assumed that there was, as I mentioned earlier, an abundant aquifer. I think I mentioned 40, 50, 60 MGD. It's more like 20. They assumed that 19 MGD would be added to the BWS system and they used their own consultants and their own engineers, based on their own reports, to, I think, assess the risk of whether they could or couldn't do this. And they thought that they could. The BWS signed an annex to that agreement, where the BWS agreed to accept the dedication and the facility they built, subject to its rules, BWS's rules and regulations. Again, this is fairly common. Somebody develops a well, they dedicate it to the board, it happens on all the islands, subject to those rules and regs. Once that is dedicated, it becomes part of the water system of the county. The BWS also agreed to set aside and provide the developed water, when needed, to the source JV, subject to its rules and regulations. What happened after the agreement was entered into, the source JV developed two wells each collectively totalling 8.4 MGD, and then later developed a third well of 5 MGD. These are sometimes known as the source JV wells. But in fact, they were dedicated so they are no longer, quote, source JV wells. The total developed pumped capacity became in aggregate 13.4 MGD, of which something over 3 MGD is actually being used by the source JV, and the actual usage from the three wells is nine and declining. I think the new Waihe'e wells will reduce some of that. But it's approximately -- it has been around nine. What else happened after the agreement, the source JV constructed developments in Kihei and Wailea. And essentially, the source JV wants to use -- would like to use all of the 13.4 MGD it has developed unreduced by various engineering formula or factors, which tend to mean that because you develop an installed pump capacity of 13.4, it doesn't mean you have 13.4 available. I think the focus of the source joint venture is on the set-aside, I call it the, quote, set-aside language in the source joint venture annex that the BWS signed. And that's the provision that said the BWS would set aside water that it had developed upon request. I don't want to get into strategies or characterization. I'm just trying to stick to the facts here. But I will say, just in concluding the kind of factual development here, that the actual context of the BWS's role is very important here. The source JV would like to characterize the BWS as a guarantor of water; but in fact, the problem is that the BWS has responsibilities under its rules and regulations as Maui grows to serve that public. When they ask for water and water is available, they have to connect them. They can't say yes to you and no to you. One might say, well, the agreement overrode that. The answer to that is no, it didn't. Because the agreement specifically made itself contingent on -- subject to the right of the board to do -- to follow its own rules and regulations. So in fact, it says any connection into the BWS system shall be made subject to and pursuant to the rules and regulations of BWS then in effect. So we have kind of a situation that is -- I'm going to kind of abstract a little from that, where somebody enters into an agreement for -- they develop the water but they don't have a need for it right then. So they want to say, well, we dedicated it, we built it, we want to reserve it for us. The board wants to encourage such investments and dedications; but at the same time, there's this growth that occurs. If you don't need it in -- it's manageable in a 2, 3, 5-year period of time where you say, okay, you don't need it now, but we can adjust things so that when you are on line the water will be available. When it gets into long periods of time, in this case, this is a 1975 agreement, they were basically looking at demands and so forth, back then. Now the 1999 growth occurs, and hookups, hookups on demand occur. The board has to meet those hookups on demand. So that it's kind of like here's the source we just developed, and if you don't use it, there will be a lot of Pacmen nibbling away at it, and those are people connecting to the source. And the source is starting -- the available water starts to shrink. Nibble, nibble, nibble, and guess what, after 20 years everybody is hooked up. Then you can say, well, they knew that, we knew that, Maui grows, who took the risk? Who took the risk that maybe these little Pacmen were going to devour the source before they were ready for it? Needless to say, we have a number of arguments whereby we believe they clearly took that risk. I think that's all I should say, because we entered into a mediation agreement, we have a very strong desire to work out things on a very reasonable and amicable basis with these people. We have a good mediator, Ron Libkumen. We made a lot of progress; but as part of any mediation, you need confidentiality to make sure people will come clean. They will tell you what their weaknesses are, and why you should agree with them that they can't give you more. And that doesn't happen unless you have a very, very strong confidentiality provision that assures that. As soon as anybody suspects it's no longer confidential, people start posturing, they start holding their cards closer to their chest and you don't have a free and open mediation. You have something different. We're trying mightily to preserve that. That would conclude my remarks on the source joint venture for open session. CHAIRMAN TAKITANI: Thank you, Mr. MacDougal. Any questions? Can we have a motion? MR. NOBRIGA: In light of this development so we can go into more detail about the Central Maui joint venture and the ramifications, I would like to move that we go into executive session pursuant to HRS 92-5(a) in order to consult with our attorney on questions and issues pertaining to the board's powers, duties, immunities, and liabilities. CHAIRMAN TAKITANI: Moved by Mr. Nobriga to go into executive session pursuant to HRS 92-5. MR. HASHIMOTO: Second. CHAIRMAN TAKITANI: Seconded by Clark Hashimoto. All those in favor signify by saying "aye." (A chorus of ayes.) Opposed "nay." (No response.) The ayes have it. We'll go into executive session. SPECIAL MEETING RESUMED CHAIRMAN TAKITANI: Reconvening the special Board of Water Supply meeting. Going to item B, discussion and possible action regarding legal issues negotiations and/or settlement proposals on the recovery costs from DBCP cleanup. We're expecting a conference call with Dwayne Miller and Vic Sher. MR. NOBRIGA: Do we need to go into executive session to talk with Dick and Vic -- or Dwayne and Vic? CHAIRMAN TAKITANI: Yes, sir. MR. NOBRIGA: Okay, pursuant to their call, I would like to make a motion we convene to executive session pursuant to HRS 92-5(a)(4) in order to consult with our attorneys, Dwayne and Vic and Gary, on questions and issues pertaining to the board's powers, duties, immunities, and liabilities. CHAIRMAN TAKITANI: Moved by Mike Nobriga. MR. STARR: Second. CHAIRMAN TAKITANI: Seconded by Jonathan Starr. All those in favor signify by saying "aye." (A chorus of ayes.) Those opposed signify by saying "nay." (No response.) The ayes have it. We'll go into executive session. (Whereupon the board went into executive session.) SPECIAL MEETING RESUMED MR. CHAIRMAN: We need a motion to proceed as discussed in executive session. MR. NOBRIGA: Why? MR. ZAKIAN: Just to make clear that the board is authorized -- MR. NOBRIGA: I move we proceed as discussed in executive session. CHAIRMAN TAKITANI: Moved by Mike Nobriga to proceed as discussed in executive session. MR. HASHIMOTO: Second. CHAIRMAN TAKITANI: Seconded by Clark Hashimoto. All those in favor signify by saying "aye." (A chorus of ayes.) Those opposed signify by saying "nay." (No response.) The ayes have it. We shall proceed as discussed in executive session. We'll move on to item C, Director's Report 99-31. MR. NOBRIGA: Mr. Chair, move to defer action 99-31, 32, and 33. MR. CRAVALHO: Second. CHAIRMAN TAKITANI: Moved by Mike Nobriga, seconded by Elmer Cravalho that we defer items 99-31, 32, and 33. CHAIRMAN TAKITANI: Mr. Craddick? MR. CRADDICK: Defer to when? MR. NOBRIGA: Next regularly scheduled meeting. MS. NAGO: The one on the 9th. MR. CRAVALHO: Whenever. MR. NOBRIGA: Next regularly scheduled meeting. MR. NOBRIGA: I stay confused already. CHAIRMAN TAKITANI: All those in favor of deferring 99-31, 32, and 33 to the 9th, signify by saying "aye." (A chorus of ayes.) Those opposed signify by saying "nay." (No response.) The ayes have it. We'll move on to item G, discussion and possible action regarding Upcountry water situation. What is the situation, Mr. Craddick? MR. CRADDICK: The Wailoa ditch is currently at 68 million, down from 111 million a week ago. Total storage is down from 105 million to 97 million. And demand is still sub 7 million, 66.7 million. One other thing here I have. The Upcountry water advisory committee had a meeting on August 18th, and it was right after the hurricane and we did have water. Water was coming in. We had a supply exceeding demand and they were making recommendation to cut back the emergency, but -- and I guess I should inform you of that so you know about it, and leave it at that. I noticed that none of the members of that group said anything about it last night. I don't know if that indicates a change of heart. MR. HASHIMOTO: Who are the members of the Upcountry water -- MR. CRADDICK: We'll ask George. MR. TENGAN: There were ten people there. The names that come to mind is Bruce Voltair (phonetic), Bill King, Peter Baldwin, Doug Maclure, Garrett Hew, Don Fujimoto, Elliott Krash, and there might have been one or two more. Peter's sitting on the committee also. MR. CRAVALHO: Mr. Chairman, may the letter be received and filed? MR. NOBRIGA: What is the condition -- not condition, but would you brief us on what housekeeping has been going on in Waikamoi, because it's been dry? MR. CRADDICK: Housekeeping? Fixing? MR. NOBRIGA: Not housekeeping. That's the wrong word. MR. STARR: Repair of the flume. MR. NOBRIGA: Stay punchy. MR. CRADDICK: That's a good question. We have in our budget $60,000 with EMI to do work on repairing it. We have had that in there for approximately the past three years, I believe, and what has happened is the entire top cover has been replaced. I don't believe they have gone in there for about six to eight months right now. My understanding as of Sunday is that they are replacing the top guide for the car that travels on top of the flume, and once that gets done, they will begin getting the foundation of the flume repaired. The foundation, keep in mind, is the same foundation that was put in in the 1920s when the flume was originally built. In the 1970s, the upper portion of the flume was replaced. But the foundation has never been replaced and the flume is sagging, dipping, things like that. My understanding of that, work is starting up on it. MR. STARR: Two items. First of all, I had requested to be informed of the meetings of the Upcountry water advisory, and I was not informed of this past meeting and perhaps other board members would like to be informed of the meetings of this and any other water advisory committees so we know when it's taking place. I would like to be sure that we're -- MR. TENGAN: It was an oversight on my part. MR. STARR: I was not concerned with blame. I want to be sure going forward that the board members are informed in advance of these meetings. And the second thing is that I think this is a good time as any to begin a little bit of a discussion over how we can try to increase the capture area of the Waikamoi intakes, and that I would also like to look into the board possibly drilling one or several wells to the west of Maliko gulch, to add it to the Upcountry system. So I would like to discuss what process we can go through to get that -- get those two items rolling. I know we have heard from the community that those are things that the community would like to see. CHAIRMAN TAKITANI: Mr. Craddick? MR. CRADDICK: I suppose we can bring something to the board here next month. But I don't know that you want to restrict it to the -- what did you say, west of Maliko gulch? MR. STARR: We at present have a plan for drilling wells to the east of Maliko gulch, even though it's been five years and we have done nothing. But what I'm saying is let's proceed with that. Meanwhile, let's start a project to the west of Maliko gulch. And last night you said that there's nothing preventing us from going ahead with that. Let's go ahead with that. CHAIRMAN TAKITANI: Mr. Tagorda? MR. TAGORDA: In response to Mr. Starr's comments on those drilling of wells on the east of Maliko gulch. I think we need to change our approach. Before we start a plan, a design on the project, I think we should employ -- we should get the community input so nobody is going to be on the other side of the fence. This way we won't be going into court litigations and so on, so forth, like what happened to Hamakuapoko wells. MR. CRADDICK: A good example or as good example as any is the Keanae well. When we put the first Keanae well in, I believe it was '87. I'm not exactly certain if it went to court but I know there was a big fight; eventually, it did get going. This second one, which is a backup for the other one, started off that way, we had numerous community meetings during the EA process. In the end we did garner enough community support. But I don't know if you are saying that you go try to get this support or if you just go file for an exploratory well and start going through the environmental process, which includes community input on it. MR. TAGORDA: I think we need community input. MR. STARR: My feeling is that we started that process last night, and we should take it from there, which is, let's create a plan over what we think would work. Let's take it out to the community. If the community doesn't like it, we'll rethink it. If the community likes it, we know we have their blessing. But at least let's start. MR. TAGORDA: Going back to the Upcountry drought, Mr. Chair, are we not ready yet to reverse our action based on the triggers that has been presented to us now. I believe when you go back to those guidelines that we set, to reverse ourselves from emergency to warning, we need to meet three triggers or more. And I think some of those -- three of those triggers are met at this time. I was expecting a lot of good questions from the meeting last night, but I think a lot of people seems not to understand very well, like I am, about the Upcountry system. I went back to my drought records, from before we declared the drought watch, which was May 26th, all the way to the present time. I have many questions to ask you, David. There were times or several occasions that Kamole, in spite its being in its lowest level at 17, 18, you were pumping 6 or 7 million gallons a day. I don't think you have a problem with that. My question is, did you have a problem with HC&S? MR. CRADDICK: No. Well, they did not like it, but the agreement allows us to do it. MR. TAGORDA: The reason I said that was I was confused. When you talked to the public about telling them the 20 to 30 million gallons level at Wailoa ditch, there's a big decision on the part of the county and HC&S, who can throw what. I think, based on that occasions of those dates that you pump water up Kamole, there is no limit. We can take that 7 million allowed to us at Wailoa, and I don't see from my drought record that you are utilizing or you are using that, a location from Wailoa ditch. And thereby cutting back those users Upcountry. And there were times, too, that a lot of things they really don't know. And I expect them to ask those questions. Pump 10, base pump 10, we seldom use that. Two is up Piiholo. 6, we never use that. Two is up Olinda, and now they are 25 percent cut back. But if you look back, David, on my drought report, it was from May to up to August that they have enough water Upcountry. Except the Olinda. But if you will pump your water from Kamole, Piiholo up to Olinda, I think we can solve that drought problem there. MR. CRADDICK: During May, June, and July, the presentation given last night, we pumped 92 million gallons up. That averages out to pretty close to a million gallons a day for the lower line. Which, during those three months, is a little less than half the demand on that line, or between a third and a half of the demand on that line during that time. So for us, that is not an insignificant amount of pumping. I think the number mentioned last night, that cost us somewhere around $95,000 to do that amount of pumping. MR. TAGORDA: I'm not talking about cost, but it's the availability of the water to supply Upcountry. MR. CRADDICK: Right now the Piiholo reservoir is full, any amount of pumping we do up from Kamole is not going to do anybody good. MR. TAGORDA: There's some instances, too, I think, that the department is bringing down water from Piiholo to Kamole through gravity flow. A lot of those things are not being said correctly to the public. Why? MR. CRADDICK: I'm not exactly sure what you are saying there. MR. TAGORDA: What I mean is, you have water from Piiholo, you go back to Kamole through gravity flow, instead of you getting water from Kamole, which you have allocation of 7 million gallons a day, I don't see the logic where your Upcountry Olinda needs more water because your reservoir there is empty. MR. CRADDICK: Right now, if you notice, Piiholo is full. MR. TAGORDA: I noticed that from May. MR. CRADDICK: So no more water can go up into that. If we pump water up there, the reservoir is just going to sit there full. There's no purpose in doing that. Now, could we treat more there and bring it down to Kamole, possibly we could; but my understanding from the treatment plant, because of the fluctuating levels of water, they are not able to on a consistent basis cover that. I know for a few days all usage at Kamole was zero. As soon as we can get back to that, we'll do that again. Until Piiholo starts to drop again. If it starts to drop again, we won't do that. The other issue, could we take some of that water and pump it up to the Olinda line, that 1.5 there, and not take any out of the Kahakapao reservoir, possibly we could do that if you want to do that. That's certainly an option. MR. CRAVALHO: Mr. Chairman, I think following on that logic, there is still a lot of storage capacity in Kahakapao. So we do spend an X number of dollars above what has been budgeted or considered and you do proceed to do the pumping and draw the maximum allowable from Wailoa ditch and try to fill up the storage capacity, yeah, to just about total. And if we keep this on, on a consistent, regular basis, as Mr. Tagorda has indicated, we would not be having an emergency situation and the drought situation. If we kept that capacity full all of the time. And I think perhaps this is what you are probably alluding to. That if we moved a little bit more speedily, yeah, anticipating that this is going to be a dry season, and immediately try to keep these storage capacities full, these tanks full, regardless, then I think we'll be all right. But as it is now, we're trying to combat a very unfortunate situation as it exists for everybody. So there is a lot of frustration. But if we anticipate a problem, we know it's going to be there, say if you have storage capacity each one of 50 million, you get down to 40, or 35, start right away. Pump, fill, pump, fill, irrespective of the amount of draw, yeah, that we keep it up there. Then that would be all right. The net result, as it relates to this particular question, could conceivably be a little less draw overall on the Wailoa or Hamakua ditches. Overall. What other area which I think does have a bearing, and I'm not sure precisely how it operates. We make reference to the Piiholo being full, which means, full means full. It cannot take any more. Does one automatically then say that the availability of water ceases as soon as the reservoir is full. No, I think it continues to flow and it comes down. When it comes down, where does it go to? Wailoa ditch. That's where it goes to. So when we make reference to the amount, yeah, that we are withdrawing from Wailua, it is really not that total amount, because a portion of it may be the overflow of the deliverable capacities that contribute to Piiholo. So it's a net kind of a situation. When we make reference to the tremendous sacrifice that sugar and others are making, and they are making sacrifices, no question about it. However, it is not as great as it may be initially represented, because there is this overflow that takes place. Otherwise, Piiholo could never be at 50 million gallons. There is this overflow that comes in. It may be a million, could be half a million. I think it's in the neighborhood of a half a million to a million. Because when you look at the capacity that's used from Piiholo and still the next day it is approximately 50 million gallons, so it shows there's enough to fill. And I think it's reasonable to think that maybe just about the same type or same amount has overflowed down into the Wailoa area. CHAIRMAN TAKITANI: Mr. Tagorda? MR. TAGORDA: Mr. Chairman, I have some kind of lingering concern about Hamakuapoko wells. I really don't know if I am really convinced that the plan is to bring that water up to Kamole. When I saw that map that you are putting a transmission line to Baldwin, Maunaolu college, I suspect that in the near future you might be adding that water into high assistant transmission line. Am I correct or am I wrong? MR. CRADDICK: The Hamakuapoko wells? MR. TAGORDA: Yes. MR. CRADDICK: When the East Maui plan EIS is completed, those wells will be part of the Central Maui system, that's correct. MR. TAGORDA: This was not brought up to the public. MR. CRAVALHO: Mr. Chairman, if I may, yeah, that's one of the concerns I personally have. That the drought situation and the emergency situation and the utilization of the Hamakuapoko wells, yeah, by and of itself will not have any massive impact on the drought relief and needs of the Upcountry area, by and of itself. But the system has already been in there, okay. And the Hamakuapoko wells, once the EIS is completed, and assuming, correct me if I'm wrong, and assuming -- MR. CRADDICK: Bob, I'm pretty sure I know what Elmer is going to say. I know our attorney is not here and we're going to get into deep trouble if we say that those wells are going to be automatically -- MR. CRAVALHO: Hey, my friend, if it's factually correct, it should be said. MR. CRADDICK: The problem is, is that the EIS is not done, and if we say we already made a decision on the EIS prior to it being completed -- MR. CRAVALHO: One moment. That's not what we said. That's not what I said. MR. CRADDICK: I stand corrected. MR. CRAVALHO: Yeah. When the EIS statement is completed, and before I had a chance to finish my statement, the EIS has to go through the process. If and when that process is completed, and the EIS is approved, based on your statement to Mr. Tagorda, the connection will be made, yeah, and the productivity of those wells shall constitute a part of the Central Maui water system. That's what you said. So I am not saying anything that should be of massive concern and which has not already been said. And this is what I am concerned about. And this is what I mentioned earlier in other prior discussions. That if we are not careful, by the utilization of separate agreements that which we agree to and sign, each agreement, each portion of that agreement appears to be able to stand on its own and it has merit. But when you put these 2, 3, 4, 5 agreements together, and you see the total impact of all of those agreements, it's a completely different picture than what has been individually presented in each agreement. And we need to be aware of this, so that we are not backing up, yeah, and reversing ourselves into a situation or backing ourselves up into a corner that we cannot get out of. And it shall be an accomplished fact, yeah, that by our activities in these areas, we may be, in effect, yeah, in a reversed manner, affect zoning, affect land use, affect land development. Which may, yeah, be contrary to the general plans, community development plans, and what have you. And hell, when we look at it, these are accomplished facts, yeah, that we have agreed to item by item, contract by contract, which may stand on its own individually with great merit, but collectively, very dangerous. Very dangerous. CHAIRMAN TAKITANI: Mr. Nobriga? MR. NOBRIGA: Going back to the Upcountry water situation. The way I look at the drought, we do have a drought, the most pressing problem of the drought is we do not have enough storage to keep water. And without us having the ability to go out in the next 30 days and put up tanks all over Upper Kula, I would much prefer seeing us spend $1.3 million to get a pipe in place so that we can pump up to Kahakapao for storage. Because Kahakapao is our largest vessel in the whole system, with 100 million gallons. I just wanted to go back to Upcountry water. CHAIRMAN TAKITANI: Good point. MR. TENGAN: I want direction from the board. Does this mean that the board is setting as an operational policy that we at all times treat Kahakapao as a top priority item whereby whenever we can, we keep those reservoirs full regardless of the operating costs? MR. CRAVALHO: Mr. Chairman, if you ask me, the answer is yes. MR. TENGAN: I just wanted to know. MR. STARR: I think during a drought emergency, certainly. I would say that when we're not facing drought, we may think differently. But certainly during a drought emergency, it must be a priority to keep our reservoirs as full as possible. MR. CRAVALHO: That becomes a matter for the board to provide the necessary funding. I agree. I agree with you. In the long run, yeah. MR. TENGAN: I need clarification. MR. CRAVALHO: Yeah, you right. CHAIRMAN TAKITANI: I think it's well stated that perhaps we have been looking at containing our dollars and being penny-wise -- MR. TENGAN: We have been trying to manage the levels of the reservoirs, taking somewhat of a risk, I must admit. We have been trying to keep a safe level at those reservoirs. In other words, like at Kahakapao when we try to keep about 50 percent or maybe somewhat less than 50 percent, so that we wouldn't spend additional monies pumping all of that water up to Kahakapao or to the upper line. We cannot pump directly into Kahakapao as it is right now, but what we can do is we can replace the demand from the Olinda system. And that's what we have done in the past. CHAIRMAN TAKITANI: Clark? MR. HASHIMOTO: Out of curiosity, how much more would it cost to pump the water up? MR. TENGAN: We're talking about two or three lifts from the lower line. MR. CRAVALHO: Dollars. MR. TENGAN: Three lifts. We're talking about 75, 80 cents per thousand gallons additional cost. MR. CRADDICK: I think Kula Kai is around 2500 feet, so from there to the upper line is 4,000. So we're talking about 1500 feet about, so it would probably be -- what did you say, 80 cents? MR. TENGAN: 75, 80. MR. CRADDICK: Yeah. That would certainly be the range. And then -- well, if it's not going back to Kahakapao, we don't have to retreat it. So water that goes back into Piiholo, we have to retreat. CHAIRMAN TAKITANI: Any other discussion? MR. NOBRIGA: Does Mr. Tagorda wish to follow up his discussion earlier with a motion or was it just for discussion? MR. TAGORDA: It's a matter of discussion. It's up to the board majority if they want to look into reversing the drought emergency warning, because you have the water there, we have -- you know there's no rain up in Waikamoa, but the lower portion of that lower Kula system is always full and Kamole we can always -- and so with Piiholo. MR. NOBRIGA: I appreciate it, because without any future rain prediction, I would be very hesitant into lifting the emergency at this time. MR. STARR: I would love to lift the emergency, but I think it's a little bit premature. Let's look at it at our next meeting. MR. TAGORDA: You look at your drought report from May to August, Piiholo is always full and the pumpage at Kamole is averaging 2 million for seven days. So that's the solution there. But if you guys don't want to put water and cut back that 25 percent, that's the board's decision. MR. STARR: That 2 million is over half the draw out of Piiholo. More than half of the Piiholo water comes from the pumping. MR. TAGORDA: Yeah. MR. STARR: What I would request is that if the trend changes and we get -- all of a sudden Kahakapao is full or something, then I would request the chair to call an emergency meeting to reexamine the lifting of the emergency. MR. TAGORDA: Mr. Chair, look at your guidelines on reversal of drought emergency warning. We met those triggers, unless we going to change all of this again. MR. CRAVALHO: Mr. Chairman, I would have no objection to that particular type of approach, provided, however, if it is consistent with all of the actions taken by this board and commitments made previously with respect to the drought situation and the commitments made and understandings reached officially through proclamations with the mayor's office and the governor's office. CHAIRMAN TAKITANI: Thank you. MR. NOBRIGA: I do know we have to revisit the exemption of the farmers. When was that? When does that expire? MR. CRADDICK: The 16th of September. CHAIRMAN TAKITANI: We have the next meeting to do that. Thank you. MR. CRAVALHO: Mr. Chairman, would it be out of order to change that date, instead of 60 days, no restrictions on the farmers at all? In essence, because how do you tell a rancher to get out there and to tell his heard of cattle, yeah, drink 25 percent less today or drink 10 percent less tomorrow. It's an unworkable situation. It's an unenforceable situation. And we're legislating criminality on the part of these ranchers or farmers who have animals, etc. The records show that thus far the community seems to have adjusted quite well, and is maintaining an even stance of storage and capacity maintenance, with the farmers being exempted. So if we can give a level of assurance to the farmers, that they would be making a reasonable decision in starting their planting and replanting and their seedbeds, etc., I think we can manage it quite well. We have been able to manage it thus far. If an absolute emergency comes in our hand, the chair always has authority to begin to move, and I think if we give this kind of assurances, we will have the level of cooperation that they have exhibited thus far. I have no objection if we don't exempt it totally right now, but we have to understand the next meeting we'll take care. MR. NOBRIGA: I would prefer to wait for the full board. CHAIRMAN TAKITANI: I think that would be better. MR. CRAVALHO: Fine. I have no objection. CHAIRMAN TAKITANI: The comments are well taken. We need to give assurances and pending what happens in the future. Otherwise, we should revisit that at the next meeting. MR. HASHIMOTO: Even though they don't have 25 percent cut back, the farmers have told me they are cutting back. So they are doing their share. CHAIRMAN TAKITANI: We'll move on to item H, clarification of the department's past practice of issuing water meters to empty lots. Are we prepared to visit this? MR. ZAKIAN: Mr. Chair, I can give you a little update. What I ask is a deferral to the next meeting on this. I want to track back to see if I can find anything in writing that represents the department's place. I believe that everything I have seen thus far, has been indications that it's verbal advice given to the water director. That was five or six years ago, David? MR. CRADDICK: To tell you the truth, it came out of that court case that Jim Smith was talking about. What would happen was -- also, he was in error saying the board implemented this shortage. It was the director that notified the board of the shortage. From that step, Corp Counsel says, Oh, you need to publicize this and publicize this guideline list. That was not our idea, need, or anything. They said to do it. Jim Smith jumped on that. I mean, it was the appearance of a rule just out of the clear blue. Here is this guideline coming up in this newspaper that you can't have it, and we discussed it as a staff, and stuff like that, things we would like to see. They said it was okay. So okay, fine. Do it. Out of that, as part of that, we said in there that if you had, say Pukalani, for instance, there are a bunch of empty lots there, it was an approved subdivision, there are many lots that have not been developed and built on. There is an implied contract there that when somebody wants a meter for that subdivision, they can get one. Well, there is also a state statute of limitations. If you have an implied contract on something, and nothing is done in reliance on that contract, after six years the contract can be broken with no problem. And so we went even beyond the six years. We said seven years. If nothing had been done for seven years, you would not be able to get a meter for that property. Corp Counsel said, yeah, no problem. It went out in the newspaper. And the judge said that that was the appearance of rule making. And I agree with the judge, it was the appearance of rule making. There's no doubt about that. Out of that, then it came back that, oh, we have to give a meter for every empty lot and there's no rule to that either. MR. ZAKIAN: That's the part I would like a little more time to the next meeting. To see if I can find anything in writing or verbally recorded in the minutes that bears that out. MR. CRAVALHO: Second. CHAIRMAN TAKITANI: Moved by Jonathan, seconded by Elmer to defer the item. All in favor signify by saying "aye." (A chorus of ayes.) Those opposed signify by saying "nay." (No response.) The ayes have it. The item is deferred. Move to item 5. We'll recess to the call of the chair. MR. ZAKIAN: Mr. Chair, I think there are two items that are still -- the board considered to keep moving on. One is the source joint venture issue; the other is the DBCP issue, in the hopes that the final remaining issues can be resolved. If there is going to be a recess, you need to state the time, date, and place when you will be convening. That would comply with the Robert's Rules. I'll leave it up to you when you -- MR. CRAVALHO: Mr. Chairman, I move we recess subject to the call of the chair. MR. NOBRIGA: Second. MR. CRAVALHO: For those two items. So then we are recessed. MR. ZAKIAN: The only concern I have, Mr. Cravalho, is the public needs to know and you are essentially making it public in this meeting now, by announcing the date, time, and place when you will reconvene. Subject to the call of the chair would normally work in the context of the meeting if you are waiting for someone. MR. CRAVALHO: We are. MR. NOBRIGA: I reamend the motion to read August 31st at 3 p.m. at -- MR. CRAVALHO: Kahoolawe. MR. NOBRIGA: Room 207, David Trask, Jr., Office Building, should it be available. CHAIRMAN TAKITANI: We need to check if the room is available. MR. NOBRIGA: If the room is not available, there's one sign posted outside the glass door, telling everybody where it went. MR. STARR: How about we meet in Wailuku? MR. ZAKIAN: It needs to be a little more specific than that. When you file a notice with the clerk's office, it needs a specific place and time. MS. NAGO: The time was 3 p.m. MR. NOBRIGA: Tuesday, August 31st. MR. HASHIMOTO: As long as we have -- MR. CRADDICK: We have to be out by one o'clock. They have one to four o'clock already, but any time before one o'clock. MR. STARR: How about the seventh floor over at -- MS. NAGO: I can check with them, I don't know. MR. CRADDICK: We can say the worst case nine o'clock here. If we can't get that -- MR. ZAKIAN: It's up to the board. I don't know if you want to meet at nine o'clock. MR. NOBRIGA: Withdraw my amendment, then. MR. STARR: I thought we had another negotiating session Tuesday. CHAIRMAN TAKITANI: Monday and Tuesday. MR. STARR: If we meet them at nine, we would be killing that, so that's why I was suggesting three. Can we just say in Kalana O Maui? MR. ZAKIAN: If you want to specify the council committee room, yeah. That's specific enough. If that's not available, the announcement will be posted there. We can have a staff member up there. The goal is to make sure the public knows. MR. NOBRIGA: I second Jonathan's amendment. CHAIRMAN TAKITANI: Motion is that we move to recess to the call of the chair, on the DBCP and CMSJV issues to August 31, 1999 at 3 p.m. in the council committee room. All those in favor signify by saying "aye." (A chorus of ayes.) Those opposed signify by saying "nay." (No response.) The ayes have it. We are recessed. (The proceedings were recessed at 3:25 p.m.)
Department of Water Supply
County of Maui
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Wailuku, HI 96793-6109
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