BOARD OF WATER SUPPLY
COUNTY OF MAUI
REGULAR BOARD MEETING
THURSDAY, OCTOBER 2, 2003
Held at the Kahului Shopping Center Conference Room, 65 West
Ka'ahumanu Avenue, Unit 29, Kahului, Maui, Hawaii,
commencing at 9:00 a.m. on Thursday, October 2, 2003.
REPORTED BY: JEANNETTE W. IWADO, RPR/CSR #135
ATTENDANCE
BOARD OF WATER SUPPLY
REGULAR MEETING
OCTOBER 2, 2003
CHAIRMAN: KENT M. HIRANAGA
VICE CHAIRMAN: MICHAEL VICTORINO
BOARD MEMBERS: MICHAEL NOBRIGA
GINNY PARSONS
DOROTHY R. PYLE
STACY HELM CRIVELLO
SALLY RAISBECK
KENNETH M. OKAMURA
EXCUSED: CLARK S. HASHIMOTO
DIRECTOR: GEORGE TENGAN
DEPUTY DIRECTOR: JEFFREY T. PEARSON
DEPUTY CORPORATION COUNSEL: EDWARD KUSHI
BOARD SECRETARY: CATHY HOWARD
STAFF: HOLLY PERDIDO, FISCAL OFFICER
ELLEN KRAFTSOW, FISCAL OFFICER
BOARD OF WATER SUPPLY
REGULAR MEETING
OCTOBER 2, 2003
TRANSCRIPT OF PROCEEDINGS
CHAIRMAN HIRANAGA: I would like to call the
Board of Water Supply meeting to order. Attendance, let the
record show Mike Nobriga, Ginny Parsons, Dorothy Pyle, Stacy
Crivello, Mike Victorino and myself are present.
MR. VICTORINO: Mr. Chair.
CHAIRMAN HIRANAGA: Yes.
MR. VICTORINO: I want to make one point. I will
have to leave by 9:30 this morning, I do apologize. Being
that today is the opening day of the fair I have to leave
early. So I hope it does not jam us for quorum. I think it
won't. I think we're okay. Here comes Ken. Okay, thank
you, Mr. Chair.
CHAIRMAN HIRANAGA: Let the record also reflect
Ken Okamura is present.
Do we have any announcements?
Approval of minutes. Any comments or corrections?
MR. VICTORINO: Move to approve the minutes.
CHAIRMAN HIRANAGA: Motion to approve the
minutes. Is there a second?
MR. NOBRIGA: Second.
CHAIRMAN HIRANAGA: Any discussion? No
discussion, all in favor say "aye."
(A chorus of ayes).
Motion is carried.
Is there anyone here from the public that wishes
to provide testimony at this time?
(No response)
Seeing none, the next item is the Director's
Report, Kulamalu Project, SD 95-83, an amendment to the
Agreement for Cost Participation to construct a one million
gallon storage tank. George?
MR. TENGAN: Mr. Chair, if you will recall, back
in November of last year the Board approved to allow
Kulamalu to reimburse the department for a portion of its
remaining share in the one million gallon tank that they
constructed. The Board has already agreed to pay $1,044,881
to Kulamalu for its share of 55 percent of the storage tank.
Up until that point in time, the department paid Kulamalu
$963,380, leaving a balance of $81,501.
Since then, we did a calculation of what would be
the appropriate amount that Kulamalu should reimburse the
department for the quantity that they wanted to purchase
back from the department. The Board had originally agreed
at the price of $396,000. However, when we did the
recalculation for the 37.1 percent that they were wanting to
purchase back, we calculated the amount to be $344,000.
So we come to the Board now to confirm our
calculations, and we will enter into an agreement with
Kulamalu for the amount of $344,077. This includes interest
up to June 30th of this year at four percent per annum.
MR. VICTORINO: Mr. Chair?
CHAIRMAN HIRANAGA: Yes, Mike.
MR. VICTORINO: George, when all these
calculations have been completed as you have shown us, that
to your best knowledge would complete this project as far as
what they would reimburse us?
MR. TENGAN: Well, the project itself has been
completed. It's just the amount that's due to the
department for the shares that they want to purchase back.
And as you recall, the reason for this is to provide the
storage that's needed for the Kamehameha School's project.
As far as construction of the project, it's completed. It's
just the amount that we need to agree on.
MR. VICTORINO: So this agreed amount, once this
has been paid then we're square with them and they're square
with us?
MR. TENGAN: Right.
MR. VICTORINO: That's what I wanted to know.
Thank you.
CHAIRMAN HIRANAGA: Any other questions?
MS. RAISBECK: I apologize for being late.
CHAIRMAN HIRANAGA: I'm sorry?
MS. RAISBECK: I said I apologize for being late.
CHAIRMAN HIRANAGA: Let the record reflect Sally
Raisbeck is also present.
No further questions?
MR. VICTORINO: I'd like to make a motion.
CHAIRMAN HIRANAGA: I guess we should make a motion
to agree to this and recommend approval.
MR. VICTORINO: Well, if one other reason that I
move that we recommend that this amount of $344,077, the
agreed upon amount by the Board for the Kulamalu project, we
recommend that they accept that. I guess accept it then, I
guess that's what I'm looking for.
CHAIRMAN HIRANAGA: With the Board's concurrence
on the Director's recommendation.
MR. VICTORINO: With concurrence on the Director's
recommendation.
CHAIRMAN HIRANAGA: Is there a second?
MR. OKAMURA: Second.
CHAIRMAN HIRANAGA: Seconded by Ken. Any
discussion?
MR. NOBRIGA: Question.
CHAIRMAN HIRANAGA: Question, Mike.
MR. NOBRIGA: George, so of the one million gallon
storage tank, there's actually no appropriation for the
general public then?
MR. TENGAN: I believe we have used up a portion
of that 550,000 that was the Board's share at the time. As
the report indicates, 310,000 gallons were allocated to King
Kekaulike School, leaving a balance of 240,000 gallons.
MR. NOBRIGA: That's the entire allotment of
550,000 gallons?
MR. TENGAN: Right.
MR. NOBRIGA: The balance of the one million
gallon tank is held for Kulamalu already?
MR. TENGAN: The remainder?
MR. NOBRIGA: Yes.
MR, TENGAN: Yes.
MR. NOBRIGA: The 310,000 for King Kekaulike is
for the total estimated use of the school once it's built
out completely?
MR. TENGAN: That's correct.
MR. NOBRIGA: And King Kamehameha School, we still
need to have more storage for that project, that is still
yet building out?
MR. TENGAN: Right. I believe they may have
additional storage requirements, but the amount we're
transferring should satisfy. I don't know exactly what's
being worked out between Kamehameha Schools and Kulamalu as
far as storage right now. The storage requirements for the
school at this point in time, you know, with regard to the
phase that they're in, I don't believe that the entire
transfer amount is needed at this time.
MR. NOBRIGA: Thank you.
MR. OKAMURA: Question.
CHAIRMAN HIRANAGA: Yes, Kenneth.
MR. OKAMURA: What was the original intent in
reserving 550,000 gallons for the County?
MR. TENGAN: I would think that that amount would
probably be committed to or would be put to the benefit of
the Kamehameha Schools also, because if Kulamalu doesn't
provide the storage -- if Kamehameha Schools doesn't
provide the storage through Kulamalu, then Kamehameha
Schools would have to come to us for the storage. So I don't
know if you can consider this achieving the same thing,
except that it's going through Kulamalu right now.
I might add that there is a little excess
capacity. We are agreed to transfer 204,000 gallons of
storage rather than the entire 240,000 gallons. So there's
about 36,000 gallons of storage remaining for the general
public use and benefit.
MR. OKAMURA: Mr. Chairman?
CHAIRMAN HIRANAGA: Yes, Kenneth.
MR. OKAMURA: I was wondering, how do you keep
track of who has how much or who uses how much of the
storage?
MR. TENGAN: As projects come in and are approved
by the staff, they determine the storage requirements for
that particular project. And if they're not providing the
storage, then they would be assessed, through the water
system, development fees for the storage requirements.
MS. RAISBECK: Mr. Chairman?
CHAIRMAN HIRANAGA: Miss Raisbeck.
MS. RAISBECK: I apologize for coming late and
possibly missing some of the discussion, but I wondered if
-- I really don't understand how, if I come in as an
individual to get a water meter Upcountry, we have the list
and so on, those people on the list, is storage reserved for
them or how does the storage work? I know source is a
problem. Is storage a problem for the general public as
well?
MR. TENGAN: The people on the list have source
requirements, not storage requirements. They're on the list
because they need source.
MS. RAISBECK: Okay. So there is no shortage of
source -- of storage capacity for the general public?
MR. TENGAN: Not necessarily. People on the list
may have some off-site improvements required, and one of
these requirements may include storage also. But they're on
the list because of the source.
MS. RAISBECK: Okay. But if we give -- I mean if
we allow developers to buy storage, then does that mean that
later on if somebody comes in they'll be told they have to
provide storage, or how does that work?
MR. TENGAN: I guess it's conceivable that there
may be a project requiring storage within the service area.
If that's the case, then that project would probably be
required to construct another storage tank.
MS. RAISBECK: Thank you.
CHAIRMAN HIRANAGA: Any other discussion? If
not, I'll call for the vote. All in favor of the motion so
indicate by saying "aye".
(A chorus of ayes).
Opposed?
(No response)
Seeing none, the motion is carried.
The next agenda item is the discussion regarding
water rate increase. Mr. Director?
MR. TENGAN: Mr. Chair, when I brought up this, I
guess, this in discussion with you, we decided that we
needed to begin discussions for a rate increase. So I just
put together this brief communication to the Board stating
some basic questions that need to be answered as we go
through the discussions. If there are specific questions, I
have staff here to assist me in addressing those questions.
CHAIRMAN HIRANAGA: Yes, Dorothy?
MS. PYLE: This is a question that concerns this
issue, but is also a broader question. I feel very strongly
that before we can start a discussion of this type we
actually should have a better understanding of what the
status of our rules are right now. Because as long as we
don't know what our rules are, we don't know what our role
is. And so is there much sense in having a discussion when
we don't know where it will go, what use it will be, and how
it will be handled?
So I think perhaps I would like to ask very
directly what is the status of the rules at this point in
time, and when can we have a look at these proposed rules?
Perhaps we should have a subcommittee to work on them.
MR. TENGAN: Mr. Chair, the Council is addressing
this issue, however it is somewhat a separate issue from the
rates itself. I will have Mr. Kushi go over the
requirements with regard to the budget and the rates.
MR. KUSHI: Mr. Chair, again, for the rates and
budget, maybe addressing Dorothy's concern, the Council
Water Resources Committee has taken up the issue about
rules, what's the status of it, who can do it, who can
change it, et cetera. Our office issued an opinion last
month sometime setting forth our opinion as to what the
status is. For whatever reasons, and they're authorized to
do it, they passed a resolution to hire Special Counsel to
look at our opinion, get a second opinion, apparently.
In any event, in that resolution they're also
hiring Special Counsel to look at this whole issue of rules
and to go over it, where the inconsistencies are, to
hopefully come up with a formatted, uniform format for
rules. When that would happen, I'm not sure.
So long story, it's still up in the air. I'm
clear, but maybe nobody else is clear, okay, and I don't
want to get into what I told you before.
As respects to your water rates and charges, the
charter changes specifically address that. And as far as
this Board is concerned, before the department goes on to
change or amend rules, rates and fees, it has to come to
this Board, per the Charter. Then it goes to the Council
and then the Council passes it by ordinance.
In the last budget session, fiscal year '04, the
Council already adopted your rates, fees and charges, and
it's in the Council budget ordinance. So any changes -- I
mean every fiscal year we are going to look at it again, but
any changes to that would have to come through this body.
So I think everybody is clear on that. And I
believe that they're trying to initiate their thing, they're
thinking about rule changes.
MS. PYLE: I guess I'm really not totally clear on
it. It comes to us for discussion, for approval,
recommendation? What is actually what happens?
MR. KUSHI: Okay. Under section 8-11.4, this is
the current Charter, powers duties and functions of the
Board. It says number two, "Recommend the establishment and
adjustment of rates and charges for furnishing of water.
Such rates and charges shall be submitted to the Mayor for
review and approval. If approved by the Mayor, proposed
rates and charges shall be submitted to the Council for
enactment by ordinance."
That sets up a scheme of levels of review. They
can't just submit it to the Council, it has to come to you.
After you review it and make recommendations, you can't
submit it to the Council, it's got to go to the Mayor.
Final say is the Council, by ordinance.
MS. PYLE: As we are discussing this today, and
this is a noticed agenda, I'm assuming this affords the
public it's opportunity to have a say about this?
MR. KUSHI: As in any meeting, the public has a
say on any agenda item.
MS. RAISBECK: Mr. Chairman?
CHAIRMAN HIRANAGA: Yes, Sally.
MS. RAISBECK: If I could just fine tune a little
bit. So we recommend to the Mayor, and he probably has the
authority to make any changes he wishes to make. He then
submits it to the Council, who then have the authority to
make any changes they wish to make. And this is different
from the way it used to be when it was a straight up and
down, no changes allowed kind of thing.
So as it is now, we recommend to the Mayor, the
Mayor accepts that or changes it, and gives it to the
Council, and they accept it or change it. Correct?
MR. KUSHI: Yes. That's the scheme of what the
Charter intended. As to what it was before, before the
Charter change, your rates and fees were embodied in your
rules. So if you needed to change the rates or fees you
needed to do a rule change, and the rule change set out
specific procedures. In essence, it almost mirrored this
procedure.
Now, this is not to say that the department and
the Board goes through this function, and the Council in its
deliberations of a budget ordinance, this is not to say that
the Council cannot entertain other inputs from other parties
to establish rates and fees. But again, it needs to be done
by ordinance.
CHAIRMAN HIRANAGA: Ginny?
MS. PARSONS: And it doesn't necessarily have to
be done all in one meeting here. We can take several
meetings if we need to discuss this, is that correct?
MR. KUSHI: Yes. I believe the intent of the
department was just to start the ball rolling, unless you
want to do something today. It's up to you.
CHAIRMAN HIRANAGA: I believe, again, this is
just to start the process. First we have to decided whether
rate changes are warranted, and if they are, what those
changes will be. So by no means do I believe we will be
taking action. I believe we will start looking at this.
This is one of the few responsibilities left to us by the
Charter change.
Any further questions? Sally?
MS. RAISBECK: If I may, it's not so much a
question as a comment. I would like to -- I need, before I
would understand whether or not rate changes are needed, I
would need to see more information from the department. In
particular, what the revenues are from the current ag rate,
what the revenues are from the current general rate in
various categories.
And also, if it's possible, to find out how much
income is generated by the different tiers in the water
rate. The bottom tier is so much a thousand gallons, and
then the rate goes up for the next set, and then the rate
goes up again.
I have an impression that even more tiers would be
valuable in order to make people who are water hogs pay more
for their -- have a higher rate than people who are being
very conservative in their water use. But without data you
can't -- there's no way of justifying that. So I would say
we need perhaps to ask for data in that mode from the
department.
CHAIRMAN HIRANAGA: Unfortunately, I don't
believe any of the current board members were involved in
the previous rate adjustment process, so we're all kind of
-- we are brand new to this process.
Maybe, George, you could first explain what the
revenue generated by water rates are used for, just a brief
overview for some of the members who may not be clear on
that.
MR. TENGAN: All right. If the Board will turn to
the next page, we have a summary of financial information
going back to 1996. Keep in mind that the rate increase
took place, the first rate increase took place in 1997. So
the rate increases would be reflected for first year 1998.
So it took effect July 1, 1997 for the fiscal year ending
1998.
I'll have Holly go over this information here. Go
ahead, Holly.
MS. PERDIDO: Okay, looking at your spreadsheet I
have here, basically it's based on all the audited
financials except for the 2003, which we are finishing up
right now. I threw in some numbers that I have in front of
me for 2003. They're on page three of the financials that
you got. Those are basically the coverage ratios, and I
have the updated amounts there.
The revenues are from our water sales, fire, and
also the fire protection. Your expenses are listed on this
spreadsheet. As you can see, power and pumping, admin and
general, transmission and distribution. So basically we
took the revenues and took out the operating expenses to
come up with our net revenues.
Further down you have your annual debt service,
which is our GO Bonds. The MSG loan, which was for the
radio read meters. And then we also have a Safe Drinking
Water mode fund loan also. This is just a really simplified
spreadsheet to kind of show you where we're at. After your
debt service, then you have what would be available for any
additional equipment purchases, and then what we could
transfer to the replacement fund.
As you know, the replacement fund, per the report
from Brown and Caldwell, they want us to be transferring
about $8 million a year, which we have not been able to do.
I can kind of go over some of the ratios at the
bottom. We have the coverage for the annual debt service.
Basically, your debt service coverage is your net revenue
before debt service, divided by your debt service. And the
minimum level that you should keep is between 1.15 and 1.25,
and that's per -- we had a policy, well, a debt policy study
done that we base our numbers on for that.
So we right now have a pretty good debt service
coverage ratio. If you look, it kind of goes up and down
basically because of the revenues, and in 2003 we're about a
1.5 or 1.6, which is pretty good. If we -- we could
possibly have about another 1.3 million in debt service,
which would be approximately 15 million more in bonds that
we could issue.
We currently are looking at like one project
coming up that would be for the Kamole clear well, and that
would be funded through the Safe Drinking Water loan fund,
and it's hard to say, $3 to $5 million. So that would only
leave us about $12 million more that we could issue in debt.
Now, you don't want to issue debt for replacement
projects. So it's really tough, because this money is
actually for operations, not for the replacement. Well, it
is for replacement projects, but you don't want to issue as
much debt for that, you don't really want to.
Operating ratios is basically your operating and
maintenance expenses divided by revenues, and the median for
that is about 63.4 percent, and we are about right now at
68.26 percent. Like I said, it's not on this spreadsheet,
but it's in your financials. These are unaudited
financials.
And then that -- let me kind of read to you. This
kind of tells you your expenses divided by revenues. I
think George gave a good scenario about that. Like 60 cents
is your expenses for every dollar you earn.
Is that right, George? Pretty much 60 or 70
cents. And they're saying 63 cents it should be. For like
the median level, that is.
The net takedown ratio is another ratio that is
used by rating agencies, and this is your net revenue
excluding depreciation divided by gross revenues. And the
median for that is about 40.5, and we're sitting at about
38.3 based on the 2003. I guess that's it. If there's any
questions on the spreadsheet --
MR. TENGAN: Holly, should you remind the Board
that the operating expenses doesn't include depreciation?
MS. PERDIDO: Yes. The operating expenses on this
spreadsheet does not include the depreciation. And our
depreciation runs -- I think this year it was about $8
million a year.
MS. PYLE: Can I ask a question?
CHAIRMAN HIRANAGA: Yes, Dorothy.
MS. PYLE: Actually, I appreciate all the
information that you have given us, and this is pretty
clearly stated. But I really think that the question that
Sally asked is a very valid one. We have a nice lump sum
here of where the revenue comes from that this is, you know,
water rate money and it comes in. But who does it come
from? You know, what is the percentage of water meters that
are ag water meters, and what percentage of the revenues
comes in from ag water?
And I am not picking on ag, but it's a simple one
to separate out. What's the percentage of the revenues that
come from, as you stated so nicely, the water hogs? And,
you know, without that kind of information it's really hard
to tell where any water rate increase should go.
Certainly if the amount of revenues that comes in
from ag users is more than enough to justify the rate that
they have for the number of users, well then maybe their
rates shouldn't go up, but other people's should, and we
can't get that from the information that we currently have.
Does that make sense?
CHAIRMAN HIRANAGA: Yes, Ginny?
MS. PARSONS: I concur with that. I think also
maybe the first discussion ought to be, since we have not
done it before, when we do a rate increase it's across the
board. So maybe the discussion after we see the detailed
financials should be should we segment it, should rate
increases be segmented. And maybe there's areas that should
not be raised, and agriculture may not be one, Upper Kula
may not be one. We need to see a break-out.
CHAIRMAN HIRANAGA: Yes, George?
MR. TENGAN: Maybe I should explain to the Board
the process that I have envisioned going through. At this
point in time I was looking for the Board's concurrence that
we should be looking at adjusting the water rates. Once
that's been achieved, then I am intending to go out and seek
a rate consultant to do a rate study. And the rate study
would include a lot of the items that were brought up here.
As we mentioned earlier, this is just a summary to
indicate that there may be a need to look at our rates
again. And once that's determined then we can, through
discussions with the Board, we can develop a scope of the
study for the breakdown of that.
I could have included what we did the last time we
went through the rate increase. The rate increase basically
was done in-house with the citizens committee, but that was
a very time-consuming process. And I believe that if we do
have professionals looking at it we can have a better job
done, and that's why I'm looking at engaging the services of
a rate consultant, and that's to free up staff time also.
CHAIRMAN HIRANAGA: Yes, Ginny?
MS. PARSONS: I think that's a great idea, George,
get a rate consultant in. And also when we do, maybe we can
set some guidelines up, because I'd like to see what the
other counties are charging. I'd like to see -- I know
Molokai is more expensive than we are, the Big Island. I
think we're probably the least expensive in the state.
So maybe if we have a chart that shows you what
the other counties are paying and the services that they
offer, it will also help with how much the rate increases
should be. But I think that a consultant would be a very
good way to go.
CHAIRMAN HIRANAGA: Yes, Holly?
MS. PERDIDO: I have one number that I can give
you in front of me. I don't have everything else. But our
total consumption for the fiscal year 2003 was approximately
12.7 billion gallons. Of that, only about 1.2 billion was
ag, and the 11.4 was general, and that's the only breakdown
I have right now.
MS. PYLE: Thanks.
CHAIRMAN HIRANAGA: Yes, Sally?
MS. RAISBECK: I concur with what Dorothy and
Ginny said. And I would like to also ask Holly, when was
the Brown and Caldwell study of replacement costs, when was
that done, what year?
MS. PERDIDO: November of 2000.
MS. RAISBECK: 2000. So if we followed their
recommendations, we would have set aside 8 million in 2001,
8 million in 2002, 8 million in 2003, correct? So that
we're behind as far as setting up a fund to cover
replacement, is that correct, compared to their
recommendations?
MS. PERDIDO: Jeff might be able to help you a
little bit more. I don't have the exact amount right in
front of me, but I know it started out smaller and then it
went up higher.
MR. PEARSON: She's correct. When the rate study,
when that replacement model was done I was working at Brown
and Caldwell. I was kind of their grunt, I wasn't the
brains behind the study, but there is -- we can provide
copies of the study, I think.
But there was a couple of different methods of
providing the funds for replacement, and if you do a similar
fund this year, like Holly said, it wasn't exactly 8 million
a year. But to answer your question, yes, we're behind on
the replacement fund.
MS. RAISBECK: So if we're going to be setting up
guidelines for a rate consultant, it seems to me we should
be both including an adequate amount for a replacement fund,
and we should in some, by some method, make up for the years
that, well, for being behind on setting aside money.
And the current, the projected 2003 column here
that has $3 million for transfers to the replacement fund,
obviously if it should be $8 million, the revenues would
have to be higher to accomplish that.
CHAIRMAN HIRANAGA: Yes, Ginny?
MS. PARSONS: Sally, I totally agree that we need
the replacement fund, and I'm 100 percent behind you, but
with the understanding that we don't have employees to
fulfill the funds to do the replacement. We still have
positions that need to be filled in order to do the job.
So it doesn't make a lot of sense to put money
into the replacement fund if you don't have people to
provide the services. So that's another area that we need
to work on, is getting our staffing in place, and then we
can build the fund from there.
CHAIRMAN HIRANAGA: Yes, George?
MR. TENGAN: Mr. Chair, Ginny is exactly correct
on that. Whenever, you know, I've gone through two rate
requests through the County Council, and the one primary
concern when everybody, they're looking at our request to
increase the water rates, they always look at our cash
balance. And because of the way projects are funded, the
funds have to be certified as far as availability upon
institution of the contract.
So this is all unspent funds, but when we execute
the contract we encumber the funds and set them aside. But
they're not looking at that, they're just looking at the
total cash balance we have on hand. And this is a great
concern of the County Council, and it's something that we
need to address in trying to get them to agree that yes, we
need a rate increase.
The second concern is our ability to get CIP out.
They look at our cash balances and they ask, "Hey, you know,
how much in projects did you do this year?" And over the
years we have been averaging like about $10 million. If you
look at our budget this year, review it, you will see that
we have $22 million in CIP.
So when we went before the Council to get our
budget approved, they asked, "Isn't this too much, can you
do all that?" And my response was that I am going to make
CIP a top priority this year, and I am going to push to have
the $22 million either committed or under construction. And
this remains the top priority with me, and I have
communicated that to the engineering division. We are
trying our best to get it done, and hopefully if we don't
achieve it, we will get very close to it.
CHAIRMAN HIRANAGA: Sally, just to give you some
historical background, the reason we came up with this $4
million allotment was, as George said, although the study
calls for $8 million dollars, they don't have the staffing
to spend the $8 million.
So the previous board philosophy was, okay,
instead of encumbering $8 million we decided to go with $4
million, but we wanted it so that one couldn't say there
isn't sufficient funds to do the work, that the problem is
there's not enough staff to do the work. But then to go the
entire $8 million, to be encumbering so much money, so we
just kind of took $4 million.
But the problem is the lack of staffing, so we
looked at that in our budget project to increase the head
count. But they still have existing vacancies, and the
problem is because the pay scale for those positions is low.
So we said, "But can we raise the pay scale?" And then they
said, "Well, you have to start dealing with the union."
So it's kind of like you have the money to spend
but you don't have anyone to spend it. You can't get anyone
to spend it because no one wants to take those jobs at that
pay. But you can't increase the pay, so what do you do?
MS. RAISBECK: Thank you for that explanation,
Kent. I can only think of things in terms of, you know, I
have an old house, and I do have an old house, and if I left
the maintenance on it go, if I don't every year do an
adequate amount of maintenance I will get further and
further behind. And then there's the separate problem of
can I hire somebody to do the maintenance. You know, I need
an odd-job man. Can I hire somebody to do it?
So I understand there are different problems, but
I still think that the Council is full of intelligent
people, and if it's properly explained to them I don't think
they're going to say, "No, since you aren't able to spend
this money you shouldn't set it aside for anything."
If it's my personal budget I would want to set
money aside for maintenance. Even if I didn't at the moment
have somebody to replace my roof, I'd still be setting money
aside to replace my roof. So I don't see that the two are
necessarily related.
CHAIRMAN HIRANAGA: But the Council did question
George's $22 million, "Do you have the staff to spend this
money?" He said he's going to try, but he realistically
doesn't. So if we went to 8 million, what would his budget
be, 30 million, 35 million? They're going to say, "Do you
have the staff?" Because they don't want to encumber the
funds. So it's a difficult situation.
I did have one question, though. Why did the
projected expenditure go from $4 million to $3 million,
Holly? Why is it $3 million instead of $4 million?
MS. PERDIDO: The transfer to replacement fund?
CHAIRMAN HIRANAGA: Right.
MS. PERDIDO: Actually, if you remember last year
in the budget we had a member who really wanted $8 million
put in there. And in the budget that the Board approved it
was $8 million to transfer, but $5 million of that was
supposed to be a bond issue. And then the balance was 3
from the cash, available cash. But the Council decided that
there would be -- that we were not going to have a bond
issue, so that's why the $5 million was pulled out. So
that's why there's only $3 million this year.
MS. CRIVELLO: Mr. Chair?
HEARINGS OFFICER: Yes, Stacy?
MS. CRIVELLO: Just a comment, maybe to our
Director here. If staffing is a problem and we recognize
maintenance is crucial, using Sally's analogy, what's the
possibility of contracting? And I don't know whether that's
ready for any kind of discussion, but it's just a thought.
MR. TENGAN: With regard to design projects, we
engaged the services of design consultants. In the case of
construction projects where, you know, we don't have the
staffing to inspect the projects on a daily basis, we would
engage the services of a construction manager, which would
normally be an engineering outfit.
And addressing the staffing issues we have right
now, we are working with personnel, the Department of
Personnel Services to do some kind of compensation so that
we at least retain the engineers that we have now and they
won't be, you know, stolen away from us. People don't
realize, but we invest a lot of time and energy and
resources in getting staff up to speed as far as
administration of the rules and everything else that happens
in the engineering division. So to lose a staff member
would put us way behind as far as having capable engineers
is concerned, and that's why we're trying to address the
compensation issue right now.
The previous director had wanted to move into
another building, into a new office where more space would
be available to accommodate the space that we need to have
more engineers on staff. Right now we probably could put
in, squeeze in one more engineer. That would be -- I see
that we need at least maybe three or four more engineers on
board so that we can do the job we need to do, and that's
something that we are going to be working on too.
CHAIRMAN HIRANAGA: Yes, Mike?
MR. NOBRIGA: I make a motion that the Board
recommend that the department begin review of rate
structures for, I don't know, fiscal 2005, I guess. 2004
pau already, so 2005, Okay.
MS. PYLE: Second.
CHAIRMAN HIRANAGA: Motion by Mike, seconded by
Dorothy. Question. If and when the rate study is completed
and rate increases are approved, is there any timing
requirement? Does it have to be at the beginning of the
fiscal year or can it occur at any time?
MR. TENGAN: For the County's budgetary process
probably it would be best to have it ready for
implementation on July 1 next year. So what we would be
doing would be to work with the Council on their timetable
as to when, you know, through the budgetary process, and
work back from there to see what our timetables would have
to be to meet the County's budget requirements.
CHAIRMAN HIRANAGA: Any other discussion? Yes,
Ken.
MR. OKAMURA: Mr. Chair, I had a couple of
questions. With regards to water sales, the revenue
portion, since 1997 to today there's been like a big
increase in revenues. Would you attribute that to the rate
increases or to the higher number of users? Are we selling
more water? How much of each would contribute to that?
MR. TENGAN: Our rate growth pattern has been
about five percent per year, so I would say that probably in
terms of consumption that would be the annual increase. As
you can see, in 1997, the revenues were $17.8 million, and
they jumped to $21.8 million in 1998, and that was the
result of the first increase that took place on July 1,
1997.
So that big increase you see there, which is
nearly $4 million, that was represented both by the increase
in consumption and the rate increase itself.
MR. OKAMURA: And in the last service schedule
from 1998 to 2002, the increase from 117 to 142, that's in
the first 10 thousand gallons. How did you arrive at the
figures, did you do a projection or was it just what people
would bear? How did you arrive at the figures?
MR. TENGAN: These amounts, as I said, these rates
were recommended for adoption through the County Council as
a result of getting the citizens group together, which
included various business organizations too. A heavy player
at that time was the hotel association. I believe there
were some agriculture representatives sitting in the group
too. And, you know, it basically represented various
segments of the community, and these rates were developed.
And I believe it's the first time that we went
into a three-tier schedule. The reason for it was to
address maybe overuse of water or high consumption or high
users. If you notice, a substantial amount from the basic
rate from $1.42 per thousand for the first 10 thousand
gallons, jumping up to $2.25 for consumption over 25,000
gallons.
MS. RAISBECK: Mr. Chair?
CHAIRMAN HIRANAGA: Yes, Sally.
MS. RAISBECK: Yes, I had a question on that sheet
that we're looking at on the rates. Those are for two
months billings? I mean in other words, from 0 to 10,000
gallons, and 10 to 25, and over 25, that's all on your two
month bill, is that correct?
MR. TENGAN: That's correct.
MS. RAISBECK: So that there would be a
possibility of going to even another tier, say, above the
25,000, from 25,000 to 50,000 gallons. You could have
another tier?
MR. TENGAN: You know, the number of tiers would
depend on what the Board wants to recommend to the Mayor and
the Council. You can be as creative as you want to. I
would say that the establishment of rates is not necessarily
a science, but more an art. So however creative you want to
be, that can be -- but what you have to keep in mind, is it
acceptable to the general public and to the community, and
all those other considerations. Would the Council go along
with it? Those kinds of issues have to be addressed on the
side also.
MS. RAISBECK: Well, if say there were a rate for
over 60,000 in two months, that's about a thousand gallons a
day, 60,000 in two months. So if you had a higher rate, if
you used over a thousand gallons a day, that would be a
possibility, correct?
MR. TENGAN: Like I said, it all depends on your
imagination.
MS. RAISBECK: Okay, thank you.
CHAIRMAN HIRANAGA: I think that's what the
consultant would provide, is the number of users in stratas
to determine where rate breaks should be.
MS. RAISBECK: But also I would like this Board,
even before you get a rate consultant, if it's all right,
Kent, to look at the rates that are charged on the other
islands. To see what they charge and how they structure
their rates is almost no work so, you know, if we could look
at that.
CHAIRMAN HIRANAGA: I would hope that that would
be in the scope of the consultant's work.
MS. RAISBECK: But do we really have to wait ten
months for that?
CHAIRMAN HIRANAGA: I don't think we will have to
wait ten months.
MS. RAISBECK: The other thing is, I do believe
the budget, the Council budget considerations take place in
March, April and May. And if we could have something to
recommend to them before March would probably be the best
thing. Thank you.
CHAIRMAN HIRANAGA: Any other discussion? If
not, I will call for the vote. All in favor of the motion
so indicate by saying "aye".
(A chorus of ayes).
Opposed?
(No response)
Seeing none, the motion passes. We will have a
short recess. We will reconvene at 10:10.
(Whereupon a brief recess was had)
CHAIRMAN HIRANAGA: Call the meeting back to
order. The next agenda item is the update on Central Maui
surface water.
MR. TENGAN: Mr. Chair, I just wanted to report to
the Board on what was going on in this area to supplement
the water in Central Maui, as Iao has become an issue of
designation. We are presently awaiting a proposal from a
private developer to design and construct a plant to produce
2.0 million gallons a day. We are also looking at the
alternative of increasing the capacity at the Iao treatment
plant.
For the long term, I think now we have identified
a site where we want to put or construct a permanent water
treatment plant for the Central Maui area, and this area,
this site would be situated as a first choice above the
Mokuhau tank, close to the site that goes across Iao Valley.
My understanding is that water is available, however that
source has to be worked out with Wailuku Ag.
So basically those are the three things that are
happening right now. My understanding is that another
developer might be coming in with a proposal to design and
construct a treatment plant also, but I haven't gotten
anything from him.
CHAIRMAN HIRANAGA: Questions by the Board?
MS. PARSONS: I have one.
CHAIRMAN HIRANAGA: Yes, Ginny.
MS. PARSONS: Mr. Director, what are the
possibilities of this treatment plant having to add
phosphoric acid?
MR. TENGAN: That would be possible, but we will
find that out. I guess we could find that out prior to the
construction of the plant by having some kind of test done
with the water and the addition of phosphoric acid.
MS. PARSONS: Would it then maybe behoove us to
get the update maybe in the next meeting on the Upcountry
situation? And then maybe get proactive down here to get
some of the faucets and things changed before we -- as we
are doing the treatment plant. Maybe figure out some way,
some promotion, some way to get before the cart and maybe
not have to do the additives.
MR. TENGAN: Yes, we could be looking into that
issue. We will take that under consideration.
MR. OKAMURA: Mr. Chair?
CHAIRMAN HIRANAGA: Yes, Ken?
MR. OKAMURA: I was wondering like, you know, what
is the capacity of the surface water sources? How much
surface water is there in the area, and are there any
underground sources in the same similar area that we can go
after also?
MR. TENGAN: When you talk about underground
sources, I assume you are talking about deep wells. As you
know, Iao has been designated. However, we are developing a
well out in the Wailuku area just primarily to spread the
pumping, rather than provide an additional source.
I don't think we can count on additional source in
the Iao Aquifer, so we are looking or we're working on North
Waihee. We are presently talking to one landowner whereby
we can develop a well or have a well developed and turned
over to us for operation and maintenance.
There's also one more possibility that was
suggested to me by John Min. He feels that there's 10
million gallons of water in Waihee Valley that would be
considered high level water, and not taking water from the
aquifer. In other words, the water percolates into the
ground, but seeps out and feeds into the existing stream,
rather than going down to the basal aquifer.
We took a walk out into the valley several weeks
ago, and the only thing that resulted from that was my back
(laughter).
Anyway, getting serious, we looked at that, and it
looks like it's going to be an expensive venture to develop,
because we would have to go back a couple miles into the
valley. Assessibility to the area is very limited. The
only way that we can get some kind of way in there would be
to helicopter a rig in there in segments and have it put
together in the valley. So that's kind of low as far as
what we are going to be doing next, but it's still an
alternative that maybe some day we would have to consider.
MR. OKAMURA: But as far as the surface water, you
don't know how much there is or is available?
MR. TENGAN: Well, Wailuku Ag is saying that they
have 17.5 million gallons a day that they could make
available to us.
MS. RAISBECK: Question.
CHAIRMAN HIRANAGA: Yes, Sally.
MS. RAISBECK: Yes, did you say 17.5?
MR. TENGAN: Yes.
MS. RAISBECK: Out of their 60, right? I believe
they have about 60 total.
MR. TENGAN: I don't know exactly.
MS. RAISBECK: I've seen that figure. So the
Wailuku Ag surface water is about 60 million gallons a day,
and I guess this deal that they're offering to the
administration is to let the County buy 17.5 million gallons
a day.
And my question though is separately, which is
that in your memo you say another alternative is to have a
private developer design and construct a plant to produce 2
million gallons a day. Would that be the same kind of deal
that we have had with wells where the private developer gets
first crack at the water, and maybe the County pays for part
of it and gets part of the water?
MR. TENGAN: The proposal as it stands now is that
the County and the developer would share on a 50/50 basis
for the water developed, but more discussions need to take
place before something like this can be finalized.
Because although the plant would be able to
produce 2 million gallons per day, we wouldn't use that
amount, rely on that amount as far as our capabilities to
provide water and commit to new meters. There would have to
be some kind of allowance for down time, backwashing, and
everything else.
MS. RAISBECK: Is there -- has there been any
discussion about the possibility of the County doing that on
its own, rather than with private development?
MR. TENGAN: Yes, we could develop it on our own,
but we don't have any control over the surface water right
now. Until we do acquire some control over it and are able
to get some assurance that water, surface water would be
available to us, you know, this would be an alternative that
we can consider.
MS. RAISBECK: So again, just to get a handle on
ballpark figures for costs, what would it cost to develop a
2 million gallon water treatment plant?
MR. TENGAN: I don't have that number with me.
Maybe staff can see if they can get a figure.
MS. RAISBECK: Just a ballpark figure.
MR. TENGAN: I would say roughly $3 million
minimum.
MS. RAISBECK: David Craddick wrote a letter to
the Maui News in which he said surface resources are not
reliable unless you have storage, and he was talking about
like reservoir, storage. So in conjunction with this plant,
would we be also proposing a water treatment reservoir, and
how big does that have to be and how much does that cost?
MR. TENGAN: That's one of the details that needs
to be worked out if we are going to pursue this alternative.
I'd say that the proposed project is being brought forward
to us by one of the major landowners or operators of surface
water in the West Maui mountains or this side, namely A&B.
They're putting something together for us to consider. The
details would need to be worked out on that.
With regard to the assurance of water for the
treatment plant, this is a portion that A&B is in total
control of, so no other party would be involved in the
supply of untreated water. So they would have to provide an
assurance that water will be available.
MS. RAISBECK: Mr. Chair, if I could, yesterday I
went to the Water Resources Committee meeting, and they are
taking up the question of allocation of water by land use
category. And I think the current thought is in terms of
future water. They want to have the control over whether it
goes for single-family or multi-family or commercial or so
and so.
I just wondered about what kind of complications
would be involved if we join in a partnership with private
companies where they get say 50 percent of the water for
their use, and that's commercial use, how this will relate
to the Council's quite evident desire to allocate water by
use? And the Mayor has expressed the desire to allocate
water for affordable housing.
So I think all of those complications will arise
as we proceed with developing source, if we do it in
partnership with private entities. Thank you.
CHAIRMAN HIRANAGA: Yes, Dorothy?
MS. PYLE: This is maybe just a request for the
Board and also the department. It seems to me that one,
even with our rules not exactly determined yet, our role
seems to clearly be one of advice and consultation. And I
think that George is trying very hard to give us as much
information as he possibly can at this point in time.
Would it be possible for the Board to request that
at our next meeting we have an executive session and invite
the Mayor to come and explain some of these negotiations to
us so that we can offer our collective intelligence as a
board in consultation?
I think that we're really very hamstrung here. I
think the department is as well, because none of us seem to
have all of the information currently. Could we do that?
MR. TENGAN: I can certainly put that request to
the Mayor. I don't know whether it would be agreed to or
not.
MS. PYLE: You can't say that he'll be here, but
can we please request that?
MR. TENGAN: Certainly.
MS. PYLE: Thank you.
CHAIRMAN HIRANAGA: I guess the question I have,
especially with the recent decision regarding the EMI water
leases is will there be challenges by other water users as
to who owns this surface water? Because the County doesn't
own the water.
MR. TENGAN: Right. I don't know that any of the
water is being taken from state land. That I would have to
reconfirm. The situation we're making reference to is water
being taken from state lands through the water license.
CHAIRMAN HIRANAGA: But the parties who opposed
the 30 year lease were people living downstream of these
sources of water. So I'm just wondering if you will
encounter a similar type of opposition, even though Wailuku
Ag and A&B have been transporting water from West Maui to
the central plain for a hundred years doesn't mean that when
the County becomes a party to this that other landowners
downstream might not oppose it. It would appear to me that
we'd want to clarify this before spending money on a capital
improvement.
MR. TENGAN: The way I see it is that there's
going to be no change in the manner with which Wailuku Ag
and A&B takes water or collects water from the valley. So
if there were any opposition to that happening, I would
think that that would have taken place already. But if we
develop a new diversion, you know, that issue could
certainly come about.
CHAIRMAN HIRANAGA: I guess Corporation Counsel
can stop me if I'm saying something I shouldn't be, but in
our discussions about land acquisition with Wailuku Ag there
were concerns about their title and kuleana rights and water
rights. And I don't know where that discussion with Wailuku
Ag has gone or progressed, but it was a concern that if we
are going to be purchasing land from Wailuku Ag in the hopes
of getting watershed lands, that the title be cleared and
there be no challenges to our attempt to divert water for
public use.
MR. TENGAN: I think that was the intent of the
Board when it engaged the services of a private attorney to
assist the then Chair in negotiating for the land purchase
with Wailuku Ag. But everything has come to a standstill on
that now.
CHAIRMAN HIRANAGA: Any other questions?
MS. RAISBECK: Mr. Chair?
CHAIRMAN HIRANAGA: Sally.
MS. RAISBECK: This is, I think, more than a
philosophic difference. I think in August of 2000 the
Waiohuli Ditch decision said in so many words that no water
is privately owned in Hawaii. That all water is the
property of the public trust for the benefit of the people
of Hawaii. All water, whether it's in a stream, whether
it's in these ditches, whether it's under a piece of ground
you own, all water is the property of the people of Hawaii,
and that includes near-shore waters. The public trust.
The state is the trustee of that trust, and they
must manage that trust for the benefit of the people. And
there are priorities set in that decision as to what uses
have priority over other uses. So that I think there will
be undoubtedly challenges to the fact that Wailuku Ag is
acting as if water is a commodity that they can sell to
other people. I think there will be many people who will
challenge that position. So I would disagree with some part
of what the Director said.
MR. TENGAN: Yes, I believe that if an agreement
was to be drafted it wouldn't make any kind of reference to
sale of water. It would be more in the form of delivery of
water, delivery services, rather than the sale of water,
actual water. We can go back to our current agreement with
Wailuku Ag and see how that phrasing is and report back to
the Board.
CHAIRMAN HIRANAGA: Any other questions? I don't
believe a motion is required for this.
The next agenda item is progress to date on the
Maui Island Water Use and Development Plan.
MR. TENGAN: Mr. Chair, I'll have Ellen go over
this.
MS. KRAFTSOW: In your packet this item goes from
page 14 to page 51. The Water Use and Development Plan
requirements are described on pages 15 to 17, but for a
quick bottom line of the current requirements if you turn to
page 35.
The Water Use and Development Plan is required to
be consistent with various other plans, to address existing
and future sources and demands, to contain multiple forecast
scenarios, to address capital needs for both public and
private systems, to allocate water to land uses, to discuss
the resource impacts of decisions, to include a credible
public involvement process. It should be coordinated
closely with the Commission on State Water Resource
Management, including a presentation of the proposed process
to the Commission, and milestones. It should include
clearly defined objectives and criteria, and there should be
an implementation matrix agreed upon.
Following that, also on page 35, you see the plans
that we're supposed to comply with. The State Water
Resources Protection Plan, which was last updated in 1990;
the State Water Quality Plan, which was last updated in
1990; the State Water Projects Plan, which was updated in
the year 2000; and the Agricultural Plan, which has not --
for which there's no financing right now to update, as far
as I know.
We're also required to comply with the Maui County
Community and General Plans. I believe the last general
plan update was 1990. I wish Brian was here, because I
thought there might be another -- anyway, Hana 1994. You
see all the dates. Basically the last set of community
plans was completed in the year 2002.
On the prior community plan and general plan prior
to 2002, we did both the 1990 and the 1992 Water Use and
Development Plan, as well as participating in working on the
working reports for Molokai, which was published in 1995,
and Lanai in 1997. Those are described in your handouts.
As far as our proposed process now, you have a
list of deliverables that goes all the way from page 23 to
33, but I have handed you a one-page handout that summarizes
and condenses that. And under that process we would work
with a public committee to define the objectives and
evaluation criteria.
That could be things like we want to provide
maximum protection to the resource, we want to maximize
conservation, or we want to maximize water quality, or we
want to maximize reliability. Whatever the issues of each
district are, it would define those. We would provide a
resource assessment.
Again, we would do a plan that could be used in
multiple forecast scenarios, a broad list of options to meet
these scenarios, and form strategies so that we can say at
this point we do this and when it hits that point we do
that, a series of those, test them against the criteria that
the committee has set, include a review of uncertainties and
how these strategies perform against these uncertainties,
and then select strategies through a public process. That
is the required framework now.
And so this one-page handout I gave you is
designed to meet that. It is draft, because we've revised
it to move Central Maui to the front. And one of the things
we're considering as you see, because there are so many
issues that Central Maui and Upcountry are affected by
together, one of the things we're considering is holding,
combining those two groups and making one big group for
Central Maui and Upcountry, so that some of the issues,
instead of being resolved at the end of the process can be
resolved throughout the process.
Other than that, is there anything else major?
Let me see. That's really it. I have an updated handout,
but I just thought just to fix a few things it wasn't worth
wasting all the paper. That's all.
MR. TENGAN: Could you briefly go over the
relationship between the Community Plan, the County General
Plan, and the state -- I mean the Water Use and Development
Plan and the State Water Plan, the relationship between all
those plans?
MS. KRAFTSOW: Okay. On page -- I kind of did.
But the State -- the County Plans are required to be
consistent. The water plans are required to be consistent
with the Community Plans. The Community Plans are required
to be consistent with the General Plans. The State Plans,
well, the state supersedes us, but I think in certain cases
the state also has the plans. Is Brian here?
And the Water Use and Development Plans of the
counties have to be consistent with both the County
Community Plans, the General Plan, the State Water Resources
Protection Plan, the State Water Quality Plan, the State
Water Projects Plan, and the State Agriculture Water Plan.
I'm not sure what else was your point. Was that it?
CHAIRMAN HIRANAGA: Yes, Mike?
MR. NOBRIGA: Explain to us what is the County's
General Plan.
MS. KRAFTSOW: Okay. The General Plan, there's
actually been some -- it's kind of like the Overarchy Plan,
20 year plan for the County. And the Community Plans,
there's been some discussion among the planners about
whether the Community Plan should be done first or whether
the General Plan should be done first.
MR. NOBRIGA: 20 years from when though?
MS. KRAFTSOW: 20 years from -- each plan is --
the plans are typically done on a 20 year time horizon,
although Water Use and Development Plan requirements, if you
expect to reach or exceed sustainable yields within that 20
year time horizon, then you have to look a little bit
further. So what the County does is it updates. It has a
general plan, which is kind of like a vision statement of
this is how we want it.
MS. PYLE: 1990 is what he wanted to know, 1990.
MR. NOBRIGA: Did that start in 1990 or 1980?
MS. PYLE: 1990 is the last one that was approved.
MR. NOBRIGA: So when did it start?
MS. PYLE: It started in 1990, because it was
approved then and it's for 20 years, and now they're working
on updating it.
MR. NOBRIGA: It couldn't have started in 1990 if
they approved it.
MS. KRAFTSOW: They approved the General Plan in
1990, and then based on the General Plan they started the
Community Plan update. So the Community Plans are based on
the General Plan for that go-round.
But within the Planning Department internally
there's been some discussion whether you should start from
the General Plan and then do the Community Plans, or whether
you should actually do the Community Plans and resolve
everything. So in any case, they all have to be consistent
with each other, and they're not.
MR. NOBRIGA: Okay.
MS. KRAFTSOW: For instance, one of the reasons
we're thinking of doing Central Maui and Upcountry together
is because if you take the build-out of the Community Plan
areas that are on the Central Maui system, which would
include part of Paia-Haiku, Kahului-Wailuku, and
Kihei-Makena, the build-out is easily over 60 million
gallons a day. There's no way that you are going to get
that water without going east, unless you completely took
over -- well, I won't even go into completely taking over
the ditches.
MS. PYLE: You don't want to go there.
MS. KRAFTSOW: But the Paia-Haiku Community Plan
specifically says that water will not be transported out of
the area until all existing and future anticipated needs of
the area are met, i.e. we have a big discrepancy. It's in
the Community Plans.
We have to comply with the Community Plans, but
the Community Plans don't even comply with each other. And
sometimes even within a Community Plan the policies say we
want to preserve the agriculture nature and rural nature of
the area to the maximum extent, and then the map zones
enough land to double or triple, easily double or triple
demands. Okay, that is also a discrepancy and it's in
almost every plan.
So if you were to look at just a per acre analysis
of the build-out, virtually every map would have a double or
triple demand, even the ones that tighten their belt. So
per analysis Upcountry and Haiku tends to be a little bit
overly conservative. But still it's worth noting that there
are inconsistencies that are not. They were looked at
probably for flexibility, but they don't give us guidance,
they're not resolved enough to give us guidance.
CHAIRMAN HIRANAGA: Yes, Mike.
MR. NOBRIGA: So the current Upcountry Community
Plan, does the proposed usage of water for Upcountry
actually exceed that of Central?
MS. KRAFTSOW: Exceed that of Central Maui? No,
no, I don't think so. I would have to check, but no. I'm
almost virtually 100 percent. No, it doesn't. But it
exceeds what it is now, it almost doubles, maybe even almost
triples.
MR. NOBRIGA: If all the guys on the list got
their water meters, we would have more water meters
Upcountry than we would have on the central system?
MS. KRAFTSOW: No.
MR. NOBRIGA: Okay.
MS. KRAFTSOW: The central system is easily our
hugest system.
MR. NOBRIGA: Including or not including Hawaiian
Homes?
MS. KRAFTSOW: Oh, well, Hawaiian Homes is an
interesting issue. But I think still the Central Maui
system would be larger.
MR. NOBRIGA: Okay.
CHAIRMAN HIRANAGA: Yes, Ken.
MR. OKAMURA: Mr. Chairman, I was wondering, you
know, this Water Use and Development Plan, you did one in
1990 or the County did one in 1990 and 1992. Would this one
be different from those, like it would be just an updated
plan, or is it a new format entirely?
MS. KRAFTSOW: Sort of all of the above. The 1990
plan, if you turn to pages -- the process is completely
new, although the 1992 draft update did also include an
extensive public process, not quite as extensive as we're
required to do now. The 1990 plan was essentially done
internally, but they did have a few public meetings to
present it and go over it.
The 1992 plan was done with an advisory committee
for each island, but not for each district, and they did
have a pretty respectable set of meetings. And they did do
important things that are required now, that were not as
clearly required then. They improved estimates on per unit
consumption and per district consumption, and recommended
further work on that, which we've undertaken.
So some of the conclusions and recommendations,
and those are summarized on pages 35 and 36 of the
historical efforts, some of those have been implemented
already, so we would need to update and go on to the next
step. The process is more extensive and the requirements
are much more extensive.
I should say that I've seen the cost estimates
that the counties did, even those who already have 20/20
capital plans to do the IRP process. They estimate, I've
seen estimates of a million to a ^ million 5, to even more
from the other counties. Our contracts all combined are
less than half a million. Our major contract is about a
third of a million. So we're doing it sooner and with less
money.
But we are going slowly, I have to acknowledge.
And it is an ambitious effort to try to meet all these
requirements. Public process does slow things down, but the
hope is that with an extensive public process there will be
more buy-in at the back end.
MR. OKAMURA: So what is the total estimated cost,
and who pays for it?
MS. KRAFTSOW: The counties are required to pay to
update the water plan.
MR. OKAMURA: About how much would it be? Do you
estimate how much it will cost to do that?
MS. KRAFTSOW: The contracts, there are some
smaller contracts, but basically I think if you add them all
together it's about $400,000. The contracts are on page 22.
We have four contracts that relate to the water plan.
MR. OKAMURA: So you do it in-house, I guess.
MS. KRAFTSOW: A great deal of the work is done
in-house. All of the contracts were written to assume that
a lot of the work would be done in-house, but we also have
some serious staffing and resource issues that keep us
moving very slowly.
CHAIRMAN HIRANAGA: Yes, Dorothy.
MS. PYLE: This is probably a really crazy, dumb
question. You have handed us this, which I have been
looking at and trying to figure out. What is the WAC?
MS. KRAFTSOW: Water Advisory Committee.
MS. PYLE: So it is going to be formed in this
month?
MS. KRAFTSOW: We have actually -- for Lanai and
Lahaina that committee is formed already. We had brought
the public process into Lanai nearly to completion, except
that one of the elements of the plan is continued process,
so it will actually never end. We have written all the
elements of that plan. For Lahaina also there was a
committee established. We did it a little bit differently.
MS. PYLE: Who establishes the committee?
MS. KRAFTSOW: With Lahaina it was under the
former director and the former Board, and we had submitted a
list upstairs to the Mayor and the Council and the Board.
MS. PYLE: Did you ask for volunteers from the
community?
MS. KRAFTSOW: What we did with Lahaina was we
actually sent it to over 70 people. And we usually have a
group of -- we have a core group. Usually attendance is
about 28, between 23 and 28 there.
MS. PYLE: I'm just wondering how people become
members of this advisory committee.
MS. KRAFTSOW: When we speak publicly we request
that anyone who is interested contact us. We make an effort
to think of all the interests, the environmental groups, the
developers, the business groups, the Hawaiian groups.
MS. PYLE: I understand.
MS. KRAFTSOW: And we contact people that we know
simply have to be included, large users and things like
that, and then we ask people. And then we also call people
and say, "Okay, we are not balanced. We don't have enough
of this kind. Can you recommend somebody?"
MS. PYLE: I understand. According to what you
have got here, this particular formation of the Water
Advisory Committee for Central and Upcountry is supposed to
happen in October of 2003.
MS. KRAFTSOW: We have a draft list of proposed
participants, which I regret I didn't bring with me today.
I don't know that it would be completely finished by the end
of October, because we want to get the Mayor's input and the
Council's input. But yes, we want to put together a
committee. There are certain people that are quite obvious
if you're doing Central Maui, like the Hotel Association,
the Chamber, you know, and the Sierra Club and Maui
Tomorrow.
MS. PYLE: One more question. What would be the
relationship, if there is one even, of this Water Advisory
Commission and the Board of Water Supply?
MS. KRAFTSOW: The Water Advisory Committee is the
public advisory group that we use for the plan, and we would
hope that the Board Member that represents each district
would participate in the Water Advisory Committee for that
district.
And in addition, the entire plan for each chapter,
what we're proposing, we have to propose the process. And
part of the thing that we're proposing is that each
district's chapter be approved individually, and then
anything still outstanding be resolved in a section at the
end when we bring all the groups together.
So we would bring each chapter to the Board and
then to the Commission, and hopefully to the Council. I
mean the whole thing has to go to the Council before it goes
to the Commission. So we would probably bring each
Commission to the Council and Mayor.
MS. PYLE: It just really helps me, and maybe some
of our newer Board Members like me to understand the
processes that go on, so that I know what's coming down the
road and how these things are interelated. So I appreciate
the information, thanks.
MS. KRAFTSOW: One other thing is the schedule you
have there. If you notice, and this is one of the things
that made it so impossible to do in Ainahaina, was we wanted
them to go kind of concurrently because of the
discrepancies. Just the logistics of those meetings are
insane. So we're thinking if we reduce the total number of
committees, maybe we will make it a somewhat larger than
normal committee, or maybe a committee with subcommittee, I
don't know.
But if we can make it so that we're planning one
meeting a month and having the rest of the month to actually
be doing the work it would help, because just the logistics
of putting a meeting together takes up to as much as a week
sometimes. That's one of the main changes we're looking at
from what you see there.
CHAIRMAN HIRANAGA: Yes, Sally.
MS. RAISBECK: Ellen, what was the reason for
doing Lanai as the first one? The department doesn't even
have -- I mean it's an entirely private system. Why work
on an entirely private system first and West Maui, which is
maybe two-thirds private? What was the rationale for doing
them first?
MS. KRAFTSOW: Actually, in 1996 and early 1997 we
negotiated -- we knew that the state was moving towards an
IRP framework. We knew that in 1992 when they did not
accept, not just our water as the development plan, but they
did not accept any Water Use and Development Plan of any of
the counties. Instead, they wrote a letter saying, "We see
that we need to write new guidelines."
So we knew that they were going to be doing the
guidelines. And we knew from conversations with them -- we
keep in good contact with them -- that they were moving
towards an IRP framework, but they had not yet published it.
So in 1996-1997 we negotiated with them a modified
IRP framework, which was the auspices under which the
contract, the initial contract for like $75,000 or $80,000
-- which is nowhere near close enough to do a full-blown IRP
-- was issued.
And that was, they requested that we start with
Lanai, because Lanai at that time had just been designated
or was -- I forget exactly when it was designated. It was
either just designated or was about to be designated. It
has the smallest sustainable yield for any island.
It's not enough to just speak about what the
County is going to do, we need to talk about how resources
will be allocated to the private systems as well. So it's
required under the Water Use and Development Plan.
And Lanai is unique in that it only has a 6
million gallons per day sustainable yield, which is less
than one-tenth of the smallest island. It's really up
against the wall. And it's estimated that as much as half
of the recharge from Lanai comes from the forest, and the
forest is diminishing.
MS. RAISBECK: But I didn't realize that Lanai has
been designated. That's true, I didn't know that.
MS. KRAFTSOW: You're right, no, you're right,
Molokai is designated. There was a designation, yes. I'm
sorry, I'm a little out of it this morning.
MS. RAISBECK: So I sort of deduced from this that
if the Water Use and Development Plan includes private as
well as County, and if the Water Use and Development Plan
talks about allocations to different uses, this is then used
as probably input by the Commission on Water Resource
Management, since they're the ones who have the power to
allocate to county or to private for specified uses,
correct?
MS. KRAFTSOW: I do know that when we have said
that we have had long-published intentions to utilize an
aquifer they say -- and that we're concerned about the
proliferation of private wells in that aquifer, that they've
said, well, the Water Use and Development Plan will help us
to honor that concern.
However, in 1990 a fully approved Water Use and
Development Plan did also say that we will use -- the
aquifer that I'm thinking of is Haiku. So in theory, yes,
they're going to use the Water Use and Development Plan as a
guideline by which they will allow for well permits.
MS. RAISBECK: Okay. Well, I do see these,
because it has been so difficult for me as a new member of
the Board to understand these incredibly complicated source
questions, what's connected to what, the local aspects of
everything. It's all been enormously complicated to me.
So I question whether getting on board new people
in, well, for example, take Central and Upcountry. If you
get 15 or 20 new people there, what the time for them to
come up to speed on these extremely complex questions will
be, so that they can actually have useful input to the
process.
MS. KRAFTSOW: I think you have a good point. One
of the ways that we would try to address that is to provide
them at the meetings with presentations, "and this is how
the system works and here are the costs of running the
system" so that they have some issues, the regulatory
frameworks, and all that.
Another thing is that part of what they have to do
is not really necessarily the engineering analysis on each
source option, but more to say this is what we want. We
want an availability policy or we don't. We want the
highest quality water, even though it will cost more. And
then we still couldn't use the committee's word, we would
have to go to a broader public forum for that. We want this
set of strategies that will maximize reliability, or we want
to balance reliability and cost, or those kinds of things.
Those are not deeply technical preferences, and those are
the ways in which we would use committee guidance.
And also ultimately we did want to exercise in the
Lahaina group, which was, "Congratulations, or should we say
condolences, you have just been appointed King of Water and
you have these ten choices. You have this much water, you
have this much surface water, and this much groundwater.
How would you allocate it?" And then we do some analysis on
those kinds of exercises to see what peoples' priorities
are, and that gets reviewed through the resource strategies.
So there's technical support. That's what the consultants
are for.
MS. RAISBECK: Okay. So I'm assuming that it
would be useful for members of the Water Board to
participate in these committees?
MS. KRAFTSOW: Absolutely. Like the Water Board
for each district, to participate in the committee for their
district.
MS. RAISBECK: If you combine Central and
Upcountry there's 1, 2, 3, 4, 5 -- I don't know where you
live, Kent, where do you live?
CHAIRMAN HIRANAGA: I live in Spreckelsville.
MS. RAISBECK: So that's Central.
CHAIRMAN HIRANAGA: Currently. They're trying to
move us.
MS. RAISBECK: So most of the Water Board is from
Central and Upcountry. And if you combine those, we would
certainly, I'm sure, be interested in the meetings of the
committee.
MS. KRAFTSOW: I would think that you would select
one Board Member to represent for Upcountry and one for
Central, and the rest could attend as observers. Remember,
you are going to have your own review and milestones of each
chapter. The Board as an entity itself is going to be able
to discuss these things too, so it's not like you would be
excluding the Board.
We don't want to turn the entire advisory
committee into a board. We do have one Central and one
Upcountry. You can even take turns. It doesn't prevent you
from attending, it just prevents you from --
MS. PARSONS: It should be selected one from each
district.
MS. KRAFTSOW: I mean the Board is still going to
have a chance to review all of this.
CHAIRMAN HIRANAGA: Any further questions for
Ellen? Thank you.
The last agenda item, I believe, is a request for
agenda items to be placed on future agendas. Yes, Ginny.
MS. PARSONS: I'd request again for an Upcountry
phosphoric acid and C9 report update on what's going on with
the community Upcountry, please, on the agenda, please,
please, please.
CHAIRMAN HIRANAGA: Any other requests? Seeing
none --
MS. PARSONS: One more thing. I didn't notice
this in the notes until I reviewed them again. In the
meeting minutes on page 49, line 11, it's Rippun, in case
anybody wants to look it up. I believe it's R-I-P-P-U-N.
Is that right? Thank you.
MS. RAISBECK: Mr. Chairman, I had a number of
changes to the minutes, but I came in too late. But I won't
go over them. I do have comments to hand out to the members
of the changes, and one of the more funny aspects was that a
number of times what I said was listed as being said by
Ginny, Ginny Parsons. So I will pass out this list of
corrections.
CHAIRMAN HIRANAGA: Moving on to division reports.
MS. RAISBECK: I wondered if in the engineering
building reports, the subdivision status reports, if we
could know how much water was associated with those, so that
we have sort of an ongoing record of how much water is
associated with the permits that are being given.
CHAIRMAN HIRANAGA: Is that something the
department can provide?
MR. TENGAN: Would this be just for subdivisions
or all permit approvals? I think I understand what you are
asking for. I will talk with staff and see what we can come
up with by next week.
CHAIRMAN HIRANAGA: On these clarifications, just
because the department approves a subdivision doesn't mean
the subdivision is actually going to be approved, because
Public Works is the final agency. So are you concerned
about --
MS. RAISBECK: I just need more clarity, really,
about at what point we estimate how much. Well, say
somebody comes in with a subdivision for 35 houses. At what
point do we estimate the water for that? And even if we
give them a letter saying, you know, water will not be, you
know, water may not be available, do we keep a record
somewhere of that estimate of water? And if so, does it get
added up anywhere and given to us in reports anywhere?
MS. KRAFTSOW: I can address that, if I can.
CHAIRMAN HIRANAGA: Sure.
MS. KRAFTSOW: We traditionally only kept that
data at the actual meter issuance stage. However, since or
around the time of designation, we started trying to
analyze, put together a list of all subdivisions pending and
the water represented, which has been presented to the Board
in a rough estimate. And right now what we are trying to
do, to add to the tracking is -- I'm sorry, it was not
traditionally, it was actually only kept at actual use, so
meters were issued.
Now with every meter issued, since designation we
are trying to track that. Subdivisions, we did that one
update. We wouldn't be doing an update monthly for that,
just because we don't have the staff right now to do that
and give it to you regularly, and we don't get the data
reliably enough. And frankly, the data in the files is not
really adequate to do a meaningful estimate.
So we would need to restructure what comes to the
water department, how it's rooted within the water
department. And I am not saying that it wouldn't be a good
thing to do, but I'm saying that right now with the existing
staffing and existing other demands, the best we can do is
keep a closer watch on meter issuance, and that is something
that we are trying to track.
The last update was as of the end of August, the
first week in September, between 200,000 and 250,000 gallons
worth of meters had been issued to those people who do not
hold reservations. As you remember, we said that we would
issue up to 800,000 gallons. So that's between a quarter
and a third of that has been issued.
CHAIRMAN HIRANAGA: I have a question. These
division reports, is it possible, or maybe it's provided
elsewhere, but like to have a capital improvement progress
report, how the CIP's are running in comparison to budget?
MR. TENGAN: I'll work with staff on that. I had
intended to work to do a quarterly report ending September
30th. I'll see what I can do to get it ready by the next
Board meeting.
CHAIRMAN HIRANAGA: Percent of completion,
projected completion date. I am also interested in it
because, as I mentioned earlier, getting the CIP is a
priority with me, so I'm interested in that also.
Any other comments regarding the division reports?
MS. RAISBECK: Yes, Mr. Chairman. I just noted a
discrepancy. In some tables the three wells, the joint
venture wells are called Waihee I, II, III, and in other
reports they're labeled Waiehu I, II, III. And it would be
helpful if we could standardize the nomenclature so that
they're referred to by the same name every time they're
referred to. Whether it's Waihee or Waiehu, I'd like to see
some standard nomenclature.
And I will also note for the record that as of,
oh, we have the source record through August, and in August
we were using 19.09 from the Central Maui aquifer, and 5.40
from the Waihee aquifer. Thank you.
CHAIRMAN HIRANAGA: Any further comments? If
not, this meeting is adjourned.
(The proceedings were concluded at 11:15 a.m.)
Department of Water Supply
County of Maui
200 South High Street
Wailuku, HI 96793-2155
Telephone (808) 270-7816
Fax (808) 270-7951