FRIDAY, DECEMBER 22, 2017

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1 BOARD OF WATER SUPPLY of the COUNTY OF KAUA I REGULAR MEETING Second Floor, Kaua i County Department of Water 4398 Pua Loke Street, Līhu e, Kaua i, Hawai i FRIDAY, DECEMBER 22, :00 a.m. A. CALL TO ORDER B. ROLL CALL C. ACCEPTANCE OF AGENDA Or soon thereafter D. MEETING MINUTES Review and approval of: Regular Board Meeting November 22, 2017 Special Board Meeting December 4, 2017 Review and approval of: Executive Session November 22, 2017 Executive Session December 4, 2017 Executive Session December 8, 2017 E. CORRESPONDENCE/ANNOUNCEMENTS 1. Committee Appointments by 2018 Incoming Chair Beth Tokioka for Rules Committee, Finance Committee, Audit Committee, Committee of the Whole 2. Correspondence from Accuity LLP, Honolulu, Hawai'i received November 20, 2017, regarding the Department of Water County of Kaua'i Financial Statements June 30, 2017 and 2016 F. BOARD COMMITTEE REPORTS G. OLD BUSINESS 1. Manager s Report No (Update) - Discussion and Possible Action on the 5 th Amendment for Contract No. 440, Job No WP2020 #WKK-15, Kilauea, Kaua i, Hawai'i, 1.0 Million Gallon Storage Tank and Connecting Pipeline with Kodani & Associates Engineer, LLC for the additional design funding of $25, Page 1 of 5 NOTE: If you need an ASL Interpreter, materials in an alternate format, or other auxiliary aid support, please contact Edie at or eineumiller@kauaiwater.org at least seven (7) calendar days before the meeting. Page 1

2 BOARD OF WATER SUPPLY REGULAR MEETING December 22, 2017 H. CONSENT CALENDAR 1. Manager s Report No Discussion and Possible Action to approve the First Amendment to the Right of Entry from McBryde Sugar Company LLC that will allow the Department of Water to locate a booster pump and water line on TMK: (4) :003, for WP2020 Project No. HE-1 (Water System Reorganization) Ele ele, Kaua i, Hawai i 2. Manager s Report No Discussion and Possible Action to approve multiple Right of Entry agreements with private owners that will allow the Department of Water to relocate and/or reconnect water meters for Job No WP2020 Project No. HE-10 (Reorganize Water System: Hanapēpē Road 6-Inch Main Replacement) Hanapēpē, Kaua i, Hawai i for the following TMKs: (4) :019, (4) :005, (4) :012, (4) :055, (4) :057, (4) :004, (4) :058, (4) :059, (4) :060, (4) :018, (4) :016, (4) :027, (4) :006, (4) :015, (4) :006, (4) :025 and (4) :054 I. NEW BUSINESS 1. Manager s Report No Discussion and Possible Action to Begin the Procurement Solicitation for the Assessment and Valuation of Alexander & Baldwin s Brydeswood Well in the amount of $100, Manager s Report No Discussion and Possible Discussion and Possible Action for Job No. 12-4, Water Plan 2020 #HE-14, Hanapepe-Eleele Booster Pump Replacements for additional construction funding in the amount of $567, Manager s Report No Discussion and Possible Action on Revised Memorandum of Understanding (Kulana Water Tank Lot), TMK: :089 (Lot 8), TMK: :046, Līhu'e, Kaua'i 4. Discussion and Possible Action on the Appointment of, or Execution of an 89-day Contract for, an Interim Manager and Chief Engineer 5. Discussion and Possible Action on Creating a Permitted Interaction Group for the Recruitment and Recommendation of a Manager and Chief Engineer 6. Manager s Report No Discussion and Possible Action on the Department s Recommendation of the Application of HAR Exempt Classes of Action, Specifically, Exemption Class #2, Item 3 and Exemption Class 3, Item 8 For Job No , Water Plan 2020 No. PLH-35b, Kapaia Cane Haul Road 18 Main, Līhu'e, Kaua'i, Hawai'i J. STAFF REPORTS MONTHLY 1. Discussion and Receipt of the Kaua i County Water Department s Statement of Revenues and Expenditures a. November Monthly Summary Budget b. Information Technology - Audit Findings Update Page 2 of 5 NOTE: If you need an ASL Interpreter, materials in an alternate format, or other auxiliary aid support, please contact Edie at or eineumiller@kauaiwater.org at least seven (7) calendars days before the meeting. Page 2

3 BOARD OF WATER SUPPLY REGULAR MEETING December 22, 2017 J. STAFF REPORTS (cont d) 2. Discussion and Receipt of the Report by the Public Relations Specialist on Public Relations Activities 3. Discussion and Receipt of the Chief of Operation s Summary Report on Operational Activities 4. Discussion and Receipt of the Manager and Chief Engineer s Monthly Update Regarding Activities of Note of the DOW a. Report of the BAB pay down as of November 2017 K. EXECUTIVE SESSION Pursuant to H.R.S. 92-7(a), the Board may, when deemed necessary, hold an executive session on any agenda item without written public notice if the executive session was not anticipated in advance. Any such executive session shall be held pursuant to H.R.S and shall be limited to those items described in H.R.S. 92-5(a). 1. Pursuant to Hawai i Revised Statutes 92-4 and 92-5(a)(4) and (8), the purpose of this Executive Session is for the Board to deliberate or make a decision upon a matter that requires the consideration of information that must be kept confidential pursuant to a state or federal law, or a court order; and to consult with the Board's attorney on questions and issues pertaining to the Board's powers, duties, privileges, immunities, and liabilities as they may relate to this agenda item: a. Manager s Report No (Update) - Discussion and Possible Action on the 5 th Amendment for Contract No. 440, Job No WP2020 #WKK-15, Kilauea, Kaua i, Hawai'i, 1.0 Million Gallon Storage Tank and Connecting Pipeline with Kodani & Associates Engineer, LLC for the additional design funding of $25, Pursuant to Hawai i Revised Statutes 92-4 and 92-5(a)(2) and (4), the purpose of this Executive Session is for the Board to consider the hiring, evaluation, dismissal, or discipline of the Manager and Chief Engineer or of charges brought against the officer or employee, where consideration of matters affecting privacy will be involved; provided that if the individual concerned requests an open meeting, an open meeting shall be held and to consult with the Board's attorney on questions and issues pertaining to the Board's powers, duties, privileges, immunities, and liabilities as they may relate to this agenda item. a. Discussion and Possible Action on the Appointment of, or Execution of an 89-day Contract for, an Interim Manager and Chief Engineer Page 3 of 5 NOTE: If you need an ASL Interpreter, materials in an alternate format, or other auxiliary aid support, please contact Edie at or eineumiller@kauaiwater.org at least seven (7) calendars days before the meeting. Page 3

4 BOARD OF WATER SUPPLY REGULAR MEETING December 22, 2017 K. EXECUTIVE SESSION (cont d) 3. Pursuant to Hawai`i Revised Statutes 92-4 and 92-5 (a)(4), the purpose of this Executive Session is for the Board to consult with the Board s attorney on questions and issues pertaining to the Board s powers, duties, privileges, immunities, and liabilities as they may relate to contractual agreements concerning the Waiahi Surface Water Treatment Plant, the potential construction of the Kapaia Cane Haul Road 18 inch Main project, and required disclosures, including but not limited to those required under Chapters 6E, 171, and 343, Hawaii Revised Statutes and Ka Paakai o Ka Aina v. Land Use Commission, 94 Haw. 31 (2000) as relates to those projects. a. Manager s Report No Discussion and Possible Action on the Department s Recommendation of the Application of HAR Exempt Classes of Action, Specifically, Exemption Class #2, Item 3 and Exemption Class 3, Item 8 For Job No , Water Plan 2020 No. PLH-35b, Kapaia Cane Haul Road 18 Main, Līhu'e, Kaua'i, Hawai'i L. TOPICS FOR NEXT WATER BOARD MEETING (January 2018) M. TOPICS FOR FUTURE WATER BOARD MEETINGS 1. Discussion and Possible Action on Proposed Board Policy for Delegating Routine Actions from the Water Board to the Department of Water s Manager and Chief Engineer regarding Right of Entry 2. Workshop presentation regarding the Long Range Plan of the Department of Water s former Administration Building 3. Discussion and Possible Action on Utility Agreement No between the State of Hawai i Department of Transportation and the Board of Water Supply, County of Kaua i for the upcoming Hanapēpē River Bridge, Kaumuali i Highway, Route 50, HI STP SR50 (1) Project, Hanapēpē, Kaua i Hawai i Water System Improvements 4. Discussion and Possible Action on the Department of Water s Standard Operations Procedures as it relates to the Board of Water s Rules and Regulation 5. Department of Water Employees of the Year Resolution 6. Draft Budget for Fiscal Year (March 2017) a. Fiscal Year Draft Operating Budget b. Fiscal Year Draft Capital Outlay Budget N. UPCOMING EVENTS 1. AWWA, HWWA, HWEA Joint Conference, Honolulu, HI (February 6 8, 2018) 2. AWWA Conference, Las Vegas, Nevada (June 11 14, 2018) 3. Make a Splash, Project Wet (September 20, 2018) 4. HWWA & HRWA Conference, Līhu'e, HI (November 7 9, 2018) Page 4 of 5 NOTE: If you need an ASL Interpreter, materials in an alternate format, or other auxiliary aid support, please contact Edie at or eineumiller@kauaiwater.org at least seven (7) calendars days before the meeting. Page 4

5 O. NEXT WATER BOARD MEETING 1. Friday, January 28, 2018, 10:00 a.m. 2. Friday, February 23, 2018, 10:00 a.m. 3. Friday, March 23, 2018, 10:00 a.m. 4. Friday, April 27, 2018, 10:00 a.m. P. ADJOURNMENT BOARD OF WATER SUPPLY REGULAR MEETING December 22, 2017 Page 5 of 5 NOTE: If you need an ASL Interpreter, materials in an alternate format, or other auxiliary aid support, please contact Edie at or eineumiller@kauaiwater.org at least seven (7) calendars days before the meeting. Page 5

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7 MEETING MINUTES BOARD OF WATER SUPPLY Wednesday, November 22, 2017 The Board of Water Supply, County of Kaua i, met in regular meeting at the Board Conference Room in Līhu'e on Wednesday, November 22, Chair Sherman Shiraishi called the meeting to order at 10:04 a.m. The following Board members were present: BOARD: Mr. Sherman Shiraishi, Chair Ms. Laurie Ho Mr. Lyle Tabata Mr. Thomas Canute Ms. Beth Tokioka Mr. Michael Dahilig (entered meeting at 8:06 a.m.) Mr. Lawrence Dill (entered meeting at 8:06 a.m.) Quorum was achieved with 5 members present at Roll Call. STAFF: Mr. Kirk Saiki Ms. Marites Yano Mr. Valentino Reyna Ms. Sandi Nadatani-Mendez Mr. Edward Doi Mr. Keith Aoki Mr. Michael Hinazumi Ms. Jonell Kaohelaulii Mr. Dustin Moises Mr. Ryan Smith Mr. Carl Arume Ms. MJ Akuna Ms. Fay Tateishi Ms. Anne Parrott Deputy County Attorney Mahealani Krafft Mr. Chris Nakamura GUEST(s) Mr. Hall Parrott, Private Citizen Mr. Dennis Esaki, Esaki Surveying & Mapping Mrs. Margaret Phillips, Phillips Living Trust Mr. Jack Phillips, Phillips Living Trust Mr. Fred Atkins, Private Citizen Mr. Donn Nakamura, Accuity, LLP Mr. Matthew Oda, Accuity, LLP Mr. Clyde T. Kodani, Kodani & Associates Ms. Tracy Tonaki, Vice President, D. R. Horton Mr. David Hamby, Davis Hamby Design Ms. Maren Arimendez Mr. M. Harismendy Ms. Shawn Shimabukuro, Grove Farm Company Mr. Todd Ozaki, Grove Farm Company Mr. Christopher Blair, Hotel Coral Reef Ms. Ida Gatasova, Private Citizen C. ACCEPTANCE OF AGENDA Mr. Canute moved to rearrange the Agenda to move up Consent Calendar Item H., Old Business Manager s Report No , Item G, No. 1 and New Business Legal Document 18-01, Item I, No. 5; seconded by Ms. Tokioka; with no objections, motion carried with 5 ayes. Regular Meeting: Wednesday, November 22, Page 1 of 16 Page 7

8 H. CONSENT CALENDAR 1. Manager s Report No Discussion and Possible Action on the Amendment to Grant of Easement for Offsite Roadway Improvements for Hokulei Village: Phase I and Phase II, Lihue, Kaua'i, Affecting the Following Landowner: a. Hokulei Village, LLC affecting TMK(s): (4) :046 (por.) Mr. Dahilig moved to approve Manager s Report No Discussion and Possible Action on the Amendment to Grant of Easement for Offsite Roadway Improvements for Hokulei Village: Phase I and Phase II, Lihue, Kaua'i, Affecting the Following Landowner: a. Hokulei Village, LLC affecting TMK(s): (4) :046 (por.); seconded by Mr. Tabata; with no objections; motion carried with 7 ayes. 2. Manager s Report No Discussion and Possible Action on the Conveyance of Water Facility from D. R. Horton, Schuler Homes, LLC., for the Hooluana at Kohea Loa (S ) Offsite Plans Project, TMK: (4) :020, Hanamaulu, Kaua'i, Hawai'i Mr. Clyde Kodani, Kodani and Associates provided his testimony. Mr. Kodani thanked the staff for assisting with this matter. Mr. Kodani did not see a Conveyance for Water Facility on the Kalepa Check Valve. Manager Saiki responded and said the Manager s Reports on Conveyances less than $500, are not needed. Construction Management Officer Mr. Moises commented to refer to the Manager s Monthly Update (page 278 in the packet). The main reason D. R. Horton was present was to ask the Department when the meters would be installed and if there needs to be a waiver to get the meters in sooner. Manager Saiki said the Department will work with Fiscal and Operations. Chair Shiraishi recognized a Point of Order from Deputy County Attorney (DCA) Kraft that Mr. Kodani would have to work this matter out administratively. Ms. Tracy Tonaki, Vice President, D. R. Horton provider her testimony. Ms. Tonaki thanked all departments in getting Hanamā'ulu s subdivision at Kohea Loa. Thirty homes has been sold; 32 homes under construction with the first home to be completed mid-december. She hopes to get water meters to close escrow and for get people moved in by Christmas. Mr. Dahilig moved to approve Manager s Report No Discussion and Possible Action on the Conveyance of Water Facility from D. R. Horton, Schuler Homes, LLC., for the Hooluana at Kohea Loa (S ) Offsite Plans Project, TMK: (4) :020, Hanamaulu, Kaua'i, Hawai'i; seconded by Mr. Tabata, with no objections; motion carried with 7 ayes. 3. Manager s Report No Discussion and Possible Action on the Conveyance of Water Facility from D.R. Horton, Schuler Homes, LLC., for the Hooluana at Kohea Loa (S ) Onsite Plans Project, TMK: (4) :020, Hanamaulu, Kaua'i, Hawai'i Mr. Dahilig moved to approve Manager s Report No Discussion and Possible Action on the Conveyance of Water Facility from D.R. Horton, Schuler Homes, LLC., for the Hooluana at Kohea Loa (S ) Onsite Plans Project, TMK: (4) :020, Hanamaulu, Kaua'i, Hawai'i; seconded by Mr. Tabata, with no objections; motion carried with 7 ayes. 4. Manager s Report No Discussion and Possible Action on the Grant of Easement for Hooluana at Kohea Loa Kalepa Tank Control Valve Replacement, Hanamaulu, Lihue, Kauai, Affecting the Following Landowner: Regular Meeting: Wednesday, November 22, Page 2 of 16 Page 8

9 a. Grove Farm Company, Incorporated affecting TMK(s): (4) :001 Mr. Dahilig moved to approve Manager s Report No Discussion and Possible Action on the Grant of Easement for Hooluana at Kohea Loa Kalepa Tank Control Valve Replacement, Hanamaulu, Lihue, Kauai, Affecting the Following Landowner: a. Grove Farm Company, Incorporated affecting TMK(s): (4) :001; seconded by Mr. Tabata; with no objections; motion carried with 7 ayes. 5. Manager s Report No Discussion and Possible Action on the Grant of Easement for the Construction Plans for Guardian Storage Facility Kalapaki, Līhu'e, Kaua'i, Hawai'i Affecting the Following Landowner: a. Island Self Storage, LLC dba Guardian Self Storage affecting TMK: (4) :009 Mr. Dahilig moved to approve Manager s Report No Discussion and Possible Action on the Grant of Easement for the Construction Plans for Guardian Storage Facility Kalapaki, Līhu'e, Kaua'i, Hawai'i Affecting the Following Landowner: a. Island Self Storage, LLC dba Guardian Self Storage affecting TMK: (4) :009; seconded by Mr. Tabata; with no objections; motion carried with 7 ayes. G. OLD BUSINESS 1. Manager s Report No Discussion and Possible Action on the Denial of Mr. Dennis Esaki s request to Waive the Department of Water s requirement s for Subdivision S , Jack Phillips, TMK: 2-3-7:01, 02 & 03, Kalāheo, Kaua'i, Hawai'i BACKGROUND: Manager Saiki recommended denial of Mr. Dennis Esaki s request to Waive the Department of Water s requirement s for Subdivision S , Jack Phillips, TMK: 2-3-7:01, 02 & 03, Kalāheo. DISCUSSION: DCA Krafft stated the waiver indemnification and duty to defend documents were provided to the Board members before the Board meeting and were approved by the land owners. Chair Shiraishi commented that the legal document was well written and thanked DCA Krafft. The document protects the Board and in great detail in her research to set forth the facts and circumstances in which the Board can justify the waiver of the Department s recommendation. Chair Shiraishi mentioned to not adopt the Manager s recommendation. Ms. Tokioka thanked DCA Krafft s work of the legal document and that everyone was patient in coming to an agreed conclusion. Chair Shiraishi said the document crystalized what the issues were, notwithstanding County Attorney Mauna Kea Trask s presentation at a previous meeting. Mrs. Margaret Phillips, Phillips Living Trust provided her testimony. Mrs. Phillips thanked DCA Krafft on behalf of the owners in working with her the past three weeks. DCA Krafft was gracious in clarifying the language and hopes to move forward in the spirit of cooperation. The Certificate of Completion (COC) that was reported in the Manager s Report from the October 27 th Board meeting, stated the Manager was waiting for the COC for the 1,000 feet of 8 inch water line that was installed in This took her by surprise and after the October 27 th Board meeting, Mrs. Phillips and her husband searched their documents. The documents required for the COC had been completed and submitted to the Department on November 9, 2004 after earlier versions were corrected and reviewed. Following the last submission, the Department installed the five water meters they requested. Regular Meeting: Wednesday, November 22, Page 3 of 16 Page 9

10 Mrs. Phillips is working with Construction Management Officer, Dustin Moises and Mr. Dennis Esaki and his team to resubmit the COC documents and that the COC is not a pre-requisite on the vote today. This has already been built into the waiver agreement. On behalf of all of the owners of the Ihu Road properties, Mrs. Phillips requests that the Board accept the waiver agreement and agree to waive the Department s requirement for the extra 1,300 feet 8 inch pipe. Mr. Dahilig asked DCA Krafft if she was comfortable to respond to Mrs. Phillips testimony to move forward or do we need go to into Executive Session? DCA Krafft mentioned the COC is separate from the waiver. The waiver is solely for the 1,300 foot line requirement of the Department. The 1,300 foot line and COC was all part of the subdivision. The 1,300 foot line is out via the waiver but the COC is a requirement for the subdivision. Mr. Dahilig moved to receive Manager s Report No Discussion and Possible Action on the Denial of Mr. Dennis Esaki s request to Waive the Department of Water s requirement s for Subdivision S , Jack Phillips, TMK: 2-3-7:01, 02 & 03, Kalāheo, Kaua'i, Hawai'i; seconded by Mr. Dill; with no objections; motion carried with 7 ayes. I. NEW BUSINESS 5. Legal Document Discussion and Possible Action on the Waiver of Subdivision Requirements Agreement for Subdivision Application S , Jack Phillips et al., TMK: 2-3-7: 01, 02 & 03, Kalāheo, Kaua'i, Hawai'i Mr. Dahilig moved to approve Legal Document Discussion and Possible Action on the Waiver of Subdivision Requirements Agreement for Subdivision Application S , Jack Phillips et al., TMK: 2-3-7: 01, 02 & 03, Kalāheo, Kaua'i, Hawai'i; seconded by Mr. Dill; with no objections; motion carried with 7 ayes. D. MEETING MINUTES Review and approval of: Regular Board Meeting October 27, 2017 Mr. Dahilig moved to approve the Regular Board Meeting minutes of October 27, 2017; seconded by Mr. Canute; with no objections; motion carried with 7 ayes. Review and approval of: Executive Session October 27, 2017 Mr. Dahilig moved to approve the Executive Session minutes of October 27, 2017 seconded by Mr. Canute; with no objections; motion carried with 7 ayes. E. CORRESPONDENCE/ANNOUNCEMENTS None. F. BOARD COMMITTEE REPORTS Mr. Dahilig will coordinate a Rules Committee meeting on the Tenant/Landlord issues. I. NEW BUSINESS (cont d) Regular Meeting: Wednesday, November 22, Page 4 of 16 Page 10

11 1. Manager s Report No Discussion and Receipt of the Department of Water s Draft Audit Financial Statements and Independent Auditor s Report by Accuity, Inc. for FY BACKGROUND: Waterworks Controller, Ms. Yano introduced Accuity, LLP consultants Mr. Donn Nakamura and Mr. Matthew Oda who presented the Department of Water s Draft Audit Financial Statements and Independent Auditor s Report for FY There are open items that were received from the Employees Retirement System (ERS) yesterday which will be worked in completing the draft. The disclosures and footnotes will be updated. Mr. Nakamura went over the Scope of Services, Management s Discussion and Analysis over the past year and the Financial Statement Highlights from the PowerPoint presentation. Draft Financial Statement (page 11) Change in Net Position increased by $4.4M in FY 2017 to $191M compared to $10.7M increased in The smaller increase in 2017 was due to a $3.4M decrease in contributions and $2.3M increase in operating expenses was related to salaries and wages and employee benefits compared to FY Statements of Cash Flows (pages 12 & 13) Department cash inflows and outflows throughout the year and were reconciled to the ending cash balance for the year. Notes to Financial Statements (page 14) Additional information on significant areas of the financial statements. New Accounting Pronouncement/Governmental Accounting Standards Board (GASB) Statement No. 75 (pages 17-19) Related to post-employment benefits plans. There is a liability for Other Post- Employment Benefits (OPEB) related to pensions that will result in a larger liability on the balance sheet. This will not affect the cash flows and out flows related to payments or other post-employment plans. The GASB says there should be a greater recognition obligation on entities in the financial statement on their balance sheets. These entities hold to the employees that earned through their service period which will be effective for FY Mr. Nakamura will be working with Ms. Yano and Employer Union Health Benefits Trust Fund (EUTF) to make sure it is properly implemented. Notes to Financial Statement (page 29-36) Some of the narrative and highlighted information will be updated and provided to management (pages 33-35). Report of Independent Auditors related on Internal Control of Financial Reporting (page 47 & 49) Relates to Information Technology General Control Deficiencies (Significant Deficiency) which will be covered by Mr. Oda s presentation. DISCUSSION: Mr. Tabata asked what was the biggest influence on decrease cash flow (page 12-13)? Mr. Oda said it was based on the Department s investment purchases. Regarding cash flows from investing activities (page 12), it was broken down by investment purchases. There were $51.6M fewer sales last year and $34.6M cash inflow from liquidating compared to last year. Mr. Nakamura added the decrease was not a bad thing because it resulted in an increase in investments. The decrease was not due to an excess of expenses. Regular Meeting: Wednesday, November 22, Page 5 of 16 Page 11

12 PowerPoint presentation (page 3) The consultants are required to communicate to the Department who are in charge of governance. Required Communications (page 4) The tables represented on the left column are what the consultants are required to communicate; the right column are the Applications and how it affects the Department of Water (DOW). Some of the items were not applicable in the report. The consultants are required to provide the fairness of the DOW s financial statements and reported a clean or unmodified opinion on the financials. The scope and the timing of the audit was communicated in a June 2017 contract. There were no significant accounting policies or changes to County policies (which had no changes this year). GASB 75 for FY 2018 will effect the reporting of OPEB liability. Management judgments and accounting estimates (page 5) The right column are more difficult and subjective judgments and estimates: 1) Allowance for uncollectible receivables, 2) Revenue recognized related to unbilled accounts, 3) Depreciation and useful life of capital assets, and 4) Calculation of net pension benefits, OPEB and accrued workers compensation liabilities. The DOW s estimates were reasonable and fair. Audit adjustments (page 5) Required to disclose audit adjustments and uncorrected misstatements noted during the audit. There were three adjusting journal entries and five reclassifying journal entries. Many of the entries were related to the pension and management that relied on the consultants to look to see which ones were recurring. Reclassification entries were mostly on the financials within the prior year. The consultants look at the way things were presented last year and suggested reclassifications (details on pages 9-11). During the audit there were no uncorrected misstatements; anything that was proposed, management elected to record in the financial statements. There were no significant risks or exposures (page 6). There were no related entity concerns. There were no documents distributed containing the audit financials statements. There were no disagreement with management. There were no consultations made by management. There were no significant accounting matters prior to the consultant s retention (page 7). There were no difficulties encountered in performing the audit. The Manager, Ms. Yano and staff were easy to work with. There was one internal control related to Information Technology (IT) general controls. The previous auditors did not look into IT operations possibly because of the smaller size of IT. The findings were outlined in detail in the Financial Statement Draft in the Board packet (page 49). Mr. Tabata asked how does this affect the financial reporting? Does IT correlate to any issues with the financial statements? Mr. Oda said it does not affect their opinion but prepared to present unmodified on the financial statements. Mr. Dahilig added is the information coming to the audit accurate and can you rely on it with degree certainty. Mr. Canute asked has it added any control deficiencies as a result of the financials so far? Mr. Nakamura explained they were able to test the information in other ways. Mr. Oda said they would have to tailor their testing robustly in certain areas to mitigate any risk or concerns. Mr. Oda referred back to the PowerPoint presentation (page 7) - There were no fraud of illegal acts. Other written communications required (page 8). Regular Meeting: Wednesday, November 22, Page 6 of 16 Page 12

13 1) Management representation letter Will be dated the same date when the audit report is completed, 2) Schedule of findings IT and 3) Engagement letter captured in the contract entered in June Adjusted Journal entries (page 9-11) noted during the audit. Audit Plan for June 30, 2018 Timeline (page 12) Discussion with management to understand any key risks or areas of focus for current year (May 2018). Planning audit approach (July 2018) Year-end financial statement fieldwork & testing (August September 2018) Draft report to management (Mid-October 2018) Issue final report (October 31, 2018 if pension allocation and OPEB valuation (implementation of GASB Statement No. 75) audits are completed by ERS and EUTF auditors in a timely manner). Mr. Nakamura added they are the auditors of the State of Hawai'i and work closely with ERS and EUTF and their auditors. Chair Shiraishi asked management if there is a deadline for the Board to approve the final draft of the audit to be submitted to the County? Ms. Yano provided a draft of the financial statements to the County with all the information needed and will need the final copy of the financial statements. Mr. Dahilig said formally the final draft audit will need Board action. Chair Shiraishi was concerned about the timeline and wanted to know if a Special Meeting is required. Ms. Yano said the financial statement does not have to be approved because it is a formality to transmit the financial statements. Mr. Nakamura commented that other agencies require the Board to approve the draft financial statements. Mr. Dahilig added last year the Board accepted the audited draft the communication as stated. The ERS would not be changed; numbers in the financial statements will not change as indicated by Mr. Nakamura. Mr. Dahilig mentioned it would be helpful for the Department to look at the corrective action items. Chair Shiraishi requested Waterworks Information Technology Officer Mr. Jeff Mendez to be present at the December Board meeting. An IT report will be added to the December agenda on IT procedure issues. Chair Shiraishi noted the December 31 st deadline and also requested to read Standard Operating Procedure 45. Mr. Dahilig commended the Department for a clean audit this year. Ms. Yano thanked and acknowledged two Fiscal Accountants Ms. Fay Tateishi and Ms. Anne Parrott who worked tirelessly for doing a good job with the draft financial audit. Mr. Dahilig moved to accept the Department of Water s Draft Audit Financial Statements and Independent Auditor s Report by Accuity, Inc. for FY in draft form; seconded by Mr. Canute; with no objections, motion carried with 7 ayes. Mr. Dahilig moved to rearrange the Agenda to take up the Staff Reports after Executive Session; seconded by Ms. Tokioka; with no objections. 2. Manager s Report No Discussion and Possible Action to Begin the Construction Procurement Solicitation for Job No. 18-1, Abandon Hanamā'ulu Well No. 1 and Hanamā'ulu Well No. 2 in the amount of $200, Regular Meeting: Wednesday, November 22, Page 7 of 16 Page 13

14 BACKGROUND: Manager Saiki recommended the Board approved $200, of new funding to abandon Hanamā'ulu Well No. 1 and Hanamā'ulu Well No. 2. These are test wells which need to be abandoned so that the Adolescent Treatment Center can be built. DISCUSSION: Chair Shiraishi asked why it was necessary to complete a condemnation process when the wells will be abandoned? He defined condemnation as acquiring property or land. Civil Engineer Mr. Aoki explained that Hanamā'ulu Well No. 1 and No. 2 test sites were not developed. The condemnation are for other well sites for the existing pipeline running down from Hanamā'ulu Road. One of the wells is not in the condemnation area but part of the same large lot. The condemnation is a different item for the existing facilities the Department has. Chair Shiraishi asked if the condemnation is another expense? Mr. Aoki said the condemnation is a different project. Mr. Dill asked if the condemnation is related to the abandonment? Mr. Aoki explained that one of the condemnation site is where one of the wells is located and this well is not being developed by the Department. The Department is working with Grove Farm to change the site that was not part of the original condemnation which is being switched. The condemnation is for the existing facilities along Maalo Road going to the projection well sites. Hanamā'ulu Well No. 1 and No. 2 are not production wells. Mr. Dill asked if the Department will come back to the Board for approvals the condemnation? Mr. Aoki said the condemnation is currently working Grove Farm and does not need Board approval. This would come back to the Board to accept the Grant of Easement. Chair Shiraishi asked if Mr. Aoki could come back with a cleaner report regarding his concern on the condemnation. Mr. Dahilig added there is not enough information on why this is coming up. He also asked for the Department to provide an explanation on the progression of the condemnation which would be helpful to the Board to act on this item. If this was an urgent matter, does the money need to be spent? Mr. Aoki said this matter affects the adolescent treatment center. Mr. Tabata asked if the condemnation could be carved out from this report and to do it separately? The wells need to be abandoned so that there are no water properties on the adolescent treatment center property to proceed with construction. At 9:01 a.m., Mr. Canute exited the meeting. Chair Shiraishi was unclear of what is going to be approved; abandoning the wells or condemnation. Mr. Aoki said the land that is being acquired is not part of the property. One of the wells is part of the condemnation, but at that time the well was unknown if it was good or not. Mr. Tabata asked if this is on the property required for the adolescent treatment center? He suggested doing one well at a time. The well dealing with the adolescent treatment center should have been abandoned previously so the work can be accomplished today. Mr. Dahilig asked Mr. Aoki could come back to the Board in one hour to provide maps and materials to provide the Board more information. Mr. Dahilig deferred Manager s Report No to the end of the meeting to allow Mr. Aoki to provide maps and condemnation information to the Board; seconded by Mr. Tabata; with no objections, motion carried with 6 ayes. Regular Meeting: Wednesday, November 22, Page 8 of 16 Page 14

15 At 9:08 a.m., Mr. Canute re-entered the meeting. 3. Manager s Report No Discussion and Possible Action on Water Plan 2020 Prioritization Methodology and Strategic Implementation BACKGROUND: Chief of Water Resources and Planning Mr. Doi gave a brief overview of Water Plan 2020 Prioritization Methodology and Strategic Implementation. Goals of Water Plan 2020 included: 1) How prioritization was accomplished, 2) Prioritization criteria, 3) Prioritization list and development of island wide improvements. Water Plan 2020 was the latest update of the Department s long-range plan which is used as a road map to provide better service to existing and future customers. This comprehensive plan covers all water systems of the DOW. Goals included insuring reliable future water supply, caring for deteriorating and aging water systems, insuring water quality by meeting state and federal water regulations, increasing customer service, operating water system in a sustainable and financially secured manner. 1) How prioritization was accomplished - Project identification and evaluation identified the needed improvements for the island. CIP prioritization project defined and developed project utilization criteria utilized from similar water systems CIP development. Major criteria used in prioritizing the proposed improvement project included condition assessment, actual condition of the facilities, life expectancy of the facilities, frequency of mainline breaks, age of facility, safety size of pipe to meet fire flow, and other criteria. Policy, Rules and Regulations, Water Systems Standards that identify what the Department should be providing for customer, public health and safety criteria that provides continuous domestic flow and fire suppression flows and pressures. 2) Project prioritization criteria - A large list was generated to see how to improve the water system facilities. The next phase rated each of the projects from 1 to 10 = highest, which that could be weekly breaks or health and safety. Projects are ranked, then are identified which projects were of immediate need, need to do, or can wait, etc. From this procedure, a project listing and development of island wide improvements were done. This phase included more criteria which comprised on what a useful life is remaining and what are the geographic locations of the projects. Cost and time to construct the projects includes whether there is State funding or developer contributions cost share with the Department. The end of report included a Project Summary Report which shows the status of the projects from Water Plan 2020 initiation and status of added projects as of today. DISCUSSION: Mr. Tabata understood the priority of projects set. At a previous Board meeting there was discussion on the Kīlauea water tank system improvements, which had funds that were voted down by the Board. He asked when would projects be presented to the Board to show the island, and what the Department is proposing for improvements to meet all of the criteria. (Example: For this need vs. another part of the island, show how this correlates the priorities set throughout the island.) Mr. Tabata would like to see a graphic of the island on how this project is going to meet this criteria. Chair Shiraishi mentioned when the Kīlauea wells and storage tank was discussed, he asked how the projects were prioritized related to all projects as a whole by looking at the scores in the packet. The total score on the methodology for Kīlauea Well No. 1 and No. 2 is 14. For Kīlauea Tanks No. 1 and No. 2, the total score is 16. Compared to other projects, it did not rate that high. Chair Shiraishi felt the projects were Regular Meeting: Wednesday, November 22, Page 9 of 16 Page 15

16 needed in the pipeline. The concerns Mr. Tabata and Mr. Dahilig had were how the projects prioritized and other projects that have higher scores. Mr. Tabata added it could be the highest score for that system which needed to be conveyed why. Mr. Dahilig was glad there was a scoring system. His concern was that it does not differentiate the funding source; funding is collected for different things. The way that the scoring system is set up is that all money is green but it is not. There needs to be a discipline to follow the scoring system. Some of the things before the Board are not correlating in the first place. Civil Engineer Mr. Hinazumi clarified that Project No. WKK-02 Kīlauea Wells No. 3 and No. 4 has the highest score of 30 points (Page 197) as well as the Storage tank WKK-15. Projects in the original Water Plan 2020 were slated to go into construction in Phase I in 2001 to The prioritization of the projects were per system. Toward the end of Water Plan 2020 all projects were brought together into one comprehensive list which were scored island wide. This was partially to utilize funding differences for Capital Improvement Project funding, Capital Replacement funding and Capital Rehab funding at the time. The other considerations were not to do all of the projects in a specific system, which are shown in all of the prioritizations. All projects have moved into Phase III and toward the tail end of Water Plan Mr. Hinazumi added that all of the decisions were made by the Board and Department to divvy up the projects so there were would be a distribution around the island, not just a focus in the Kīlauea area. Ms. Tokioka asked if the projects have been re-prioritized from the original prioritization? Over the years, things may have changed. Mr. Hinazumi said the prior prioritization was updated in 2004 and 2007 which were conditional assessments. This was discussed with Operations on what their operational needs were and where they saw major breakdowns and cost factors that drove up the operational cost for the Department. The reason there were no updates since 2007, was due to the recession that caused delays. The next long range plan will take up these considerations to be reprioritized for the future. Ms. Tokioka asked if there is a plan to reprioritize in the interim? Ms. Tokioka asked if anything could be changed with unanticipated priorities? Mr. Hinazumi said currently the recommendation is projects are in design and construction which will carry the Department out the next 5 to 7 years. It will capture all of the needs currently and in line with the next long range plan. The Paua Valley Tank was rated low on the priority list because of immediate needs and rose to the top, moving into design and construction. They are looking at conditional assessments and working closely with the Operations Division. Chair Shiraishi commented this is useful and addresses the concerns of the Board. Previously, he did not like that the Board did not act on the Kīlauea well and storage tanks based on the questions on prioritization and feels the Department needs those projects. He hoped that the Board would not use the prioritization issue to micro manage what the Department has in the pipeline and to see the project to through. The Kīlauea well and storage tanks are not on the agenda but will be brought up at the next Board meeting. A lot of the Chair s comments were directed to some of Mr. Dahilig s concerns which was not an issue of micro managing but a fiduciary responsibility to ensure that if the Board is obligating the County and the DOW to spend money, then the funds that are being used appropriately on what the funds are being collected for. Mr. Dahilig s main concern was that the Kīlauea tanks were presented as a health and safety issue but was being paid by Facilities Reserve Charge (FRC) revenues. The FRC being used for this will be recouped based on the amount of potential future development and future payments made into the system. It is not the lack of trusting the Department to make an appropriate judgment on a health and safety issue. The Board would be approving a fund blend or for a particular project and should represent on what the Board is asking the rate payers and FRC payers to follow through. He has no objections to the Regular Meeting: Wednesday, November 22, Page 10 of 16 Page 16

17 construction of that system. The concern is how we are paying for both projects and the amount of FRC attributed as presented based on the potential future development and future payment in the Kīlauea area. This area is not due for a large expansion and Mr. Dahilig would like to see the fund blends directly attributed to what is being presented a health and safety matter. Manager Saiki reminded the Board four years ago, FRC was determined that the entire County was to be looked at as one benefit. The benefit of doing this is when there are smaller systems that may or may not increase, there is a need to expand the system, you can collect FRC from Līhu'e to Waimea to allow the Department to increase capacity in a smaller system. Mr. Tabata said in general, the presentation did not have explanations that was in the Board packet. The completed jobs should not be shown on the summary. Mr. Hinazumi understood Mr. Tabata s comment and would do a better job. Chair Shiraishi commented that the priority list is good. Receive for the Record was Manager s Report No Discussion and Possible Action on Water Plan 2020 Prioritization Methodology and Strategic Implementation, with no action needed. 4. Election of Officers for 2018 Mr. Dahilig moved nominate Ms. Beth Tokioka as Chair; seconded by Mr. Canute; with no objections, motion carried with 7 ayes. Ms. Tokioka moved to nominate Mr. Shiraishi as Vice Chair; seconded by Ms. Ho; with no objections, motion carried with 7 ayes. Mr. Tabata moved to nominate Mr. Tom Canute as Secretary; seconded by Mr. Dill; with no objections, motion carried with 7 ayes. Mr. Dill suggested for the future that before a Board member can graduate to the Chair position, they serve as Secretary and/or Vice Chair. The Board should try to set up a slate in the future. Ms. Tokioka moved to go into Executive Session at 9:36 a.m. for Executive Session Item K, No. 3. and Item K, No. 2; seconded by Mr. Tabata; motion was unanimous. K. EXECUTIVE SESSION 3. Pursuant to Hawai`i Revised Statutes 92-4 and 92-5 (a)(4), the purpose of this Executive Session is for the Board to consult with the Board s attorney on questions and issues pertaining to the Board s powers, duties, privileges, immunities, and liabilities as they may relate to contractual agreements concerning the Waiahi Surface Water Treatment Plant, the potential construction of the Kapaia Cane Haul Road 18 inch Main project, and required disclosures, including but not limited those required under Chapters 6E, 171, and 343, Hawaii Revised Statutes and Ka Paakai o Ka Aina v. Land Use Commission, 94 Haw. 31 (2000) as relates to those projects. Ms. Shawn Shimabukuro, Grove Farm Company provided her testimony on Executive Session Item K, No. 3. Ms. Shimabukuro commented that this agenda item is regarding a cost share between the Board of Water Supply and Grove Farm Company. Grove Farm is willing to assist and able to answer any questions. The Regular Meeting: Wednesday, November 22, Page 11 of 16 Page 17

18 design was done by Grove Farm Company through Kodani and Associates on the plans for the 18 inch line. Grove Farm is going through the process looking at exemptions in terms of an Environmental Assessment (EA) using government funds. Grove Farm was under an impression that an EA is required but because there are exemptions, an EA may not be required and could move forward. Ms. Shimabukuro understood the urgency to encumber funds from the legislature before the end of June 30, Pursuant to Hawai`i Revised Statutes 92-4 and 92-5 (a) (2) and (4), the purpose of this Executive Session is for the Board to evaluate the performance of the Manager and Chief Engineer, where consideration of matters affecting privacy will be involved; provided that if the individual concerned requests an open meeting, an open meeting shall be held, and to consult with its attorney on issues pertaining to the Board s powers, duties, privileges, immunities, and/or liabilities as they may relate to this agenda item a. Annual Evaluation of the Department of Water s Manager and Chief Engineer from December 18, 2016 to December 17, 2017 At 10:11 a.m., Mr. Dahilig exited the meeting. A Special Meeting will be scheduled on Monday, December 4, 2017, 9:00 a.m. At 10:53 a.m., Chair Shiraishi called the Regular Meeting back to order. I. NEW BUSINESS (cont d) 2. Manager s Report No Discussion and Possible Action to Begin the Construction Procurement Solicitation for Job No. 18-1, Abandon Hanamā'ulu Well No. 1 and Hanamā'ulu Well No. 2 in the amount of $200, Presentation Slides 1, 2, & 3 were Received for the Record. DISCUSSION: Mr. Aoki continued his presentation by showing Resolution No. 6 on Slide 1 that started the condemnation process and was signed by the Board Chair. Slide 2 was the Stipulation Agreement and Order that came from the condemnation process. Mr. Tabata asked if the condemnation was to be able to get to this well if it was going to be a production well? Since it is not, do we need this? Mr. Aoki commented it would be for Hanamā'ulu Well No. 1. Slide 3 is the map of the condemnation areas. Off of Maalo Road there are tank sites and two well sites. In the Stipulation Order, the landowner will be giving the Department the sites. The green line is the easement by the pipeline which goes down to the site which will be obtained through a subdivision and the easement for the pipeline, the location of the adolescent treatment center, intersection of Maalo Road and Kapaia Road. At the other side of the adolescent treatment center is Hanamā'ulu Well No. 1 that was not producing enough water. The original order was to subdivide a site by the well. The lot is not needed that was originally ordered and the site where the well is not needed. When the pipeline was installed, it was a control valve station. The original stipulation did not come for this location, it was installed at a different location that was originally planned. In Mr. Aoki s discussion with Grove Farm, the Department is trying to mutually agree that we don t need this site but eventually want to get the land rights to the control valve Regular Meeting: Wednesday, November 22, Page 12 of 16 Page 18

19 station. Grove Farm is agreeable to exchange this site and instead of subdividing the site above would be to subdivide at the control valve station. The site of the control valve station is half the size more than the other site which is giving up more land (refer to map on the Slide 3). If the sites are switched and not own the site, Grove Farm does not want the well on their land and they request the Department abandon the well and at the same time abandon Hanamā'ulu Well No. 2 which is on the Grove Farm land. Mr. Aoki recommended that the Department should abandon the well. If it was a good well and developed the well site, the Department would request to have rights to the well and easement for the connecting pipeline. It is the Department s responsibility to abandon both Hanamā'ulu Well No. 1 and Hanamā'ulu Well No. 2. If the Department decides to not abandon either of the wells, go through with the stipulation and subdivide to use it for the well, they would have to address Grove Farm later. Mr. Tabata moved to approve Manager s Report No to Begin the Construction Procurement Solicitation for Job No. 18-1, Abandon Hanamā'ulu Well No. 1 and Hanamā'ulu Well No. 2 in the amount of $200,000.00, without reference to condemnation or stipulation; seconded by Mr. Dill; with no objections motion carried with 6 ayes. J. STAFF REPORTS MONTHLY 1. Discussion and Receipt of the Kaua i County Water Department s Statement of Revenues and Expenditures a. September Monthly Summary Budget DISCUSSION: Chair Shiraishi asked if Mr. Dill s changes were made that he requested from the last report? Waterworks Controller Ms. Yano did not make any changes. She referred to the top portion of page 246 which was a condensed summary of page 248, Monthly Budget Summary vs. Actual. Mr. Dill s request will be worked on when the Project Management (PM) software is in place and worked on by the CM Division. Ms. Yano said she is relying on the PM software to generate the information. Mr. Moises provided information on Mr. Dill was asking for. When the annual budget is approved, Mr. Moises gives the Notice to Proceed (NTP) on January 1 st. He mentioned to start the Year-to-Date Variance in January and not July 1 st so that the Department not 6 months behind based on the month of the fiscal year of the NTP. Not every project has a NTP on the 1 st day of the fiscal year. Mr. Dill requested to see the projections of expenditures of projects in the month so that there is a better chance of the budget expenses matching up. Mr. Moises added this could be done in the financial budget. It has to be programed and cannot be based on July 1 st ; it has to be made in different periods from the start of the year. NTP and variance is in the annual budget. Mr. Dill commented the money is spread evenly and we should actually anticipate where the expenses will occur. For a $2M project, the Department would save $1M between from January to June or by taking $1M divided by 6 months would be close. Mr. Dill said he was asking beyond what Mr. Moises was explaining. The same amount of money could be spent on every project on what the extra work would be on actual estimates and on how to spend the money. Mr. Moises added the BAB graph (page 281) has a percentage formula based on historical payments on projects. Mr. Dill mentioned at Department of Transportation, they base activity and cash flow consumption on the construction schedule and what to expect to pay every month. CM has a construction schedule and line items which is a good first step. Regular Meeting: Wednesday, November 22, Page 13 of 16 Page 19

20 Mr. Moises has the information needed and asked if Fiscal could program through June to be able to produce a report of what Mr. Dill needs. Mr. Tabata asked once the funds are encumbered, you need to show the ability to pay. Cash flow is not an issue with the Department. If funds are encumbered, the project is moving because it is encumbered to produce a cash flow report. Mr. Dill referred to line item columns Total Budget of $25.7M on page 246 and Expensed $12.4M. Mr. Tabata suggested that line should be called Capital Project Encumbrances. Ms. Yano explained that there is a difference between Operating Expenses and Capital Projects and would need the encumbrance method on Capital Projects that Mr. Dill is requesting. This would not tell Mr. Dill if projects are moving. Mr. Tabata added if projects are moving, it would be in the Manager s Report. Mr. Moises referred to the Variance on page the anticipated start date would be up until October 31 st to January and should now have an anticipated variance. The limiting factor is the application of the software. The PM application software pulled data but does not push for reporting. A report could be produced from the new application in Great Plains. Mr. Dill added the report shows a monthly original budget and revised budget but it looks like it is taking 12 months to average which could be input manually to vary anticipated expenses. Information Technology Specialist Ms. Nadatani-Mendez commented that a budget amount for the whole year is divided by 12 months. If it is known when the Department is going to spend the money, it could be pushed to January of next year by divvying it up then. Mr. Moises said if $2M is put into a project to start in month 11, the variance on 12 months would say $2M when looking for the actual cash flow (performance vs. expenses). For a projected expense, it would show month 11 and month 12 but would not show $2M. Board received 6 members 2. Discussion and Receipt of the Report by the Public Relations Specialist on Public Relations Activities BACKGROUND: Information Specialist Mr. Kaohelaulii highlighted the Management of Project Wet Hawai'i Network Public Relations recently completed a two-day certification workshop on the Big Island for educators to expand the network. This project was held in conjunction with the State conference and the workshop reached Lanai. Updates received from the network of facilitators from O ahu and Moloka i have been proactive. Project Wet will be active statewide within this fiscal year. A big request was made to do a Project Wet Make a Splash on Lāna i in May. O ahu has six facilitators that represent different agencies but logistically it is difficult at this time to coordinate. A smaller event this spring will be planned on Moloka i. Board received 6 members 3. Discussion and Receipt of the Chief of Operation s Summary Report on Operational Activities Regular Meeting: Wednesday, November 22, Page 14 of 16 Page 20

21 BACKGROUND: Chief of Operations Mr. Reyna highlighted the following - Operation s non-cdl drivers were sent to the Department of Human Resources Driver Improvement Program classes. DISCUSSION: Mr. Tabata thanked Mr. Reyna for his help at Pualani Stream. Operations assisted Public Works in fixing the Department s water line due to a storm drain collapse. Board received 6 members 4. Discussion and Receipt of the Manager and Chief Engineer s Monthly Update Regarding Activities of Note of the DOW BACKGROUND: Manager Saiki highlighted the following: 1. Personnel Matters - Procurement Specialist Position Description was revised and is being reviewed by DHR. 2. Customer Care & Billing (CC&B) System was updated Monday. There were minor glitches that are being fixed. The breakdown of Tier 1 and Tier 2 was not on the back of the bill; it only indicated the cost. Board received 6 members a. Report of the BAB pay down as of September 2017 Board received 6 members L. TOPICS FOR NEXT WATER BOARD MEETING (December 2017) 1. Information Technology (IT) Audit Action Items to be addressed. (Refer to page 178 & 179 in Board packet for Recommendations by the Auditors.) Department to update procedures in SOP 45. Rules Committee meeting will be scheduled to discuss: 2. Manager s Report No (Update) - Discussion and Possible Action on Part 2 Rules and Regulation for Water Service Connection to address Landlord and/or Property Managers and Tenant issues a. Section I Definitions b. Section III Conservation Measures and Interruption of Water Supply c. Section IV Elevation Agreement, Pressure Controls d. Section V Application for Water Service and Service Connection M. TOPICS FOR FUTURE WATER BOARD MEETINGS 1. Discussion and Possible Action on Proposed Board Policy for Delegating Routine Actions from the Water Board to the Department of Water s Manager and Chief Engineer regarding Right of Entry 2. Workshop presentation regarding the Long Range Plan of the Department of Water s former Administration Building 3. Discussion and Possible Action on Utility Agreement No between the State of Hawai i Department of Transportation and the Board of Water Supply, County of Kaua i for the upcoming Hanapēpē River Bridge, Kaumuali i Highway, Route 50, HI STP SR50 (1) Project, Hanapēpē, Kaua i Hawai i Water System Improvements Regular Meeting: Wednesday, November 22, Page 15 of 16 Page 21

22 4. Discussion and Possible Action on the Department of Water s Standard Operations Procedures as it relates to the Board of Water s Rules and Regulation 5. Department of Water Employees of the Year N. UPCOMING EVENTS 1. Lights on Rice Street Parade (Friday, December 1, 2017) 2. Annual Meeting (Friday, December 8, 2017) 3. AWWA Conference (Las Vegas, Nevada, June 11 14, 2018) 4. Make a Splash, Project Wet (September 20, 2018) O. NEXT WATER BOARD MEETING 1. Monday, December 4, 2017, 9:00 a.m. Special Board Meeting 2. Friday, December 22, 2017, 10:00 a.m. 3. Friday, January 28, 2018, 10:00 a.m. 4. Friday, February 23, 2018, 10:00 a.m. 5. Friday, March 23, 2018, 10:00 a.m. P. ADJOURNMENT Mr. Canute moved to adjourn the Regular Board meeting at 11:19 p.m., seconded by Ms. Ho; with no objections, motion carried with 6 ayes. Respectfully submitted, Approved, Edith Ignacio Neumiller Commission Support Clerk Beth Tokioka Secretary Board of Water Supply Regular Meeting: Wednesday, November 22, Page 16 of 16 Page 22

23 SPECIAL BOARD MEETING MINUTES BOARD OF WATER SUPPLY Monday, December 4, 2017 The Board of Water, County of Kaua'i, met in a special meeting at Department of Water s Board Room in Līhu'e on Monday, December 4, Chair Sherman Shiraishi called the meeting to order at 9:02 a.m. BOARD: Mr. Sherman Shiraishi, Board Chair Ms. Laurie Ho Mr. Lyle Tabata Mr. Michael Dahilig Ms. Beth Tokioka Mr. Thomas Canute Mr. Lawrence Dill (entered 9:16 a.m.) Quorum was achieved with 6 members present. STAFF: Mr. Kirk Saiki Mr. Valentino Reyna Ms. MJ Akuna Mr. Chris Nakamura Mr. Carl Arume Mr. Ryan Smith Deputy County Attorney Mahealani Krafft GUESTS: Ms. Janine Rapozo, Director, Department of Human Resources Mr. Hall Parrott, Private Citizen C. ACCEPTANCE OF THE AGENDA The Agenda was approved as circulated with no objections. D. NEW BUSINESS 1. Discussion and Possible Action on selecting an interim Manager and Chief Engineer and the recruitment of a Manager and Chief Engineer, and the development of a succession plan Mr. Dahilig moved to go into Executive Session at 9:05 a.m. for the Board to comply with DCA Krafft s legal advice with respect to the Charter and employer statue requirements; seconded by Ms. Tokioka; with no objections, motion was unanimous with 6 members. E. EXECUTIVE SESSION Pursuant to Hawai i Revised Statutes 92-4 and 92-5(a)(2) and (4), the purpose of this Executive Session is for the Board to consider the hiring, evaluation, dismissal, or discipline of the Manager and Chief Engineer or of charges brought against the officer or employee, where consideration of matters affecting privacy will be involved; provided that if the individual concerned requests an open meeting, an open meeting shall be held and to consult with the Board's attorney on questions and issues pertaining to the Board's powers, duties, privileges, immunities, and liabilities as they may relate to this agenda item. At 10:16 a.m., Chair Shiraishi called the meeting back to order with no public testimony. F. RECESS Mr. Tokioka moved to recess the Special Board meeting on Friday, December 8, 2017 at 12 noon; seconded by Mr. Canute; with no objections; motion was unanimous with 7 members. Respectfully submitted, Approved, Edith Ignacio Neumiller Beth Tokioka Commission Support Clerk Secretary Board of Water Supply Special Meeting: Monday, December 4, Page 1 of 1 Page 23

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25 DEPARTMENT OF WATER County of Kaua'i Water has no Substitute Conserve It! Board of Water Supply Officers and Committee Members for 2018 (Effective January 1, 2018) Current Officers Board of Water Supply: 2017 Officers: Chair Sherman Shiraishi Chair: Beth Tokioka Vice-Chair Laurie Ho Vice-Chair: Sherman Shiraishi Secretary Beth Tokioka Secretary: Tom Canute Rules Committee: Chair Michael Dahilig Chair: Michael Dahilig Member Lyle Tabata Member: Lyle Tabata Member Sherman Shiraishi Member: Laurie Ho Finance Committee: Chair Larry Dill Chair: Larry Dill Member Beth Tokioka Member: Beth Tokioka Member Clyde Nakaya Member: Thomas Canute Audit Committee: Chair: Lyle Tabata Committee of the Whole: Member: Member: Beth Tokioka Thomas Canute All Board Members Chair: Beth Tokioka 4398 Pua Loke Street Līhu'e, HI Phone: Fax: Operations Fax: Page 25

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93 198DEPARTMENT OF WATER County of Kaua i Water has no Substitute Conserve It! MANAGER S REPORT No (Update) December 22, 2017 Re: Discussion and Possible Action on the 5 th Amendment for Contract No. 440, Job No WP2020 #WKK-15, Kīlauea, Kaua i, Hawai'i, 1.0 Million Gallon Storage Tank and Connecting Pipeline with Kodani & Associates Engineer, LLC for the additional design funding of $25, RECOMMENDATION: It is recommended that the Board approve a total of $25, in additional design funds to be expended for the Kilauea 1.0 MG Storage Tank and Connecting Pipeline Project. FUNDING: Account (BAB) Account No , No , No Certified Amount for Contract No. 440 $346, Contract: Kodani & Associates Engineers, LLC executed 10/12/04; NTP 12/13/04, time extension for 150 days; site selection report and documents to obtain right of entry $12, Amendment No. 1; executed 4/7/10; NTP 6/1/10 time extension for 210 days, feasibility report for selected site, prepare EA if site is acceptable $68, Amendment No. 2; execution 12/20/11; NTP 1/2/12 time extension for 365 days, provide technical information required for projects design, permitting and construction of tank, and drill and test well at site. $202, Amendment No. 3; executed 2/10/14; time extension for additional 120 days, revise grading sheets due to removing drill and testing of well from scope (4/18/14) $6, Amendment No. 4 executed 4/28/16; time extension for 270 days, provide additional reinforced concrete tank design 53, Total Contract Amount $342, Additional Funds Requested for Amendment No. 5 of contract Build America Bond (BAB) Fund Account no $25, Total Additional Funds Requested $25, Contingency available $3, New Contract Amount for Kilauea 1.0 MG Storage Tank and Connecting Pipeline Project $367, BACKGROUND: The Board requested at the August 21, 2017 Board meeting that the Department provide justification for project. For justification, the Department presented Manager s Report No at the November 22, 2017 Board meeting that reported on the Water Plan 2020 Project Prioritization Methodology and Strategic 4398 Pua Loke Street Līhu'e, HI Phone: Fax: Operations Fax: Page 93

94 Manager s Report No December 22, 2017 Page 2 of 3 Implementation and Water Plan 2020 project status (attached for reference). Manager s Report shows that the proposed Kilauea tank has high scores for the criteria used in determining priority. The Kīlauea-Waipake-Kalihiwai water system is considered one of the largest in terms of total service area. The system stretches from Waipake Subdivision in east Kilauea nearly seven miles to the Kalihiwai River. Beside the residential community of Kīlauea Town, the majority of the service area consists of agricultural subdivisions that consist of a mixture of agricultural and residential uses. Kīlauea includes the highest percentage of agricultural users on the island and approximately 33% of the water sales in the area qualify for DOW agricultural rates. The Kīlauea-Waipake-Kalihiwai Water system is supplied by two well sources; one production well and one standby well, as required by the Water System Standards, located on the mauka side of Kuhio Highway in Kilauea. These wells provide supply to two (2) 0.25 MG storage tanks at the same location, four (4) 0.10 MG storage tanks at Waipake, Puu Pane, Kalihiwai & Namahana, respectively, and consumers. Water distribution from the Kilauea wells and storage tank site is provided through a single transmission main before splitting off to provide service through a water distribution network to the three 0.10 MG tanks noted above and consumers. The two (2) Kilauea 0.25 MG tanks and Puu Pane 0.1 MG tank service share the same overflow elevation of 466 ft. and service the majority of the agricultural and residential units in the Kilauea-Waipake-Kalihiwai system. The Waipake 0.10 MG tank provides service only to the agricultural/residential lots of the Waipake subdivision, both mauka and makai of Kuhio Highway. The Kalihiwai 0.10 MG tank provides service only to the high elevation agricultural/residential lots (approximately 2/3) within the Kalihiwai Ridge Subdivision. (Reference attached map.) The Department has utilized and continues to utilize Water Plan 2020 to prioritize and implement its capital infrastructure improvement projects. Due to the storage deficiency during the fire flow and maximum day demand conditions, the Construct Kilauea 466 Tank project had been slated for execution during the first phase of the capital infrastructure improvement implementation. As no other storage in the area have been developed, the need remains today. The factors that have been identified within Water Plan 2020 and keep this project high on the priority list are the storage deficiency need, the largest percentage of agriculture users on the island (pursuant to Water Plan 2020, 33% of water sales in the area qualify for DOW agricultural rates), additional dwelling unit construction, development of vacant lands and the need to provide system hardening and redundancy as the current supply to this water system is reliant upon a single transmission main from its only source and major storage area to the water system distribution network and consumers. The construction cost of the project is estimated to be in the $5 million range. The storage facilities for the Kīlauea area are not adequate. The Department is currently limiting water service to lots in the area until additional storage facilities (and additional source facilities) are provided. The DOW is proposing to construct a new 1.0 MG storage tank on the same site as an existing 0.1 MG storage tank. The 0.1 MG tank will be demolished and replaced with the new 1.0 MG storage tank. The addition of the proposed 1.0 MG tank will provide adequate storage facilities for the area. The Environmental Assessment (EA) for the project also required the following permits to be completed; Use, Class IV zoning and Special permits. The design consultant, Kodani & Associates Engineers, LLC did not know or anticipate the need to complete these permits and did not include the cost to complete Page 94

95 Manager s Report No December 22, 2017 Page 3 of 3 these permits for the design. The consultant has requested additional funds to complete these permits required from the EA. The Department has reviewed the request and documentation from Kodani & Associates Engineers, LLC and is satisfied that the consultant did not include the cost to complete the Use, Class IV zoning and Special permits in their contract proposal amount for the contract. The NPDES permit required for the project required a flat $ application fee. The application fee was determined to not be in the contract scope of work. The consultant submitted an invoice for the fee as a reimbursable expense which the Department paid. In oversight by the Department and the consultant, the contract was not amended at that time to include the NPDES application fee in the contract. The Department realized later that the contract should be amended to include the application fee. The NPDES permit application fee is included in the requested $25, in additional funds being requested and will be included in the scope of work to make the contract correct. The Department has found the requested amount to complete the Use, Class IV zoning and Special permits reasonable and recommend approval of the additional funds. The contract time will also be extended with Contract Amendment No. 5 to complete the permits and will be addressed in a Report to Manager/Manager s Update. OPTIONS: Option 1: Pro: Con: Option 2: Pro: Con: Approve the additional funding to complete the Use, Class IV and Special permits. Approving the expenditure of additional design funds will allow the DOW to complete the required Use, Class IV and Special permits. None. Do not approve the additional funding to complete the Use, Class IV and Special permits. None. Not completing the Use, Class IV and Special permits may prevent the project from being constructed. Respectfully submitted, Funding reviewed: Keith Aoki, P.E. Engineering Division Marites Yano Waterworks Controller CONCURRED: Kirk Saiki, P.E. Manager and Chief Engineer KA/ein Attachments: Hydraulic Profile for Kīlauea Schematic Hydraulic Profile for Kilauea Manager s Report No , Narrative Project List & Status Manager s Report No , Project List & Status Mgrrp/December /Discussion and Possible Action on the 5 th Amendment for Contract No. 440, Job No WP2020 #WKK-15, Kīlauea, Kaua i, Hawai'i, 1.0 Million Gallon Storage Tank and Connecting Pipeline with Kodani & Associates Engineer, LLC for the additional design funding of $25, (Update) ( , , ):ein Page 95

96 Page 96 LIMITS OF KILAUEA SERVICE AREA LIMITS OF KILAUEA SERVICE AREA

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98 DEPARTMENT OF WATER County of Kaua i Water has no Substitute Conserve It! MANAGER S REPORT No November 22, 2017 Re: Discussion and Possible on Water Plan 2020 Project Prioritization Methodology and Strategic Implementation RECOMMENDATION: As requested by the Board, the following is a synopsis of the methodology of Water Plan 2020 utilized to formulate and update its strategic implementation plan to meet the needs of the Department and people of Kauai. FUNDING: N/A. BACKGROUND: The Department of Water (DOW) initiated and completed its long-range plan, Water Plan 2020, between mid-1999 and 2001 to formulate and solidify a vision to guide its planning and strategic implementation direction. Water Plan 2020 is a comprehensive plan that covers all of the water systems of the DOW, from Haena to Kekaha, addressing issues of its aging and deteriorating infrastructure, financial needs and roadmap to operating its water systems in a sustainable fashion to ensure reliability for Kauai s communities into the future. A culmination of planning efforts, spanning from the inception of the DOW in 1961 to the formulation of Water Plan 2020 were utilized, as appropriate, and incorporated into this longrange plan. These plans include: Water System Standards, State of Hawaii, 1985 Water System Plan, R.M. Towill, 1999 A General Plan for Domestic Water/Island of Kauai, Division of Water and Land Development, Department of Land and Natural Resources, State of Hawaii, 1972 Kauai General Plan, County of Kauai, 2000 While land use policies are established and governed by the County of Kauai, in accordance with Kauai General Plan (2000), the DOW coordinates development efforts with the County and private developers seeking to connect to DOW operated water systems. Water Plan 2020 utilized population and land use projection developed as part of the Kauai General Plan (2000) as the basis for its water demand forecasting for supply, storage and fire protection needs. The demand projection provided island-wide water use through 2020 and 2050 and was a key component for identification of future capital improvement projects and the water long-range planning effort. The planning approach and methodology for Water Plan 2020 was guided by the existing water system policies and an analysis of the appropriate level of service to be provided by the water system operation to the people of Kauai Pua Loke Street Līhu'e, HI Phone: Fax: Operations Fax: Page 98

99 Manager s Report No November 22, 2017 Page 2 of 6 Water system polices are established by the Board of Water Supply and guide the development and financing of the water system infrastructure required to provide water service throughout the service area. DOW water system policies are described and documented in the Rules and Regulations, Department of Water, County of Kauai, (effective November 20, 1976 and as amended). Water system policies also include Board policies that are established from time to time by the Board. Additionally, administrative (engineering based) procedures of the Department, and the Water System Standards (1985 and as amended) guide the actions of the DOW. Level of Service (LOS) standards incorporate both policy considerations as well as engineering standards and planning criteria to guide the Department in evaluation and development of new facilities and improvements to existing facilities. DOW planning and design standards are contained in the Water System Standards, State of Hawaii, adopted in 1985 and as amended. These standards provide specific engineering criteria for the planning and design for each of the major water suppliers on the islands of Kauai, Oahu, Maui and Hawaii. Prior to the establishment of these standards, the DOW planned and designed around the standards presented in A General Plan for Domestic Water/Island of Kauai, 1972, prepared by the State of Hawaii Department of Land and Natural Resources and The Standard Specifications For Waterworks Construction (1963 and as amended) and the requirements of the State Department of Health. Due to the integral link between Water Plan 2020 and policy considerations of the Board of Water Supply, Board consultation and direction was coordinated at key milestones throughout the process. Additionally, in an effort to provide transparency as well as to ensure the plan encompassed the needs of the people of Kauai, an extensive public involvement process was implemented, consisting of several rounds of public meetings and community outreach. Four major tasks were identified in the development of Water Plan 2020: System Documentation: Collect and analyze the water system planning, engineering and water quality data; identify service area characteristics, polices and level of service requirements, and the develop population projections, and the associated water demands for each water system. System Analysis: Evaluate the water system components, including the supply, storage and distribution systems. Review the system water quality conditions and future requirements and document the system operations and maintenance. Capital Improvement Program: Develop the capital improvement, rehabilitation, and replacement plan. Create a 20-year financial plan and a 5-year rate study that focuses on the implementation of Phase I of Water Plan Identification of Capital Improvements required by the DOW water systems was a major focus of Water Plan Improvements were identified through the planning approach by consideration of level of service requirements and the source, storage and transmission evaluation criteria. While level of service considerations provided information about the current and future water system deficiencies, additional considerations to those improvements required to maintain the existing aging water system infrastructure became a significant factor. To address the water system infrastructure requirements for both new facilities and renovation and replacement of existing facilities, Water Plan 2020 defined an island-wide Capital Improvements Program, which entailed: Page 99

100 Manager s Report No November 22, 2017 Page 3 of 6 Project Identification and Evaluation Project Prioritization within each Water System, and Island-Wide Improvement Program Prioritization and Scheduling Identification of capital improvement projects began with the water system planning evaluation based on level of service for each water system s source, storage and transmission current capacity and future capacity need. Additionally, input of the actual water system condition were obtained primarily from the DOW s Operations Division, based on the following criteria: Pipelines with frequent failures or leaking pipe joints Poor facility access due to flooding, erosion or deterioration of roadway conditions Safety Distribution mains traversing cross county The transmission and distribution systems were evaluated using a hydraulic model to determine the current and future capacity to provide for peak hour and fire suppression flows and pressures. Based on these analyses, proposed system improvement alternatives were developed and compiled for each system. Additionally, the transmission and distribution networks were analyzed for the following conditions: Pipelines installed prior to 1960 (40+ years of age) Galvanized steel pipes (most are old, in poor conditions and also have limited capacity) Polyvinyl Chloride (PVC) pipe installed prior to 1973 (most are small diameter and thin walled) Areas with dead-end mains Pipeline diameters below 6-inch The resulting analysis identified additional proposed projects to be included in each of the water systems. The result of the project identification efforts was a list of needed projects for each water system. The list was evaluated to classify each project by category and determine how well the project would address the need for improvement within the water system, as well as to service as a basis for prioritization of projects. Additional classifications were developed to address certain funding restrictions for certain types of projects. The project evaluation consisted of developing: Evaluation criteria for prioritizing the projects and the overall program Project type classifications: o CIP: Capital Improvement Project o CRP: Capital Rehabilitation Project in kind replacement o CRPL: Capital Replacement Project replace with additional capacity Prioritized project list by water system A prioritization process was developed to provide a methodology for establishing the DOW project priorities and a phased improvement implementation plan would be developed to provide the ability to fund and staff an improvement program. The approach used in Water Plan 2020 was a two-part process: 1. Prioritize the projects by water system 2. Develop an island-wide Implementation Program Page 100

101 Manager s Report No November 22, 2017 Page 4 of 6 The overall Capital Improvement Program prioritization process defined and developed project prioritization criteria utilized from other similar water system CIP development. The major criteria used in prioritizing the proposed improvement project included: Condition Assessment Public Health & Safety Level of Service The prioritization process started from the un-prioritized list of projects that had been developed within each water system. The criteria above were defined and a numerical rating system was established to rank each project within its water system. As a result, a prioritized project list with numerical ratings was developed for each of the DOW water systems. In order to complete the island-wide capital improvement program it was necessary to convert these individual system lists into a comprehensive program to determine an overall project prioritization. To accomplish this programming, the DOW started with the scoring associated with each project based on the three prioritization criteria (Condition Assessment, Health and Safety and Level of Service). In addition to the overall scoring that each project received from the prioritization, there were additional Programming Criteria that were used to assign projects into phases of the 20-year program. Based on the prioritization scoring, projects were initially assigned to improvement phases in the following order: Must do now: Rating 27 points + Phase 1 (2002 to 2006): Rating 22 to 26 points Phase 2 (2007 to 2011): Rating 18 to 21 points Phase 3 (2012 to 2021): Rating under 18 points Programming criteria were also used in the overall CIP program development and are identified under the classifications of 1) Strategic Initiatives and 2) Financial and Funding Strategies. Strategic initiatives consisted of several considerations including: Geographic distribution of projects around the island Addressing must do projects Complementary projects or projects that achieve other management priorities Reality check Schedule and project sequencing considerations. Financial and Funding strategies generally pertained to project where supplemental funding is available, i.e. from state or federal grants, or projects where private sector funds may be available on a cost sharing basis, taking into consideration that many supplemental funds are time sensitive and are required to be expended within a specified time frame. An additional funding consideration was to complete the projects that were already approved and funded by the Department. Several iterations were done to balance projects across the CIP phasing for funding purposes with special attention given to projects that qualified in the must do now categories. DOW Page 101

102 Manager s Report No November 22, 2017 Page 5 of 6 also included all improvement projects already funded in the first phase. By this process, the prioritized list of projects from each water system were integrated into an island-wide program. Two other considerations DOW used during the Program Prioritization process as the ability to fund the CIP in any given year and the potential rate impacts, and DOW s staff capacity to manage multiple CIP projects. Both of these concerns impacted the final improvement program development and the pace at which the projects could be implemented. In 2007, nearing the onset to the halfway point of Water Plan 2020, the island-wide program was reviewed and updated to assess the DOW s accomplishments, address any significant changes that may have an impact to the Water Plan 2020 implementation plan, include additional DOW infrastructure needs and provide an up-to-date project status. Utilizing the 2007 program list, the attached report describes the island-wide program project list update for all Water Plan 2020 projects to date. The attached report is described as follows: Water Plan 2020 Plan Project Evaluation Summary Report includes all 260 Water Plan 2020 projects sorted first by Strategic Initiative (0, 0.5, 0.7, 1, 2, or 6) and secondly by score. The score is the raw number of points assigned to each project based on the Water Plan 2020 prioritization criteria. These criteria include: Condition Assessment Public Health and Safety, and Level of Service A category for phase type was created during the 2007 update to identify and classify the projects. The phase type refers to the project status and is labeled as follows: 0 = Complete Project 0.5 = Project Under Construction 0.7 = Project Under Design 1 = Phase 1 Project 2 = Phase 2 Project 3 = Phase 3 Project 4 = Shelved Project 5 = On-Hold Project 6 = Deleted Project A detail description of these phase types are as follows: Phase 0 includes projects that are already completed and Phase 0.5 for projects that are under construction and not completed. Phase 0.7 include projects that are in the project design phase and is covered by a DOW design contract. Phase 1 includes projects to be completed in the first 5 year projection; Phase 2, the second 5 year projection and Phase 3, a projection to 20 years. Phase 4 includes completed design projects that have other contributing projects that are not anticipated to be complete in the Phase 1 or Phase 2 timeframe. Phase 5 includes projects which require additional resources not anticipated by the Department and Water Plan 2020; and Phase 6 includes projects that have been deleted or are no longer needed. Page 102

103 Manager s Report No November 22, 2017 Page 6 of 6 Respectively submitted, Edward Doi, P.E. Chief of Water Resources and Planning CONCURRED: Kirk Saiki, P.E. Manager and Chief Engineer ED/ein Attachment: Water Plan 2020 Plan Project Evaluation Summary Report Mgrrp/November 2017/18-82/Discussion and Possible on Water Plan 2020 Project Prioritization Methodology and Strategic Implementation ( ):ein Page 103

104 Water Plan 2020 Project Evaluation Summary Report Project No. Water System Project Title Condition Assessment Health Safety Service Level Total Score Strategic Initiative Fund Type Project Type Status/Phase Priority KW-14 Kekaha-Waimea Waimea Canyon Drive 12" Main Replacement (1,860') CRPL PIPELINE Completed KW-15 Kekaha-Waimea Kaumualii Hwy 12", Huakai to Moana Road Main Replacement (1,950') CRPL PIPELINE Completed KW-25 Kekaha-Waimea Construct Kapilimao 196 Tank, 0.5MG CIP OTHER Completed KW-27 Kekaha-Waimea Kaumualii Hwy - Kekaha Rd to Huakai 12" D.I. Main Replacement CRPL PIPELINE Completed PLH-02 Puhi-Lihue-Hanamaulu Kokolau Tunnel to Mano St. 16" Main Replacement (14,630') CRPL PIPELINE Completed PLH-13 Puhi-Lihue-Hanamaulu Develop Puhi Well #5A, #5B and Puhi #1 re-pipe to 393' CIP SOURCE Completed WK-09 Wailua-Kapaa Construct Kapaa Homesteads 530 Tank, 0.5 MG CIP STORAGE Completed WK-21 Wailua-Kapaa Drill & Develop Wailua Homesteads Well # CIP SOURCE Completed WK-28 Wailua-Kapaa Wailua Houselots 8" Main Replacement (11,004') CRPL PIPELINE Completed WK-42 Wailua-Kapaa Construct Stable 1.0MG Tank, 214' CIP Completed PLH-16 Puhi-Lihue-Hanamaulu Drill & Develop Hanamaulu Well #4, 150 gpm CIP SOURCE Completed PLH-14 Puhi-Lihue-Hanamaulu Develop Pukaki Well, 120 gpm CIP SOURCE Completed PLH-15 Puhi-Lihue-Hanamaulu Develop Hanamaulu Well #3, 160 gpm CIP SOURCE Completed HW-07 Haena-Wainiha Replace Wainiha Redwood Tank, 5,000 gal CRP STORAGE Completed KW-11 Kekaha-Waimea Kapilimao Valley Well Development CIP SOURCE Completed KW-12 Kekaha-Waimea Kekaha/Waimea Booster CIP BOOSTER PUMP Completed WK-12 Wailua-Kapaa Waipouli 6",8"Main Replacement (7,286'') CRPL PIPELINE Completed WK-14 Wailua-Kapaa Vivian Hghts./Kanaele Rd 8", 6"Main Replacement (13,678') & relocate PRV CRP PIPELINE Completed WK-30 Wailua-Kapaa Waipouli Rd. / Hauiki Rd. 6" Main Replacement (18,419') CRPL PIPELINE Completed WK-32 Wailua-Kapaa Kapaa Homesteads 6"Main Replacement (24,773'') CRPL PIPELINE Completed WK-36 Wailua-Kapaa Wailua, Kuamoo,Ohana,Anolani Rds., Lehika Ln. 6"Main Replacement (2,000') CRPL PIPELINE Completed WKK-14 Waipake-Kilauea-Kalihiwai Construct East Kilauea Booster Pump Station, 300 gpm CIP BOOSTER PUMP Completed K-07 Kalaheo Waha, Wawae, Niho Main Replacement (3,309') CRPL PIPELINE Completed PLH-09 Puhi-Lihue-Hanamaulu Lihue Town 6" & 8" Main Replacement (4,970') CRPL PIPELINE Completed K-10 Kalaheo 0.5 MG Kalaheo 908 Tank, Generator Storage CIP STORAGE Completed PLH-25 Puhi-Lihue-Hanamaulu Eiwa, Umi, Akahi, Elua & Hardy St. 8" Main Replacement (5,970') CRPL PIPELINE Completed PLH-30 Puhi-Lihue-Hanamaulu Nawiliwili-Niumalu & Kupolo 6, 8 & 12" Main Replacement (12,380') CRPL PIPELINE Completed WK-24 Wailua-Kapaa Develop Kapaa Homestead Well s Well #2, 500gpm & 8" DI (1,600') CIP SOURCE Completed HW-02 Haena-Wainiha Rehabilitate Wainiha Redwood Tank booster pumps CRP BOOSTER PUMP Completed KP-01 Koloa-Poipu Develop Koloa Well F CIP SOURCE Completed KP-06a Koloa-Poipu Lawai Road (Alania Road - Spouting Horn) 8" Main Replacement (2,800') CRPL PIPELINE Completed KP-07 Koloa-Poipu Poipu Road (Lawai Rd - Kiahuna Plant. Drv) Main Replacement (5,900') CRPL PIPELINE Completed K-08a Kalaheo Puu Road 12" Main (3,646') & 0.2 MG Tank CIP STORAGE Completed WKK-09 Waipake-Kilauea-Kalihiwai Kolo Road (Pukalani Place - Hookui Rd) Main Replacement (1,680') CRPL PIPELINE Completed KW-16 Kekaha-Waimea Waimea 6" Main Replacement (6,250') CRPL PIPELINE Completed KW-20 Kekaha-Waimea Waimea Well "A" Rehabilitation CRP SOURCE Completed LO-01 Lawai-Omao Lawai Well #2 mercury seal CRP SOURCE Completed PLH-11 Puhi-Lihue-Hanamaulu Rehabilitate Lihue Steel Tanks #1 & 2, 1.0 MG CRP SOURCE Completed WK-05 Wailua-Kapaa Kapaa Homesteads Well No. 1 ( Makaleha Well"A"),mercury seals CRP SOURCE Completed WK-07 Wailua-Kapaa Rehabilitate Ornellas Tank, 0.2 MG CRP STORAGE Completed WKK-10 Waipake-Kilauea-Kalihiwai Construct Namahana 722 Tank, 0.1MG CIP STORAGE Completed WKK-18 Waipake-Kilauea-Kalihiwai Construct Puu Pane Tank, 0.1MG CIP STORAGE Completed H-10 Hanalei Maka Ridge Tank to Hanalei Town 12" Main Replacement (7,190') CRPL PIPELINE Completed HE-07 Hanapepe-Eleele Hanapepe Vy to Eleele Steel Tanks Rehab/Replace 27" Pipeline (1,175') CRPL STORAGE Completed Page 104

105 Water Plan 2020 Project Evaluation Summary Report Project No. Water System Project Title Condition Assessment Health Safety Service Level Total Score Strategic Initiative Fund Type Project Type Status/Phase Priority HE-10a Hanapepe-Eleele Uliuli Rd, Ulaula Rd 12" Main Replacement 19 0 CRPL PIPELINE Completed KP-08 Koloa-Poipu Poipu Rd (Kiahuna Plant. Drv - Kuai Rd) 16" Main Replacement (3,200') CRPL PIPELINE Completed WK-22 Wailua-Kapaa Drill & Develop Kapaa Homesteads Well No. 3, 500 gpm, DLNR Project CIP SOURCE Completed A-11 Anahola Develop Anahola Well No. 3, 350 gpm CIP SOURCE Completed HE-06 Hanapepe-Eleele Hanapepe Stream Crossing 12" Main and slope control, 2 Design Phases CRP PIPELINE Completed KP-16 Koloa-Poipu Omao Tank - Poipu Road 12" Main Replacement (6,660') CRPL PIPELINE Completed KW-06 Kekaha-Waimea Rehabilitate Kekaha Shaft CRP SOURCE Completed A-04 Anahola Rehabilitate Anahola Tank, 0.15 MG CRP STORAGE Completed K-02 Kalaheo Rehabilitate Jelly Factory B.P. Sta. (3-250 gpm) CRP BOOSTER PUMP Completed KW-22a Kekaha-Waimea MCC, Chlorination Facilities, Waimea Well "A" CRP SOURCE Completed WK-15 Wailua-Kapaa Generator Storage - Kapaa Homesteads Well No CRP SOURCE Completed H-03 Hanalei Rehabilitate Maka Ridge Tank, 225',0.25 MG [Concrete Tanks] CRP STORAGE Completed HE-08 Hanapepe-Eleele Refurbish Eleele Steel Tanks CRP STORAGE Completed KW-09a Kekaha-Waimea MCC, Chlorination Facilities, Kekaha Shaft # CRP SOURCE Completed PLH-39a Puhi-Lihue-Hanamaulu Lihue Baseyard Complex Improvements - Phase I CRP Completed H-02 Hanalei MCC, Chlorination Facilities - Maka Ridge Well [Separate pumps & MCC, Rehab Chlorination Facilities] CRP SOURCE Completed HW-03 Haena-Wainiha Rehabilitate Haena Steel Tank 144' CRP STORAGE Completed KW-03 Kekaha-Waimea Elepaio Road (Aukuu - Kaumualii) 8" Main Replacement (970') CRPL PIPELINE Completed KW-09b Kekaha-Waimea MCC, Chlorination Facilities, Paua Valley Well CRP SOURCE Completed KW-09c Kekaha-Waimea MCC, Chlorination Facilities, Kekaha (Waipao) Well "B" CRP SOURCE Completed LO-13 Lawai-Omao Lawai/Kalaheo Water System Interconnection 8" Main Replacement (8,628') CRPL PIPELINE Completed WK-03 Wailua-Kapaa Kuhio Hwy. ( N. Leho Rd. - Papaloa Rd.Main Replacement (8,500') CRPL PIPELINE Completed PLH-19 Puhi-Lihue-Hanamaulu Barrier Removal - DOW Office and Lab buildings, ADA compliance CRP OTHER Completed H-01 Hanalei Maka Ridge Tank to Kuhio Hwy Road improvement CRP OTHER Completed KW-24 Kekaha-Waimea Permanent Generator and Housing Kapilimao Valley Well CRP SOURCE Completed PLH-17 Puhi-Lihue-Hanamaulu Lihue Baseyard Landscaping CRP OTHER Completed PLH-39b Puhi-Lihue-Hanamaulu Lihue Baseyard Complex Expansion CIP Completed PLH-31 Puhi-Lihue-Hanamaulu Altitude Valve Lihue Steel Tanks 1 & 2, KCC 393 Tank CRP STORAGE Completed KW-05 Kekaha-Waimea Hydro-cell Improvement, Kekaha (Waipao) Well "B" CRP SOURCE Completed K-11 Kalaheo Install MCC for Kalaheo Well No CRP SOURCE Completed LO-04 Lawai-Omao Construct Omao 677 Tank, 0.5 MG CIP STORAGE Completed K-18 Kalaheo 8" Water Main Replacement Halewili Road 0 CRPL Completed PLH-41 Puhi-Lihue-Hanamaulu Nawiliwili Rd - PRV, Booster Pump, 6" WL 0 CRP BOOSTER PUMP Completed PLH-44b Puhi-Lihue-Hanamaulu Lihue Mill Bridge 24" Main (State DOT Project) 0 CIP Completed WK-14b Wailua-Kapaa Vivian Hghts/Kanaele Rd 8", 6" Main Repl (11,325'), Ph II 0 CRP PIPELINE Completed WK-32b Wailua-Kapaa Kapaa Homesteads 6"Main Replacement (24,773''), Phase II 0 CRPL PIPELINE Completed WK-42b Wailua-Kapaa Construct Stable 1.0MG Tank, 214', Phase II Connecting Pipeline 0 CIP PIPELINE Completed KP-09 Koloa-Poipu MCC, Chlorination Facilities, Koloa Well "16-A" & "E", & "16-B" Site and Bldg Improvements CRP SOURCE Under Construction WK-39 Wailua-Kapaa Drill and Develop Kapaa Homesteads Well No. 4, 500GPM CIP In Design 3 WKK-02 Waipake-Kilauea-Kalihiwai Drill & Develop New Kilauea Well (No. 3 or No. 4), 700 gpm CIP SOURCE In Design 8 WK-08 Wailua-Kapaa Construct Kapaa Homesteads 313 Tank, 1.0 MG CIP STORAGE In Design 10 WK-23 Wailua-Kapaa Construct U.H. Exp. Station 605' Tank, 0.25 MG & 12" DI (2900') pipeline CIP STORAGE In Design 12 WKK-15 Waipake-Kilauea-Kalihiwai Construct Kilauea 466 Tank, 1.0 MG CIP STORAGE In Design 13 HW-12 Haena-Wainiha Drill & Dev. Wainiha/Haena Well 100 gpm CIP SOURCE In Design 16 Page 105

106 Water Plan 2020 Project Evaluation Summary Report Project No. Water System Project Title Condition Assessment Health Safety Service Level Total Score Strategic Initiative Fund Type Project Type Status/Phase Priority M-02 Moloaa Construct Moloaa Tank, 100,000 Gallon Storage Tank CIP STORAGE In Design PLH-12 Puhi-Lihue-Hanamaulu Kilohana Wells A, B, F & I Permanent Generator CRP SOURCE In Design H-05 Hanalei Weke, Anae, Mahimahi and He'e Roads 6" and 8" Main Replacement (2,760') CRPL PIPELINE In Design K-01 Kalaheo Kalaheo 1111' & 1222' Water System Improvements (8" Main, Well, 0.5 MG Tank) CIP OTHER In Design 6 K-05a Kalaheo Kalaheo New Tank, 0.5MG, 886' CIP SOURCE In Design PLH-27 Puhi-Lihue-Hanamaulu Kuhio Hwy (Hardy - Oxford ) 16" Main Replacement (1,680') CRPL PIPELINE In Design 11 HW-11 Haena-Wainiha Construct 0.2 MG Storage Tank, 144' CIP STORAGE In Design 17 PLH-35b Puhi-Lihue-Hanamaulu Kapaia Cane Haul Road 18" Main CIP In Design 4 WKK-03 Waipake-Kilauea-Kalihiwai MCC, Chlorination Facilities - Kilauea Well #1 & # CRP SOURCE In Design 5 HE-01 Hanapepe-Eleele Reorganize Water System (See Description Below) CIP OTHER In Design 2 M-01 Moloaa Koolau Road, Moloaa 6" Main & Water Meter & Backflow Device (1,500') CIP PIPELINE In Design Ani-01a Anini Anini and Kalihiwai Road 6" Main (9,156') CRPL PIPELINE In Design KW-07 Kekaha-Waimea Rehabilitate Paua Valley Tank #1, 0.5 MG Concrete CRP STORAGE In Design 1 KP-05 Koloa-Poipu Construct Poipu 245 Tank, 1.0 MG CIP STORAGE 1 M-03 Moloaa Acquire Source / Install Pump, Controls, and 12" Pipeline CIP 1 H-08 Hanalei Drill & Dev Hanalei Well, 300 gpm CIP SOURCE 2 9 WK-33 Wailua-Kapaa Kahuna Road 12' Main Replacement (9500') CRPL PIPELINE 2 K-09 Kalaheo Kalaheo Town 6 ", 8" & 12" Main Replacement (8,530') CRPL PIPELINE 2 WK-13 Wailua-Kapaa Kapaa Town 8"Main Replacement (3,487') CRPL PIPELINE 2 KP-13 Koloa-Poipu Waikomo Road (Poipu Rd - Weliweli Rd) 8" Main Replacement (1,828') CRPL PIPELINE 2 LO-12 Lawai-Omao Iwipoo 8" & Lauoho 6" Main Replacement (8,400') CRPL PIPELINE 2 WK-27 Wailua-Kapaa Kawaihau Rd (Ornellas Tk - Piliamoo Rd.) 12" Main Replacement (14,357') CRPL PIPELINE 2 WK-25 Wailua-Kapaa Kuhio Hwy. ( N. Papaloa - Kawaihau Road) 16" and 12" Main Replacement (10,800') CRPL PIPELINE 2 15 HE-11 Hanapepe-Eleele Lele Road to Salt Pond 6" Main Replacement (5,379') CRPL PIPELINE 2 WK-10 Wailua-Kapaa Construct Wailua Homesteads 538 Tank, 1.0 MG CIP OTHER 3 22 H-07 Hanalei New MG Tank, Abandon Hanalei Tank CIP STORAGE 3 HW-13 Haena-Wainiha Construct 0.1 MG Storage Tank, 217' CIP STORAGE 3 PLH-38 Puhi-Lihue-Hanamaulu Construct Lihue New 1.0 MG Tank, 393' CIP 3 WKK-19 Waipake-Kilauea-Kalihiwai Construct Kilauea 0.25MG Tank, 466' CIP 3 LO-03 Lawai-Omao Construct Lawai (Andrade) Tank 825, 0.05 MG CIP STORAGE 3 PLH-12a Puhi-Lihue-Hanamaulu Kilohana Wells A, B, F & I Rehab MCC, Chlorination Facilicites, Kilohana Wells CRP SOURCE 3 A-02 Anahola Drill & Dev. Anahola Well 400gpm CIP SOURCE 3 WKK-07 Waipake-Kilauea-Kalihiwai Kilauea Tanks 1 & 2 - Pukalani Place, 16"Main Replacement (8,050') CRPL PIPELINE 3 WK-19 Wailua-Kapaa Puuopae/ Opaekaa/ Kalama/ Kipapa Rds. 8" Main Replacement (15,417') CRPL PIPELINE 3 KP-14 Koloa-Poipu Koloa 6" & 12" Main Replacement (13,756') CRP PIPELINE 3 KP-17 Koloa-Poipu Paanau Tank - Poipu Road 16" Main Replacement (1,150') CRPL PIPELINE 3 LO-07 Lawai-Omao Drill & Develop Omao Well CIP SOURCE 3 LO-08 Lawai-Omao Koloa Rd (Alaloke Pl. - Piko Rd) 8" Main Replacement (1,700') CRPL PIPELINE 3 24 PLH-26 Puhi-Lihue-Hanamaulu Isenberg/Camp A 6 & 8" Main Replacement (12,240') CRPL PIPELINE 3 WK-26a Wailua-Kapaa Kanepoonui Road 12' Main replacement (6,000') CRPL PIPELINE 3 WK-31 Wailua-Kapaa Kamalu, Crossley Rds., Polani, Kiinani Pl. 8",6"Main Replacement (4,000') CRPL PIPELINE 3 WK-41 Wailua-Kapaa Kawaihau Road 16" Main Replacement CRPL PIPELINE 3 WKK-04 Waipake-Kilauea-Kalihiwai Kaohe Road / Kalihiwai Road 6"Main Replacement (4,510') & PRV CRPL PIPELINE 3 WKK-08 Waipake-Kilauea-Kalihiwai Kilauea Road ( Pukalani Pl - FH X-76) Main Replacement (4,370') CRPL PIPELINE 3 Page 106

107 Water Plan 2020 Project Evaluation Summary Report Project No. Water System Project Title Condition Assessment Health Safety Service Level Total Score Strategic Initiative Fund Type Project Type Status/Phase Priority A-05 Anahola North Anahola Area 6" Main Replacement (3,160') CRPL PIPELINE 3 KP-22 Koloa-Poipu Wailaau Road 12" Main Replacement CRPL 3 KW-17 Kekaha-Waimea Waimea Heights 6", 8", 12" Main Replacement (5,505') CRPL PIPELINE 3 LO-11 Lawai-Omao Omao 6" Main Replacements (6,200') CRPL PIPELINE 3 WK-29 Wailua-Kapaa Hauaala/ Keapana Roads 6"' Main Replacement (10,611') CRPL PIPELINE 3 HW-08b Haena-Wainiha Wainiha Powerhouse Road 6" Main Replacement (5,930') CRPL PIPELINE 3 K-08b Kalaheo Puu, Ai, Ihu Roads 6" Main Replacement (12,321') CRPL PIPELINE 3 K-13 Kalaheo Puuwai, Poohiwi, Wawae Road 8" Main Replacement (5,500') CRPL PIPELINE 3 K-14 Kalaheo Kalaheo Well No CIP SOURCE 3 KP-15 Koloa-Poipu Hooma & Pane Rd 6", Hoonani Rd 12" Main Replacement (5,098') CRPL PIPELINE 3 KP-20 Koloa-Poipu Drill and Develop Koloa Well G CIP 3 KW-26 Kekaha-Waimea Construct Waimea 196 Tank, 0.5MG CIP STORAGE 3 WK-01 Wailua-Kapaa Rehabilitate Moelepe Tunnel & improve access road CRP SOURCE 3 WK-37 Wailua-Kapaa Construct Upper Waipouli 0.25MG Tank, 686' CIP 3 WK-40 Wailua-Kapaa Construct Upper Makaleha 0.25MG Tank, 575' CIP 3 WK-20 Wailua-Kapaa Rehabilitate Puupilo Steel Tank, MG CRP STORAGE 3 19 LO-10 Lawai-Omao Lawai 6" & 8" Main Replacement (6,400') CRPL PIPELINE 3 25 HE-10 Hanapepe-Eleele Hanapepe Town and Eleele Main Replacement CRPL PIPELINE 3 KW-13b Kekaha-Waimea Kokee & Alae Rd 12" Main Replacement (4,150') CRPL PIPELINE 3 PLH-08 Puhi-Lihue-Hanamaulu Nawiliwili Rd (Nokekula, Apapane, Eleki) 2 1/2" Main Replacement & Transfer Services, Nawiliwili Rd. (5,650') CRPL PIPELINE 3 PLH-29 Puhi-Lihue-Hanamaulu Kuhio Hwy/Hanamaulu Rd. 12" Main Replacement (3,530') CRPL PIPELINE 3 WK-16 Wailua-Kapaa MCC, Chlorination Facility Nonou Well 9-1A & 9-1B CRP SOURCE 3 PLH-28 Puhi-Lihue-Hanamaulu Hanamaulu 6" Main Replacement (13,520') CRPL PIPELINE 3 23 HW-01 Haena-Wainiha Improve access to Wainiha 217' Tank CRP STORAGE 3 HW-09 Haena-Wainiha Alamihi, Alealea, Alamo'o Main Replacement (4,900') CRPL PIPELINE 3 KW-01 Kekaha-Waimea Kekaha Road, Puueo Rd - Kaumualii Hwy 12" Main Replacement (4,490') CRPL PIPELINE 3 LO-05a Lawai-Omao MCC, Chlorination Facilities, Lawai Wells No. 1 (22) & No CRP SOURCE 3 LO-09 Lawai-Omao Piko, Hailima, Koloa 12" Main Replacement (2,800') CRPL PIPELINE 3 PLH-06 Puhi-Lihue-Hanamaulu MCC, Chlorination Facilities, Puhi Well 1 (KCC) CRP SOURCE 3 PLH-07 Puhi-Lihue-Hanamaulu MCC, Chlorination Facilities, Puhi Wells 2 & CRP SOURCE 3 PLH-10 Puhi-Lihue-Hanamaulu MCC, Chlorination Facilities, Lihue Grammer School Well CRP SOURCE 3 PLH-20 Puhi-Lihue-Hanamaulu Puhi Rd.- Huleia Valley Rd. 6" Main Replacement (5,550') & 3 PRVs CRPL PIPELINE 3 WKK-06 Waipake-Kilauea-Kalihiwai Kuhio Hwy. ( Pukalani Pl. - Kahiliholo Rd) Main Replacement (9,370') CRPL PIPELINE 3 KP-21 Koloa-Poipu Makanui Road 6" Main Replacement CRPL 3 KW-22b Kekaha-Waimea MCC, Chlorination Facilities, Waimea Well "2" CRP SOURCE 3 LO-17 Lawai-Omao Akemama Road / Iii Road 8' Main Replacement CRPL PIPELINE 3 LO-18 Lawai-Omao Kua Road 6" Main Replacement CRPL PIPELINE 3 WK-15a Wailua-Kapaa Kapaa Homesteads Well No. 1 - MCC, Chlorination Facility CRP SOURCE 3 WK-17 Wailua-Kapaa MCC, Chlorination Facility and Site Improvements Nonou Well 9-1C CRP SOURCE 3 WK-18 Wailua-Kapaa MCC, Chlorination Facility Wailua Homestead Wells "A" & "B" CRP SOURCE 3 WKK-17 Waipake-Kilauea-Kalihiwai Kuhio Hwy. (Pukalani Pl. - Kolo Road) New Main (4,790') CIP PIPELINE 3 A-01 Anahola Anahola Road 8" Main Replacement(6,980') CRPL PIPELINE 3 A-08 Anahola Kealia Road 12" Main Replacement (1,940') CRPL PIPELINE 3 HW-04 Haena-Wainiha MCC, Chlorination Facilities, Haena Well 66 & Wainiha Well 67 & CRP SOURCE 3 Page 107

108 Water Plan 2020 Project Evaluation Summary Report Project No. Water System Project Title Condition Assessment Health Safety Service Level Total Score Strategic Initiative Fund Type Project Type Status/Phase Priority K-06 Kalaheo Puuwai, Opu Roads 12" Main Replacement (3,320') CRPL PIPELINE 3 KW-13a Kekaha-Waimea Elepaio Road (Aliae - Aukuu) 12" Main Replacement, Kala Road 8" Main (4,900') CRPL PIPELINE 3 PLH-32 Puhi-Lihue-Hanamaulu Rice Street (Kauai Inn Tank - Paina Rd) 12" Main Replacement & PRV (4,850") CRPL PIPELINE 3 PLH-35a Puhi-Lihue-Hanamaulu Kuhio Hwy 18" Main Replacement CRPL 3 WK-06 Wailua-Kapaa Rehabilitate Makaleha Tank, 1.0 MG CRP STORAGE 3 WK-11 Wailua-Kapaa Upper Wailua Houselots 6" Main Replacement (3,451') & booster pump CRPL PIPELINE 3 WKK-01 Waipake-Kilauea-Kalihiwai Rehabilitate Kilauea Tanks #1 & #2, 0.25 MG CRP STORAGE 3 WKK-16 Waipake-Kilauea-Kalihiwai Waipake, Namahana, Kalihiwai Booster Pump Stations -Install PRV CRP BOOSTER PUMP 3 HE-03a Hanapepe-Eleele Hanapepe Town Well MCC, Chlorination Facilities CRP SOURCE 3 18 WK-34 Wailua-Kapaa Kuamoo Road 8" Main Replacement (6,500') CRPL PIPELINE 3 21 HE-03b Hanapepe-Eleele Hanapepe Well A MCC, Chlorination Facilities CRP SOURCE 3 KP-11 Koloa-Poipu Poipu Tank (Mahaulepu)- Poipu By-pass Rd 18" Main (7,200') CIP STORAGE 3 KW-23 Kekaha-Waimea Menehune Road 8" Main Replacement (9,340') CRPL PIPELINE 3 LO-05b Lawai-Omao Permanent Generator and Housing, Lawai Tank, CRP SOURCE 3 PLH-23 Puhi-Lihue-Hanamaulu Pua Loke 6" Main Replacement (8,640') CRPL PIPELINE 3 WK-26 Wailua-Kapaa Moelepe Tu. - Wailua Hmstds,538 Tank 12" Main Replacement (12,726') CRPL PIPELINE 3 HE-03c Hanapepe-Eleele Hanapepe Well B MCC, Chlorination Facilities CRP SOURCE 3 K-04 Kalaheo Kalaheo Wells, Rehabilitate Chlorine Facilities (CHECK) CRP SOURCE 3 KP-23 Koloa-Poipu Kapili Road New 12" Main CIP 3 KW-04 Kekaha-Waimea Pre-lube Improvement Paua Valley Well CRP SOURCE 3 KW-18 Kekaha-Waimea Rehabilitate Waimea Tank 1, 0.25 MG CRP STORAGE 3 M-04 Moloaa Koolau Road / Moloaa Road 6" Main Replacement CRPL 3 PLH-05 Puhi-Lihue-Hanamaulu Rehabilitate Kalepa Tank, 0.5 MG CRP STORAGE 3 PLH-22 Puhi-Lihue-Hanamaulu Nawiliwili Rd. (Lihue Grammer School Well - Kukui Grove St) 12" Main Replacement (680') & 1 PRV CRPL PIPELINE 3 WK-38 Wailua-Kapaa Rehabilitate Puu Pilo Booster Station CRPL 3 HE-02 Hanapepe-Eleele Hanapepe Valley Main Replacement (1,500') and Main Abandonment (9,830') CRPL PIPELINE 3 HE-04 Hanapepe-Eleele Rehabilitate Hanapepe Heights 0.5 MG Tank, 212' CRP STORAGE 3 HE-09 Hanapepe-Eleele Lower Hanapepe Hgts 6" Main Replacement (7,190') CRPL PIPELINE 3 KP-19 Koloa-Poipu Koloa Well C 18" Main Replacement CRP 3 LO-14 Lawai-Omao Kaumualii Hwy 16" Main Replacement CRPL PIPELINE 3 PLH-04 Puhi-Lihue-Hanamaulu Puhi Subd. / Leleiona St. 2-1/2" & 12" Main replacement (930') CRPL PIPELINE 3 WK-04 Wailua-Kapaa Rehabilitate Nonou Tank, 2.0 MG CRP STORAGE 3 A-09 Anahola Kuhio Hwy 8" Main (500') CRPL PIPELINE 3 KW-02a Kekaha-Waimea East Kekaha 6" & 8" Main Replacement (9,580') CRPL PIPELINE 3 KW-02b Kekaha-Waimea West Kekaha 6"& 8" Main Replacement 9,430') CRPL PIPELINE 3 LO-16 Lawai-Omao East Koloa Road New 8" Mainline CIP PIPELINE 3 PLH-21 Puhi-Lihue-Hanamaulu Haleko Rd. ( Rice St. - Kukui Grove St.) 16"Main Replacement (3,300') CRPL PIPELINE 3 H-04 Hanalei Hanalei River 8" Main Replacement (1,670') CRP PIPELINE 3 HW-10 Haena-Wainiha Kuhio Hwy 6" Main Replacement (4,530') CRPL PIPELINE 3 A-06 Anahola Puuhale/Kikoo Loop 6" Main Replacement (2,260') CRP PIPELINE 3 H-11 Hanalei Kuhio Hwy 6" Main Replacement (7,700') CRPL 3 KP-12 Koloa-Poipu Rehabilitate Paanau Tank, 0.25 MG CRP STORAGE 3 WKK-12 Waipake-Kilauea-Kalihiwai Kilauea Road (Iwalani lane - Kaupea Road) 6" Main replacement (5,720') CRPL PIPELINE 3 HE-03d Hanapepe-Eleele Hanapepe Well #4 MCC, Rehab Chlorination Facilities,generator storage CRP SOURCE 3 Page 108

109 Water Plan 2020 Project Evaluation Summary Report Project No. Water System Project Title Condition Assessment Health Safety Service Level Total Score Strategic Initiative Fund Type Project Type Status/Phase Priority HW-06 Haena-Wainiha Ala'Eke Road 6" Main Replacement (2,570') CRPL PIPELINE 3 HW-08a Haena-Wainiha Wainiha 217' Tank to Wainiha Well 67 6" Main Replacement (4,880') CRPL PIPELINE 3 LO-15 Lawai-Omao Construct Omao New Tank, 0.25MG, 677' CIP STORAGE 3 WKK-13 Waipake-Kilauea-Kalihiwai Koolau Road (Kuhio Hwy. - FH X-122) 6' Main replacement (4,880') CRPL PIPELINE 3 HW-14 Haena-Wainiha Construct Water Treatment - Wainiha Well 66 & CRP SOURCE 3 KP-10 Koloa-Poipu MCC, Chlorination Facilities, Koloa Well "C" & "D" CRP SOURCE 3 WKK-20 Waipake-Kilauea-Kalihiwai Kuhio Hwy 12" Main Replacement (Kolo Road to Koolau Road) (14,000') CRPL 3 HE-12 Hanapepe-Eleele New PRV Station at Alii Road/Ahi Road Intersection CIP PIPELINE 3 HE-13 Hanapepe-Eleele Demolish Eleele Tank, 97', 60,000 Gallon CRP OTHER 3 PLH-24 Puhi-Lihue-Hanamaulu Rice Street (Haleko & Kapule Hwy) 16" Main Replacement (5,160') CRPL PIPELINE 3 WK-43 Wailua-Kapaa Demolish Kondo Tank, 520' CRP 3 WKK-11 Waipake-Kilauea-Kalihiwai Kapuna Rd (Waipake 562Tank - Kula School) Main Replacement (1,740) CRPL PIPELINE 3 A-07 Anahola Manai/Kukuihale Road 8" Main (2,200') CIP PIPELINE 3 PLH-34 Puhi-Lihue-Hanamaulu Kapule Hwy. (Kuhio Hwy - Ahukini Rd) 16" Main (8,750') CIP PIPELINE 3 KP-03 Koloa-Poipu Construct Koloa 366 Tank, 0.5 MG CIP STORAGE 3 KP-04 Koloa-Poipu Construct Koloa 366 Tank, 0.25 MG CIP STORAGE 3 WKK-05 Waipake-Kilauea-Kalihiwai Rehabilitate Mainline Service Road (Kilauea Tanks - Kahiliholo Rd) (5,130') CRP OTHER 3 A-10 Anahola Construct Anahola 0.25MG Tank, 288' CIP 3 K-15 Kalaheo Kalaheo 12" Main Replacement CRP PIPELINE 3 K-16 Kalaheo Abandon Kalaheo Well No CRP OTHER 3 H-09 Hanalei Paint 0.05 MG Hanalei Tank CRP STORAGE 3 LO-19 Lawai-Omao Omao Microturbine 3 3 KW-28 Kekaha-Waimea Renovate Kekaha Shaft( ) & 12" D.I CIP SOURCE Shelved PLH-01a Puhi-Lihue-Hanamaulu Replace Grove Farm Tanks #1 & # CRP STORAGE Shelved Ani-01b Anini Anini and Kalihiwai Road 6" Main (5300') CIP PIPELINE Shelved K-17 Kalaheo Construct Kalaheo Surface Water Treatment Facility, 0.5MGD CIP On-Hold PLH-42 Puhi-Lihue-Hanamaulu Construct Kokolau Tunnel WTP, 400gpm CIP SOURCE On-Hold WK-02 Wailua-Kapaa Rehabilitate Akulikuli Tunnel & prevent surface water infiltration CRP SOURCE On-Hold PLH-03 Puhi-Lihue-Hanamaulu Drill & Develop Horizontal wells CIP SOURCE On-Hold PLH-43 Puhi-Lihue-Hanamaulu DOW Buyout Dedication Option of Kapaia SWTP (3.0 MGD) 5 CIP SOURCE On-Hold PLH-36 Puhi-Lihue-Hanamaulu Kapaia SWTP Expansion, 1.0MGD CIP Deleted PLH-37 Puhi-Lihue-Hanamaulu Deepen Kilohana Wells C, G, and F CRP Deleted K-12 Kalaheo Nursery 1111' Tank Booster Pump Station (2-200 gpm) CRP BOOSTER PUMP Deleted KP-02 Koloa-Poipu Rehabilitate Omao Tank, 0.2 MG CRP STORAGE Deleted PLH-40 Puhi-Lihue-Hanamaulu Install CO2 Removal System at Puhi Well No. 2 and CRP SOURCE Deleted Ani-02 Anini Renegotiate Water Purchase Agreement CIP Deleted A-03 Anahola Rehabilitate Chlorination Facilities, Anahola Well A & B CRP SOURCE Deleted WK-35 Wailua-Kapaa Develop Alinea Street HHA Artesian Well CIP SOURCE Deleted K-05 Kalaheo Rehabilitate Kukuiolono 0.2 MG tank CRP STORAGE Deleted KW-19 Kekaha-Waimea Relocate Waimea Heights Boosters CRP BOOSTER PUMP Deleted KP-18 Koloa-Poipu Preserve Ex. 12" Main (Waiohai Hotel Site) CRPL PIPELINE Deleted PLH-01b Puhi-Lihue-Hanamaulu Rehabilitate Grove Farm Tanks #1 & # CRP STORAGE Deleted KW-21 Kekaha-Waimea Waimea Shaft #9, Water Treatment Plant CRP SOURCE Deleted Page 109

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111 MANAGER S REPORT No December 22, 2017 DEPARTMENT OF WATER County of Kaua i Water has no Substitute Conserve It! Re: Discussion and Possible Action to approve the First Amendment to the Right of Entry from McBryde Sugar Company LLC that will allow the Department of Water to locate a booster pump and water line for Job No , WP2020 Project No. HE-1, (Water System Reorganization) a. McBryde Sugar Company, Limited, TMK: (4) :003, Ele ele, Kaua i, Hawai i RECOMMENDATION: It is recommended that the Board approve the First Amendment to this Right of Entry (ROE) agreement whereby, McBryde Sugar Company LLC, Series R, a series of a Delaware limited liability company (successor by conversion to McBryde Sugar Company LLC), a Hawai`i limited liability company formerly known as McBryde Sugar Company, Limited, a Hawai i Corporation (Grantor), grants to the Board of Water Supply (BWS), County of Kaua`i, its officers, employees, contractors, subcontractors, and agents, a right of entry, over, under, and across TMK: (4) :003 for the purpose of surveying, grading, installing new water lines, a new booster pump and pad, and all necessary appurtenances for Job No Reorganize Water System - Pipeline Connecting Hanapēpē and Ele ele (Water Plan 2020 Project No. HE- 1). Further, BWS approval is specifically requested of the indemnification provision in this agreement; wherein, the BWS agrees to indemnify and hold harmless the Grantor from and against any claims for injuries or damages of any kind occasioned, in whole or in part, by the BWS, or its officers, employees, contractors, subcontractors, and agents (collectively the Grantee ) negligent actions or omissions arising out of its exercise of this right-of-entry. FUNDING: N/A. BACKGROUND: The Department of Water (DOW) is proposing to reorganize the Hanapepe and Ele ele water systems by connecting the Hanapēpē 212 system with the Ele ele 190 service zone with a new transmission water line along Kaumuali`i Highway and Waialo Road. As a part of the project, a new booster pump and connecting pipeline will be installed in private property next to Waialo Road which will allow the DOW to pump and transmit water from the new Hanapēpē- Ele ele 212 service zone to the Ele ele 340 storage tanks. The end result will be a second, redundant pump site capable of pumping water up to the Ele ele 340 storage tanks. Due to existing conditions and State requirements, the best location for the booster pump was determined to be in the Grantor s property. Furthermore, to minimize disruptions to traffic, the State has required that the DOW install the proposed water line crossing Waialo Road by not trenching across the road. The viable alternative to trenching would be by horizontal directional drilling method Pua Loke Street Līhu'e, HI Phone: Fax: Operations Fax: Page 111

112 Manager s Report No December 22, 2017 Page 2 of 2 The Department previously executed a Right of Entry from McBryde Sugar Company LLC on January 27, 2017 for the project; however, during the design process it was determined that the required entry point for the horizontal directional drilling must extend further into the Grantor s property. Therefore, the purpose of this First Amendment to the Right of Entry is to increase the dimensions of the original Right of Entry to accommodate the revised entry point for the horizontal directional drilling. The revised dimensions will also provide more area to construct the pad for the booster pump. The owner has indicated that they are willing to grant the BWS a temporary ROE and, a subsequent Grant of Easement (GOE) after or near the end of construction. The Department will submit a Manager s Report for the subsequent GOE at a future BWS meeting. This First Amendment to the Right of Entry shall supersede the Right of Entry executed on January 27, OPTIONS: Option 1: Pro: Cons: Option 2: Pro: Cons: Approve the First Amendment to Right of Entry from McBryde Sugar Company LLC. This will allow the DOW to access the Grantor s property for design and construction purposes for the project and to install the booster pump and pipeline across Waialo Road via horizontal directional drilling. None. Do not approve the First Amendment to Right of Entry from McBryde Sugar Company LLC. None. The DOW will not be able to install a water line across Waialo Road via horizontal directional drilling as currently designed. The DOW will not be able to construct the project unless the State allows trenching across Waialo Road. Respectfully submitted, Keith Aoki, P.E. Engineering Division CONCURRED: Kirk Saiki, P.E. Manager and Chief Engineer KA/ein Attachments: Right of Entry Agreement Exhibit A to the Right of Entry Agreement Mgrrp/December 2017/18-83/Discussion and Possible Action to approve the First Amendment to the Right of Entry from McBryde Sugar Company LLC that will allow the Department of Water to locate a booster pump and water line for Job No , WP2020 Project No. HE-1, (Water System Reorganization), a) McBryde Sugar Company, Limited, TMK: (4) :003, Ele ele, Kaua i, Hawai i ( ):ein Page 112

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118 MANAGER S REPORT No December 22, 2017 DEPARTMENT OF WATER County of Kaua i Water has no Substitute Conserve It! Re: Discussion and Possible Action to approve multiple Right of Entry agreements with private owners that will allow the Department of Water to relocate and/or reconnect water meters for Job No WP2020 Project No. HE-10 (Reorganize Water System: Hanapēpē Road 6-Inch Main Replacement) Hanapēpē, Kaua i, Hawai i for the following TMKs: (4) :019, (4) :005, (4) :012, (4) :055, (4) :057, (4) :004, (4) :058, (4) :059, (4) :060, (4) :018, (4) :016, (4) :027, (4) :006, (4) :015, (4) :006, (4) :025 and (4) :054 RECOMMENDATION: It is recommended that the Board approve the following Right of Entry (ROE) agreements whereby, the owners and/or trustees grant to the Board of Water Supply (BWS), County of Kaua`i, its officers, employees, contractors, subcontractors, and agents, a right of entry, over, under, and across the following TMKs: a. (4) :019; William J. Farlander, trustee of the Farx Trust, and Joanne Farlander, trustee of the Joanne Farlander Trust b. (4) :005; Doreen M. Fujita-Hino, trustee of the Doreen M. Fujita-Hino Revocable Living Trust, Ronald H. Hino, trustee of the Doreen M. Fujita-Hino Revocable Living Trust, Teruko F. Fujita, and Colette C. Akahoshi c. (4) :012; Dennis H. Kurokawa, trustee of the Dennis H. Kurokawa Revocable Living Trust, Dayle R. Kurokawa, trustee of the Dennis H. Kurokawa Revocable Living Trust, Dayle R. Kurokawa, trustee of the Dayle Reiko Kurokawa Revocable Living Trust, and Dennis H. Kurokawa, trustee of the Dayle Reiko Kurokawa Revocable Living Trust d. (4) :055; Miyoko Sakahashi, successor trustee of the Stanley Sakahashi Revocable Living Trust e. (4) :057; Jeanette C. Yoshimura, trustee of the Yoshimura Family By-pass Trust f. (4) :004; Duane A. Girard and Rosemalia B. Girard g. (4) :058; Joanne O. Imamura h. (4) :059; Elvin Kaiakapu and Linda Kaiakapu i. (4) :060; Elvin K. Kaiakapu and Linda P. Kaiakapu j. (4) :018; Steven T. Okikawa and Susan Okikawa k. (4) :016; Donna E. Richards l. (4) :027; Masahiro S. Satta m. (4) :006; Richard Kazuo Ueoka and Linda H. Ueoka n. (4) :015; John Von Krusenstiern and Elizabeth Von Krusenstiern o. (4) :006; Richard K. Nakatsuka 4398 Pua Loke Street Līhu'e, HI Phone: Fax: Operations Fax: Page 118

119 Manager s Report No December 22, 2017 Page 2 of 2 p. (4) :025; Rachel S. Yamauchi, trustee of the Rachel S. Yamauchi Self-Trusted Trust, and Rachel S. Yamauchi, trustee of the Paul M. Yamauchi Self-Trusted Trust q. (4) :054; Trent Conlon all for purposes of the construction, installation, reinstallation, maintenance, repair, and removal of water pipelines and related meters, valves, and other associated waterworks facilities appurtenances and any and all necessary appurtenances as part Job No WP2020 Project No. HE-10 (Reorganize Water System: Hanapēpē Road 6-Inch Main Replacement), Hanapēpē, Kaua i, Hawai i. Further, BWS approval is specifically requested of the indemnification provision in these agreements; wherein, the BWS agrees to indemnify and hold harmless the Grantor from and against any claims for injuries or damages of any kind occasioned, in whole or in part, by Grantee s, negligent actions or omissions arising out of its exercise of this Right-of-Entry. FUNDING: N/A. BACKGROUND: The County of Kaua i, Department of Water (DOW) is proposing to replace aging water mains along Hanapēpē Road between Moi Road and Kona Road with the upcoming project Reorganize Water System: Hanapēpē Road 6-Inch Main Replacement. This project will improve the DOW s water system s reliability, service, and fire-flow capacity. As part of the project, the DOW will be reconnecting existing water meter services to the new water main, including relocating existing water meters located in private property to the County right of way. The DOW and its contractors are required to obtain a ROE from private landowners to relocate and/or reconnect new water meter services to private plumbing located on the subject properties. The owners of each privately owned parcel have indicated they are willing to grant the BWS a temporary ROE and if applicable, a subsequent Grant of Easement (GOE) after or near the end of construction. The Department will submit a Manager s Report for the subsequent GOEs at a future BWS Board meeting. The DOW will be requesting Board approval of additional ROEs for this project at a future Board meeting. OPTIONS: Option 1: Pros: Cons: Approve the Right of Entry agreements. This will allow the DOW to access the properties for construction purposes for the project and relocate meters out of private property and/or reconnect the relocated services to private plumbing located in private property. None. Page 119

120 Manager s Report No December 22, 2017 Page 3 of 3 Option 2: Pros: Cons: Do not approve the Right of Entry agreements. None. The Department will not be able to access the properties for construction purposes for the project to relocate meters out of private property and/or reconnect the relocated services to private plumbing located in private property. Existing water service will not be maintained until the owner can reconnect their own plumbing. Respectfully submitted, Keith Aoki, P.E. Engineering Division CONCURRED: Kirk Saiki, P.E. Manager and Chief Engineer KA/BW/ein Attachments: Right of Entry Agreements: 1. (4) :019; William J. Farlander, trustee of the Farx Trust, and Joanne Farlander, trustee of the Joanne Farlander Trust 2. (4) :005; Doreen M. Fujita-Hino, trustee of the Doreen M. Fujita-Hino Revocable Living Trust, Ronald H. Hino, trustee of the Doreen M. Fujita-Hino Revocable Living Trust, Teruko F. Fujita, and Colette C. Akahoshi 3. (4) :012; Dennis H. Kurokawa, trustee of the Dennis H. Kurokawa Revocable Living Trust, Dayle R. Kurokawa, trustee of the Dennis H. Kurokawa Revocable Living Trust, Dayle R. Kurokawa, trustee of the Dayle Reiko Kurokawa Revocable Living Trust, and Dennis H. Kurokawa, trustee of the Dayle Reiko Kurokawa Revocable Living Trust 4. (4) :055; Miyoko Sakahashi, successor trustee of the Stanley Sakahashi Revocable Living Trust 5. (4) :057; Jeanette C. Yoshimura, trustee of the Yoshimura Family By-pass Trust 6. (4) :004; Duane A. Girard and Rosemalia B. Girard 7. (4) :058; Joanne O. Imamura 8. (4) :059; Elvin Kaiakapu and Linda Kaiakapu 9. (4) :060; Elvin K. Kaiakapu and Linda P. Kaiakapu 10. (4) :018; Steven T. Okikawa and Susan Okikawa 11. (4) :016; Donna E. Richards 12. (4) :027; Masahiro S. Satta 13. (4) :006; Richard Kazuo Ueoka and Linda H. Ueoka 14. (4) :015; John Von Krusenstiern and Elizabeth Von Krusenstiern 15. (4) :006; Richard K. Nakatsuka 16. (4) :025; Rachel S. Yamauchi, trustee of the Rachel S. Yamauchi Self-Trusted Trust, and Rachel S. Yamauchi, trustee of the Paul M. Yamauchi Self-Trusted Trust 17. (4) :054; Trent Conlon Mgrrp/December 2017/18-84/Discussion and Possible Action to approve multiple Right of Entry agreements with private owners that will allow the Department of Water to relocate and/or reconnect water meters for Job No WP2020 Project No. HE-10 (Reorganize Water System: Hanapēpē Road 6-Inch Main Replacement) Hanapēpē, Kaua i, Hawai i for the following TMKs: (4) :019, (4) :005, (4) :012, (4) :055, (4) :057, (4) :004, (4) :058, (4) :059, (4) :060, (4) :018, (4) :016, (4) :027, (4) :006, (4) :015, (4) :006, and (4) :025(4) :054 ( ):ein Page 120

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197 DEPARTMENT OF WATER County of Kaua i Water has no Substitute Conserve It! MANAGER S REPORT No December 22, 2017 Re: Discussion and Possible Action to Begin the Procurement Solicitation for the Assessment and Valuation of Alexander & Baldwin s Brydeswood Well in the amount of $100, RECOMMENDATION: It is recommended the Board approve a total of $100, in funding to be expended for the condition assessment and determination of the estimated market value of the Alexander & Baldwin Brydeswood Well. FUNDING: Water Utility Fund Account: Account No Funds Requested for Assessment and Valuation of Alexander & Baldwin Brydeswood Well $100, Total Funds Requested $100, Funds for Assessment and Valuation of Alexander & Baldwin Brydeswood Well $100, BACKGROUND: The Department of Water (Department) has been approached by a representative of Alexander & Baldwin (A&B) to see if the Department was interested in acquiring their Brydeswood well. The Brydeswood well was constructed by A&B in 2012 in the Kalaheo area. The well has a 21 inch bore hole with a 14 inch diameter casing and is 1245 feet deep. When tested the well was capable for pumping 608 gallons per minute for a duration of 73.5 hours. The Department is interested in acquiring this well, but first needs to assess its capabilities, condition, performance and value. The Department would hire an experienced consultant to complete this work. The successful acquisition of this well may allow the Department to defer the exploration and development of the Yamada Well project currently in design Pua Loke Street Līhu'e, HI Phone: Fax: Operations Fax: Page 197

198 Manager s Report No December 22, 2017 Page 2 of 2 OPTIONS: Option 1: Pros: Con: Option 2: Pro: Con: Approve the funding for assessment and valuation of Alexander & Baldwin Brydeswood Well. Approving funding will allow the Department to have a third well source in the Kalaheo water system, increasing system reliability. Approving funding could allow the Department to defer the construction of the Yamada Well. If negotiations to acquire the Brydeswood well are unsuccessful, the Department would have no tangible results for the money spent on the well assessment consultant. Do not approve the funding for assessment and valuation of Alexander & Baldwin Brydeswood Well. The Department will continue the design, exploration and construction of the Yamada Well Project. There are no guarantees that the initial siting and testing of the Yamada well will produce a productive well or a well equivalent to the Brydeswood well. Respectfully submitted, Funding reviewed, Kirk Saiki, P.E. Manager and Chief Engineer Marites Yano Waterworks Controller KA/ein Mgrrp/December 2017/18-85/Discussion and Possible Action to Begin the Procurement Solicitation for the Assessment and Valuation of Alexander & Baldwin s Brydeswood Well in the amount of $100, ( ):ein Page 198

199 MANAGER S REPORT NO December 22, 2017 DEPARTMENT OF WATER County of Kaua i Water has no Substitute Conserve It! Re: Discussion and Possible Action for Job No. 12-4, Water Plan 2020 No. HE-14, Hanapepe- Eleele Booster Pump Replacements for additional construction funding in the amount of $567, RECOMMENDATION: It is recommended that the Board approve additional funds for the subject project construction for awarding and executing a new contract for the project. FUNDING: Build America Bond/Capital Outlay/R&R WU/ Capital Outlay/HE-14, Eleele Booster Rehab (100%RR) Approved budget FY $577, Contractor Proposal $ 1,090, Total Contingency (approx. 5%) $ 54, Total Funding Required $ 1,144, Available Water Utility Fund Balance $18,904, Additional Funds Requested, (Water Utility) $ 567, Water Utility Fund balance to remain after additional funds approved $ 18,337, BACKGROUND: This project consists of the contractor to furnish all materials, labor, tools, equipment, and appurtenances required to provide and install two (2) booster pumps, two (2) fixed aluminum louvers for the existing Booster Pump Building, discharge piping, and MCC as specified in the plans and specifications. The work is located at the existing Hanapēpē-Ele`ele Booster Pump site, off Ko Road. All work shall be in-place complete and in accordance with the plans and specifications. The existing Ele ele booster pumps are considered to be outdated and they are the only means to pump water up to the Ele ele water system. The Ele ele water system currently obtains water from the Hanapēpē water system. Water from the Hanapēpē 212 water system is pumped by a booster pump located in Hanapēpē Valley, up to the Ele ele 340 storage tanks through a transmission line that runs up the valley cliff from the booster pumps to the Ele ele 340 storage tanks. From these storage tanks, water flows down transmission lines to the Ele ele 340 service zone and then through a pressure reducing valve to the lower Ele ele 190 sub-zone. Therefore, if the Ele ele Booster pumps fail, the DOW would not have a means for pumping water to the Ele ele system. Concurrent with the project to replace the aging Ele ele Booster pumps, the Department has a project design underway to reorganize the Hanapepe and Ele ele water systems by connecting 4398 Pua Loke Street Līhu'e, HI Phone: Fax: Operations Fax: Page 199

200 Manager s Report No December 22, 2017 Page 2 of 4 the Hanapēpē 212 system with the Ele ele 190 service zone with a new transmission water line along Kaumuali`i Highway. The project will reduce the Department s energy cost by eliminating the need to pump water from the 212 service area and up to the Ele ele 340 level and then dropping water back down to the Ele ele 190 service area from the 340 level. The project will also strengthen the Ele ele system by providing a redundant way to transmit water from Hanapēpē to the Ele ele system. A new trailer mounted booster pump and connecting pipeline will be installed in private property next to Waialo Road that will allow the Department to pump and transmit water from the new Hanapēpē- Ele ele 212 service zone to the Ele ele 340 storage tanks. The end result will be two booster pump sites that will be capable of pumping water up to the Ele ele 340 storage tanks, instead of the single existing booster pump station. In February 2013, there was a Manager s Report that mentioned outdated pumps and equipment at the project site. DOW Operations requested that this project be performed as soon as possible in order to reduce maintenance hours and the chances of irreparable pump failure. Due to their age and configuration, the current booster pumps are able to be maintained on a limited basis. This project serves to alleviate those issues and as of November 2017, the situation has not changed. Currently, the MCC, booster pumps, and appurtenances are very old and deteriorating and in need of replacement to assure a reliable source of water for the Eleele System. The existing MCC does not have a connection for an emergency generator, to hook up emergency power DOW Operations staff will have to disconnect the KIUC leads and wire in a generator directly to the main breaker. The main thing to stress is that if we have a catastrophic failure at this site due to the age and condition of the equipment, we would not have a source of water for Eleele System. This project has been procured multiple times. The first procurement in July 2017 resulted with no qualified offerors. For that reason, the DOW reprocured the project in September The requests for proposals for the subject project resulted in only one qualified/responsible proposal with a cost of $1,113, On October 30, 2017, pursuant to HRS 103D-312, the Department of Water requested the Cost or Pricing data from WASA Electrical Services, Inc. (WASA), who is the qualified proposer to review their data for fair and reasonableness before any award of the contract is made. On November 6, 2017, the information was submitted to the Department for review. On November 10, 2017 after cost price data review, it was recommended to request at Best and Final Offer BAFO from WASA. The request was made on November 14, 2017 and a meeting was held on November 20, 2017 to discuss BAFO items. On November 10, 2017, a price range was internally created by DOW based on cost price review with a range of $1,000,013-$1,100,000 after cost price data review. On November 27, 2017 the BAFO was received with additional cost price data information related to the proposal offer of $1,107,031 (corrected$1,106,822). On November 28, 2017, the evaluation committee reviewed the BAFO and recommended moving forward with the selection. However, the cost was above the price range that was determined to be fair and reasonable. Thus, with the guidance of the Chief Procurement Officer, the DOW entered into direct negotiations with WASA per Hawaii Administrative Rules (a)(4) to attain a cost that could be determined as fair and reasonable. On December 1, 2017, WASA submitted a revised proposal in the amount of $1,090, The revised offer was then deemed fair and reasonable. My determination of whether the offer is fair and reasonable is a matter of judgment. There is no simple formula that is available to me to provide an answer of fair and reasonable. Determining Page 200

201 Manager s Report No December 22, 2017 Page 3 of 4 what is fair and reasonable depends on a lot of factors such as market conditions (Extent of competition), scope of the project (specialty contracting for water booster pump facilities), and procurement method (Government Unique Requirements). The current construction industry is relatively busy at the time as it is evident by the DOW Construction Management active projects that are proving we are short staffed each day. For this reason, contractors are not as desperate for work which plays a factor into the extent of competition. This particular project scope consists of mostly specialty electrical, mechanical and pump work that are very specific to the water industry. Given our island isolation, this further reduces the extent of competition while increasing pricing for materials, labor and equipment operations. Finally, government procurement requirements are more extensive than private developers so the DOW also sees added cost by the contractor to meet our stringent general provisions and request for proposal requirements which in turn correlates to higher general requirements, other items and overhead. As stated in the November 10, 2017 cost price date memo, the engineers estimate provided by the DOW design team via Okahara & Associates was much lower than the proposal. The original engineer s estimate during the budget formulation of FY17-18 was $550,000. After adding a 5% contingency, the budget was finalized at $577,500. In May 2017, the engineers estimate was revised to $674,402. The CM division was not notified of this during CM budget approval so the $577,500 budget line item remained. On November 7, 2017, Okahara & Associates conducted a review of WASA s proposal and provided the following response. If this Hanapēpē-Eleele project is a high priority that needs to happen now, we would say yes, award the bid. If this project is not critical, can Kauai DOW wait until the economy slows down when contractors are hungry? If yes, we would say wait because the number of bids will likely increase and prices will likely drop. for the proposal amount of $1,113,458 proposed by WASA. This project now ranks #37 in the most recent WP2020 priority list provided as of this memo. Although it is not very high, it will benefit the affordable housing projects planned for the area. Further, this project was advertised twice with only a few interested proposers given the technical scope of the project. Waiting to construct at a later time will not necessarily equate to more proposers since the construction economy doesn t look to be slowing down and it will definitely lead to inflationary costs. After the initial price analysis per November 10, 2017 memo and supplemental cost analysis per HRS 103D-312, in my judgment, I do believe that after factoring in market conditions, our alternatives for meeting the requirement, price-related factors, and the non-price evaluation factors that relate to each procurement, my determination is that the single qualified direct negotiation offer as submitted on December 1, 2017 seems to be fair and reasonable to DOW customers for the majority of total pricing and that the engineer s estimate was simply too low in several areas. There are items that may have seen further price reduction had there been more competition but the price is reasonable given the circumstances. As Procurement Officer responsible for exercising the requisite judgment needed to reach a negotiated settlement with the offeror and is solely responsible for the final price agreement, I recommend the Department move forward with award of the construction now that we have achieved a cost within our price point range. The price of the apparent successful offeror is reasonable despite the identified differences. Page 201

202 Manager s Report No December 22, 2017 Page 4 of 4 The RFP process (competitive sealed proposals) although more technical and time consuming than low bid procurement allows for a BAFO which can provide substantial cost savings at times. The associated costs for material, labor, equipment, overhead and fee looked reasonable with further cost reduction of $23, realized with the BAFO and direct negotiation process. Thus, it is recommended the Board approve the additional funds so the construction contract can be awarded and executed with the contractor selected which is WASA Electrical Services, Inc. OPTIONS: Option 1: Pro: Con: Option 2: Pro: Con: Approve the additional funds. Project can be awarded. Eleele booster pump rehabilitation can be done as needed for DOW Operations and avoid Higher budget than anticipated. Not approve additional funds. Department does not spend more than budgeted. We would have to dramatically reduce scope and no guarantees that we can stay within the current budget while meeting the needs of the facility given the price realities seen recently. Project would likely be cancelled and shelved until budget available. The DOW Operations staff risk major issues to serve our customers. Respectfully submitted, Dustin Moises, P.E. Chief of Construction Management CONCURRED: Kirk Saiki, P.E. Manager and Chief Engineer DM/ein Mgrrp/December2017/18-86/Discussion and Possible Action for Job No. 12-4, Water Plan 2020 No. HE-14, Hanapepe-Eleele Booster Pump Replacements for additional construction funding in the amount of $567, ( ):ein Page 202

203 DEPARTMENT OF WATER County of Kaua i Water has no Substitute Conserve It! MANAGER S REPORT No December 22, 2017 Re: Discussion and Possible Action on Revised Memorandum of Understanding (Kulana Water Tank Lot), TMK: :089 (Lot 8), TMK: :046, Līhu'e, Kaua'i RECOMMENDATION: It is recommended that the Board Approve the Revised Memorandum of Understanding with the Association of Apartment Owners of Kulana Condominium for the Kulana Water Tank Lot. FUNDING: N/A. BACKGROUND: Kulana Subdivision, S-99-49, is a 20 lot subdivision located along Kaapuni, Olohena and Hauiki Roads. Kulana Subdivision s approved water master plan included the construction of a water storage tank. The developer designed and constructed a 250 gallon concrete storage tank for Kulana Subdivision on TMK: :089, Lot 8 (see Exhibit 2). The developer intends to subdivide TMK: :089 into two lots. The water tank is located on one of the two lots. The developer intends to convey both the water tank and the newly created lot that the water tank is located on to the Department of Water (DOW). TMK: :089 (The Water Tank Lot) is located in the State Land Use Agricultural District, was previously subdivided, and cannot be re-subdivided unless it qualifies under one of the exceptions listed in Section 8-8.3(c) of the Comprehensive Zoning Ordinance. The first exception is for a subdivision requested by a governmental agency (for example, DOW). The DOW agreed, with the County of Kaua'i s Planning Department s concurrence, that the DOW would join with the Applicant in requesting the Water Tank Lot Subdivision, provided that the Applicant is entirely responsible for all work and costs necessary to complete the Subdivision. Without the DOW s assistance, the County of Kaua'i s Planning Commission cannot approve the Water Tank Lot Subdivision. If there is no Water Tank Lot Subdivision, then there is no way to transfer the portion of the property upon which the Water Tank is located to the Water Board. If the Water Tank cannot be conveyed, then the Kulana Subdivision cannot be approved. This is crucial to the ability of the applicant to complete the Kulana Subdivision. The DOW made a commitment to assist the Applicant in this matter by joining in the Water Tank Lot Subdivision and entered into the original MOU on July 20, Pua Loke Street Līhu'e, HI Phone: Fax: Operations Fax: Page 203

204 Manager s Report No December 22, 2017 Page 2 of 2 OPTIONS: Option 1: Approve recommendation. Pros: a. The applicant will be able to subdivide TMK: 4-4-3:89 into two lots. b. The applicant will convey the water tank and lot to the DOW. Con: a. The Department would need to maintain a water tank and lot. Option 2: Reject the recommendation. Pro: a. The Department would not need to maintain a water tank and lot. Cons: a. The applicant will be not be able to subdivide TMK: 4-4-3:89 into two lots. b. The Department would not have a water tank and lot. Respectfully submitted, Edward Doi, P.E. Chief of Water Resources and Planning CONCURRED: Kirk Saiki, P.E. Manager and Chief Engineer ED/ein Mgrrp/December 2017/18-87/ Discussion and Possible Action on Revised Memorandum of Understanding (Kulana Water Tank Lot), TMK: :089 (Lot 8), TMK: :046, Līhu'e, Kaua'i ( ):ein Page 204

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218 I. NEW BUSINESS 4. Discussion and Possible Action on the Appointment of, or Execution of an 89- day Contract for, an Interim Manager and Chief Engineer REPORT PENDING Page 218

219 I. NEW BUSINESS 5. Discussion and Possible Action on Creating a Permitted Interaction Group for the Recruitment and Recommendation of a Manager and Chief Engineer REPORT PENDING Page 219

220 MANAGER S REPORT No December 22, 2017 DEPARTMENT OF WATER County of Kaua i Water has no Substitute Conserve It! Re: Discussion and Possible Action on the Department s Recommendation of the Application of HAR Exempt Classes of Action, Specifically, Exemption Class #2, Item 3 and Exemption Class 3, Item 8 For Job No , Water Plan 2020 No. PLH-35b, Kapaia Cane Haul Road 18 Main, Līhu'e, Kaua'i, Hawai'i RECOMMENDATION: The Department has been asked to review the proposed HEPA (Chapter 343) exemptions for the proposed 18-Inch Waterline along Kapaia Cane Haul Road. Utilizing the Comprehensive Exemption List for the Department of Water, County of Kauai, as approved by the Environmental Council, March 10, 2004, two potential exemption criteria have been identified for further review: Exemption Class #2, Item 3 and Exemption Class #3, Item 8. Upon review by the Water Resources and Planning (WRP) Division, with respect given to the water system condition and planning aspect, the following information is presented for Department consideration. Note: In consideration of the analysis by the WRP Division, it shall be noted that the analysis is based upon the previously approved hydraulic model of the Water Plan 2020 plan, 2001, in conjunction with the approved hydraulic model information of the Water Master Plan for the former AMFAC/JMB Lihue-Hanamaulu Master Planned Community, July 21, 2009, prepared by Kodani & Associates, Inc. Exemption Class #2: Replacement or reconstruction of existing structures and facilities where the new structure will be located generally on the same site and will have substantially the same purpose, capacity, density, height and dimensions as the structure replaced. Item 3 Replacement of waterlines and appurtenances where no change in purpose is intended. Replacement may be size for size, or may involve an increase in pipe diameter if the existing waterline is inadequate to meet current Water System Standards and current zoning requirements. Review and analysis by the WRP Division concludes that the use of this exemption is not applicable for the 18-Inch Waterline along Kapaia Cane Haul Road, based on the following: The new waterline cannot be considered to be a replacement since the existing waterline will not be removed and/or abandoned. The proposed new waterline does not meet a condition of the Exemption Class #2 criteria be located generally on the same site. In an effort to assist with a proposed alternative that may meet the above exemption criteria, the WRP Division recommends reconsideration of the 12-Inch waterline replacement along Kūhi ō Highway, from approximately the Maalo Road/Kūhi ō Highway intersection to the Kuene 4398 Pua Loke Street Līhu'e, HI Phone: Fax: Operations Fax: Page 220

221 Manager s Report No December 22, 2017 Page 2 of 3 Street/Kūhi ō Highway intersection, with a 16-Inch waterline and noted in the above referenced Water Master Plan. Exemption Class #3: Construction and location of single, new, small facilities or structures and the alteration and modification of same and installation of new, small, equipment and facilities and the alternation and modification of same, including but not limited to: (a) single family residences less than 3,500 square feet not in conjunction with the building of two (2) or more such units; (b) multi-unit structures designed for not more than four (4) dwelling units if not in conjunction with the building of two (2) or more such structures; (c) stores, offices and restaurants designed for total occupant load of twenty (20) persons or less, if not in conjunction with the building of two (2) or more such structures; (d) water, sewage, electrical, gas, telephone and other essential public utility services extensions to serve such structures or facilities; and (e) accessory or appurtenant structures including garages, carports, patios, swimming pools, and fences; and acquisition of utility easements. Item 8 Installation of new water mains and fire hydrants to provide fire protection. Assumptions & understanding of exemption intent: Water system fire protection deficiency is required to be a pre-existing condition. Installation of new water mains and fire hydrants to provide fire protection would need to be small pursuant to the criteria of the base Exemption Class #3. Item 8 provides clarity of the type of small facility which would be allowed by Exemption Class #3 (d). Review and analysis by the WRP Division concludes that the, use of this exemption is not applicable for the 18-Inch Waterline along Kapaia Cane Haul Road based on the following: Currently, fire protection for the Līhu'e area is adequate and meets the requirements set forth in the Water System Standards, 2002, and as amended. Examples of recent developments and improvements which assisted to address fire protection deficiencies in the Līhu'e area: DOW office building required to provide 2,000 gpm fire flow. Waterline extension from Kaumuali i highway remedied the fire flow deficiency. Developments along Akahi (Tip Top) and Elua Streets required to provide 2,000 gpm fire flow. DOW WP 2020 project was completed to replace and up size water mains to address fire flow deficiency. Elderly housing near the Līhu'e fire station Malama and Hoala streets, replaced and up-graded waterlines along these roads to satisfy the DOW fire flow requirement. The approved Water Master Plan for the former AMFAC/JMB Līhu'e-Hanamaulu Master Planned Community, July 21, 2009, prepared by Kodani & Associates, Inc., provides fire flow reports to identify how the proposed developments will affect our existing water systems. A requirement in the preparation of the Water Master Plan (WMP) is to provide information of the existing water system condition as a basis to start the analysis of future development impacts and proposed solution alternatives. Page 221

222 Manager s Report No December 22, 2017 Page 3 of 3 The Base DOW MDD, Fire Flow Analysis, Fire Flow Report, included as part of the approved WMP, conducted a hydraulic model run to analyze the DOW s existing water system with Max Day Demand and fire flow demands at that time. The following were considerations of the model analysis: Existing waterlines in the Lihue-Hanamaulu area (Did not include new waterlines installed or waterlines upgraded after 5/09) Located and provided Fire Flow data at selected locations with the system (see attached map and corresponding labels (nodes/fh). Selected nodes/fh was loaded with Fire Flow demands for that areas zoning, hydraulic model was used and results were obtained. Selected nodes/fh were in areas of industrial, subdivisions, business area, commercial and Hospital. Results of selected nodes/fh values are used for comparison with other scenarios The result of the Base DOW MDD, Fire Flow Analysis, Fire Flow Report indicates that based on the available information at the time, the fire flows in the Līhu'e area are sufficient to meet the minimum requirements as set forth in the Water System Standards, 2002, and as amended. Respectfully submitted, Kirk Saiki, P.E. Manager and Chief Engineer KS/ein Mgrrp/December 2017/18-88 Page 222

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224 DEPARTMENT OF WATER County of Kaua i Water has no Substitute Conserve It! FISCAL REPORT: MONTHLY SUMMARY HIGHLIGHTS NOVEMBER, 2017 I. BUDGET SUMMARY VS. ACTUAL (see attached report for details) YEAR TO DATE (YTD) BUDGET & ACTUAL EXPENSES SUMMARY AS OF NOVEMBER, 2017 BUDGET vs EXPENSED Operating Expenses $13,813, $9,774, Debt Principal Payment 3,822, ,822, Capital Projects 11,793, ,003, TOTAL $29,430, $14,600, REVENUES: VARIANCE = ACTUAL LESS BUDGET ; POSITIVE INDICATES HIGHER PERFORMANCE THAN EXPECTED. Total Revenue as of November, 2017 was 3% below projection. o Water sales of $13.2 million (M) was $1.2M or 10% above projection. o Other Water Revenue Receipts of $163 thousand ( K ) exceeded projection by $59K or 57%. o Capital Contributions: Cash contributions including Federal & State Grants $381.1K. o Investment Income & Net Increase in FV of Investments $164.5K OPERATING EXPENSES: VARIANCE = BUDGET LESS ACTUAL EXPENSES; POSITIVE INDICATES LESS SPENDING THAN PLANNED. YTD Operating Expenses before depreciation and amortization was $9.8M. Total spending was $4M less than planned or budgeted; a positive variance of 29%. o Employee Related Expenses $3.8M with a 15% positive variance. o Contracts & Services $2.4M with a 56% positive variance. Professional & Other Services, Insurance, Repairs and Maintenance for both water and nonwater systems are the main items contributing to the 56% positive variance. o o o o o o o Exceptional Expenses None Fuel & Utilities $1.23M; 2% negative variance. Bulk Water Purchase $663.3; 12% positive variance. Office & Operating Supplies $266K, 39% positive variance. Training, Travel & Meeting Expenses $30K. Debt Service Interest Expense $1.47M. Depreciation & Amortization (non cash expenses) is $3.16M. NET OPERATING INCOME: Net Operating Income before depreciation and amortization $5.33M. Net Operating Income after depreciation & amortization was $2.17M. Fiscal report 11/2017 Page 224

225 DEPARTMENT OF WATER County of Kaua i Water has no Substitute Conserve It! NON OPERATING PROCEEDS & DISBURSEMENTS SRF Loan Proceeds None FRC Facility Reserve Charge Receipts of $233, YTD Debt Principal Payment is $3,822, CAPITAL PROJECTS BUDGET: YTD DISBURSEMENTS = $1,003, Capital Projects: Water Utility Fund $433.5K Capital Projects: FRC Fund $75.5K Capital Projects: BAB Fund $494.K Capital Projects: SRF Loan Fund None. II. FY ENCUMBERED FUNDS (SEE ATTACHED) FY Certification of Funds $5,747, III. COMPARATIVE CHARTS: METERED CONSUMPTION: November, 2017 metered consumption 330 million gallons (mg); decreased by 20 mg as compared from the same month of FY Year to Date (YTD) metered consumption as of 11/30/17 1,867 mg; YTD increase of 102 mg as compared from the same month of FY IV. COMPARATIVE BALANCE SHEET: * Statement of Net Positions as of November 30, 2017 & See attached. V. OTHER FISCAL ONGOING ACTIVITIES/INITIATIVES: Five (5) years Water Rate Study. CC&B Field Service Management has been implemented. Financial Statements June 30, 2017 and 2016 Final Auditor s Report issued. Budget Program Solution procurement is in process. CC&B hosting solution going out for RFQ. Respectfully submitted, Marites Yano Waterworks Controller Fiscal report 11/2017 Page 225

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233 FY Certification of Funds Available ACCOUNT # W/U BAB FRC TOTALS 7/1/ Utilitec, Inc. WU bill mail processing and mailing services OE 200, , /6/ Prithibi As needed Technical Support & CC&B Oracle Upgrade OE 640, , Wong's Equipment And Solicitation GS , Furnishing and Delivery of Noise 7/27/ Service, LLC Leak Logger System CO 35, , /3/ Belt Collins Hawaii, Ltd. Amendment 9, Job. No , Kapaa Homesteads 0.5MG Storage Tank & Kapahi 1.0 MG Storage Tank & Connecting Pipelines, Wailua-Kapaa Water System CO 160, , /3/ Valley Isle Motors, Ltd. Solicitation GS , Furnishing and Delivery of 3 vehicles CO 275, , /3/ Valley Isle Motors, Ltd. Solicitation GS , Furnishing and Delivery of 2 vehicles CO 120, , Unlimited Construction Job no , WP 2020, KP-09, MCC Chlorination Facilities, Koloa Well 16A & 16B site building 8/11/ Services, Inc. improvements CO 1,750, ,750, /11/ Unlimited Construction Services, Inc. Job no , WP 2020, KP-09, MCC Chlorination Facilities, Koloa Well 16A & 16B site building improvements CO 2,005, ,005, Derricks Well Drilling & 9/18/ Pump Services, LLC CO #1, Job. # 17-05, Puhi Well 5A Repairs OE 49, , Job. No , WP 2020, No. WKK-2, Drill and Develop 9/18/ R.M. Towill Corporation New Kilauea Well No. 3, Kilauea, Kauai, HI CO , Job. No , WP 2020, No. WKK-2, Drill and Develop 9/18/ R.M. Towill Corporation New Kilauea Well No. 3, Kilauea, Kauai, HI OE 70, , /7/ King Auto Center GS , Furnishing and delivery f one SUV 4-door 4 wheeel drive CO 39, , /29/ Oasis Water Systems 12/22/ Kauai Air Conditioning 12/22/ Kauai Air Conditioning Job No , Kekaha Shaft 12 Replacement AC ; To furnish the services and maintenance of DOW's various air conditioning units. AC ; To furnish the services and maintenance of DOW's various air conditioning units CO 69, , OE 22, , OE 10, , ,531, ,915, , ,747, Page 233

234 III. BILLED REVENUES COMPARATIVE REPORT For Fiscal Years 2016, 2017 & Cum. Inc (Dec) % Inc. (Dec.) July $ 2,389,827 $ 2,626,380 $ 2,760,278 $ 133, % August $ 5,285,956 $ 5,097,118 $ 5,480,992 $ 383, % September $ 7,743,790 $ 7,767,863 $ 8,381,960 $ 614, % October $ 10,076,762 $ 10,231,048 $ 11,028,260 $ 797, % November $ 12,649,063 $ 12,718,113 $ 13,685,184 $ 967, % December $ 14,656,392 $ 14,905,179 $ (14,905,179) % January $ 16,981,290 $ BILLED REVENUES 17,167,603 COMPARATIVE CHART $ (17,167,603) % February $ 19,297,429 $ 19,387,481 $ (19,387,481) % As of November: FY 2016, 2017 & 2018 March $ 21,676,963 $ 21,562,033 $ (21,562,033) % April $32 M $ 24,320,174 $ 23,993,720 $ (23,993,720) % May $30 M $ 26,663,804 $ 26,225,406 $ (26,225,406) % June $28 M $ 29,092,060 $ 28,767,205 $ (28,767,205) % $26 M ** AFS error $24 in Mbilling AJE 288,133 $22 M $20 M $18 M $16 M $14 M $12 M $10 M $8 M $6 M $4 M $2 M $0 M revenue comparison Page 234

235 CASH RECEIPTS (W/U) COMPARATIVE REPORT For Fiscal Years 2016, 2017 & 2018 FY 2016 FY 2017 FY 2018 Cum. Inc (Dec) % of Inc (Dec) July $ 2,877,122 $ 2,036,499 $ 2,385,872 $ 349,373 17% August $ 5,578,998 $ 4,881,715 $ 5,504,876 $ 623,161 13% September $ 8,342,249 $ 7,182,779 $ 8,155,772 $ 972,993 14% October $ 10,566,640 $ 9,806,314 $ 11,034,364 $ 1,228,050 13% November $ 12,935,656 $ 12,190,276 $ 13,377,231 $ 1,186,955 10% December $ 15,243,144 $ 14,510,720 $ (14,510,720) -100% January $ 17,306,718 $ 16,654,692 $ (16,654,692) -100% Cash Receipts Comparative Chart February $ 19,659,624 $ 18,823,674 $ (18,823,674) -100% March $ 22,198,390 As of November: $ 21,192,407 FY 2016, 2017 & 2018 $ (21,192,407) -100% April $ 24,345,414 $ 23,243,462 $ (23,243,462) -100% $32 M May $ 26,778,010 $ 25,924,897 $ (25,924,897) -100% June $30 M $ 29,203,668 $ 28,436,387 $ (28,436,387) -100% $28 M $26 M $24 M $22 M $20 M $18 M $16 M $14 M $12 M $10 M $8 M $6 M $4 M $2 M $0 M FY 2016 FY 2017 FY receipts Page 235

236 METERED CONSUMPTION (000 GALLONS) MONTHLY COMPARATIVE CHART For Fiscal Years 2016, 2017 & 2018 (expressed in thousands) FY 2016 FY 2017 FY 2018 INC (DEC) July 436, , ,831 20,136 August 361, , ,414 44,958 September 415, , ,598 28,161 October 384, , ,247 28,705 November 398, , ,959-19,950 December 305, , ,246 January 453, , ,392 February 366, , ,462 March 323, , ,619 April 334, , , ,000 May 335, , ,701 June 388, , ,055 ** AFS error in billing AJE 288, ,133 Adjustment MONTHLY CONSUMPTION COMPARATIVE CHART As of November, FY 2016, 2017 & , , , ,000 FY 2016 FY 2018 FY ,000 0 Note: refer to monthly summary highlights mo. consumption comp Page 236

237 YTD METERED CONSUMPTION (000 GALLONS) COMPARATIVE REPORT For Fiscal Years 2016, 2017 & 2018 (expressed in thousands) FY 2016 FY 2017 FY 2018 CUM. INC (DEC) July 400, , ,831 20,136 August 792, , ,245 65,094 September 1,119,690 1,070,588 1,163,843 93,255 October 1,434,146 1,415,130 1,537, ,960 November 1,784,988 1,765,039 1,867, ,010 December 2,072,021 2,069,285-2,069,285 January ,394,442 2,385,677-2,385,677 February As 2,714,729 of November: FY 2016, 2,700, & ,700,139 March ,041,325 3,006,758-3,006,758 Billions YTD WATER CONSUMPTION COMPARATIVE CHART April 3,398,279 3,355,539-3,355, May 3,722,903 3,670,240-3,670,240 June ,048,246 4,025,295-4,025, ** AFS error in billing AJE 288, ,133 Adjustment FY 2016 FY 2017 FY consumption (000 gallons) Page 237

238 Assets and Deferred Outflows Department of Water - County of Kauai Statements of Net Position October 31, 2017 and 2016 THE MO 11/30/2017 (Unadjusted) AS OF: YEAR TO DATE 11/30/2016 (Adjusted) Current Assets Cash 9,136, ,081, Equity interest in pooled investments 5,135, ,808, Receivables: Accounts, net of allowance for doubtful accounts* 1,937, ,893, Due from other funds Unbilled accounts 1,525, ,428, Grants and subsidies 212, Accrued interest 80, , Total receivables 3,755, ,394, Materials and supplies 1,097, , Prepaid expenses 62, , Total current asset 19,187, ,220, Restricted Assets: Facility reserve charge funds: Cash 710, ,975, Accounts receivable and other 90, Total facility reserve charge funds 801, ,975, Bond funds: Cash 1,824, ,581, Investments 12,446, ,864, Accrued interest 57, , Total bond funds 14,328, ,507, Total restricted assets 15,129, ,483, Equity Interest in Pooled Investment - Noncurrent 39,344, ,015, Utility Plant: In service 333,082, ,279, Accumulated depreciation (123,521,456.97) (115,942,069.27) Total utility plant 209,560, ,337, Construction work in progress 5,359, ,620, Total property, plant and equipment 214,919, ,958, Total assets 288,581, ,676, Deferred Outflow of Resources 6,375, ,963, Total assets and deferred outflows of resources $ 294,956, $ 291,640, *Allowance for doubtful accounts (276,016.87) (269,187.20) Report Format Created by: S. Nadatani Page 238

239 Liabilities, Deferred Inflows and Net Position Department of Water - County of Kauai Statements of Net Position October 31, 2017 and /30/2017 (Unadjusted) 11/30/2016 (Adjusted) Current Liabilities: Accounts payable and accrued liabilities 2,128, $ 2,111, Contracts payable, including retainages 27, , Due to/due From Other Funds - Customer overpayment 162, , Customer deposits and advances 420, , Current portion of long term debt 4,835, ,717, Current portion of capital lease obligation 742, , Total current liabilities 8,317, ,660, Long-Term Debt 73,549, ,557, Capital Lease Obligation 526, ,269, OPEB & Retirement Benefits 17,415, ,783, Accrued Vacation and Compensatory Pay 1,327, ,245, Deferred Inflow of Assets 338, ,286, Total liabilities and deferred inflows: 101,474, ,801, Net Position: Water Utility Reserves 10,200, ,200, Restricted FRC 797, ,975, Restricted Build American Bonds 14,315, ,941, Invested in Capital Assets Net of Related Debt 135,819, ,028, Unrestricted 32,349, ,694, Total net position 193,482, ,839, Total liabilities, deferred inflows and net position: $ 294,956, $ 291,640, Report Format Created by: S. Nadatani Page 239

240 DEPARTMENT OF WATER, COUNTY OF KAUAI CORRECTIVE ACTION PLAN Section I Financial Statement Finding IT Controls Deficiencies (Significant Deficiency) (Page 48) This pertains only to Great Plains (GP) and Customer Care & Billing (CC&B) Corrective Action Plan Concur. The Department of Water address their respective IT control deficiencies in the areas of IT governance, logical security, and change management as follows: IT governance Finding: Lack of management steering committee to direct, review, and approve IT plans and priorities Response: We have an IT Strategic Plan which was adopted in 2013 and was approved by our Water Board. For each IT project, we have a committee that reviews all submittals and goes through a selection process. Each month, we will provide a summary update to the Water Board at the Board Meetings. Person Responsible: Jeff Mendez Anticipated Completion Date: On Going Logical Security Finding: Formal security procedures are outdated and not consistently followed for new hires, transfers and separated users. Response: We have an Add/Remove Form that is not being utilized. We will be updating our SOP 45 to ensure steps are being taken to remove terminated or transferred users. Person Responsible: Jeff Mendez Anticipated Completion Date: December 31, 2017 UPDATE: We currently are working on a new draft to update SOP 45. This final update will incorporate changes based on the audit findings. Page 240

241 DEPARTMENT OF WATER, COUNTY OF KAUAI CORRECTIVE ACTION PLAN Finding: Weak password Security. Response: Great Plains we will be turning on password complexity and forcing users to change their password every 90 days. CC&B Will issue new passwords every 90 days. We will use a password randomizer to auto generate a new unique password for each user. We have already begun this procedure at of the end of September. Person Responsible: Jeff Mendez (GP) / Sandi Nadatani (CC&B) Anticipated Completion Date: CC&B Passwords Completed. GP Password December 31, 2017 UPDATE: The CC&B Passwords have been updated and the complexity includes mixed case letters, numbers, and special characters. UPDATE: On November 28, password complexity was enabled for Great Plains. Passwords will need to be complex passwords and will be forced to change every 90 days. All staff was notified via and Division Heads were notified at the weekly staff meeting. Passwords will be a minimum of 7 characters and will consist of letters, numbers and special characters. Finding: User access rights are not reviewed on a periodic basis to ensure access is limited to applicable position functions. Response: We have begun the process of periodic reviews to ensure access is limited to the function of the position. A listing has been sent to the Controller to review permissions for each individual. This plan is to do this review annually. A typical scenario for us is that someone in Accounting (Great Plains) will work Temporary Assignment and get additional access to modules for the TA work. When the TA is completed, we are not informed to change permissions to the previous state. We have begun the process of periodic reviews and will be forwarding to the Controller a listing of permissions for review. For CC&B, access does not typically change over the course of the year. We will perform an Access Review annually to verify user access. Person Responsible: Sandi Nadatani Anticipated Completion Date: December 31, 2017 Page 241

242 DEPARTMENT OF WATER, COUNTY OF KAUAI CORRECTIVE ACTION PLAN UPDATE: CC&B User Access rights have been reviewed by the Waterworks Controller and has been updated in the program to match up with the Access Rights. Finding: No review or approvals by functional users for user accounts. Response: When the department migrated from the HBWS hosted CC&B, the I.T. section reviewed and ensured that all users had the same functionality in our new environment. This was tested and confirmed. There was no formal sign off from the Controller on access permissions. Going forward, we have begun the process of periodic reviews and updating SOP 45 to track permission approvals for user accounts. Person Responsible: Sandi Nadatani Anticipated Completion Date: October 31, 2017 for GP; November 31, 2017 for CC&B UPDATE: CC&B User Access rights have been reviewed by the Waterworks Controller and has been updated in the program to match up with the Access Rights. Page 242

243 DEPARTMENT OF WATER, COUNTY OF KAUAI CORRECTIVE ACTION PLAN Change management Finding: Lack of formal change management policies and procedures. Response: We are working to update our SOP 45 to include a form to specifically show Add/Delete/Change for access to Great Plains and CC&B. The form will show more detail that includes which modules to add or remove for an individual. The goal is to show a proper trail of the Controller/Accountant IV giving permissions to have access to each module and hopefully maintain a segregation of duties for staff. Person Responsible: Jeff Mendez Anticipated Completion Date: December 31, 2017 UPDATE: We are currently working on revising SOP45 Finding: Lack of segregation of duties for developers. Response: We have been taking over more of the daily duties, such as running batch jobs and monitoring these jobs. Until we get proper training, we would not feel comfortable moving changes made by our consultants in a test environment and pushing it into production. We will research if this can be a viable possibility in the upcoming fiscal year. We are actually looking into having the consultants doing everything for the department. They would be responsible for backups and modifications and running/monitoring nightly batch jobs. We are a very small staff and would need someone dedicated full time to learn the system. Person Responsible: Sandi Nadatani Anticipated Completion Date: In Progress UPDATE: Staff is currently being trained on the processes for CC&B and what all is involved with promoting changes to the system. Page 243

244 DEPARTMENT OF WATER, COUNTY OF KAUAI CORRECTIVE ACTION PLAN Finding: Evidence of testing or approvals for system changes is not consistently retained. Response: We do not have a consistent trail of modifications. In the future, we will be retaining s, taking screen shots of changes and the use of logs to show testing and/or approvals for system changes. Person Responsible: Sandi Nadatani Anticipated Completion Date: June 30, 2018 UPDATE: All changes to CC&B and GP will need to be routed directly thru the Departments IT Section instead of going directly to our consultants. IT operations Finding: System restoration testing is not performed. Response: Great Plains is backed up daily. For Great Plains, in prior years and not the fiscal year in question, we perform backups prior to making changes, such as encumbrance rollovers. When the data did not show the expected results, we restore the database to its previous state. This fiscal year, everything rolled over as expected and there was not a need to restore the database. Going forward, to test system restoration, we will back up the test environment database every 6 months and make changes in the system. We will then restore the database and show that the changes are no longer reflected in the system. For CC&B, the Department is taking steps to be trained to do backups/restore and going forward the department will schedule system restoration testing annually. Person Responsible: Jeff Mendez (GP) / Sandi Nadatani (CC&B) Anticipated Completion Date: December 31, 2017 UPDATE: The IT Section is working on a time where we can do a system restore without affecting the users. Finding: Unable to confirm if system backups are performed. Response: For Great Plains, we were able to confirm with you that backups are performed on a consistent basis. Page 244

245 DEPARTMENT OF WATER, COUNTY OF KAUAI CORRECTIVE ACTION PLAN For CC&B, The Department provided the SOC2 report that should show the information that you are requesting. Person Responsible: Sandi Nadatani Anticipated Completion Date: June 30, 2018 Finding: Lack of monitoring controls to ensure completeness and accuracy of certain financial system interfaces. Response: A procedure will be put in place to show the interface between CC&B and the Meter Reading System will be accurately transferred. Periodically (or some time period) someone from Fiscal will verify the downloaded values for the days read contains the correct information. Upon uploading the routes to CC&B, staff will spot check and verify that the values in the upload file correspond to the values in the CC&B system. Person Responsible: Waterworks Controller Anticipated Completion Date: November 30, 2017 Page 245

246 DEPARTMENT OF WATER County of Kaua i Water has no Substitute Conserve it! INFORMATION & EDUCATION SPECIALIST REPORT December 22, 2017 Public Notices and Announcements All news releases were also published on the Department s Facebook and Twitter social media pages. Poipu Scheduled water service shutdown o A media announcement was issued on November 14, 2017 to notify the public that a water service shutdown was scheduled for customers located on Pane Road in Poipu on Wednesday, Nov. 15, 2017 from 9 a.m. to 2 p.m., weather permitting. Door to door notices were also provided to affected customers on Pane Road. The water service shutdown was scheduled to allow DOW crews to work on improvements to the water line in the area. As a courtesy, a trailer-mounted water tank was provided for essential water needs. Kekaha - Paua Valley tank remains offline for maintenance o A news release was issued on December 4, 2017 regarding the polychlorinated biphenyls (PCB) detected in the Department of Water s Paua Valley storage tank and its plans to proceed with the refurbishment of the tank under the direction of the Environmental Protection Agency s guidelines. The news release further explained the Department s compliance with the Department of Health s water sampling requirements and reports to conclude that the water samplings from the distribution point of the tank is safe and remained safe while the tank was in service. The news release was published in The Garden Island on December 5, 2017 (Attached). PR worked with the Department of Health to draft the public notice announcement via news release, to ensure accuracy and consistency in the information being released to the public. As of this report, media coverage on the PCB detection has been consistent with the information in the news release. Dec. 4, 2017 The Department of Health issued a news release, Organic chemical found in Kauai water tank, announcing the PCB detection in the Department of Water s Paua Valley storage tank. The news release was published online, on the Govenor.Hawaii.gov, website. (Attached) The Department of Water was also mentioned in the following news releases regarding the PCB detection in the Paua Valley storage tank: Dec. 4, 2017 Hawaii News Now.com: Contaminants found in Kauai, Kona drinking water, on Hawaii News Now.com. It was also featured in the Dec. 4-5 news broadcast. (Attached) Dec. 4, 2017 Star Advertiser, staff writer: Health Department confirms PCBs in Kauai reservoir. Published online and via print on Dec. 5, (Attached) Dec. 5, 2017 West Hawaii Today, written by Max Dible: DWS finds trace contaminant in South Kona backup wells (Attached) Dec. 5, 2017 For Kauai online, written by Leo Azambuja: DOH: Chemical in Westside water tank not a health threat. (Attached) 4398 Pua Loke Street Līhu'e, HI Phone: Fax: Operations Fax: Page 246

247 Information & Education Specialist Report December 22, 2017 Page 2 of 3 Other Media Dec. 5, 2017 The Department was mentioned in the Garden Island Newspaper article, Proposed increases in salaries, taxes a quandary, regarding proposed increases in the County of Kauai, Department Heads annual salaries. (Attached) Public Relations Program Education & Community Outreach o Jonell Kaohelaulii provided a water education presentation at Kula Aupuni Niihau A Kalahelelani Aloha Charter School in Kekaha on November 20, 2017 as part of their Community in the Classroom program. Students from grades 3 5 learned about point and non-point source pollution, the importance of the water cycle and ground water as part of the presentation. Students received conservation notebooks, magnets, pencils and shower timers to practice water conservation at home. o Jonell Kaohelaulii participated in career day presentations at King Kaumualii Elementary School on November 29, She provided an overview of Department of Water career opportunities, to approximately 65 students and explained how water services are delivered to homes. Students received a goody bag with a notebook, shower timer and conservation message magnets. o Carl Arume and Jonell Kaohelaulii provided career day presentations to fifth graders at Eleele Elementary School students on December 1, Jonell spoke about careers in each division and their contributions to delivering water services to customers. Carl gave a water quality presentation; promoting the importance of science, education, source water protection and his career experiences as a microbiologist. Together, they reached 77 students and distributed goody bags filled with shower timers and other water-related conservation tools. Upcoming Community Outreach & Educational Events March 24, 2018 Kauai Regional Science & Engineering Fair March 19 23, 2018 Fix a Leak Week Project WET Project WET Hawaii Annual Report o Jonell has begun research for Project WET Hawaii s annual report. A new facilitator report form was created to assist in gathering a summary of information; including activities, workshops and annual results from each facilitator in the Project WET Hawaii network. The new form will also provide valuable feedback for the Department to identify successes with activity results and areas where the application of the program will need improvements. The annual report is due to the Project WET foundation on January 31, Miscellaneous The Department participated in the annual Lights on Rice Parade event on Dec. 1, The Department s Annual Employee Meeting was held on Dec. 8, The Fun Committee organized a tour for staff with Kipu Kai Ranch Adventures on Dec. 9, Approximately 12 staff and their guests participated. The County s Employee Council hosted its Holly Jolly event on Dec. 14, Page 247

248 Information & Education Specialist Report December 22, 2017 Page 3 of 3 Respectfully submitted, Jonell S.T. Kaohelaulii For Information & Education Specialist JSK: ein Attachments: Health Department: Contaminants found in Kauai, Kona drinking water Hawaii News Now Organic Chemical found in Kauai water tank Govenor.Hawaii.gov Health Department confirms PCBs in Kauai reservoir Star Advertiser Contaminant shuts down water tank The Garden Island DWS finds trace contaminant in South Kona backup wells West Hawaii Today DOH Chemical in Westside water tank not a health threat For Kauai Proposed increases in salaries, taxes a quandary The Garden Island Mgrrp/December 2017/Information & Education Specialist Report ( ):ein Page 248

249 Page 249

250 Page 250

251 Published online at on , and in the printed edition of the Star Advertiser on Page 251

252 Published in The Garden Island on Page 252

253 Published in West Hawaii Today on Page 253

254 Page 254

255 Published in the Garden Island Newspaper on Page 255