the regular meeting of the water resources committee please come to order today is wednesday march sixteenth twenty sixteen and it's about a few minutes after nine in the morning the meeting will come to order and i'd like to ask all of you if you could please turn your cell phones on to the silent mode so that we won't be interrupted during the meeting i'd appreciate that very much members that's us too  mike boyd is excuse he's a little under the weather and members done guzmn and mr holcombe are not voting members of this committee and so they are also not required to be here we have with us we have dave taylor our director of water supply pointer good morning and we have jennifer or one our deputy corporation counsel good morning and welcome to both of you we also of course have our staff in couldn't begin to do presentation the council's annual budget session is set to begin on march thirtieth twenty sixteen each year for the past four years just before the budget session begins mr taylor has delivered comprehensive presentation regarding the department's projected budgetary means the council has found that mr taylor's presentation is very helpful in preparing us to address the department's needs during the budget session we are happy to welcome here today and to watch his testimony his presentation and listen to the discussion here about what to see in their presentation we will take public testimony it will be limited to and i'm sorry to the item on the agenda today if you wish to testify please sign up at the desk located in the eighth floor lobby or at one of the district offices listed on the agenda testimony will be limited to three minutes and upon request up to one minute to conclude at three minutes the light will turn yellow and at four minutes the light will blink read if you are still talking at the four minute mark i will kindly ask you to graph it up when testifying please state your name in who you are representing we have established a connection to the district offices to be fair we will rotate through each of the six members we're going to begin public testimony without any objection thank you very much miss will then bring would you like to handle it from here on down to be lovely thank you chair hon office to you have anyone wishing to testify chair a first person to sign up for testimony in the chamber is brett on stock good morning ari i my name is brett fahnestock and i'm here representing myself and i've been on the board of directors at some point it's a condominium here for many years but today i'm representing myself and i just want to ask you do you think that that harbor lights over here in the harbor should be paying the same rate for water as the four seasons resort do you think they should be paying the same thing probably the answer is no i would guess but do you even know that they pay the same rate they do pay the same rate and so that's one of the issues that i'm trying to bring up as we get into the budget is it like that on a wall who who treat those two entities the same the answer is no they do not i've given you a hand out today hopefully you have a copy of it compares the honolulu water rate schedule to the water rate schedule they're very different why would two islands not that far apart in the pacific ocean have incredibly different water rates structures and your guess is as good as mine probably because we don't talk to each other i think that's probably changed a little bit with the head here but i think my guess is that we don't talk to them very much what's the difference between the two rate structures between the honolulu rate structure and the mallee structure well the honolulu they have so many condos and so many multifamily homes they have a multifamily they give the first nine thousand gallons for a multifamily they give it to a lower rate which kind of makes them equivalent to someone in a house if you're in a house you get a lower rate on a wahoo if you're in a condo you still share that same rate because there's a a multi family rate on maui we don't do that condos on maui pay in the all other category so we're paying at the same as hotels so if you look at the condos a number of condos are part siders harbor lights is key villages or south point villages there are thousands and thousands of families living in condominiums and we're paying the same r as if we're staying at the grand wailea and i can assure you we're not how does this equate to numbers what does it mean for numbers when you look at the fact that we're paying the same thing as these hotels if you're in a house an individual house on maui you pay for fifteen thousand gallons where you pay sixty three bucks if you're in the south point for that same fifteen thousand dollars wall or you pay eighty three dollars twenty dollars more per month just because we live in a condo now what does that mean for south point in a month at seven thousand dollars what does it mean in a year it's eighty two thousand dollars in one year just because we're raising our kids in an economy of eighty two grand first southpoint alone my suspicion is that none of you understand this and that that's why it's continuing to go on and dave doesn't bring it up but that's why we continue to have it year after year dave mentioned on the march second meeting that one option to build out all the infrastructure needed for all the new development is to jack up the top two tiers of rates and please understand that's harbor lights that's me at south point do you want harbor lights and us to pay for the infrastructure that was one option only that he brought up but please don't do it the us in condos we have the water shortage bill hanging over our heads which is if you really understand it's a disaster for us in a house on maui you would still pay sixty three dollars in a water shortage for that same fifteen thousand in a condo we go up to one twelfth so it's the water shortage bill is hanging over our heads and if we ever have it we're going to get you know we're going to assess i just asked to you start this budget process please look at these rate structures the honolulu rate structure and look at them out structure and notice the differences and try to understand why they're different and i would be happy to meet with any of you to help you understand why you know southpoint pays eighty two thousand extra a year just and let's try to implement where we have a similar kind of structure as honolulu going forward it may not be this year but please try to you know work it out in the future thank differences in the rates so i'm looking at the rates for single family dwellings on maui sure and it looks like five thousand is one thousand dollars ninety five thousand and one fifteen thousand and three sixty and fifteen zero one to two thirty five thousand is five forty right and then the general rate seems the numbers and the the ranges are the same except for the over fifteen thousand  rates are the same so why is that different thing how does that make it different you know in what it is in a condo you're excuse me you're on the same meters as a whole bunch of other people so there's you know if you notice on a wahoo for the all other category they don't they don't give you a five thousand and ten thousand just goes right to that rate because at southpoint on the same meter as sixty other units in the first day of a noose billing cycle i go right to the top anyway right so fifteen thousand gallon break makes no difference when you have sixty does that make sense don what i'm saying so so in ottawa who they give you the first nine thousand per unit as a lower rate so you convey their kids and you know what south when we only use nine thousand gallons a month average per year i've been doing this for years i have it on a spreadsheet we average one thousand gallons a month per unit so for us to take care of our kids that would that would do it right and i'm sure that's over process of a lot of that's how they figure in one thousand gallons i don't know but i would imagine that's how they came up that number ok so the major difference in it looks like basically it has the monthly per unit as opposed to overall for the for the you know water meter that's on there so for instance in the same i'm in a condo two we have two water meters so they both get up over fifteen thousand and after day one because we're all on the same meters as opposed to for we're per unit you divide the the total number of units that are on that water meter and then you get a more reasonable rate is that you're saying absolutely i mean the impact to maui county would be the revenue coming in would would just massively reduce i mean that's that would be the major problem because the condos are all paying you know if you give us that nine thousand gallons the revenues i mean they're going to plummet and  how is that going to be made up and obviously that probably can't be done right away but that and what i'm asking is can we do a rate structure even if it's over a couple years if we're looking at it if we're we're trying to think about why does harbor lites pay for seed and i'm not against through this consul for the last few weeks and that's the issue of fairness you know what it's fair news and so i think you raise a very important issue if we're talking about fairness thank you and building your ten wells i don't know i mean right now it's the reason that there aren't i think more condo people up here is because the water bill is paid by a management company they never see it they don't really understand it you know i'm saying so most homeowners in a in a condo they just call that manus fees went up and they don't really know why and so there's a real disconnect between the person paying the bill and the person the people that live there and so we've already use the answer to your question is it's already i mean we have to pay the bill that comes in the association does right and so we're charged the hotel rate essentially and then you basically divide that up to each owner based on their square footage just the way that each person's maintenance fees get determined is how big of a space do they have and so that's basically state law you know that because condos are governed by five fourteen a and b and y state law and it's they have to pay based on square footage and that's how their maintenance fees are determined and so you take all the bills for the year divided by the square footage of each unit that's how we collect so it's kind of a standard way i'm not sure if i'm answering your question i i'm really asking that you guys really look at the rate structure so that monthly bill would be take into consideration that we we you know we have families in these places and there's more and more condos being to i mean it's kind of what's getting approved is the multifamily homes and so the direction is more of what i'm talking about ok look thank you very much in bringing that perspective originated thank you thank you thank you is there any other questions for that as saying thank you very much as well and very yes madam chair the final person signed up to testify here in the chamber is mark mark his artistic fire here madam chair i think that might have been a mistake i think mr cal is a deal which consultant who's going to handle the end of our presentation so i don't think he's actually going to testify except when he comes down here  has anyone shown up to testify has anyone shown up to testify madam chair and we appreciate the opportunity that water resource chair the previous water resource chair has given us every year right before a budget so we can give an overview of what we're doing in the department how that reflects the budget you're about to see and get into some specifics of what you're going to see when the mayor proposes his budget next week so we can talk about it a little more in the in the water realm before we get to the stress of the budget hearings discussion in this committee i think it might have been agenda item year or so ago maybe longer when that came up but i didn't bring that data with me going from recollection i recalled i checked with mr therea who runs for a property tax and found out that of all the multifamily units in maui county roughly a third file homeowner tax exemption case about a third are owner occupants about a third filed meaning they are short term vacation and the other third there is no information on either their long term renters short term rentals or second homes i suppose so each condo building has one or possibly more meters we don't have any information on the tenants of each unit so we just have a meter and that meter has to get a rate structure attached to the meter assuming that each condo had the equal spit of a third owner occupants and a third short term rentals and a third long term rentals or something we really can't see that so each meter has to be classified either as one rate or another so multifamily would either all have to get the same rates a single family or would all have to get general or would all have to have some new category there is really just no way for the department to know looking at southpoint versus many on the shores what the make up is of the units so the challenge from a practical standpoint is are you going to assume that  hundred percent of them fall in single family or what we've really done is put one hundred percent of them into you know the general category the other thing that wasn't mentioned is that the single family category has a fourth tier a really high fourth tier the general does not have that so what we showed to the council back we had that council meeting is we took i think twenty condos at random and we compared what were they paying versus what would they pay under the single family with that thirty year or that fourth year and i think what the council found is they were relatively the same you know summer might have been a little higher some might have been a little bit lower but so we've got the practical issue of how do we designate each meter which is it and then you've got this third this fourth tier issue so from a policy standpoint i have no problem with it from a practical standpoint i don't know how we would as the department of water supply how would we know which condo is mostly residential and which ones mostly be cation rentals we have no access to that there's only one meter if every unit had its own meter we could probably get into that so we've just got some practical issues and again in this committee we ran the different numbers and found that there wasn't a huge difference because the fourth tier does not apply to to the general category so that but in general if the council wanted to pursue that we could do a great study and figure it all out  rebalance the numbers if they were as always if there is less revenue coming from one certain customer we have to make that up from a different one and we could do that we would just be clear direction how to do it and have some practical way to implement i hope that addresses all of the issues ar and that was the other question i had was the revenue what would happen to the revenue so you made your point so madam chair it might be that during the budget when it comes time for the department will take a letter rates and fees actually we'll take a look at that i'll try and bring some more documentation and how it works ok you know thank you very much i do i have a lot of questions about that but i don't know if you want to do it now know we're talking about having a difficulty and spitting it well we've made a decision to call it could tell but i'm not sure that there is that they meet the same qualifications that's why we have different categories of th ings that are not hotel i could tell timeshares and my condos and god knows what else apartments so i think it's possible but it is complicated but i think we might want to take a serious look at it because we keep hearing it over and over as i was saying right before a budget we'd like to just go through what we've done and what we're looking at doing so today we're going to go through some accomplishments of the past few years to show what their fruits of the resources that we've been allocated by the council of have gotten us some fiscal analysis and to talk a little about the consequences of failure that we're trying to avoid we're going to get into some detail of what to expect in the proposed seventeen budget and then northbridge or consultants for the department of health are going to give  short addition to the presentation about how some of the s r f loan system might be changing a little and that might affect how we have to do budget probably next year so what we've been trying to do is provide high quality water use our resources efficiently with fiscal responsibility and compliance what we've accomplished over the past few years is we have doubled our capital improvement production so we are spending about twice as much money as we used to and that's without adding any staff to the capital improvement group we have doubled the amount of customer billings we do because we've gone from bimonthly to monthly and that's also without adding any staff we've done all the system evaluations that we've shown you that's also been done in house without adding staff where we looked at everything where we analyzed all of our physical systems we've done an enormous amount of treatment plant maintenance that i don't think we've really talked to you much about but in the national news we're hearing a lot about flint michigan that's all surface water treatment based we have made an enormous effort long before that hit the news to make sure that our surface water treatment plants have had major maintenance upgrades that's also all the done in house we built  detection program thanks to the council adding to positions so that's off and running and in a previous meeting we talked about the results we're getting from that we've done a whole bunch of comprehensive audits that i want to talk about next i think we're about ninety five percent audited the department of health every year comes to each of our systems and they go through every well every tank every treatment plan and they give us very detailed operational audits they get into details such as replace the bird screen because it's bent i mean they are very very detailed so a lot of what we do is to comply with these operational audits or what they're called sanitary surveys and to make sure that we're making high quality water so most of the operation is audited through that program the laboratory gets two separate audits one from the department of health one from the national environmental laboratory a creation program so that we you can be sure that the results we're getting from the lab are high quality results that the laboratories operating according to high standards the s r f program where most of our capital improvement is done gets essentially two audits they do a financial audit plus they do an operational audit meaning that when they see our blueprints when they see our specifications they go through those to make sure that money's being well spent so from that aspect our methodology of capital improvement is essentially audited by the department of health some of those people are here in the audience today we had an independent financial audit that you see every year showing how we spend money how we account for it etc the department of land and out to resources does a dam inspection of each of our dams every year so we get reports on those so almost everything we're doing somehow is audited by an outside entity and the results of these audits have been very high standards with no major findings so first thing we look at is are we doing anything wrong and i would say that there's a lot of evidence to show that at least ninety five percent of what we're doing the regulatory agencies in the audit type of agencies are saying we're doing a good job so that at least gives us a good sense that whatever we're doing is meeting the standards that the customers need we really ramped up c a p we've tried to be more proactive preventative meet future challenges and we have a whole list of things we've talked about most of these before so we have from a source development and reliable capacity standpoint made improvements in every area it's been brought up before that sometimes that the department hasn't developed source and i don't i don't think that's actually true source and reliable capacity that we've talked about before really give you the same thing whether we add a brand new source or take our sources and make them more reliable so they don't break down as much both and with the same result that we can give more water to more people so going from itself up and add about half a million gallons a day of reliable capacity to a country under construction right now is the west now well number two that's being drilled as we speak meaning he know well number one we are asking for funding for that in fiscal year seventeen that's the well that we've talked about in the past we weren't sure if we were going to proceed or not we had hoped to get a one million gallon a day well according to our hydro testing it's good for about three quarters of a million gallons we've crunched the numbers and decided that it's still worth pursuing even at a slightly less capacity so we are asking for construction funding to finish that in f y seventeen meaning a reservoir cover in f y fifteen seems odd to think of a reservoir cover as a source but what we found as we did all of our long at our analyses of our systems is that that plant had more capacity but the surface water systems were in a backwash phase so much of the time because there is so much algae in it by putting a cover on it we stop the photosynthesis stop the algae from growing and our preliminary tests are that that plant is putting out half a million gallons more than it used to because it was stuck in a backwash cycle so much of the time so that's something that goes back to my narrative of reliable capacity is more important than source because we're able to ramp up our capacity for west maui it looks like about a half a million gallons a day literally just by keeping algae out of the system so it gives the same results of building a half million gallon well at a fraction of the cost in a fraction of the time the treatment plant you funded that last year at fifteen million dollars that just opened bids yesterday the upper chemo tank mean retrofits we're asking for funding for this in seventeen this project will allow us to use the kakapo reservoir whenever we want right now because it's on a different type of treatment we can't mix the water so we tween another well it would be and our believe you to save the water in the reservoir till we needed we're anticipating that the combination of those projects is going to ramp up the capet reliable capacity up country by more than half a million gallons a day and possibly up to a million gallons a day between the two and also the h vocal improvements so again although people tend to look at unless we're building a treatment plan or building a well that we're not developing source that may be true but there's a lot of other things that develop reliable capacity which is the ability to give meters so we've done a lot of that in the past few years we've talked about most of these projects at one point or another but because each one tends to either be a design or a land acquisition until you see them all together you don't get a sense of how much has been accomplished what is even shown on these maps is some of the upcountry improvements like why can we flume some of the reservoir improvements the improvements in central maui to get to replace shaft thirty three and add capacity there because those were done sort of in the same timeframe in the slide became too messy but i think you can see that we have been developing source and reliable  not here yet but i want to mention molokai molokai is tied up in some water commission issues with the quality or so that's sort of stalled until we get to the other side of that sea worm action it was supposed to happen this spring i think it got put off till summer we're actively trying to work with the water commission the other parties so that we can free up some capacity that we can develop right now the entire island is designated so it's tough for us to do capital improvement projects until that gets freed up so we're working on that tank in people don't tend to think of tanks as reliable capacity but if the tank is too small that is a reason that people can't access the water they need so  the upper chemo tank is under construction now the heights right at the beginning of south maui the malka of the highway this is the area we had a big break mr couch remember in august where a lot of he didn't have water for a whole day by putting a tank here would be able to avoid something like that if the main transmission line breaks and be able to balance the pressures in the area that a lot of your constituents are complaining about so this was actually already under design when that happened in august  but we are asking for construction funding this year to resolve that ongoing issue and the ranch tank along with a bunch of other tanks are improving things all over really quickly just going through some of these projects are all familiar with the flu project twelve million dollars the hum of cool well well upgrades allowing us to use that for more real upcountry reliable capacity replace tanks in like a way reservoir you can see the size these are big reservoirs fifteen million gallons lining that project was a big construction project you know almost three million dollars that keeps that water from leaking out we all know how valuable that water is at four thousand foot elevation so just a project to keep it from leaking again expand our reliable capacity may not be looked at as a source development but every gallon that doesn't leak out of the bottom of the tank is a gallon we can give to a customer up or o p o road another upcountry system improvement reservoir cover and liner this is what i talked about earlier this is what got rid of the algae you can't see the cover on it because it wasn't completed when this photo was taken but at one point four million dollars adding half a million gallons of capacity compare that to a well which might be eight times that cost this was probably the biggest bang for the buck of develop in capacity that we've done in a decade part of our efforts to take shaft thirty three out of service and expand the capacity there by half a million gallons including a well development agreement the plant project which will use which will  end up being a three point two million gallon treatment plant this open bids yesterday is all up our capacity by a million and a half gallon unfortunately the original proposal the original estimate was fifteen million dollars bids opened yesterday in the low bid was about twenty million dollars we've already crunched the numbers it's still our best option and we will be putting forward a budget amendment and f y sixteen budget amendment to move ahead with this and i see john to see to it from department of health who i'm sure is going to be thrilled to get us another five million dollars because her job is to get us more money so i had great faith that she will be approving us our of money this might be the first she's heard about it i meant to tell her earlier it just happened yesterday afternoon so that these i think are going to be ok we we will be coming with a with a sixteen budget amendment to move ahead with  whole water treatment plan organic carbon reduction project final picture we don't talk a lot about water quality we tend to talk about quantity water quality is taking a new light with what's going on in flint michigan and the national news we have put an enorm into upcountry because the water quality there is so difficult to nail down because it comes from different sources with different types of chemistry and getting it treated to meet safe drinking water act standards has not been easy and we have ongoing projects going on to further evaluate this but you can see this is a pretty big project that doesn't get the public excited because it their volume of water isn't changing but i want to everyone to be sure that we put just as much or more effort into water quality as we do into quantity it doesn't get a lot of front pages but when it does get there front page you get what happened in front flint michigan and that is not good so we've been doing an enormous amount of work behind the scenes retrofitting all of the surface water treatment plants upgrading them to make sure the water we provide stays meeting high quality standards which is you know frankly even more important than expanding the use which is what we spend most of our time you know this committee talking about but there's an enormous amount of work that's been going on just to make sure the water stays safe so when my presentations wouldn't be complete without some fiscal analysis i know you've been waiting for it so what you see on the left is our two thousand and ten budget compared to our two thousand and sixteen budget on the right those are to scale so you can see how it's grown from seventy million to ninety two million so we've done some analysis this year to say look we know we've been raising rates we know that's hard on the public have we been being efficient so we tore through the numbers and what we found is as expected most of the cost increase has to do with either with morsi ip or with fixed costs that are beyond our control the fact that our overhead has gone up the fact that salaries and wages through collective bargaining etc etc our amount of production from what we can tell from our numbers has increased but the fixed costs are going up faster than any hope we have of increasing efficiency and that is driving the costs up and we estimate that will continue to happen one of our just want to point out in the orange you see it going from was a ten million to seventeen million which seems like a huge operating expense increase that is because of the five million dollars at the council allocated last year to upcountry future improvements of cash that's tied up in that orange so five million of that is five million of the seven million increase is just simply that we probably should have made that a different color and called it something else but that's why the that orange slices is so much bigger it's because that five million is in there because it came out of operations cash that that's why so looking at our budget you can see how it's increased from two thousand and seven two to now and how it's projected do increase in blue is our revenue from two thousand and two to current and in orange is our expenditures so the difference between those two is the carryover savings every every year we have a discussion on carry over savings you can see how the carryover savings has grown a little bit in past years you can see that last year council really clamp down by not putting as much buffer in and you can see that at the very right hand of the slide so it's back to where it was before what i like to call maybe you know six weeks of cash we are proposing roughly the same this year being a self funded enterprise fund we think that most experts most business owners agree that having a cash reserve roughly a month or so of savings is just good planning we don't spend it if we don't need it but if we do need it it's there and if we don't spend it we roll it over and keep it controlling rates the next year we think if you look at how the carry over savings essentially has changed over the years got a little big in the two thousand and ten range is maybe a little too big probably because electricity might have gone down but we think it's about where it should be and we hope we'll have the support to keep that it scares us a little right any closer to the edge than having you know we like having a month of carryover savings at the end of the year we think that's good fiscal planning but again they're both heading upward which is expected to continue debt service one of the negative impacts of us doubling our c a p production is that debt service has been going up these are an service payments you can see we refinanced back around two thousand and ten it's gone down the last two years it's going up it's going up because we've been more successful in c a p the plans we came up with in f y eleven twelve are now reaching implementation the last couple years we've been spending that money we're asking for more this year we're ready to spend it the early years of doing design and planning those are sort of over and we're moving into that construction phase which is a lot more expensive so payments are climbing and they're expected to keep climbing if we keep up an aggressive capital improvement program this is the debt service as a percentage of our budget you can see it's it was hovering around a little below ten and it's heading back towards fifteen that's fifteen percent of our budget being debt and i know i've talked about this before this is a big concern of ours honolulu got to about twenty percent of their budget being debt and they were forced to take really aggressive financing revenue measures so we're heading towards fifteen percent waste waters at twenty percent which means your combined water waste water bill you know fifteen to twenty percent of  that is debt and if we look at what that limit is i don't know where the council is going to set the limit i know budget in finance or okami as previously said he feels the county as a whole should be no more than ten percent i know the county as a whole is below ten percent but this self funded water waste water utilities are way above ten percent now so it is a concern because i think we all know that it's a certain range either we're going to stop the ip we're going to raise rates overnight so i have continued to be really concerned that the debt ratio is going up much much faster than revenue why why are we so concerned about these things to talk a little about the consequences of failure that we're trying to avoid the first one is bad water like in flint michigan there is nothing worse from a water utility than finding out later that you poison your customers and the number my number one priority continues to be that all the water that goes out is safe and so there's a lot of behind the scenes work that you've been finding that we've been implementing that is meeting that i can tell you that although we're always worried that something like flint michigan can happen here i have no rational reason to believe anything like that could possibly happen here i believe we are way on top of that and i think  that with continued support i do not see any realistic way something like that would happen here it is our number one priority every single day the second thing you're trying to avoid is regular source adage is because of source meaning wells are breaking you deal with that with preventative mechanical maintenance that long before i got here i think the guys did a fantastic job ramping that up you rarely hear about long term outages due to our wells failing so i think the first two of those i think we're in really good shape and we're looking at continuing to being good shape not having those failures the third is more frequent service interruptions this is what honolulu is experiencing with all their lines breaking right now we haven't had a really big ones but if you think back in the last couple months we put on our our leak detection program we are finding many many many more leaks than we can get to every one of those leaks will some day be a break so we are in what i would call the early precursor stage of getting too frequent service disruptions and it is a concern that we're finding problems much faster than we can fix them so that is something i think is going to require more attention poor road repairs that tends to be a small thing but what we do is we fix our brakes and then a couple times a year we group them together hire somebody to do permanent paving in my five years in this job twice i've had to put that off to the next fiscal year because we didn't have enough money so already we're in this i think fiscal mode where we can barely cover fixing our repairs so what we hear from our constituents a lot is that our roads our road repairs are not good enough and we know  that they're expensive it's something that i think the leak detection program is pointing out that's going to be a future problem whether it's fixing leaks or having the brake and having to do more road i can see we're in this sort of early stage heading towards that being a bigger concern so we're trying to jump up on that i think it's going to take more resources than we have so that's going to be something to talk about and then the last consequence of failure is no new services between the upcountry meter list and show me the water i think everyone's aware of what that looks like what you saw earlier with our source development reliable capacity development we've been taking huge strides in that i don't think we'll ever get to a point where every single person who wants water is going to have a department of water supply mainline right in front of their house but we're making huge strides so the whole point of our budget is to avoid these failures and getting into the details of our seventeen budget here's some big things you're going to see you're go be exploratory well a two point eight million dollars that is a new well right on the side of the existing well we call it exploratory because until we pass a water quality and quantity test we still call it explo tory but it is literally on the same site as the old well there's very high probability that's going to be fine so by having two wells on the same site essentially they back each other up and that well i think  electric companies tend to use that term firm capacity means you can count on it twenty four seven three sixty five right now the back up for a typical but by having two wells on the same site ones backing the other up and you kind of rotate them in and out of service when you need them that becomes firm capacity so you don't get the so right now they were permitted to take the number with the exact number it is maybe one point two million gallons a day but let's say about a million gallons a day so you're permitted to take three hundred sixty five million gallons a year from that site but that well might only run sixty or ninety days so you're only really using sixty or ninety million gallons a day by having two wells there and saying we're ready to run one all the time you've ramped up your capacity by that much it's going to cost more electricity but i think if you compare that to go into a new site drilling a brand new well with new environmental impact statements and all this kind of thing a second well at the same site is the biggest bang for the buck with the highest probability of success in the shortest timeframe so we are going to be asking for construction funding for that the upper chemo chloramine retrofit i talked about that that's going to be able to change our water chemistry coming from the upper reservoir so we can mix water whenever we want that will allow us to save the reservoir water for the drought and use the a and b all the time saving water for drought this is going to ramp up those ups and downs we showed you before in our presentations of how where the drop outs are upcountry has to do more with ups and downs during drought this will allow us to smooth the ups and downs he know well number one development thirteen million dollars this is the well that's come up before that we drilled we weren't sure if we're going to go ahead with it this will be a three quarter of a million gallon a day well we are ready for construction and we will be requesting those fines we're asking for another million dollars in leak repairs this will continue our effort as we recognize as we find leaks to take some of the biggest ones and hire contractors to go fix them that one million dollars is not going to go real far we are still probably going to be finding leaks much much faster than we're addressing them and we've got various replacement and safety upgrades all across all across the county that we'll get into and budget there again those projects that don't get a lot of excitement but they're the things that we have to do to keep existing service to existing customers as a system ages some other things that you'll see in our if i seventeen budget i think we have one extension position for a plant operations clerk plan operations includes the treatment plants and all the pumping there is not a single clerk in either of those two divisions so right now the two division heads who are supposed to be in charge of efficiency improvements are calling that they're the ones who really get into how the systems are operating to save electricity to save on maintenance costs to work with the engineers and what the future needs are they're probably each spending about a third of their time doing clerical work so what we're trying to do is free their time up to do more of what they were hired to do rather than this large amount of work i mean these two division heads who both make right around one hundred thousand dollars a year they literally have to take care of all their employees time sheets they have to take all their data and make spreadsheets further on your reports they run the mail that's something that we can hire a clear to do all of those things and get that back to their primary job they were hired for so we would really appreciate your support with that and i think you'll find that the time that they've put into our system improvements has paid for itself ten times over so getting those guys more into system improvements and out of clerical duties i think we will find that that is a huge improvement and a huge efficiency improvement are we're going to be asking for overtime increase we've been tracking since july first every hour of overtime which groups have it is it is it  in response to an alarm is it planned etc and what we've found in our operations group is this huge percentage of the time is either due to alarms from our status system or due to night time after hours calls they are not things that we can put off so i think we're doing a good job controlling or over time but most of the overtime is just beyond our control and we have enough money to cover it we may need to do a budget resolution towards the end of the year we're not sure but we do know that what we have budgeted for overtime just isn't meeting these needs of response for the after hours so most of you probably know this but we operate twenty four seven three sixty five we are only staffed normal business hours so anything that happens between three thirty in the afternoon and seven next morning or all weekend that is overtime so rather than having second shifts like some utilities we pay for with overtime it's still much less expensive to deal with it with three premium day but it is more expensive that was budgeted we are asking for that adjustment this year we're asking for one hundred thousand dollars for a rate study for some fixture unit changes when barry from honolulu board of water supply was here he showed how rather than just charging for certain size meters they charge for each fixture and then the department decides what size meter you need we would like to move to that we think the council really like that we like it but in order to do that we need comprehensive rate analysis about how to adjust all the numbers it has to do with the different usages in different capital costs it's not something we can just pick a convenient number it really needs a rate study that is something that if the council does wish our rate study to do establish multifamily units something like that we could add those kind of things into a rate study but what i would ask is we would be really clear direction about exactly what sort of philosophical direction the council wants us to investigate because we can only pick certain ways to do it and have those analyzed but we're more than happy for the f one eighteen budget to come up with a different method of charging but we need to know early so we can have our consultant crunch those different scenarios billing system replacement we've talked a lot about this there is a budget amendment in the budget and finance committee right now to get our billing system replacement started and the rest of the money is in the f y seventeen budget the committee chair has some concerns were meeting with him about those next week we are hoping to move forward with an f y sixteen budget amendment for the billing system and have the rest of it be in the f y seventeen budget but not knowing what's going to happen with that we may have to modify this depending on how the the budget amendment goes the end of the line the sort of the bottom line on this is that our contract with  increases four hundred thousand dollars every single year for the next several years so our view is the earliest the earlier we can initiate a new billing system the sooner we can stop short of paying those penalties it's probably going to year and a half to get that on so we are hoping to move forward that we are meeting with mr com about that next week we're having a moderate rate increase which is within the realm of what you've seen in the past several years and we are proposing  increase along the lines of what you see in the past few years we know this is always been controversial and so far we haven't been supported but we we do still think it's the best way to generate the revenue we need and we are going to again be requesting that the budget finally it's going to look at what the other counties have done when they've been our same predicament honolulu board of water supply as mr when mr years ago was here you heard him say they had to increase their rates about seventy percent over five years so that was an average of nine point six five percent a year that's how they moved from twenty percent debt ratio down to ten and they moved to an eighty percent cash capital improvement program that's how they got their finances under control fee from forty six hundred dollars to fourteen thousand dollars that's how they're bringing in revenue so it's interesting that we have our two you know sister counties that both have exactly the same problem we're having they got to the point where they can do more projects but they don't have enough revenue coming in honolulu chose to do it through rates because most of their problems most of their costs haven't had to do with repair and maintenance or replacement so they felt it's spreading out over their existing user base was more fair why on the other hand it was probably a little more like us they had these huge costs due to increasing capacity for new users so their decision was to put that in sort of a growth piece for growth philosophy and put i that fee i think their numbers crunched out that that that he was supposed to be twenty two thousand dollars but just due to kind of softening if they lowered it to fourteen and they're subsidizing with their rates but their real number just like ours was closer to twenty thousand dollars so with me today's markel it from northridge or three northridge who's a consultant to d o h a what we're what looks like it's about to happen is a change in the s r a funding program for both water and waste water that's likely to need us to bundle our projects in our budget to be able to access the money more efficiently and get our share that's not going to be happening in the f y seventeen budget but it looks like it's likely to happen the f eighteen budget so we want to take this opportunity consult and talk about what's happening why just as an informational exercise so you're ready for the changes that will probably be coming to the u s our program so this is mark from northbridge consultants carrie thank you very much delighted to be here and great to hear the presentation and all the good things that are happening in maui and thank you to the department of health clients and colleagues are sitting in the back we've been working for the last several years trying to find ways of improving the us or upper ramps and getting money to counties the low cost financing is so valuable and we want to try to maximize the benefit of the program and that's really what we're about  talking to you today we are e p a s national consultants we were at work across the country and we're working with a number of different states doing a similar kind of project  one of the problems that we've often found is that with us are of programs unless you really focus on doing proactive planning with your bar worst you can end up not taking advantage of the money quickly enough and that means drawing down federal capitalization funds that in congress is your mark for your state and taking advantage of dollars that have been collected through repay me that are sitting in state accounts and that that is something that gets noticed by the federal government and i want you to know that while we're talking to you to do something that's going to benefit your rate payers it's also very important to remember the by participating in this process you're helping to improve the state performance and the national performance as a whole which is very very important believe me it's important to see how hawaii shows up on the lists of states whether or not they've taken advantage of their capitals ation funds in part of the reason that we're here is because there is been a problem we haven't been using them effectively enough in the state so we want to try to change some processes to guarantee that we're not going to have your free money sitting in the federal treasury it's there for you with your money through the state to take advantage of and it's the lowest cost financing you're going to come across so so that is what this is all about it's it's both improving the state from a national performance standpoint which is connected to really making sure these campgrounds continue to be appropriated by congress and also making sure that we get the lowest cost for me it's impossible for your infrastructure here in the county about the basic the basic approach we want to try to take is to do more proactive planning between the state and dave in his shop and we call a program addict financing we are instead of trying to year mark individual projects that will receive us or a funding out of years we would like to establish a process by which the state identifies a sum of money we're modeling this right now in policeman area numbers we're kicking around maybe now we would could be offered ten million dollars a year if that's acceptable in low cost us or a financing and that would be a sort of guaranteed a plan guarantee number that you can you can count on as you go forward into your planning and the state could count on you to take the money and by doing that we create much more certainty in the cash flow planning process  around and that's critically important to maximizing the efficiency so instead of doing it the reason it increases efficiency is that often projects that are your markers us are up projects not necessarily here but another you know counties  other utilities is that they may not go forward on the expected implementation that was planned and the money sits we want to eliminate that by saying that any projects that you have that  eligible can be found not one project but any project from your city ip can receive this low cost funding it doesn't wait us or if works is that you don't have to fund a hundred percent of the project from an officer of well you could fund ten twenty thirty forty any percent of a project can be s r o so you could have out of all of your c p c ip projects a mix of what percent of those projects receive house or up money and you're there for funding the program much like you do when you're mixing bond funds and using cash on hand to pay for projects so the the  the the the phrase that we use is programatic financing we're funding program to see our program not individual loans we've shortened to profile because it's easier to say the benefits that we see is that the loan process there's only one loan per year instead of having multiple loans for multiple projects so we reduce paperwork and administrative burden it increases planning efficiency you'll know basically the funding level that you're going to get be able to plan on that going forward and you're going to increase cost savings because they'll be more money available if we increase the efficiency in planning we can run the per gram closer to a working capital balance as dave was saying he was looking at having in the bank a month to a month and a half of cash take that same sort of thinking and use it for us or up with greater uncertainty we need to maintain a larger working capital balance with a with more certainty and better planning we can squeeze the level working capital needed down a lot therefore providing you more low cost funding that's what's behind the financial planning in the permit planning that we would like to implement here in the state of why are you in bali and of course it's really worth a just looking and doing a really basic calculation you know comparing a double a municipal tax exempt bond to what us or office are for and you were able to say one point three million dollars for every ten million dollars spent it adds up it really adds up over time that is why us are up has always worked it's a great deal and we want to make sure that you're getting to the greatest benefit possible and i will tell you the state compared to other states is highly attractive rates of rates so case you're wondering what others are getting there are others that are paying more there are a couple of sort of you know changes the thinking that we would ask you to contemplate to make this work and one is that we've been brooke we broached in our addressing these topics very actively with border water  supply the folks over in sitting county in the wastewater in wahoo we had a working cap we had a working meeting yesterday with water water supply addressing some of these issues and how we can get beyond them but one of them was that in c ip planning often the individual projects or components of projects are associated with various funding sources there or they're identified upfront during the planning and budgeting process that creates a problem or has to be addressed if we are proposing that you would receive a loan which could be used for anything so that is a slightly different way of approaching the whole budgeting  process yesterday there was a comment made from the board of water supply that we shouldn't let the be standardized accounting rules stand in the way of getting the best access to this money and i was very glad to hear that and wanted to use it as a qu e so that now in terms of getting pure you know transparency in what funding source is paying for project you certainly would be able to get that with regular reports but from the standpoint of we want to see the when you are doing your c p projects when you have invoices come in take the first invoices and send them to the state for reimbursement we want to access that federal grant money is for the faster it gets out of the federal treasury into your projects the better  and that's what we're trying to do by asking you to go when you were funding projects take the invoices as they come in tampa s or a first in draw down your money that will be a you know save the month accessing the money quickly enough they very much helps us if you're able to do that but you'll always be able to do reporting and tracking and find out where the various sources of money have been have bones about there are a couple of ways that we of been hearing from from counties as way of getting you know addressing how to change it you could split fund all the projects between us are often other sources and then rearrange the fonz sort of on the back end invoices come in so you could identify funding specific funding sources and then just adjust as as the invoices come in or you get income for general borrower problems to the project and specify the primary funding source which is the city what with the city county is planning on doing here's an example on this page that shows their ordinance the sewer projects that i have plan identified as are is the source of funds which is quite simply saying sewer revenue improvement by phone i even borrowed money so they're ramping into borrowed money or their bond plans and that's all they have to that now there i should mention that there are other counties water waste water utilities using this kind of approach with say revolving fund programs this is an example of the near against a big commission it's a very very large waste water utility the state of rhode island essentially provides all their money just about to this commission they use this approach and this is their this is their resolution from the board to adopt an answer of loan where you can see in the details they quite simply list all of the projects they could potentially fund they don't say you know which one is going to receive what percent of us are off and then they also identified a smart way and other projects up with the commission list projects and then we can do anything else we want as well as long as it's us erev eligible the state doesn't clear the state wants you to get the money and why would they care if you used it for one eligible project or another they wanted to be you to have the flexibility to make it work this is another example from the state of minnesota were they provide a this is a sixty million dollars loan that they provide to the which is minneapolis st paul very large couldn't be more opposite in terms of temperature but they have just the same challenges that you have here in providing large utility services and they use this approach where they provide sixty million dollars and it can go to any list of projects here is there was a projects but they have the doesn't care which money receives the sixty million and they  quite simply works now this list the way that the loan agreements work is that in the loan agreement you would put in projects the total funding for the projects so you get were offered ten million dollars a year the total amount of the of the projects could be forty million but the us or a portion would only be ten in whichever invoices come from those forty million projects you go up to ten million dollars for that year for us are off and you do it early it makes it much easier than tracking by project it's low cost funding for your program as a whole and you help the state address some of their fundamental challenges and really nationally make the book in taking this approach we think that this is the we're seeing this in talking about it at national conferences this approach we've we've talked to minneapolis to our friends in rhode island about how it's much more precise financial planning so we know exactly how much money you're going to have available is really going to maximize the efficiency of the going forward so we're in the mode of planning for right now we the when things market and so i think what you can see probably coming in f y eighteen probably a budget presentation for a c f p that looks a little different which has some sort of joint funding which is seventeen but probably the top you'll see an f eighteen so to wrap up in my previous presentations over the years we've really focused on the future because we were in that planning phase so today we switched around wanted to focus on the accomplishments we are  few years into our new program and i think you can see we've doubled the ip production we're starting to really make real headway on these issues that have plagued us for a long time and i think we've shown that we can do these things there are still a lot of challenges to come we all know that and we have these opportunities to be ahead of those challenges so i think we have a positive message that we can do these things i think we all know the financial challenges are probably going to be hardest to overcome we're not hiding from them they're going to have to be center stage probably in the seventeen budget and we hope that this this presentation helps as we go into budget for the members to understand the context of what we're asking for and why so without we really appreciate everyone's attention and we'll certainly be happy to take any questions and we saw the announcement i think we did a good job on that thank you very much we also have corrigan d u h safe drinking water branch engineer welcome idea each save drinking water branch a business loan officer thank you and we have of course we introduce let me introduce her tiny northbridge environmental but they're the consultants and apparently you're here with mr kelly thank you very much for being here we really appreciate having you folks here with us today you know we're all partners trying to do the best thing for the people of the county so we appreciate the cooperation thank you very much we think complaining about the state and you know how they don't pay attention to us or they don't do their share or whatever but i think we're all trying very hard to do the right thing thank you very much ok members you've seen the presentation and we're essentially let's use mr cal it's numbered and let's say that we're allocated ten million a year for the next five years from s r f let's just use that as a number but our c a p is more like twenty twenty five mil right so essentially we would submit a ca people shit for council approval at twenty five million just imagine that every single project in there was on the list the budget would be built that we can use up to ten million and the other fifteen would come from either cash or us or if loans what we would do practically is dollars be ten is coming from s r f but it can be even if one project gets cancelled we just use a different project then i guess the question is what's that number because if they're saying we need to spend down the number i don't know that we have again we want to know who is answering questions for the record ok the the thing mark hallett sorry speaking the thing that we're doing is financial modeling so we can determine the capacity of the us or a program and then also talking to to you and to your colleagues and other counties to determine what your needs are and it's not a it's not you know pressure for in what each bar world wants while we're doing the modeling to see how to best take advantage and generally between all of the construction that's going on in a while who you know we're not going to have a problem using the money ok it's more of an issue of trying to be equitable which is what you would work out with you or your colleagues in the state ok that's why i want to make sure it sounded like through the presentation that you got all this money that we're not spending some and mr conscious so my first question was that i would see him out in our federal treasury which were like not spending down and but i guess there is no figure per se there as well  get a federal grant every year the state gets a federal grant every year and you know there's a there's a plan but it's called the intended use plan that's part of the grant application in that intended use plan is we're the projects would be listed that you you have that would be ready to go in that so you have to the state has to prove to e p i that it has the projects that it would be able to commit the money to want to receive the grant plus providing that match so right which is excellent and i totally concur that as much as we can get out of this program the better and we were here to take it and i'm know we can use it and then am like who dropped the ball on this i mean it did we only now i know this is existed and that we have the opportunity to participate i mean i know we c s r efforts come through our paperwork and what have you but i mean this we have in this whole presentation you're saying and we're not going to probably be getting it in the budget in twenty eighteen so where what happened in the previous you know times with our projects we county department of water supply and wastewater have been using us r f for more than a decade and there are going to be a star of projects in the budget this year what we're talking about is a different program attic approach to start using next year i don't know that anyone dropped the ball in the past as much as deal which has been under fire from the v a for not getting this money to the counties especially the water departments the difficulty has been that the water departments projects tend to be on land they don't own in projects that are environmentally areas or environmentally sensitive and the projects get delayed for a number of reasons beyond our control so if you think about the budget well the certain project you know something well in a certain location and we have it as as our a funding that's in the budget that the council approves it's also in a sort of slowest if we want to or if we run into problems with that we want to switch that money to a pipeline project it's actually easier to get d h to change it but we have to come back agreement to territory so you've got this whole bureaucracy that is fine if our plan happens as per our plan but when the plan changes it's really difficult on the time frame to change it what this would do is make it more flexible so that all the projects  and as things change in the field we just switch to a different project and keep going that's essentially what this does i don't again i don't know that anyone dropped the ball the wastewater guys i don't think it had it's much trouble because they're big projects tend to be in their fence lines you've got like sand island treatment plant which is you know has huge projects but they're in their fence lines so they have a lot it's a lot more under their control keeping their projects on track i think so the four water departments have had a more difficult time because there just tend to be more things out of our control so this has more to do with flexibility for the things that are out of our control just one more thing is that the what happened was really from the to the from the state of the the bar was moved on them used to be  the state just needed to commit them dollars to projects and if there were delays it was just an unknown that was naturally occurring so the federal dollars were to sit in the treasury until they were committed to projects but the projects that move forward the bar were shifted to a lot of the law there was a lot of congressional inquiry looking into the balances on the ground at the federal level and the issue became not are you committing the money are you drawing it down and they were called liquidated obligations you will which is a acronym that we all hate and it's it's because it's not it's become the new bar and that's all that's a lot of the reason that you now see more of a focus  you're doing things to increase your reliable capacity a country and some figures who are throwing out and i think i added a black one and a half million gallons more if we do all these things does that necessarily mean that we'll be able to do more with the meter list you know that's the question that i get every single day no matter where i go where am i going to get my meter thank you and i assume that would come up to well it's always the number one question it so i'm not sure if a million and a half i may have double counted you know i think probably closer to somewhere around a million gallons ok i'll take you know which is probably a little closer once all of this is done between h poco and these other improvements probably somewhere more in that neighborhood  hello will be ok so that's the actual capacity that exists how quickly we're getting through the meter lists really comes down to staffing just we have the list and we can only go as fast as our staffing allows right now i think last year you know last year we probably processed about one hundred names off the list and that's about the rate we're going we at the end of last year and into this year we have been hit by a large number of engineers leaving the department we've had a couple have moved back to the mainland for family reasons a couple of been promoted to higher jobs other places some of left to relocate et c but almost half i mean getting close to half of our engineers we're about to have five opening acts so we're already actively recruiting and last year we'd asked for an extra engineering position that was not approved if we had gotten that that person would have just started probably in january at this point we're not asking for another engineer position this year mostly because i'm not sure we're going to be able to fill all the empties we have right now that's each one has to go through the civil service process etc so our production ability i think probably peaked two years ago we had a lot of very senior staff who are really capable now we have more openings and we have more junior people that have moved up and while they're coming up to speed it's going to take us all think a little while to ramp back up so i'm expecting that our ability to produce service next couple years will be a little less than it was over the last couple of years and i think this is happening all over the county i think the wave of retirements that we've all known was happening from all the way up staffing that in the ninety's eighty's and ninety's you know everyone sitting there through thirty years retirements are happening all over the place the senior people are leaving not only are people those people leaving but people from other departments are taking transfers and promotions to different departments so these these retirements are cascading through the county and everyone's having to deal with them so i don't have any good news about this other than i think for the next several years we're going to be in a difficult place across the whole county of filling empty positions as people retire and everyone juggles you know to get a promotion in a different county jobs are generally you know jobs that people want i don't know that i know the answer to that i can tell you that at the lower and we've been more successful for example we had a senior engineer quit our retire and we ended up recruiting we found somebody on the hook to move here from the mainland and they ended up deciding against it we love changing that to an entry level position and we recruited and we hired jordan molina used to be you're still our guy we stole your guy and were three but again you know what's interesting is you lost your budget in finance analyst because we had a senior engineer retire so that recruitment cascaded over the course of a year while the whole kept moving that's exactly what i'm talking about so we're trying to recruit i don't know if it's salaries or people aren't interested in being engineers we've had some interests we've had some of these jobs we've had a number of people interested in a higher level jobs not so much the lower level jobs with all retirements i mean the only actual solution i have no one's going to like is would be to wrap up  a s sort of double up wall these retirements are happening and we get to the other side of the ramp to back down and i know everyone's going to be afraid that they'll never ramp back down and i can't imagine that's going to be approved but the problem with i heard somebody some members talk about l t is limited term appointments a limited term appointment for anyone who doesn't know is a civil service job that doesn't have any guarantee of being kept and the difficulty is i can tell you engineers and accountants and other professionals will not take those jobs the only reason for professionals at that level to take county jobs is because they're making a decision that they want some security rather than salary and no one takes those jobs if they don't come with security so i am not a fan of l t a limited term appointments unless it's for people that are relatively easy to recruit because no one's going to stay and as soon as a job that's permanent in another department comes up they will j long now i'm coming to where comment you going to pay me no they're only comparable you know because i've gone through this so you know i've been here twenty four years and a couple times when i've thought about leaving in the past you know compared the numbers and the fact is it's only the post retirement benefits sa that even it out so a career in the private sector is being an engineer and the public sector i think if you live to be eighty they're probably about even but if you're just looking at your annual salary you're behind every year in the county and you catch up you know after twenty years of retirement maybe but if you're just looking at this year they're not at all comparable very good because you know we know young people can't think to retirement i know because i have kids and my age you begin to very seriously lo retirement benefits and what you're going to get when you retire but tell that to a kid fresh out of college who wants a nice big fat salary so he can be a student loan you can think about your retirement so you know i think we have an issue here and we have to look at how we can fill these positions because i am tired of being asked about this whatever meter list if we're going to have water we have to get a way to put these meters in another we don't agree on legislation but we still cannot the list and one hundred people a year you know how many people how many people on that list eight hundred ok well there we go that's going to be a non long time and i don't think that's acceptable so to put some numbers to what the chair just said we want on a recruiting chip trip to u h last spring figuring let's try to find some some people graduating from college and you each according to the the professor we talked to there they had about a third a third a third of electrical engineers mechanical engineers and civil engineer we were there for we advertise it we had flyers put up one person came one we talked to the professor he said what's going on he said rail picked up everybody he said th people out of school graduating from college with engineering degrees were being picked up by rail contractors subcontractors for above sixty thousand dollars a year sixty to eighty thousand dollars a year twenty one years old right out of school with no experience so that's that's our range of senior licensed engineer so we i think rail is having this impact on both construction costs because the big contractors are not getting our projects you know no one wants to be a twenty million dollars contract when these guys are getting hundred million dollar contracts on a walk to the engineers are going to work for the construction companies rail is sucking up all the talent in both contracting and engineering right now high step and if we want to hire above the minimum step we have to get approved from the director of personnel services engineers is long as i can remember i mean twenty four years since i've been here have always been approved for the highest step so we offer the highest up we department water supply i think we offer up to something like five thousand dollars for moving expenses etc etc so we are as lucrative as we can be and you know we what we get and i don't know if we're going to be able to fill all five of our positions this year we will try we are actively talking to people we're not just advertising hoping people apply we're you know actively trying to recruit  think the retirements are happening between the retirements and i really think it's rail between retirements and rail i just think there's more openings than we're going to be able to fill the next couple years and i don't have any easy solutions for this ok thank you very much i think  that to death but we really really need to get some people in here so we can solve this problem and this guy out thank you kondracke is not helping either the consolidated rental car facility that's another three hundred million dollar project on this island that is taking up construction workers and i think it's your might get ok get a better better ok so yeah that's another one that's taking up a lot of people back to your presentation mr taylor you said that ninety five percent of what you do is audited what's the five percent that is unmoderated first to ninety five percent was in quotes because it's not an exact measured right what is audited i mean no one really looks at how we process up contributor applications for example i mean how those are actually process i mean we have these little things we do of public education and these kind of miscellaneous things like that there's no real audit to know that we're doing well on that maybe it's more than ninety five percent you know from a dollar value maybe it's even ninety nine percent but most of what we do is somehow looked at by an outside entity from a quality control standpoint i mean except for these little things i mean who do who goes to conferences and shirts like that that's obviously not audited but they're really really small almost everything operational as anything to do with spending large money or customer service is somehow wrapped up in one of those audits ok back on you you had a live picture of the island and some projects you during the  and they're not numbered they're not numbered on our i know it is there are numbered up there but they're not numbered are they sorry we were asked to number them after we had printed and to say expensive copying costs we decided not to that one's wars to help with that well there's the a m b project there's i think me right projects is the other one and there's our existing problems so that area where that is and that's in north kiev just malka the highway that entire area right now is served directly by the pipeline that comes from central maui so those people get this very varied pressure depending on what the pressure of the pipeline is that's why when that pipeline broke this summer no one had any water most customers in our water system in all water systems get their service from tanks not directly off a pressurized line so it's an existing problem that we need to solve anyway plus there are those developments so we're building a slightly bigger tank and because each of those developments we get into the water system development fee there's a source component a transmission component in a storage component and they will be paying their share of that through the storage component so we will be collecting money from each of those developments to help reimburse us for that tank that is r c m p project so everyone's helping to pay for it but that's what that water system veltman fee is for ok we're not getting a free ride if that's where you're going no we're doing it as a cia project but they're certainly paying their share through that and that's why having that water system development fee be right sized match the actual cost is so important otherwise we do a project like this and if we only charge a fraction of what it really cost we have to raise everyone's rates to compensate for it right reservoirs just like the many many in a you know one are they do not have a problem there because it's so cold up there we don't have that same production problem with algae and those other reservoirs are so big got might have been the site more than the tank we we didn't put those numbers here to try to apples and apples i'm out some could include site work in palms and other kind of thing some might just be the tank we have certain things that we buy in our own guys installed so that cost may not include the labor we're just giving sort of an order of magnitude of the fact that we've done a lot of these large sized projects we weren't trying to make this as apples and apples comparison of things so  i wouldn't i wouldn't try too hard to use the numbers that we didn't we weren't that careful with the comparisons ok well good to know because i was just you know cross referencing picture to picture it take to take the upper to that but then jumping in to your pie charts and we don't have a page of years i can find that i just wanted to highlight the pluses here that not every year do things go up and i like that the number for electricity had gone down and just a comment as to what your department has been doing to accomplish that because that's a great example i would love to take credit for the fact that it rains more and opec lowered oil prices but i can't take credit for other what we track internally is kilowatt hours used you know per gallon produced because we can that shows we're replacing things with high efficiency motors and chose a republican are we of our control systems that are pumping water only when we need it that's really our internal performance measure i don't think anyone's going to understand it but the end costs end up being more much much more driven by global oil prices but the mico pass through and whether or not it rained so i can't take any credit for that reduction it's really just the oil pricing and rainfall  the brunt but i think you folks have been doing some wonderful upgrades and being more efficient and also have you not been going with p v and things of that nature at some here plants we have done all of those things and thank you for bringing that up and we put photo c in many of our plants we have every time something is implemented we take electricity cost and electricity usage as part of the design criteria to try to minimise that that goes into each specific project and especially how we juggle water between projects we don't want to pump water up and then run it back down the hills we're trying to be much more careful about that that gets back into that kirk i talked about the division head who's in charge of that i'd like to have him have more time to optimize those systems and less time clerical duties we've done a lot of it we think there is more to do we'll take our part of that is because of actions we've taken but again just the majority of it has to do with rainfall and and you know oil pricing the reason i mention that is that can jump up with almost no notice you know two years from now that could be much much higher than it is now so it's something that is this huge uncertainty when it comes to you know this graph i talked about about our revenue for expended versus expenditure that gap can disappear almost overnight if oil prices go back to one hundred dollars a barrel and there's a huge drought up country that's gone i mean that cap will be gone it will be back for a budget amendment and probably even a loan from the general fund to get us through the next year electricity is such a big part of our budget that we've it looks good now because those things have been on have been in our favor but that can switch by next year and it could be against us so it's just one of those things completely beyond our control and that's not the part that we can't control we're i can see you're doing a good job  at we're really shepherding us and we're here to help assist with budgeting to make that happen so because you have well you have on the other graph you were saying how you'd like to have at least a month kind of around sixty million a year so five million a year so five million five million carry overs about a month ten millions about two months so you know somewhere between five and ten million dollars i think when our fiscal officer does our budget she you can see she's been doing her budget this entire time so you can really see her philosophy long before my time has been around two months you know a good budget should have about two months carry over which again isn't a waste of money it  just rolls in as revenue for the next year just balances the rate increases and something that come up a couple of times maybe since last year's budget this idea of us going on a spending spree at the end of the year you know we've talked about that a lot internally i think that's something that's less likely in the self funded enterprise funds than it is in the general fund in my time here and most of my time in the to you know water and waste water which yourself funded and it was never part of our culture and it's almost surprising when i hear about it because any money we don't spend rolls into our account the next year or so is long as i've been here in those two groups there's never been a push for end of the year you know buying because we know if we don't need it you know that money is still  ours to budget next year it will come back in at reallocated i think if you're in a general fund group where you have no idea if you're getting any money next year that's probably much more of a tendency so i think this carryover savings in this special funds is not nearly as dangerous as maybe some people think because we don't spend it and i think you know this graph is really telling it shows that in the last decade of the department of water supply there has not been a rush to spend the extra money just because it's the if there is carry over we create is carry over we don't rush to spend it so i think you'll recognize that by looking at our expenditures and the carry over saving we'd rather save it if we don't need it because we are  charts are also telling if you look at most of the other departments the council services or the planning department what you're going to see in their pie chart is you're going to see eighty or ninety percent of it direct salary and only a very small amount b and c and a unknown so what you tend to see is we tend to budget high for electricity but you'll never see us spend that on trucks or anything else because we're always worried we're going to need and so i think if you really analyze our budget like we did we took a really close look we have not been sprees at the end of the year and that's might i'm in before my time so we truly recommend that the council try to support us in this fiscal management effort of keeping these separated by you know six weeks or so of spending we get to the end of the year let's have an extra six weeks of cash roll it to the next year if there is a big electricity spike it will disappear and we don't have to absorb it all the next year we can spread it recreated over a couple of years ago rather than writing right on the edge if there's a problem well to come back to general fund for a loan and then have a huge array to increase to pay back the next year so i think if you look from a fiscal management standpoint this shows really efficient  management that consistent and balances rate increases rather than you know having each emergency have a reading crease attached to it thank you and then found those pie charts the cash section it fees that that million that is from your funds but again on that on that seven million i just want to point out i mean cost over quickly in the presentation last year and budget council set aside five million dollars of cash for a country reserve fund so basically that money that's five million of that seven million difference because we didn't get it because it came from cash there wasn't really another pie chart to put it in but that's why it looks like it's such a huge increase five million of that seven million is from that single expenditure and sorry chair five got one more a the work we we outsource that so what we do is when we fix or repair our guys called batch it and then we try to maintain that cold batch until we have enough of them that we go out for bid and we have a professional come in and those are not patched them so that isn't something we're really equipped to do that's not our expertise so they've been languishing a little too long and in order to make them clean public works has been pushing us to make the patches much much larger than the original tranche so it asphalt expensive these days and you know we might do a small tranche but into paving half the road so the money just doesn't go very far and we're finding that we're spending more and more on that like i said in the last five years i've had to bump that twice to the next fiscal year because we just didn't have enough money to do it thank you so public works and you folks so although they have the ability to do that i think how why i know how that their schedule is for bigger projects in our projects so they're not available to just stop what they're doing and do little trench repairs for us so it's something that  is i think we're probably going to continue to outsource unless they really ramped up their ability you know with a second crew or something like that but looking at what their scheduling is because we meet with them about their scheduling our scheduling try to coordinate that and it just doesn't seem like they have enough  production ability to do what they're doing and you are trying to patches i mean they would have to do our trench patches instead and then you know hire they they would have to outsource to pave those roads ok we'll get you know and thank you thank you that sounds like something we can this year but yet that's one of the most important things to catch potential breaks so why wouldn't you bump that up are you short on staff or a million dollars i'm not sure why we're trying to work within a budget of a reasonable rate increase and so if the council sees our budget and look at the rate increase i'm sure you look at our rate increase with waste water and you know  if you feel that you'd like to add more money to that and increase our rates to compensate we could spend that money ok i'm just a little concerned about it seems like it's put low on the priority list when it should be a little bit higher it's it's only lower than the other priorities i add and that's i think part of my job is to see that things that we have to do have to be a higher priority and that is something that i'd like to do i'd like to get more handle on that and but that has to be icing on the cake not instead of the cake ok in the last question it's the big elephant in the there's nothing in our budget about trying to think of what's public in our in our filings with sea water commission so i think the last thing that happened with the state commission is there was a finding of facts and conclusions of law that we i think talked about here before from the hearings officer that hasn't yet been scheduled with the commission and then in another case which also uses water also goes teaching us there was just a filing with one of the parties last week that wanted to reopen that case based on the fact that each us wasn't using water we are parties in both of those cases our position is very clear is that we want to keep the water we have and we'd love to have a little bit more if we had more and we were we had some strong indication we were getting more then at that point you would probably see a request for funds for design and then construction of additional surface water treatment plant capacity but we're not out that stage yet because we're not comfortable enough with what the results will be to start spending money on on a plant that we may never get allocated water for as we go to thing we want to be careful with  consultant we can direct your consultants to pointed direction so you have something going on or you kind of come in for some budget funding for this or what where's that at there re a rate steady for not just fix before basically we've been she's done our raid studies regarding regards of which company she's been with for a number of years so somebody would do a rate study we do a qualifications based election of someone to rate study we tend to do that every few years and then our staff are physical off certain assistance just coughs or make minor modifications to it in the intervening years just to add just little bits and then every so often if we feel it's not a balanced we hire a consultant to redo the rate study and so there's a new baseline any time there's a major change in philosophy if we were going to add multifamily as a new category somebody have to go through all of the numbers to say well what should the rates be what we're proposing is a rate study to look at the water system development fees how to take that dollar value and how to break it down by fixture rather than break it down by size meter so that's something that no hasn't been looked at in a very long time so it's not about what the dollar value has to be we've already done those analyses you know we know what the total dollar we know what what each meter is worth but if we're not going to sell it we're not going to sort of pick charge for whole meters but we're going to charge for each fixture we need to do a study to find out what is the appropriate charge per fixture and that's something we just have no idea that's what we were asking for if simultaneously the council wants to look at a different philosophy of fees meaning establishing something like multi family under that same contract we would also add that scope it would cost a little bit more obviously it's a different aspect of it we weren't planning on doing that but if the council has a specific fee for loss if he that you want to explore develop and compare we can certainly do that as ok thank you so that fixture unit would that be something that could bring fairness to mr brett fahnestock comments earlier as in a you know condo version because now you've got like each unit has a certain amount of fixtures would that break it down i don't it it wouldn't address his direct concerns he talked about today but what it could do  its more about the fee you pay to get your meter installed has nothing to with your monthly fees so it could be for example his condo needed you know condos needed some four inch meter but by doing it  other way they only need a three inch meter it could save money on the purchase price it could also help people who just want a small addition maybe they have a five essential meter now and they're at their their cap they can't have any more experience right now we're telling them they have to buy they have to upgrade to a three quarter inch meter if we could charge just for a couple more fixtures they could buy sort of ones and twos and in fact what you're going to see in this year's budget something i didn't have an opportunity mention are going to see a little bit of that we are proposing a minor change that based on a certain five meter size you can buy up to a certain amount of additional fixtures for that five  meter without upgrading so within some limits and you'll see that in the budget when you get it next week so we are sort of wetting our toe in the pool of going that way but we don't feel comfortable doing any more than what we're proposing until we do a complete rate study but we have heard from many many people who just want to do something very small and they feel that they should have to pay for the entire meter upgrade so we are proposing something to try to help them this could help some people on the up contributor list who don't want a subdivision who maybe just want an addition of one bathroom and rather than having to get a five eighth's inch meter upgrade to three quarter which they can't get they could just come in perhaps if they fit those certain circumstances and it could actually help them so it's a limited program we want to do a great study to look at the whole program but we are going to propose like i said it's taking a step in that direction in this year's budget ok with that sounds pretty exciting and promising for people like you said so looking forward to further discussion on that and with that mr taylor i mean of good here and just not appreciative that you took jordan away but you know covered a lot of the things that needed to be covered i want to see that you know i really appreciate this three budget meeting because i think it really helps us when we get to looking at the numbers we're more prepared to deal with them because now we have some things to think about and we also have information mr pillar question i don't want to create work for you but i notice that every month we get a report from your department telling us about the water that is being used and where it's coming from and those kinds of things has there ever been a request to report to console quality results there has not i believe there's an ordinance that requires us to provide those reports i think probably one reason quality hasn't come up is the great majority of all our water is agricultural water and it isn't used under the safe drinking water act so there might be a couple things in there that have some small drinking water components but the great majority of that i don't i don't know that even has any water quality requirements and i've never you know thought about it because you send them notices when things are really bad but with this flint michigan thing on the table i was wondering if it might be hopeful if you prepare them anyway just to share them with the because i know that you're doing them i know you're doing a lot of testing we only have so they were mixing two different things our department only knows about the water quality from our system right those water reports are from other people's systems and only because she's here in the audience i know she's dying to come up i wonder if you request john a seato to come up and say you know if there are private system water quality problems on maui how does their department get notified and see me you and maybe learn more about your family history too and must read in the family i can tell he's a very intelligent man and quite handsome too so go for it to your question  all of our systems every year every water user cats and it's on our website right the consumer confidence report so very valid is our system what exactly happens with the non county systems missy took an and again most of the reports you get are for agricultural water which i don't think are the qualities regulated by by anyone but i guess the end result i guess the your reports are at your end which goes through the machine a treatment plant and all that but the initial water pumps out from those wells gets sent down to the county plant and then you you are monitoring what is being produced at that plant correct we we don't do a lot of testing of raw water other than pre designed we try to see what it is and we know how to treat it properly but what we are concerned with is testing water before it goes into the public system is not what happens backstage so most of our all of our data we share with the public is about what is the water you're drinking not you know what is the then from that point it's being ingested into our system so that is a critical point to me to be to reason the reason that you can be confident of that is you can talk about this more because she's the expert is we have to sample of places that are or representative of what people are drinking after all of our processing so our primary testing that's being done every day on various pieces of the system is about what is the water that's being delivered state of hawaii need to feel have the same meet the same criteria that the county of molly water quality means they also have the consumer confidence reports that they provide and they notify the not occurred eighteen or so for the small private water systems they primarily receive their water through ground water wells and the quite a quality of their water has not been  impacted by a lot of the contaminants that may be observed in culture or agriculture wells so they are aware of the treatment process is that they need to do and if they do need to improve their treatment they will notify us because that is a considered a significant change in their treatment process and we need to review it to approve that process change ok and so i guess the oversight or you're just getting reports from the private entities do you folks periodically go you know walk the ground and actually do site inspections so they all the private regulated systems also receive sanitary surveys and they may have them on a three or five year frequency depending on how well their survey goes they provide us with the please i guess it's in regards to water pressure and i think i am the woman from your department it comes and she's the expert on this kind of stuff i forget her name  and do you folks you don't have a certain number as in a p s i i that you are mandated to provide for the community or would like to meet for the community or  generalize our answer to that i don't believe it's by ordinance and i don't remember the number i think it might be i think our minimum standards might be thirty or thirty five p s i i something like that i don't remember with the engineering standard in our standards is  most areas it's higher than that and we try to keep it not too high not too though i don't remember that the numbers there are certain places where it's lower certain places where it's you know most of the places right in the right range think you i believe  mentioned forty and you are right ok and then how does that relate to fire suppression pressures do you do you know or do i present a fight perma question it's a plumbing question which is it's really more of an engineering question it depends on the size line you know and it depends on the elevation between the street and where you're fighting the fire if your lines in the street and your house to the top of the big hill you have a three story house there might not even be enough pressure to get up there versus if you're lower than the street and you have a big pipe between the street in your house here that can be plenty of pressure so it's not just pressure at the street it's also still with the plumbing in the topography of your your own development right anything there has to be for fire i have to have some kind of guarantee that they're going to fire me to certain super fire fire ok fire so fire flow for for example a fire hydrant you know they need a certain amount of flow at that hydrant so the pressure and the size of the line has to do with what that flow would be if you have something like a fire sprinkler in your house that might also require the fire sprinkler in the valve to the sprinkler system also needs a certain pressure flow so depending on what the fire suppression system is or hydrogen it's it's sort of just engineering hydraulics and that's why every project that has a system like that has to be stopped by lyson engineer reviewed either by our staff or by fire depending on what it is so it is an engineered system and there it just falls to the the crunching of the numbers ok thank you engineer the only reason why i bring that up is because there is some subdivisions and perhaps because as the entire town is growing and more users are being put on to the system pressure is going down and the pressure was tested at one house at twenty five and so the neighbors putting area geishas system there again cannot work to full potential because of the pressure to address it because like i said people have spent thousands of dollars for irrigation and now though these irrigation systems cannot produce as much as it ought to be because of the pressure issue understood and that's you know we hear people testify all the time th don't like our rules saying that they don't think they should have to upgrade to an eight inch pipe in this kind of thing that's why those rules are there i don't know there's so many old systems i don't know that everything's perfect everywhere but that's a reason of why those kind of rules exist one of our our system evaluation criteria when someone comes in is we're saying can we serve you without negatively impacting your neighbors and that is one of the evaluations our engineers do which is why the engineering why many people come to the podium and say hey i don't like the water department they're saying i have to build a tank i have to upsize a line but we're trying to avoid those things the fact of the matter is you can almost take any system anywhere if you've got everyone to go in and turn everything on the pressure is going to drop so these things are not an exact science and a lot of times you know we use best engineering principles sometimes it didn't work out because this is some sort of so put together over the years in not in any sort of organized way and we have to retrofit in tanks and upsize lines and things like that i'm certainly not saying it's perfect everywhere if we know about that if they call if they call us we can look into that and if there is a system problem we can look at if there's ways to fix it sometimes it's as simple as opening a valve that was sort of half closed and rebalancing it based on future demands sometimes the pipes are big enough but the field guys are just valves to balance pressures and those can just be changed on the fly so if we're contacted by those people there might be something we can do but it's it's there's some sort of hardwired stuff in the pipe size and some things that are modified with you know the fuel guys playing with v and and shared it is always very helpful prior to budget session to get an idea of what's going to come our way so thank you and any other questions thing none we have completed our business for today i'd like to think is to kill it and i'd like to thank the folks from the department of health thank you so much for being here and i'd like to think my step forward so hard in getting things together appreciate my members who made it today we had a beer  had some issues here today but you know what i think we'll did a really good job mr taylor and miss the women thank you very much you think that this is a very very worthwhile meeting today we're no ready for budget so without