MEDIA RELEASE

House passes resolution to investigate County of Hawaii Department of Water Supply on Ocean View – Kahuku water system project

Honolulu, Hawaii. The House of Representatives passed House Resolution 136, which establishes a committee to investigate the County of Hawaii Department of Water Supply. The purpose of the committee will be to investigate the status and handling of the stalled Ocean View – Kahuku water system construction project on the island of Hawaii.

The resolution was proposed by Rep. Robert Herkes, District 5 – Puna, Kau, South Kona, North Kona.

“It is unfortunate that, despite efforts by many groups and individuals to obtain information on the project, many questions remain unanswered,” said Rep. Herkes. “The community is depending on the completion of this project, and there have been severe roadbIocks and delays from the department. It is important to the taxpayers of this State and the residents of Kahuku on Hawaii Island to get satisfactory answers to these questions.”

The 2005 Legislature appropriated $6 million to Hawaii County for development of a water well and adjoining system with the storage capacity to fill stations to accommodate four water hauler trucks and other amenities. The money was released in April 2006 to the County.

The water well was completed about two years ago, but work on the storage tank has stalled. SSFM International was originally contracted to provide the design of the project and to conduct an Environmental Assessment (EA). The department has since contracted with a different firm, Bolton, Inc. to prepare a new design and to finish the project. The new design differs significantly from the original design that was supported by the community.

The committee on Commerce and Consumer Protection heard testimony on HR136 from Mr. Loren Heck , President of the Ocean View Community Development Corporation, who also served as a member of the Board of Directors of the Department of Water Supply in 2003. Mr. Heck’s testimony states, in part:

“Initially, the DWS met their deadlines to encumber the $6,000,000. In the years that have followed, The Ocean View Water Project has suffered continuous delays. Response to requests from the Ocean View Community Development Corp. for regular updates are irregular, with no reported ‘tentative’ deadlines being met. It is questionable if communication with outsourced contractors is clear or timely.”

The Department of Water Supply does not currently serve Ocean View. Further, Mr. Heck’s testimony reads:

“Ocean View Community Development Corp argued that by the fact that water-hauling companies were purchasing and delivering DWS water to Ocean View residents daily, we were customers. Furthermore, we were paying over ten times the general customer rate, covering the cost of a private truck delivery system which saved DWS the cost of delivering the water to Ocean View.”

The duties of the committee will be:

• To determine the status of the water well and overall water system project,
• To provide for an audit of the money allocated to the water system,
• To determine whether an amendment to the EA was required relating to the change in project scope after the EA was approved, and
• To determine upon what basis Bolton Inc. was retained and whether its contract with the department complied with the State Procurement Code under Chapter 103D, HRS.

The investigative committee will be appointed by the Speaker of the House of Representatives exclusively from the membership of the House of Representatives, and it will be authorized to exercise its powers during the interim period between the 2010 and 2011 Regular Sessions. The committee is required to submit a report to the House of Representatives no later than 20 days prior to the convening of the 2011 Legislative Session.

Rep. Herkes has also sent a letter to Mayor William P. Kenoi, County of Hawaii to request that the Office of the Mayor and the Board of Water Supply address concerns related to the Ocean View water project.

Letter by Speaker of the House Calvin Say to Mayor Billy Kenoi

The Honorable William P. Kenoi
Office of the Mayor
County of Hawaii
25 Aupuni Street
Hilo, HI 96720

April 19, 2010

Dear Mayor Kenoi:

This is a formal request that your office and the Board of Water Supply address concerns over the Ocean View water project.

During the Legislative Session of 2005 an appropriation of $6,000,000 was approved in the budget with the funds to go to Hawaii County for the development of a water well and adjoining system with a storage system of appropriate size fill stations to accommodate 4 water hauler trucks and other amenities. The money was released on April 19, 2006 by Governor Lingle to the Mayor of Hawaii County, Mayor Kim, for this project.

Mayor Kim had a number of options available to him at this time including issuing a RFP for design/build for the project or turning the project over to the Hawaii County Department of Public Works to implement. Mayor Kim’s decision was to turn the project over to the Department of Water Supply (DWS). The State looks to the Mayor’s office to provide answers on this project.

It is our understanding that DWS contracted with a private firm to design the project and to complete an Environmental Assessment (EA). Community members in Ocean View have advised this Committee that they were very happy with the design and EA.

Additionally, we understand that the water well was completed two years ago with sufficient head to supply the community with needed water. It is also our understanding that not much has happened since that time.

Furthermore, it is our understanding that DWS has contracted with Bolton, Inc. with a design/build contract to finish the project and it is our understanding that the new design prepared by Bolton, Inc. differs significantly from the original design, and what was shown in the EA and approved by the community.

The original design provided for four fill stations to accommodate water hauler trucks. The area of the fill station also had a fence and landscaping to shield the area from the neighboring landowner. This was detailed in the EA. The revised design calls for two fill stations not designed for water hauler trucks and removed the fence and landscaping. These are significant changes that reduce the value and operability of the fill station and differ from the approved EA.

We are requesting that your office provide the House of Representatives of the Hawaii State Legislature with the following:

1. A complete audit of all funds received from the appropriation, how they were expended, what services were received and what funds are remaining,
2. A copy of the original plans and EA and information on who was retained as a consultant for this project,
3. A copy of the current agreement with Bolton, Inc. and details of the procurement process used as required by law,
4. A copy of the design submitted by Bolton, Inc., cost of the design, and the name of the individual or individuals who approved the design,
5. An analysis of how the Bolton plan differs from the original plan and the EA,
6. An analysis of whether Bolton’s design/build contract contains the requirement to design and construct a concrete water tank,
7. A summary and comparison of the number of steel water tanks of comparable size or larger to those proposed in this project as compared to the number of concrete water tanks of comparable size or larger in the Department of Water Supply’s system,
8. A copy of all reported problems concerning steel water tanks, if any, from the Department of Water Supply,
9. A report summarizing the specifics of all concrete water tanks Bolton, Inc. has designed and/or built for any projects including, but not limited to, information concerning the size and dimensions of the tank, scope and location of the project, duration of construction period, and completion or estimated completion date,
10. Any record of public hearings in Kahuku to obtain community input on the new design and the community reaction,
11. A timetable for completion of the project with plans and costs and availability of funds,
12. A statement from the Board of Water Supply regarding whether they will accept the complete system for operation with an operational plan,
13. A copy of any Audit done by the Hawaii Council Legislative Auditor on the Department of Water Supply,
14. A statement concerning the status of the requirement to bring 3-phase power to the pump site and plans for any alternative means of power,
15. Any plan developed for the operation of the system upon completion, and
16. Any other information you wish to submit to help clarify the management of this project.

The information requested is to be submitted to the Speaker of the State House of Representatives at the Hawaii State Capitol in Honolulu no later than June 1, 2010.
Upon receipt of the information the Speaker of the State House of Representatives and the Chair of the special investigative committee created by House Resolution 136 H.D. 1 will examine the information for accuracy and clarity. At the end of this process the following decisions will be made:

1. Accept the information and determine if any legislative relief is required or,
2. Subpoena certain documents and individuals for further examination.

It is unfortunate that, despite efforts by many groups and individuals to obtain information on the project, many questions remain unanswered.
It is important to the taxpayers of this State and the residents of Kahuku on Hawaii Island to get satifactory answers to these questions. How Hawaii County and the Hawaii County Department of Water Supply have managed this appropriation will weigh heavily on any further State appropriations to Hawaii County and Hawaii County Department of Water Supply.

Sincerely,

Speaker Say

Chair of the State House Committee on Finance

Chair of the Special Investigating Committee

Vice Chair of the Special Investgating Committee

Cc: Members of the Hawaii County County Council
Governor Lingle
Attorney General