Ernest Lau is in a position to see aspects of Oahu’s water supply the rest of us would rather miss: lines running through old communities, right beneath the sidewalks; exposed water pipes showing a level of corrosion that surely signals a break ahead.
But that’s the truth of an aging water delivery system, and Lau, the 10th person to hold the manager and chief engineer title at the Honolulu Board of Water Supply, would rather just confront it.
"I guess I’m not afraid to tackle problems and issues," said Lau, 57, "and I prefer not to defer them but just start dealing with it forthrightly."
And there have been many of them. Rate payers have raised some protest over the shift to a monthly billing schedule; the assessment of a $7.50 customer fee now also happens twice as frequently. There have been complaints about the adjustments to past bills that had to be estimated due to failures in meter readings. Proposals to redevelop the agency’s Beretania Street headquarters, a parcel little over 6 acres, possibly including the office complex built in 1958, will soon be evaluated.
Most recently, the City Council has contemplated its response: first, a proposal to take charge of the agency, and then legislation to conduct an audit of the water board.
To some extent, Lau knows the drill of government oversight. Previously he has served as deputy director of the state Commission on Water Resource Management and was manager and chief engineer of the Kauai Department of Water. He started his current job about 18 months ago, leaving a post as administrator of the Public Works Division under the state Department of Accounting and General Services.
The married father of two, who said he finds relaxation in photography and fishing, cited a personal reason for accepting this job.
"I was in a good position with the state, but I felt I wanted to come back to BWS to try to help improve things," he said. "It sounds a little corny, but it’s about our future, and about my children and their future. I know we have a lot of problems, but we need to fix them and take care of them, and improve."
QUESTION: How do you respond to the audit the City Council has proposed doing on the water board?
ANSWER: You know, it’s always healthy to have an objective party evaluate your agency to see how you’re performing. I’m sure the auditor will find areas that we can improve on. We are taking major steps to improve in different areas already. So I’m looking forward to working with the auditor.
It’ll let everybody know how well or how poorly the Board of Water Supply is doing. I believe we’re doing some good things, but we do have areas to improve on. …
Q: Is there any particular area you think could be a red flag to an auditor?
A: They’re going to be looking at operations, management, policies. Of course, they’ll probably be looking at the billing system implementation, and some of the challenges there.
Q: There have been a lot of confusing bill adjustments going out, sometimes over several months, to correct earlier billing estimates. Is that going to get fixed somehow?
A: We wanted to be informative, but I also think in a way we created more confusion for the customers. Rather than doing just one adjustment, you adjust all prior bills. We felt it was more informative, being more transparent with the customer to look at the previously estimated bill and do a corrected bill for each of those months. …
We’ve been working on … simplified instructions on how to read your multiple recalculated bills. And we plan to send this out with the recalculated bills, going forward. … What we’ll also be including in the mailing to the customer is a request for payment arrangement due to recalculated bills.
Q: You mean like an installment plan?
A: Yeah, basically an installment.
Q: But is this going to keep happening because of problems with the metering systems not being read?
A: What we’re going to try to do is minimize the number that happens. … Even under the old system, when we were bimonthly billing for residential customers, there’s always some degree of estimated bills going out.
Q: How high a percentage?
A: In May probably over 16 percent of our bills were estimated.
Q: And now?
A: And now we’ve gotten it down to 4 to 5 percent …
Q: But if you need a brochure to explain the bill, shouldn’t you just reformulate the bill?
A: I’m with you on that. Right now, because of the situation we’re in, we don’t have the time to redo the whole format. But it’s something we have to work on, a much more understandable bill for our customers. …
Q: Have accurate meter readouts always been a problem?
A: You either have problems with the meter or the meter-reading system — the radio-reader system — or there may have been flooding in the box that interferes with the signal, or objects like cars parked over it, something that prevents us from getting the read.
Q: What problems did you encounter when you started this job?
A: There were three major things going on at the beginning of the year. One is moving from a 20-year-old billing system, running on really old computers, to a new customer information system. The other was converting from bimonthly residential bills to monthly.
Then also, the third factor was the challenges with the AMR, the meter-reading system. Battery life, maintenance. We were only getting, I think, 87 percent of the actual reads of our total 166,000 meters. So we worked really hard to increase meter-reading staff, do battery changes. And now, 98-99 percent of the meters we have are getting the reads from them.
But in the meantime what was happening (was that) bills were being estimated. And that workload shifted to our finance, revenue and customer accounting section. … To convert an estimated bill to a recalculated bill based on an actual meter read, it needs somebody to do a manual review. …
And because we weren’t staffed adequately there, it started to backlog, pile up on us. Now we’re increasing the staff.
Q: What is the staffing now?
A: For the customer service reps, we’re going to be taking them up to 30 customer service reps. … Earlier in June they had about 15. So they’re doubling their size.
For the revenue accounting, which does the review of the estimated bills and corrects them for actual reads, that’s moving from seven to 19 staff.
Part of the reason for the increased staffing level is also the conversion to monthly bills. The timelines and deadlines are much quicker, faster. …
Q: Is the increased staffing permanent?
A: Right now, because of the number of multiple-month estimated bills going out to customers, we’re increasing the staff quite a bit. Where we end up at the end of the day with the permanent staffing requirement is yet to be determined. So we’re using temporary contract employees to staff up, rather than creating permanent civil service employees. …
Q: On another pending issue: What’s the time frame for redeveloping the board’s headquarters here?
A: The Beretania property redevelopment RFP (request for proposals) was issued back in March. We are going through the process now. Part 1 is the qualification of companies to be shortlisted … to move on to the next phase, Part 2, which is to submit their technical and price proposals for redevelopment of the property.
Keep in mind that the fundamental basis for looking at the redevelopment of the property is to look at the opportunity to generate an alternative source of revenue to help supplement the operations and maintenance of the water system. We don’t think it will offset all of our costs to operate, but it’ll add, hopefully, an amount that makes sense for our customers. We’ll only do this development, proceed with it, if it makes sense to our water customers. …
So, some of the timelines: The advertising was March 15; qualification proposals, which was Part 1, from the developers was due in June; Part 2, price and technical proposals, we estimate probably January or February next year.
Q: It’s going to be a mixed use of some sort?
A: Probably. It’s a little too early to tell what’s going to be submitted by the various developers, but we probably anticipate mixed uses on the property. It is A-2 zoned, so it’s apartment zoned for residential use. But for many years, Queen’s hospital, our next-door neighbor, has expressed strong interest in the property as a place for, potentially, expansion. …
I can’t share the details until we actually make a conditional award.
Q: But the possible outcomes could be … ?
A: Could be residential, could be physicians or medical or health-related. It could be anything, at this point. … A-2 is the current zoning, so if the developer would like to propose other uses, their requirement is to obtain the correct rezoning or entitlements to be able to develop it.
Q: How do you see Honolulu’s history of putting off repairs and maintenance?
A: Deferred maintenance is not uncommon. Because when you think about it, it’s OK to build things new, keep on expanding, but someday you’re going to have to come and pay the price of maintaining or replacing infrastructure. But it’s usually something that gets put off.
It’s a discipline, a maintenance system, and funding it appropriately to keep the systems maintained.
Q: But why is it so common to let things slide?
A: They’re strapped for cash. They have their challenges, so they have to determine where they put their budgets. … The approach is traditionally — not only in Hawaii but across the country — "fix it when it’s broken." And, "out of sight, out of mind; it’s running." And when it breaks you address it. …
I believe it’s cheaper to the customers, over the long term, if we do the maintenance … and to extend the life of the equipment. Doing CIP (capital improvement projects) prematurely because no maintenance was done is a real expensive way to take care of the water system.
