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Water board argues hikes needed

By Gene Park

LAST UPDATED: 1:31 a.m. HST, Jul 22, 2011

Proposed 9.65 percent water rate increases through 2015 will be used to pay for a six-year capital improvement plan for the island's aging water system, Honolulu Board of Water Supply officials said Thursday in a Star-Advertiser editorial board meeting.

The Board of Water Supply now has about $50 million budgeted for its construction program. Last fiscal year it had $49 million budgeted with a $155 million operational budget; and the year before that, about $41.3 million, with about $150 million for operations.

The agency has about $345 million of projects queued up. But acting water supply Manager Dean Nakano said that figure could drop if the board decides to adopt a smaller increase.

"It's planned, and it's contingent on the rate we want to put in place," Nakano said, adding that the board had not increased rates between 1995 and 2006.

"Perhaps if the board at that time may have undertaken a smaller increase over the 11 years, then maybe we could propose a lower rate at this time," Nakano said. "We're at a point where we have to put some funds toward our capital improvement."

The proposed rates, which could increase water bills by 70 percent by 2015, is still up for public hearing and board approval. It calls for a 9.65 percent raise each year for the next five years. The monthly bill for a typical single-family home that uses 13,000 gallons of water would increase by $27.53.

Nakano said there was no specific project that needed work to spur the rate hikes.

It's just "the right thing to do," he said.

"We're seeing rising construction over the last five years. I'd rather us undertake that now rather than deferring the cost to a later time when it'll be more expensive," Nakano said.

The agency's last rate increase was in 2006, when it began a renewed focus on pipeline maintenance. That same year, an audit by the city auditor was released, accusing the agency of fiscal waste by not adequately funding maintenance.

The 2006 audit also criticized the agency's past practices as fiscal waste, like an "experimental modernization project" that cross-trained workers in multiple trades, and poor return on investment on a plan to send agency experts to Asia-Pacific nations as consultants.

The system will likely be in a perpetual state of maintenance, especially since 984 of Honolulu's 2,100 miles of pipeline are older than 40 years.

In fiscal year 2005, the agency repaired only two miles of pipeline, according to the 2006 audit. It currently repairs about eight miles a year but hopes to repair 10 to 15 miles a year with the new rate hike.

Jason Takaki, who heads the water board's capital improvements program, said it's not just pipes that need to be repaired, but pumps.

"If we lose our pumps, we are in bad shape," Takaki said. "We need to special-order a pump from the mainland, have it shipped in and dig through big areas without water for that period of time. … We need to prioritize our projects, especially our pumps ahead of our pipes."

Even if the proposed increases are approved, there's no guarantee that there won't be another in five years, water officials said.

"If there were to be another increase, it will still go toward repair," Nakano said. "(The system's) going to continue to age no matter what."

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