All of us at the Board of Water Supply (BWS) recognize the impact of a rate increase on Oahu’s residents, but we also point out the need to address our aging infrastructure.

Appropriately funding a multi-year capital improvement program will provide for the renewal and replacement of core components of our water system and ensure continued service.

The proposed water rate increase of 9.65 percent each year, over the next five years, will support the funding of proactive pipeline replacement to minimize water main breaks and also be used to renew Oahu’s pumps, reservoirs and treatment plants.

What the new rate amounts to is an increase of 27 cents more per 1,000 gallons of water used during the first fiscal year, leading up to $1.63 more per 1,000 gallons by the fifth year.

Deferring a water rate increase will only result in increasing costs and delay necessary improvements. The ramification of not adopting needed rate adjustments is that rates in the future are likely to be even higher.

It is critical for the BWS to embrace a long-term perspective when making decisions on utility rates and the sustainability of our operations.

The BWS is committed to cost-efficient operations. Annual budgets go through a public hearing process and are carefully evaluated to provide continuous improvements.

The BWS is audited regularly and from several independent viewpoints. The city auditor has also reviewed the BWS’s operations. The last city audit in 2006 identified 16 recommendations. A follow-up conducted by the auditor in 2011 found that all of the 16 recommendations were either completed, resolved or were dropped. One of the findings involved the previous issuance of bonuses.

I note for the record that such bonuses were stopped and have not been awarded since 2005.

These are challenging economic times, and BWS employees are not exempt. All BWS employees, including management, have taken pay reductions over the last two years.

At the same time, the BWS’s successful Multi-Skilled Worker Program has resulted in a net savings of more than $1 million annually, with improved performance efficiencies from 24 percent to as high as 48 percent in response to maintenance issues and emergency water main breaks.

The program is an innovative initiative whereby field personnel are trained in the multiple skills needed to maintain pipelines and repair main breaks, such as pipefitting, masonry, carpentry, welding and heavy equipment operation, so that fewer workers are needed to respond to a break. The program is a viable prototype for achieving work efficiencies.

Our leak detection program has saved 1.4 million gallons of water a day on Oahu, about 506 million gallons of water per year.

We’re also producing about 8 million gallons a day of recycled wastewater for non-potable use through our Honouliuli Water Recycling Facility, thereby offsetting demands on our potable ground water supplies. The facility has realized a net operating return of $2.17 million since 2006.

While the BWS has employed legislative liaison services in the past, in my capacity as acting manager, I have no plans of extending or going forth with another contract.

However, I still affirm the need to monitor and closely follow proposed legislation to protect the interests of our rate payers. Water resource protection, water quality, public trust, legal, regulatory, financial and other issues have the potential to affect our operations, and ultimately the cost of service to customers.

I would like to thank the community for taking the time to express your thoughts and recommendations. As stewards of our water resources, we take our responsibilities seriously. We, too, are customers of our municipal water system, and we share the public’s concern for the need to strike a proper balance between the impact of a rate increase on Oahu’s residents and avoiding the effects of an aging infrastructure.