Water rate increases go before Kauai board

The board of the Kauai County Department of Water will consider rate increases today of 7.5 to 11.2 percent a year over four years for about 20,000 customers.

The increases are targeted to fund maintenance and replacement of aging water lines.

The meeting will begin at 9 a.m. at the department’s conference room at 4398 Pua Loke St. in Lihue.

The increases could go into effect in January.

"For the most part, funding (up to now) has been with borrowed money, so we’ve been able to keep rate increases to a minimum," said David Craddick, the department’s manager and chief engineer.

A bulk of the $43 million spent on projects and designs completed last fiscal year was financed with a $120 million Build America Bond, said Dustin Moises, the department’s project manager. Projects completed last fiscal year include a 12-inch waterline along Kaumualii Highway and Waimea Canyon Drive, a main line replacement in Waimea and a half-million-gallon storage tank for the Kapilimao well.

Craddick said the Build America Bond is backed by the federal government, which subsidizes 35 percent of the interest payments. The only catch is it must be used in three years.

The department’s debt is $157 million in government bonds and state loans.

"It is imperative that we fulfill our mission of providing safe and sufficient drinking water by maintaining and in some cases replacing this aging system. In order to do that, we must increase rates," Craddick said.

Kauai’s current general water use rates depend on meter size and consumption. Rates for a two-month period range from $3.20 per 1,000 gallons of water to $6.25 per 1,000 gallons.

A previous five-year rate increase expired in 2010. Beginning in 2006, rates increased an average of 8.2 percent each year. Before then, rates hadn’t seen a hike since 1998, said Craddick.

In the current fiscal year, which began July 1, Craddick said the department is looking to spend $28 million on scheduled improvement, rehabilitation and replacement projects.

For information on the rate increase or to request an auxiliary aid for Friday’s meeting, call the Kauai Department of Water at 245-5455.