Five City Council members signed onto bold legislation in January that would yank the Honolulu Board of Water Supply from its semi-autonomous power and ask voters this year to place it under control of the city’s executive branch.
“The point was to get the discussion going about what happened to their $80 million surplus, etc., and what about all those fluff expenses,” said Councilwoman Ann Kobayashi, who sponsored the resolution. She was referring to a large carryover of funds from 1998 to 2005, cited by a report by the city auditor.
Though the Council measure presently “is not on the agenda” to advance, it has focused needed attention on the water board and its operations, especially at a time when residents and ratepayers will start seeing a
70 percent increase in their water bills over the next five fiscal years. And, at a time when the city’s aging infrastructure seems to be surrendering regularly to burst pipes and water mains, causing disruption to water users as well as to traffic patterns.
New management at the board has made changes that have been welcomed by the Council and the Carlisle administration. At the same time, the board is going forward with the rate increase, which will raise the average monthly water bill from the current $39.19 to $66.72 a month by fiscal year 2016. (That is dwarfed on the same bill by sewer services that average $95 a month.)
In January, the seven-member board, appointed by the mayor, named Ernest Y.W. Lau to the top position of manager and chief engineer, a post he held at the Kauai water department for seven years after 14 years as an engineer at the Honolulu Board of Water Supply.
Since then, Lau has agreed to drop the hiring of lobbyists to look out for the board’s interests at the Legislature and the City Council.
The board had spent more than $469,000 on lobbyists since 2006, according to state and city ethics reports.
Former City Councilman Charles Djou maintained in an op-ed column last July that the board paid high-priced lobbyists to “court” the Council and Legislature because it was “deathly afraid of the Council amending the charter to give the Council real authority to scrutinize and disapprove BWS’ annual budgets.”
“Both Ernest and I have been very actively taking over those lobbyist activities,” said Ellen Hirayama, newly appointed by Lau as his deputy. “We have been working with the City Council so far, but I know Ernest has also gone over to talk to the Legislature on some of the bills that need our attention.”
In addition, the board’s new management has responded to Kobayashi’s suggestion that the board consider other ways to increase revenues, such as developing the board’s employee parking lot off Beretania Street into a money-generating condominium.
“We are definitely looking at that,” Hirayama said.
After consulting Kobayashi, she said, the board plans to put out a request for a proposal for development of the property by the end of this year. Noting that the land now offers parking for state employees at only $18 a month, Kobayashi expressed satisfaction that the new management has decided to seek a method to gain more revenue from the property.
The Kobayashi proposal to put the water supply under an executive department called for a drastic change. The territorial Legislature created the seven-member, semi-autonomous board in 1929 following a four-year period of water shortages.
Financed by water rates and not state or city funding, the Board of Water Supply is helmed by a manager and a chief engineer with expertise in water policy issues. It is charged with managing Oahu’s reservoirs and pipelines that deliver more than 150 million gallons of water daily. Five of its seven board members are appointed by the mayor and approved by the City Council; the sixth is the state transportation director; the seventh is the city’s Department of Facility Maintenance chief engineer.
“A prime consideration in the creation of the new board was to remove the operation and management of the waterworks from direct political influence and control,” Lau testified to the Council in opposition to the change proposed by Kobayashi.
In 1958, he added, the Charter Commission said, “Politics and political expediency do not have a place in the operation of a water department. It added that the board had “proven itself to be an agency that can plan for and run its business efficiently.”
However, the board in December 2004 had approved $555,763 in incentives paid to 49 employees, including $63,000 to then-manager Clifford Jamile and $54,000 to his deputy, Donna Kiyosaki.
A city auditor’s 2006 report also was less than complimentary “due to significant organization changes.” The board’s budget for pipeline maintenance had “declined precipitously, sufficient only for the most critical repairs,” according to the audit.
Rate increases had not been imposed for 11 years and, the audit asserted, reports that the board had been “unable to cover its operational costs and the high number of water main breaks, bring rise to concern that resources for maintenance and repair of existing drinking water infrastructure may have been compromised by these organizational changes.”
Since 2006, the board has imposed rate increases from 13 percent dropping gradually to 5 percent over the five-year period.
“The current rate increase that was proposed and accepted by the board dealt a lot with looking at our infrastructure needs and what we need to do in order to make sure that our infrastructure is able to support our capital improvement project and other initiatives,” Hirayama said.
“So far, the response by councilmen had been very, very positive,” Hirayama said.
Kobayashi agreed that the Board of Water Supply’s new management has taken moves that shelve, for now, the notion of transferring the board to city executive status.
In addition, Hirayama said members of the Carlisle administration seem “happy with the new management at the Board of Water Supply. I would take that as a plus that they’re happy with us and want to keep us intact.”
