Drinking-water fund needs quick attention

Managers of the Drinking Water State Revolving Fund just can’t seem to spend federal dollars fast enough to improve Hawaii’s aging drinking water infrastructure, and took yet another hit this week when the feds withheld the state’s annual allotment of $8 million.

The fund stood at $100 million at the end of 2014, and the Environmental Protection Agency says the state Health Department, which administers the fund, simply isn’t hitting targets for drawing down the balance.

The EPA’s move is not just a slap on the wrist, and Health Department officials must take swift action to ensure the funds are released.

A Health Department official reassured that the EPA action is a temporary hold, but fund managers need to repair the program’s holes. The state is not in any position to lose a single dollar when an estimated $1 billion in repairs are needed to fix the state’s drinking water systems over the next two decades.

The fund has become a shining example of poor management and execution. Last year the EPA slapped the Health Department with a notice of noncompliance with loan requirements, threatened to take away funding and asked for a corrective plan in January.

And last month, it was revealed that eight of the fund’s loan officers and accountants had racked up a startling $471,304 in overtime since fiscal year 2007.

The department was required to commit $56 million in loans by June, but made only $48 million in loan commitments, according to the EPA. Moreover, the Health Department is about four months late in having a plan in place to fund 2016 projects. What’s worse, the department submitted several versions of the plan, but none were approved by the EPA.

In order to receive the $8 million, the Health Department must commit at least $28 million in new loans and disburse $7.6 million in funding by Jan. 29 — a deadline that Joanna Seto, head of the Health Department’s Safe Drinking Water Branch, says she expects to meet.

The public must see that it is — and without undue OT.

Clearly, better project management is needed. The fund has become a crucial resource to the state’s four counties, offering 20-year low-interest loans for capital improvement projects such as fixing water mains and leaking pipes or to clean contaminants from drinking water. But in the last six years, Hawaii has used just 71 to 86 percent of its available federal water funds, a rate well below the national average.

Nationally, project delays, poor management by some states and structural problems have contributed to nearly $1.1 billion in congressional appropriations sitting unspent in Drinking Water State Revolving Fund accounts.

The Honolulu Board of Water Supply depends on the federal funds as an invaluable source for capital projects and long-term planning, receiving more than $134 million in loans and loan commitments, said BWS spokeswoman Shawn Nakamoto.

Keith Kawaoka, DOH deputy director of environmental health, is confident that all benchmarks set by the EPA will be met, with steps already underway to streamline processes and create efficiencies.

The department also is investing in a $450,000 financial and project tracking system, which is expected to help ease the workload and ultimately reduce overtime once fully implemented. An EPA consultant also is being tapped to help overcome problems, Kawaoka said.

“I’m confident we’re going to meet the (EPA) targets. We have to work with the counties. … Everybody’s got to roll the same way. If we don’t meet the targets we don’t deserve the money.”

But the real point is that Hawaii’s residents deserve safe drinking water and the counties deserve a robust source of funding to provide that basic need.

Health Department officials must better manage the drinking-water fund to ensure that any amount — let alone $8 million — does not flow out of this state and into another.