Watering that lawn or filling that swimming pool is about to get a little more expensive. ADVERTISING Watering that lawn or filling that swimming pool is about to get a little more expensive. The county Water Board, meeting Tuesday in
Watering that lawn or filling that swimming pool is about to get a little more expensive.
The county Water Board, meeting Tuesday in Hilo, unanimously approved a five-year water rate plan that hikes rates 3 percent on July 1, followed by 4 percent next year and then 5 percent annually for the next three years.
A typical family on a 5/8-inch meter using 9,500 gallons monthly would see their bimonthly bill go up from $101.75 to $104.96 the first year.
Currently, Hawaii Island’s typical $101.75 bimonthly bill compares to $86.40 on Maui, $93.45 on Oahu and $129.55 on Kauai, according to consultant Ann Hajnosz of Brown and Caldwell. The actual cost to produce the water is about $4.13 per 1,000 gallons, she said.
“Nobody likes to see rate increases. It’s sort of a fact of life … that as costs increase, and especially as revenues decrease, due to reduced water sales,” Hajnosz said. “The Department of Water Supply has an obligation to be financially self-sufficient, to plan for not only current operations, but future operations.”
But Mike Flaherty, testifying at a May 26 public hearing in Kona, questioned why the Water Board anticipated a 24 percent increase over five years, compounded. Flaherty was the only person offering testimony at public hearings in Kona and Hilo.
“I wish I could find an investment that I could make 24 percent,” Flaherty said. “I know stuff costs money.”
The Water Board took heed of Flaherty’s comments, and on Tuesday agreed to have staff evaluate the rates after the first year, although without going through another full-blown rate study. Any rate changes would have to go back through the public hearing process, said Waterworks Controller Rick Sumada.
Bottom line, he said, the increases are necessary. The consultants forecast revenues based on rates and usage, and then forecast expenditures based on costs of labor, operations and capital improvements, and found a gap that needs to be filled with a rate increase.
“The expenses projected for five years are greater than revenues we project for five years,” Sumada said.
The Water Department uses a rate system that encourages conservation by charging more per thousand gallons for higher water usage. The water bill is made up of a static standby charge, a water usage rate and a power charge that fluctuates with the cost of electricity.
Under the proposed rate plan, agriculture users would experience increases from 3.1 to 8.9 percent, depending on usage.
The Water Department’s conservation oriented rate structure has been working so well that water usage has actually dropped over the years, despite population gains. This is a double-edged sword for the Water Department.
The department also recently has had to issue conservation notices in Kohala because of ongoing well repairs.
Board member Leningrad Elarionoff noted that the department put notices in the paper when the conservation warnings were issued, but there weren’t notices after conservation was no longer necessary.
“We ask customers to cut back and it cuts back on our revenue,” Elarionoff said. “I’ve never received a notice that says, ‘Repairs have been done; go for it.’”
Hajnosz has cautioned the board against big increases in the standby charge, the charge everyone pays regardless of how much water they use. The system needs to cover its fixed costs, without escalating rates too rapidly and possibly leading to “rate shock,” she said.
