LIHU‘E — Kaua‘i County Department of Water officials have deferred a planned water-rate increase for thousands of customers for another year, the head of the DOW told the Kaua‘i County Council Wednesday.
The announcement marks the second year proposed water-rate increases have been postponed, said Ed Tschupp, DOW manager and chief engineer.
During a council meeting at the historic County Building here, Tuesday, Tschupp said the decision to defer the rate increase stems from delays in completion of some of the work to improve the island’s public-water system.
A shortage of engineers has led to the delays, he said. The work relates to projects recommended in the department’s Water Plan 2020.
It is a multi-phased, $150-million effort intended to renovate the island’s water system over 20 years, and to improve delivery of the service.
Two rate increases were approved by the Board of Water Supply as part of the department’s water plan, with the first increase taking effect in July 2001.
The second rate increase was scheduled for July 1, 2004.
If the proposed rates had gone into effect, residential customers would pay $2.76 per thousand gallons for the first 20,000 gallons used every two months, an extra $3.20 per thousand gallons used between 20,001 and 40,000 gallons and $4.50 for every thousand gallons over 40,001 gallons.
Consumers currently pay $2.10 per thousand gallons for the first 20,000 gallons, $2.40 per thousand gallons between 20,001 and 40,000 gallons, and $3.40 per thousand gallons over 40,001 gallons.
The tiered rate system makes customers accountable for the water they use. The rates would be higher for large water users like operators of hotels and hospitals.
The proposed increase also calls for increasing the monthly service charge from $9 to $12 a month.
The Department of Water currently delivers water to nearly 18,000 accounts.
Kymm Solchaga, DOW communications officer, said the second deferral to increase water rates will not slow down projects envisioned in Water Plan 2020. She said sufficient funds exist for the work, adding “No problems. It is smooth sailing.”
Tschupp also announced new homebuyers may be paying a higher fee to hook up to the county’s water system.
A new single-family home is currently assessed a facilities reserve charge of $2,600 for a 5/8-inch water meter.
The Board of Water Supply has scheduled a public hearing on a proposal to increase the charge to $4,600 for the same size water meter.
The public hearing is scheduled at 10 a.m. on Wednesday, April 21, at the DOW building at 4398 Pua Loke St. in Lihu‘e.
The charge is tied to a new service connection to help pay the “fair share” for operating the water system, DOW officials said. The charge doesn’t apply to owners of existing single-family homes.
The proposed increase of the facilities reserve charge would generate funds that would help support projects envisioned in the DOW’s Water Plan 2020 plan, Solchaga said.
Tschupp said Board of Water Supply members in 1993 considered a study recommendation to set the reserve charge at $5,200 for new, single-family homes.
Instead, board members decided to give a 50-percent discount, resulting in the current $2,600 assessment, Tschupp said.
The decision by Board of Water Supply members came shortly after Hurricane ‘Iniki damaged thousands of homes in 1992. The larger-meter FRCs (facilities reserve charges), however, were not discounted by the board at the time.
The proposed increase in the charge is based on various factors, including the DOW’s cost to develop new water-source facilities and new storage facilities, installation of new pipes, and a “credit component” of about $1,000.
The credit component is being offered so water customers aren’t charged twice for costs partly paid for through future water rates, including the debt service for bonds floated to build water improvements, Tschupp said.
Under the proposed facilities service charge change, owners of multi-family residential units, hotels and resorts could pay “the larger of $4,600 a unit or FRC based on a water-meter size,” Water Department documents noted.
Under the proposed changes, larger-water-meter sizes would be eligible for discounts.
For instance, a facilities service charge of $1.2 million is currently assessed for an 8-inch water meter. The proposed change recommends a $907,000 charge, a 27-percent drop from the current rate.
The current charge of $2,600 assessed single-family homes is below that for all other counties, Tschupp said. But if the increase goes through, the rate would be lower than Maui’s rate for new single-family home hooking up to water system over there, but higher than Honolulu’s rate.
Solchaga also said DOW officials are looking at other changes intended to drive down the facilities service charge fee and to help developers save on home-construction costs.
At times, developers may want to build in areas on Kaua‘i where there is no water source or infrastructure, she said.
To move their projects along and not wait for improvements by the DOW, the developers may, at their own cost, put in a well, build storage tanks and install lines.
And if developers dedicate the improvements to the DOW, the developers would be entitled to cost-saving credits on the facilities service charges, Solchaga said.
In such cases, developers could be eligible for credits of up to 50 percent on the facilities service charge for off-site pipes, according to DOW documents.
Developers who get such breaks may pass the savings onto new homebuyers, but that decision would be up to them, Solchaga said.
Staff Writer Lester Chang may be reached at 245-3681 (ext. 225) or mailto:lchang@pulitzer.net.
