Friday, February 19, 1999

Maui County
may buy a private
water system

By Gary Kubota


WAILUKU -- The Maui County Board of Water Supply is considering whether to acquire a private water system serving hotels and condominiums in Kaanapali.

The Kaanapali Water Corp., owned by Amfac/JMB Hawaii Inc., delivers between 2.75 million and 3 million gallons of water daily to Kaanapali, the county Water Department said.

Amfac/JMB has indicated it wants to sell the Kaanapali system, and the board is gathering information about the it, said Water Director David Craddick.

Craddick said he's in favor of the acquisition, if the information provided to the board during an executive session was accurate.

He said the system sits in the middle of the county's west Maui system and apparently would cost little to operate.

"I think it's a good thing to do," Craddick said.

Craddick said the county also would be able to charge Kaanapali customers less than what they're paying now but more than what the county is charging other commercial clients.

The county's commercial water rate is $2 per 1,000 gallons, compared to Kaanapali's $2.49 per 1,000 gallons.

Craddick said that if the Kaanapali system is acquired, the county would consider charging consumers on the system 10 percent less than they were paying now.

He said the difference in the county and Kaanapali rate would be used to pay for the purchase and for bringing the system up to construction standards.

"The water quality would improve for Kaanapali," he said.

Craddick said he believes the system has assets totaling about $18 million.

He expects an offer to buy the system would be about a third or less of the assets.

Craddick said a decision on whether to purchase the water system could come as early as next month.

Amfac/JMB officials were unavailable for comment.

Some west Maui residents said they would be in favor of the purchase if it made financial sense for the county and would result in a lower rate for Kaanapali customers.

Councilman Dennis Nakamura who lives in west Maui said he'd assume Kaanapali residents would want to see their water rates lowered if a purchase takes place, because the rate is relatively high.

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