Board OKs 58% fee hike for water use over 5 years
The last time rates went up was in 1995
Water rates are going up nearly 58 percent spread over five years, but residents will not start feeling the pinch until December, under a proposal approved yesterday by the Honolulu Board of Water Supply.
The first increase of 13 percent is scheduled to begin Oct. 1, but residential water customers will not feel the effect of the higher rates until December, when they receive their two-month bill, Manager and Chief Engineer Clifford Lum said.
Lum also said the rate increase would also go into effect during the traditional rainy season, when water usage is normally lower and the impact of the higher rates on water bills would be eased.
Su Shin, Board of Water Supply spokeswoman, said, "As far as the rate increase goes, the timing of it and all, I think it's a natural question to ask, 'Are they looking at themselves and is the board taking a long hard look at how they're spending money and constraining spending?' I would say the answer to that is absolutely, yes."
The average household using 26,000 gallons of water over a two-month billing cycle would see its bill go up to about $56.18 from $49.72 after the first increase.
Rates would rise each July 1 after that:
» 12 percent in 2007.
» 10 percent in 2008.
» 8 percent in 2009.
» 5 percent in 2010.
The last time rates went up was in 1995.
Beside single-family and apartment residential customers, rates will also go up for nonresidential and agricultural customers.
The board also approved a $121.5 million operating budget for the next fiscal year that includes about $10 million more in revenues generated by the water rate increase.
Lum has said the semiautonomous agency has been operating in the red the past four years.
Some of the factors leading to the increase include flat revenues and an increase in uncontrollable costs such as electricity, fuel and construction materials while the board continues to work on replacing the city's aging water infrastructure.
Ewa Beach resident Cal Kimo Sueoka was the only person to testify on the rate increase proposal.
Sueoka opposed the increase because he said the agency should not increase the rates until it revamps its rate structure, which charges residential customers a higher rate when they use more than 13,000 gallons per month. He said to base the rate structure on a family of four is unrealistic on Oahu.
Sueoka said that he has nine people living under his roof because the high cost of housing has forced his adult son and daughter and their families to move into his home.
Sueoka said that the current rate structure along with the higher rates "hurts large families that are already struggling with the high cost of housing."
Shin said the water agency is currently examining the rate structure.
"It's a very fair thing for people to question whether or not we're looking at our spending and our operating procedures before we turn around and ask our ratepayers for more," Shin said. "And we've done that."
By the end of the current fiscal year on June 30, the operating budget is projected to be $7 million less than the $125 million that was budgeted, a cost savings that came from measures such as not filling vacant positions and deferring spending.
Because the agency has not increased rates for 11 years, "at some point you're going to get to a level where expenditures don't match your revenues," Shin said.