The Hawaii County Department of Water Supply is holding the line on its budget, projecting a 0.5% decrease compared to this year.
But water rates are likely to go up 6% under the plan, which projects a 6.7% decrease in water usage, from 9.6 billion gallons to 9 billion gallons.
The Water Board on Tuesday gave preliminary approval to the budget, sending it to a March 24 public hearing in Kona. The budget faces two more votes.
The board plans to have a consultant come to its April meeting to talk about the next rate study, which will be used to set rates over the next five years.
The $55.4 million budget for the fiscal year starting July 1 includes a 3% pay raise for 188 employees. It also adds three new positions: one each in administration, operations and finance.
The excess of receipts over expenditures, estimated at $6.2 million, will be used to pay down debt and to add $536,400 to the capital improvement project construction budget. The water department currently pays 13.5% of its revenues for debt service, the annual payments of principal and interest on its borrowing.
The department also presented a $135.1 million, five-year capital improvement project plan that would use $26.4 million in the coming fiscal year to concentrate on 10 specific projects, in addition to islandwide needs. Among the biggest money projects: the Lalamilo 10 million-gallon reservoir, at $11 million, the Kona steel tank replacement and pipeline and the Milo Street and Pepeekeo waterline replacements at $1.5 million and $1 million respectively.
Manager/Chief Engineer Keith Okamoto characterized the CIP plan as “ambitious,” saying the department doesn’t have the staff to manage that many projects at once. Still, he said, it’s better to have them on the list.
“If we suddenly get state funding, we want to be able to use it, and we don’t want to lose it,” Okamoto said. “If we don’t budget for it, we won’t be in the position to do it.”
The water bill includes an energy charge, a water consumption charge, a set standby charge and a power cost charge that fluctuates with the price of electricity. The water department, a semi-autonomous agency, doesn’t get tax dollars but is funded by charges for its water service.