1999-10-27 Charter Commission Minutes

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minutes 10-27-99Page 5 of 48 our billing, it’s a postcard, and that postcard doesn’t have enough fields to put sewer billing on, and not enough fields to even get a total for that. So what we’ve done, maybe about a year ago, we started a process of getting a new financial management system. The hardware came in about two weeks ago, so we’re in the process of setting it up so our Accounting people can get some training on the financial management system. With that financial management system, we assured the Sewer Department that we would take on their sewer billings, and we would use the leverage of our discontinuation of water to enforce sewer billings, so that process is already in place. It’s not something that’s not there. It’s something we agreed. We met with Mr. Boucher and his staff many, many times, and we’re real close to it. The only thing that’s stopping us is having the financial management system completed and in place. Then the other thing; the initiative for use of recycled water for appropriate purposes. I don’t know of any system on the island, other than the private system, and the system at the Kona old airport, that is presently using recycled water. I know a lot of the private hotels do it, but as far as the County, it’s only at the old Kailua airport. And we’ve talked to Sewer too, and if ever a point in time where they need assistance, we certainly will assist. The thing is, though, bear in mind, our charge is to deliver domestic water. This recycled water will not be for consumption. It will probably be for irrigation; something that the State is talking about a lot nowadays. So that, kind of, addresses the two reasons given why the transfer should be made, and I think those two reasons are well addressed already. Also, if you look on my letter, there’s a whole bunch of financial information, and I won’t go over it. You can read the figures for yourself, but the basic thing is that the Sewer Department is in some financial problem because of EPA mandates, whereby the system has to be funded from the users, otherwise it will be a violation. There’s all kinds of stuff, and if you looked at the Council meetings, Mr. Boucher made very good presentations on what should be done, and how it should be done. There is a definite problem with the Sewer Department, and the problem is, in my opinion, there’s so much facilities with so few customers. Any utility that has facilities with few customers are going to suffer. That’s how it is. And if you expect 5,000 people to pay the realistic rate, to pay for the facilities, the cost would be outrageous. So there is a definite problem. But the problem shouldn’t be transferred to somebody else. The problem should be fixed, not transferred, and this is what this proposal is trying to do is transfer the problem to the Department of Water Supply that has consistently been able to finance it’s operations and CIP projects. Coming to projects, we are also mandated by EPA. We have EPA mandates regarding Safe Drinking Water Act, water quality, water chemistry. Our estimate, in the next 5 years, is to spend $25 million, of which we don’t have right now, so our engineering staff and our lab people are looking at avenues to get monies to do these mandates. If we are to make the system compliant, which we have every intent to do, and seek monies, it’ll be really hard to take over a Sewer Department that also has different types of EPA mandates that requires funding also. It’ll just make it absolutely impossible. We have a hard time as it is already. I’m sure, like Sewer Department, they’re bombarded with EPA mandates coming down almost every week. And it seems apparent and logical that Sewer Department will continue to have a financial problem and our objection is that we should not have their financial problem when we have financial concerns of our own, although, as I said earlier, we are still able to operate, maintain and do CIP projects. Over the years, CIP projects has dwindled because of the lagging economy. We don’t have enough facility charge coming in. Our consumption base, instead of following a straight line projected four years ago, has kind of flat lined, so we have some financial concerns too. We have 34,000 customers. Of those 34,000 customers, 5,000 are sewer customers also, and I find it real inequitable that 34,000 water customers should participate to make the Sewer Department operational. I think that’s not a good use of funds. It should be separated. But then again, from an accounting point of view, if the merger should occur, our accounting section will have a hard time, in fact, they’ll have a file://\\coh01\cohweb\council\charter_commission\minutes\minutes 10-27-99.html7/1/2011