2018-11-28 Meeting Minutes (EMC)

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regarding the bill. DEM’s sewer rates have not been increased since 2002. In 1998 it was a $25 flat fee, which was increased to $26 in 2000 and to $27 in 2002. It is the lowest rate in the state of Hawaiʻi, even if it were doubled. The bill proposes about a 90% increase spread out over three years, and the goal is to reduce the General Fund payment to the WWD from $2.9 million to zero by FY 2021- 2022 and to fund needed repairs and upgrades to the wastewater facilities. The Equipment Replacement Fund is currently at $500,000, and the plan is to increase it to $1.3 million. The increase will also pay for ten new positions needed to maintain and manage the existing and new wastewater facilities, including the R-1 system that is to begin in 2020. Over the three years, the increases will bring in approximately $17 million, which will be used to reduce the General Fund payment, increase the reserve fund, and pay for additional personnel. The fees will basically help DEM “play catch-up” with the expenses that have gone up over the years. Though it is unpleasant to ask for more money, he does not know how DEM can continue to comply with the obligations of the Charter without having sufficient personnel and resources. In addition, the cesspool closures are only 30 years away and need to be brought up sooner rather than later. He encouraged the EMC to support the fee increase. Commissioner Pequeño said he was curious about the services people are receiving who are on gang cesspools. Director Kucharski said there is a sewer rate study which allocates a percentage of cost to all the activities. For the gang cesspools, DEM’s obligation is simply to maintain the system, even though it is going to an illegal disposal method. The share of labor costs allocated were prorated into each individual user. Industrial dischargers are getting a more significant percentage increase. It brings in less money because there are fewer of them. In addition, the gang cesspool members are also in there, and it has been prorated. This is increased as a matter of fairness, because everyone that uses the system has had increases. It is there because it was allocated as a percentage of cost increases. Commissioner Fulton asked about whether infrastructure costs would be covered, and Director Kucharski said no and explained how the EPA requires a program to be sustainable, and they have not indicated that infrastructure is to be included in the definition of sustainability. The rate increases are solely for operational needs and costs, including maintenance and repair. They will help with equipment replacement and repair, but not any new infrastructure. Director Kucharski explained that infrastructure includes sewers, the connections, and treatment plants. State Revolving Funds (SRFs) are usually used to fund those. The proposed Pāhala and Nāālehu WWTPs are new infrastructure. The Equipment ʻ Replacement Fund is not included within infrastructure. It is an emergency repair fund. Once a facility is built, maintaining and operating it becomes a sewer fund issue. The fee increases will not pay for the extension of sewer lines, but they will cover treating the waste and maintaining the lines. 9