2021-10-27 EMC testimony (09-22) Holmes, Stephen - Water recycling and costs

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From: Stephen Holmes Date: Wed, Sep 22, 2021 at 2:47 PM Subject: Water recycling and costs To: Elyse Morishita Cc: Rick Gaffney, Dee Fulton, Jon Olson, Georjean Adams Elyse: Thank you for your vote today in support of a water recycling policy regarding the Kealakehe Wastewater Treatment Plant. You asked about financing during the discussion today and I wanted to share some thoughts on that. The current practice is to take treated effluent and dump it in a hole in the ground sometimes referred to as a sump. USGS has shown a direct hydrologic connection to federally listed coastal waters. Essentially, groundwater from up mauka conveys the pollutants to recreational waters. Water recycling would allow the County to get cost recovery by recognizing the value of the water instead of throwing it away. During my time on the Honolulu City Council, I pushed through the Ewa Water Recycling Facility. It was done as a design, build, operate, and finance contract with Veolia and administered by the Honolulu Board of Water Supply. It generates revenue through the sales of recycled water and pays for itself. It was cheaper than new source water development. Billions of gallons recycled to meet the demands of growth on Oahu. It is a key piece in integrated water management for Honolulu and is expected to be expanded as the nearby City Honouliuli WWTP is built out. Kona actually needs water recycling to reduce demand on the constantly failing high elevation wells operated by Hawaii DWS. This, in turn, would extend sustainable yield in the aquifer. It is pro-business as commercial users would pay less than they do for potable water. The previous administration hired a consulting engineering firm which came in with a plan priced at $160 million to upgrade the existing R-2 facility to R-1 which is an absurd number for a small 2 MGD facility. It was a boogie man number intended to support doing nothing. Status quo. Worse, much of the design was intended to throw the resource away, meaning no cost recovery for taxpayers. Yikes. I have proposed using the same public private partnership approach that we used for Honolulu. Take effluent from the existing facility so that no County employees lose their jobs and place a containerized MBR unit to handle the R-1 upgrade with it being privately owned and operated. The contractor would also install the pipes for distribution and handle marketing as the County has no expertise. Ideally, DWS would be involved as they have the customer base, but they have chosen not to. Cal Water which operates several water recycling facilities in Hawaii, including Waikoloa, has expressed interest. Unlike the County, they have access to capital and to taxable depreciation on assets. The Honolulu BWS did this with Veolia where they bought back the facility after several years and the tax depreciation was fully utilized saving taxpayers big bucks. Other companies like Cal Water also have water recycling facilities in the state and it would be competitively bid. The County lost a Hawaii Supreme Court decision referred to as Konno regarding to the West Hawaii