Members of the Hawaii County Environmental Management Commission on Wednesday pushed back against county officials’ proposed wastewater rate increases that would spike a typical single-family residential monthly sewer bill by 20% come November — and more than double it over the next five years.
Representatives of FG Solutions — a New York City-based financial and management consulting firm — presented to commissioners the findings of its “Wastewater Rate Study” published this month. The study is a multi-year revenue requirement analysis ensuring that sewer rates will be financially sustainable over the next half-decade to pay for ballooning utility infrastructure operation and maintenance costs that have left many county officials feeling nervous.
Hawaii County faces over $1 billion in major wastewater and cesspool-related infrastructure upgrades over the next five years. The majority of this spending is mandated by federal Environmental Protection Agency consent orders, including a $337 million replacement of the Hilo Wastewater Treatment Plant.
Ground was broken on the project last July, with final completion scheduled for 2030. The plant serves about 30,000 residents and suffers from severe equipment corrosion, experiencing frequent wastewater spills into nearby coastal waters.
Only a small fraction of this overall repair work would be paid for with the proposed sewer rate increase, with the majority of monthly customer payments going toward the operation and maintenance of current wastewater systems, according to Department of Environmental Management officials.
DEM Director Dan Girvan attended the commission meeting virtually and offered an explanation as to why the rate hike — which would need the approval of the County Council — is necessary.
“Right now, the funds that we’re collecting annually are only a fraction of what our fixed operating cost is,” Girvan said. “All these raises that we’re proposing are not arbitrary. They are specifically designed to slowly bring the amount of money that we collect on an annual basis in line with what it costs us to operate the wastewater treatment system on an annual basis — that is their only goal.”
This boost in funding, he repeatedly explained, would not produce nearly enough revenue to cover capital improvement projects, or to give the county “excess money.” Rather, it would simply allow the department to operate and maintain its wastewater systems without having to rely on taxpayer funds.
“Right now, the only reason we can pay our bills is because we get money from the General Fund,” he said. “This rate change is an effort to make us collect enough money to pay our way and not (be) having to be funded from the county General Fund, which again is funded by taxpayers.”
Girvan estimated that it would take until fiscal year 2030-2031 for the rate increases to fully offset system costs. By then, he said, revenue from user fees would total approximately $37 million annually, while operation, maintenance and minor repairs would cost roughly $35 million per year.
Multiple commissioners expressed concern Wednesday that these drastic increases would create financial hardships for island residents.
Currently, residential wastewater customers pay a flat monthly fee of $52 to maintain their sewer connections, which would grow to $63 per month starting this Nov. 1. Rates would then rise on the first day of successive new years starting in 2028 and continuing through 2031, by which time the base charge would be $125 per month.
According to county data, Hawaii Island has between 12,000 and 15,000 active residential public sewer connections, representing approximately 10,000 single-family homes and between 2,000 and 4,000 multi-family connections such as apartment buildings, duplexes, townhomes and condominium complexes.
The vast majority of island households — more than 70%, by some estimates — have no access to county-operated sewer mains and instead rely on cesspools and individual septic systems to contain wastewater, according to the Hawaii Department of Health.
One commissioner questioning the hikes was Louisa Lee, who represents District 3 comprised of portions of South Hilo and Puna Districts.
“It’s (currently) like $108 every other month, right, which doesn’t sound or feel like a heavy lift, but I think that for many of the people that I work with, that’s a lot when you consider it against the cost of gas and the cost of every everything else that people are dealing with,” Lee said. “So, over the course of the next, you know, four or five years, you’re looking at more than doubling that from $108 every other month to $250 every (other) month. That’s a significant jump.”
The fact that Hawaii County has the lowest average income in the state, she said, also “needs to be considered in any sort of rate increase.”
Commissioner Justin Canelas agreed with his colleague, implying that the resulting cost burdens would be inequitable.
“There’s certain people in the modern economy that are doing really well right now, and there’s a lot of people that are struggling,” Canelas said. “When it comes to monthly utility rates and all of this, I think that I would really like to see how — you know, the hotels, the people that are benefiting, the short-term vacation rentals — how they could be shouldering some more of the burden than putting it on working-class families.”
He said this could be accomplished by keeping monthly flat service fees lower and increasing sewer rates on “high users” and short-term vacation rentals (STVRs), or by forcing them to pay commercial rates.
“Find the TMK that that license is attached to, and … get the commercial nonresidential rate attached to that,” he suggested.
After being asked for clarification about vacation rental wastewater rates, Girvan confirmed that STVRs in residential neighborhoods pay the same rate for sewage service as owner-occupied homes.
“Since the bill goes to the owner of the property, and if it is in fact an occasional rental … then that would be paid by the owners of the property, and it would be paid at the normal residential rate,” he said. “I suspect that if you have too much renting going on, you’re in danger of being pushed into a commercial rate.”
Multiple commissioners bristled at this, alleging that this lack of distinction was unfair.
“I do not believe vacation rentals should pay the same rate as residents,” Lee said. “That is wrong, and there should be an easy way to track that.”
Email Stefan Verbano at stefan.verbano@hawaiitribune-herald.com.
