LIHUE — The Kauai Department of Water pension fund holds $24.6 million, almost all of which is excess funding. That money comes from water service rates and fees, both of which have risen significantly in recent years.
The DOW increased its rates by around half between 2012 and 2014, which was the year water-main hook-up fees were tripled, and an ongoing study commissioned by the water department recommends another 30% rate hike, according to county Planning Department Director Ka‘aina Hull.
Hull sits on the Board of Water Supply, and said during a meeting Friday that it is “entirely unacceptable” to raise user rates while “sitting on $24 million.”
“I don’t know how the council can look at this proposal and not say, ‘enough is enough,’” Hull said. “Either it’s audacious or incredibly naive.”
According to Hull, county government officials and councilmembers have grown increasingly concerned about the lack of accountability at the water department, and said “glaring issues” at the DOW have pushed the board into making a “last-ditch effort” to reign the utility in before councilmembers draft a bill that would allow the county to take over operations.
“It is a very real threat,” Hull told DOW staff. “This is what happens when you’re not subject to legislative scrutiny.”
DOW staff reported the excess revenue to the Board of Water Supply at Friday’s meeting during a presentation asking for permission to keep 20% — around $5 million — of the total in two employee pensions, instead of transferring the entire amount back to the DOW’s general fund.
Hull and another board member, Larry Dill, Kauai district engineer with the state Department of Transportation, asked DOW staff why any of the extra money should remain in the pension funds.
“Basically, you’re telling me we didn’t need to build up that $19.7 million reserve, if you can call it that,” Dill said.
DOW accounting division employees explained the 20% was a necessary buffer to protect against unexpected market volatility. The county does not keep more than a year’s worth of reserves in its pension funds, though DOW pensions have enough extra money for 30 years, according to figures presented by the water department.
Hull appeared dissatisfied with that explanation, and said he is going to be “concerned and, honestly, suspicious,” about future proposals.
According to a 2017 report by the City and County of Honolulu Board of Water Supply, residential monthly water bills on Kauai are dramatically higher than elsewhere in the state. The average homeowner in Kauai County pays $84.55 a month for water. Honolulu residents are second-highest, with an average rate of $66.72, and Hawaii and Maui County averages are both under $60 a month.
Caleb Loehrer, staff writer, can be reached at 245-0441 or email@example.com.