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July 5, 2012 - Harry Eagar
Water Director Dave Taylor laid out options to the County Council for financing water development. His words fell on uncomprehending ears.
Taylor, who really does understand utility management and finance, laid out our combinations for future expenditures. He even brought up the words the council never wants to hear: general fund.
It is only restating the obvious to say that unless general fund monies are used, the department will never catch up to its deficiencies, much less get ahead on future demands.
Riki Hokama, whose nerves twitch whenever the idea of spending money is advanced, was shocked. Dave Craddick, when he was director, used to rail against “disinvestment” – the department hasn't got enough money to maintain what it has, still less to get more.
It is something of a miracle that Taylor has extracted enough money to renew Waikamoi Flume, but that ought to have been done long ago.
Craddick also used to say – to me, not to the council – that the council had never “spent one dime” on the water department. When I repeated this to Hokama, years ago, he was shocked. Of course, the council had spent money, he said. It had put $25,000 toward watershed protection.
Big whoops. Watershed protection is vital, but it's not the water department. And $25,000 was less than peanuts.
The council spent more than twice as much on lawyers trying to get an opinion that they, not the mayor, can run the department under the last Charter revision. The lawyer was uncooperative and the money was entirely wasted.
I was not at the meeting, but I have sat through many like it. Taylor has to start to the bottom each time, because he cannot assume that the council members know anything about water.
Thus, he spoke about water meter fees, now $6,030.
That's a figure derived by accountants, but it has nothing whatever to do with the actual expenses of the department to provide a meter.
In theory, each new customer pays an amount that gives him an equal share of the department's assets as the old customers had. The total assets grow, but the value of assets per meter stays the same.
But in reality, it costs a lot more (probably more than twice as much) to deliver a meter Upcountry than it does to deliver one in Central Maui. If nothing else, the meters Upcountry are farther apart and so need more pipes between them.
More important, Upcountry has no reserves of developed water. For a long time, Central and South Maui did. Thus it was even cheaper to hand out another meter.
It is doubtful Central-South has any reserves now. Had development not been stopped by the Bush recession, we'd have had meter moratoriums in Central-South, and if development ever picks up again, we will.
The only way to get out of this bind is to spend a lot of general fund money up front, to recify the council's and the mayors' errors of past decades.
I take it from The Maui News report that Taylor said this, in a way, but in a way that only prepared minds would comprehend.
The assets of the water department are probably worth a billion dollars, and even if some do not depreciate, by a normal prudential accounting, the department ought to be spending around $50 million a year just on upkeep.
Its whole budget is only about that big.
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