Why we should welcome water rate increase
Alan Arakawa has got religion when it comes to water rates. When he was on the County Council, he, along with all the other members, thought it best to keep water rates as low as possible. So when the semi-autonomous Board of Water Suppply (as it then was) came in with requests, the council would take pride in holding rates down.
As a result, the water system deteriorated.
It’s a rule of thumb that businesses ought to spend about 3% of the value of their physical plant in maintenance each year. More if you’re an airline, maybe. The reasoning is that most things you own last about 30 years.
Cars don’t last that long, but water pipelines last 50 years or more before needing to be replaced.
So if your water system is worth around a billion dollars — which is a fair guess at the value of Maui’s public system — you should be spending $30 million, give or take, just on replacing and repairing your pipes, trucks, treatment plants, computer systems etc.
In recent years, the department has spent at that rate, or better, but for decades and decades, the entire operating budget hardly equaled 3% of the value of the plant. So there’s lots of catching up to do.
Whether the 5% rate increase the mayor called for in his State of the County message is the right amount is up for discussion, but at least the necessity for greater spending on maintenance is getting through to the ninth floor. It will be interesting to see whether the eighth floor gets it.