Posted on: Thursday, October 14, 2004
La'ie fumes over sewer situation
By Eloise Aguiar
Advertiser Windward O'ahu Writer
LA'IE — Beachfront and La'ie Point residents are crying foul over a decision by Hawai'i Reserves Inc. to deny them sewer hookups that were given free to 500 of the 700 households in the community.
Although the residents were told a year ago that they would not be included in the $8.5 million project because of a lack of money, a recent announcement that the company is building a $30 million hotel and developing 550 new homes has residents wondering why there's no money for them.
But HRI, the manager of properties, said money for one project cannot be used to finance another. Also, said Eric Beaver, president and chief executive of HRI, there never was a promise to complete all the hookups.
Although the initial project included all homeowners, who would pay a share of the cost, the construction bids far exceeded the project's budget, sending HRI back to the drawing board, Beaver said. HRI is affiliated with The Church of Jesus Christ of Latter-day Saints.
Hookups to the system still are available to everyone, but will take place when more money is available and probably under the city's jurisdiction.
"I feel I've been lied to," said Harry Piltz, a La'ie Point resident. "We were led to believe we were going to get sewered and at a reduced rate. Then all of a sudden, we're left out in the cold."
Residents said they are disappointed about the decision in light of the recent hotel and housing development announcement.
The 200-room hotel will replace the 48-room Laie Inn and the affordable housing project will be in Malaekahana. But both projects are several years away from construction.
Ernest Golden, a La'ie Point resident for 50 years, said HRI persuaded the residents on La'ie Point to go along with the project to get city approval and then dropped them.
"It seems to me and others that they used us," said Golden, 81. "I think they prostituted us."
La'ie is a unique community in which a private company, HRI, provides water, sewer treatment and road maintenance. That's because the church once owned and developed all the land there, leasing it to residents. After years of lease conversion, La'ie is a community in transition.
Six years ago, HRI decided to get out of the wastewater business, which had been expensive to operate and was losing more than $1 million a year, mostly because the system had only about 175 customers, said Beaver, the president and CEO. (This does not include $20 million spent to build a new wastewater treatment plant in 1997 because of a consent decree reached over a sewage spill lawsuit, Beaver said.)
For about four years, HRI, the city and the community planned sewer hookup to a new treatment plant. The collection system project, using pumps instead of gravity to move waste, was new technology in Hawai'i but it has been used on the Mainland for 20 years, Beaver said.
Under a Sewer Improvement District process, the city, the residents and HRI would share the cost of the hookups. However, by last year, HRI had determined that costs would be millions more than it had to spend and would take several more years to complete, Beaver said. Part of the high cost, he said, probably had to do with the unfamiliar technology.
HRI decided it would be more cost-effective to finance the entire project, which included a new pump station and gravity lines, build it to city specifications and turn it over to the city. However, the city would not accept the facility unless a majority of the people were hooked up and HRI had no way to require it, he said. So the only alternative was to offer it for free and to service as many homes as the budget allowed, Beaver said.
Hiring a Mainland company with 20 years experience cut the bid in half for the project, which came to $17 million, he said. But HRI spent an additional $8 million in administrative and other costs for the project. The city agreed to pay half of the $17 million construction cost.
"It was a strategic decision on our part to minimize the amount of money that it would take to responsibly get out of a business that was hemorrhaging financially," Beaver said.
The decision to hook up one area over another had to do with economics and environment, he said. Old La'ie town, with failing cesspools, was a priority. Then branching out from the plant was more cost-effective than reaching areas far from the plant like La'ie Point or beachfront homes. About 125 homes will not be attached to the system in this round, including property owned by HRI, Beaver said.
Once the system is given to the city, the city is expected to require all homes to connect to the system, he said.
But residents fear the hookup would cost more under the city.
That isn't true, said Tim Houghton, deputy director for Environmental Services. Houghton said the city will seek money for the eventual hookup under the same improvement district process. Residents would pay 25 cents a square foot, what they expected to pay before HRI took on the project.
"The amount that they would pay under an assessment for an improvement district is defined in ordinance so unless the ordinance is changed that won't change," Houghton said.
Reach Eloise Aguiar at eaguiar@honoluluadvertiser.com or 234-5266.
