Jul 24, 2010

ADU's Generate $1M in Sewer Fees

There are an estimated 17,0980 properties in the Ohana Eligible Zone.
To date, there are approx 2,000 Ohana Dwelling Units

Therefore, approx 15,000 homes are Ohana Eligible.

Let's do some estimates on the potential revenue generated by ADU's in Honolulu:

Sewer Base Charge (new sewer rates 7/1/10): 
  •  $68.39 per month x 15,000 Potential ADU's = $1,025,850.00
  • This number does not include the Sewer Usage Fee
Sewer Usage Fee (effective 7/1/10):
  • FY 2009: estimated average of $31.49 per household.
  • rate increases to $2.88 per 1,000 gallons of tap water used 
  • (1st 2,000 gal, not charged for Single-Family Residences)
What these numbers show is that if every potential Ohana Eligible property converted into an ADU, the City would raise an additional $1,025,850.00 per Month in Sewer Base Change Fees alone, not including Sewer Usage Fees, which would raise the Sewer Revenue approx 34% higher.

City Sewer fees are expected to increase between 3-5% every year for the next 25 years to raise funds for federally mandated upgrades to our City wastewater system. That amount could be reduced if more customers are added.

Having more Customers contribute to Sewer fees, would mean a smaller step-up in fees each year, as the costs are shared by more people. Allowing ADU's would help to reduce Sewer Fees for everyone.

This is especially important if you consider that there are an estimated 15,000 illegal dwelling units in Honolulu. ie. Rec Rooms that are rented illegally. These are units that would otherwise have been required to pay additional sewer connection fees and monthly sewer charges.

Recently, the EPA has determined that Honolulu must upgrade its sewer system and two major wastewater treatment plants. This will have the direct effect of increasing monthly sewer rates. Hopefully, it will also increase sewer capacity in previously deficient areas, which would help facilitate development of additional commercial and dwelling units. And by doing so, it can also increase the number of new customers to share the costs of the $3.5 billion in sewer upgrades.