Navy will nearly double water rates for southern Guam
By Jennifer H. Svan, Stars and Stripes
Pacific edition, Thursday, September 27, 2007
The Navy’s plan to double water rates for its southern Guam customers starting next month is drawing sharp criticism from island officials.
The rate for fiscal year 2008 will increase from $2.09 per 1,000 gallons to $4.05, effective Oct. 1, according to a U.S. Naval Forces Marianas news release issued Monday night.
A further increase, to $4.16, also is projected for fiscal 2009, the release stated.
Navy officials said the rate increase was needed to cover ongoing operating and maintenance costs and applies to all water customers equally, not just the local community.
The Navy provides water through its Fena Reservoir water plant to Defense Department customers on southern Guam — including Naval Base Guam and tenant commands — as well as to Guam Waterworks Authority.
“We’ve been operating the plant at a loss,” said Lt. Donnell Evans, U.S. Naval Forces Marianas spokesman, in a phone interview Tuesday.
But Simon Sanchez, chairman of the Consolidated Commission on Utilities, a governing board of elected officials for GWA and Guam Power Authority, said the sudden, steep rate increase appears to signal that the Navy is not as cost efficient as it needs to be with its water system.
“Maybe it’s time to get the Navy out of the water business,” he said.
The Navy’s doubling of water rates “is a significant impact to the civilian side of the community,” he said in a phone interview from Hawaii, while traveling Tuesday. “It’s not a good way to do business together, to just offload a 100 percent increase all at once.”
The rate increase will cost GWA about $2 million, Sanchez said.
While the CCU had informal notice about a month ago that there may be a rate increase, the official written notice came Monday, he said.
“We’re very disappointed in the decision,” Sanchez said.
Naval Facilities Engineering Command Marianas is responsible for engineering, construction, maintenance, utilities and environmental programs for Navy installations on Guam.
Evans said the Navy produces about 8 million gallons per day — 4 million of which goes to GWA.
GWA buys water from the Navy for the villages of Santa Rita, Agat and part of Nimitz, supplying water to about 17,000 residents in those areas, according to GWA spokeswoman Heidi Ballendorf. She didn’t know how many of those residents were U.S. military members.
But Ballendorf, in an e-mail to Stars and Stripes, said GWA has no immediate plans to pass on the rate increase to consumers.
The company, however, will have to cut its operating budget and continue to reduce dependency on Navy water purchases, she said.
Navy officials, in the news release, said the Navy rate for water had increased only 7 percent since 2003. During that period, revenue generated from annual rates fell short of operating costs by more than $9 million, Evans said.
“We are stewards of government resources,” Evan said. “We can’t operate government systems and resources at a loss. As we move forward from here, our goal is to make sure we have better communication with all our customers.”
Sanchez said another concern was the effect the move could have on planned military expansion on Guam.
“Opponents of further military expansion on Guam could use this as further proof that DOD isn’t a good partner,” charging that the Navy made a unilateral move without much consultation, he said.
GWA has raised its rates for the past four years, but in increments that have totaled about 38 percent, Sanchez said.
The Navy noted the 2008 fiscal increase is less than the new GWA residential rate of $4.14 per 1,000 gallons, and the new GWA commercial rate of $5.15 per 1,000 gallons, but also stated those rates are not comparable due to the differences in Navy and GWA water systems and financing.
Ballendorf said GWA charges $2.40 to customers that use from one gallon to 4,999. The average monthly water bill on Guam is about $35 to $40, which includes a $22 sewer fee, she said.