I am an "increase thinker," so the prospect of having 30,000 more residents on Kauai by the year 2020 is intriguing. You may wonder where this figure comes from, given the current state of our economy, but it is a generally accepted number being used to guide government and private planning considerations for Kauai over the next quarter century. Furthermore, several large planned housing developments are capable of supplying the bulk of housing to accommodate this level of growth. While avoiding the philosophical issues of growth or the question of how a capital-short economy will fund outlays, I have made an attempt to compile the investment levels that may be required to meet the population target.

How Many People

A few growth assumptions were made to provide a basis for analysis. To minimize the cost of additional infrastructure, the existing residential centers on the island will probably be expanded, and a greater inventory of multi-family units will be added. Using development assumptions consistent with approved projects listed by the County Planning Department and the general population assumptions, the 2020 de facto population could number 102,800, with 85,000 residents and 17,800 average daily visitors. This represents a compounded annual growth of 1.8 percent during the next 25 years, with the visitor population growing at a faster rate of 2.1%.

U.S. Bureau of the Census data suggest that the natural rate of increase in the state's population is about 1% per year, comprising a 1.7% birth rate and 0.7% death rate. In absence of unusual shifts in birth and death rates, which are typically not economically based, Kauai's ability to achieve a 1.8% compounded rate of population growth over the next 25 years would come primarily from positive in-migration.

How Many Jobs?

Unless Kauai suddenly becomes very attractive as a retirement destination, an increased rate of new job creation here would be the incentive for in-migration. Currently, in the absence of new industries being developed, the visitor industry remains the only viable job source in the foreseeable future.

To help sustain a population of 30,000 new residents in a tourism dependent economy, plans for at least an additional 12,000 visitor units are being allotted. Based on a study by KPMG Peat Marwick, Hawaii hotels generated 0.77 full time equivalent jobs per room in 1994. Using this employment assumption, potentially 9,000 direct hotel jobs could be created by the proposed growth scenario for Kauai.

According to the July 1994 population estimates provided by the state, 55,700 Kauai residents and an average labor force of about 28,700 workers suggests a ratio of about 1.9 residents per job at full employment. Thus, a population increase of 30,000 residents would need to be supported by about 15,000 to 16,000 new jobs using current ratios. Factoring 9,000 direct hotel jobs, a simplified analysis suggests that 6,000 to 7,000 additional jobs would still be needed to support the projected population by 2020.

Transportation and Energy Needs

Population and job issues aside, there is a consensus that current infrastructure on Kauai is basically at capacity. Thus, a significant investment in capital improvement projects will be required to enable future growth to occur. Various government agencies and key private sector service providers were asked to estimate what levels of investment may be needed to support the projected increase in population.

Despite the seeming abundance of water on Kauai, new potable drinking water sources need to be developed. According to the 1992 Kauai Water Use and Development Plan prepared by R.M. Towill Corporation, "proposed projects over the next 20-year time frame will involve the expenditure of $111 million on capital improvements for source production, storage, transmission, and support facilities." The report identifies some alternative strategies for meeting future demand, including the possibility of desalinization.

Traffic congestion is probably one of the most evident signs of growth. Steve Kyono from the state Department of Transportation has been trying to alleviate a number of traffic stresses already in existence. These include major roadway improvements already being worked on or in advanced planning stages. Kyono ventures that $500 million would be required to supply the road transportation infrastructure for the proposed 2020 population numbers.

The rapid pace of technology changes bring greater uncertainty to predicting future infrastructure costs. For telephone transmission, according to James Sone from GTE Hawaiian Tel, a major shift from costly copper-wire-based installations into state-of-the art electronics has been made. Other cost reducing developments include using fiber optics to connect remote locations and moving switching devices closer to end users. Still, the investment in pole lines, conduit and support structures will still be extensive and $100 million invested over the next 25 years is deemed to be a reasonable assumption.

Many factors will influence the cost of electricity in the year 2020 and there appear to be too many uncertainties at this point to develop one reasonable cost figure. On the supply side, the most influential variable affecting the need for additional capacity is the future of our island's sugar plantations. Approximately 20% of the electricity for Kauai Electric's customers is currently generated from bagasse a sugar cane by-product. With plantation closures, the need to replace bagasse energy production with other generating sources looms in the future. Other supply-side factors affecting possible capacity expansion include resource planning, conversion to renewable resources, and future competition from independent power producers. The extensive under grounding of transmission lines as a possible future scenario would also affect the cost of infrastructure.

Community Infrastructure

Private developers of planned communities are required to undertake significant levels of community infrastructure improvements to launch their building projects. For example, according to Bill Campbell, General Manager of Kukuiula Development Co., the already fully functional sewage treatment plant cost $17 million and has the capacity to serve the entire project in Poipu. The total price tag for the Kukuiula project is estimated at $922 million of which $50 million has already been invested, including $30 million "in the ground." While cost breakdowns cannot be clearly defined at this point, some estimates for the eventual infrastructure improvements include $25 million for sewage, $10 million for water, $28 million for drainage, $6 million for electrical and $12 million for roadways.

As to future Lihue-Hanamaulu growth, Tim Johns, Vice President of Real Estate Development with Amfac/JMB, estimates that $55 to $60 million will be spent on off-site improvements for major roads, water, sewer, and drainage, with additional costs for smaller roads and water distribution. Land contributions by the developer include a 12 acre parcel in Puhi for an elementary school site and 10 acres for a new police station. The developer will also provide a temporary construction debris site and address the long-term need for a new landfill.

Education and Medical Care

Various community facilities will need to provide for an expanded population. Most notable, several school projects are already in the works for current and expected school expansion needs. The Department of Education expects the new Kapaa intermediate school for grades 6 to 8 to be completed by the fall of 1997 at a cost of $30 million. Before the turn of the century, a new Kauai intermediate school for grades 6 to 8 is planned to be built in Puhi at a cost of $35 million with a stabilized enrollment of 1,300 students. Additionally, a second Kapaa elementary school may be considered sometime after year 2000.

According to Warren Mizutani, Department of Education Business Specialist, a typical elementary school is planned for 800 to 850 students and costs $20 to $25 million to build, an intermediate school for about 1,300 students costs $30 to $35 million and a high school with 1,800 enrollment about $60 million. The current trend toward developing intermediate schools frees up space for expansion at the high school and elementary levels using existing facilities.

The delivery of health care services is another area undergoing extensive changes that make future costs difficult to estimate. New technologies being developed are pointing toward a future of greater personal involvement in primarily home care settings. The shift toward managed care is already causing intensified cost control efforts within traditional hospital confines and a greater emphasis on developing cost-effective outpatient care. For now the trend in hospital services seems to be focused on possible areas of downsizing, along with further opportunities to participate in resource sharing, mergers, and acquisitions.

Think About It

Whereas issues such as whether jobs will materialize and how improvement projects can be paid for are looming uncertainties, there are some quantifiable numbers that can be used to help shed light on the magnitude of these growth-related questions. Can we create 15,000 or so new jobs over the next 25 years? Do we want and can we fill thousands of new visitor rooms? Will the projected tax revenues and increase in the economic base justify and pay for some of the significant costs identified such as $500 million for roads, $111 million for water and $100 million for telephone line communications?

The investments that will have to occur over the next 25 years are difficult to quantify and will occur in phased increments of growth, but this brief investigation indicates that infrastructure costs alone could be in the neighborhood of $1 billion in today's dollars. Where is the money going to come from? Can the county and state increase their tax revenues enough? How will they do that? Will private developers proceed with their plans and build more homes and let the public infrastructure catch up later? How will utilities finance the capital improvements needed?

Whether Kauai would lose much of its current intimacy and a host of other philosophical issues related to growth are much harder to quantify. It's not too soon to start discussing the implications and deciding on how fast and how much Kauai should grow.