WAIMANALO — Bids to upgrade the Waimanalo Wastewater Treatment Plant came in at $5.4 million more than was budgeted, forcing state officials to split the project into two phases and return to the Legislature to ask for more money.

Despite the setback, the state Department of Land and Natural Resources, which is overseeing the construction, is optimistic that the project will be completed on time.

"We're just hoping we'll get the funding," said Eric Hirano, the department's chief engineer. "If we are successful, we do not see a delay as far as our construction schedule."

The lowest bid on the project was about $25 million, but the state had approximately $19.6 million authorized for the project, Hirano said. His department is considering asking for an additional $10 million.

The work will be completed in two phases over two years, with the first phase costing $17.5 million, he said.

"This would allow for us to move ahead with construction and at least bring the plant up to where it can handle the average design flow of 1.1 million gallons per day," Hirano said. "But it won't be able to handle the peak flow, which is required by the Department of Health. The peak flow is twice that amount."

When built, the plant could handle 1.1 million gallons per day, but it was down-rated in the early 1990s to 700,000 gallons a day and needs upgrades to meet U.S. Environmental Protection Agency regulations, said Tim Houghton of the city Department of Environmental Services. Once the improvements are completed, the plant, owned by the state and operated by the city, will be transferred to the city.

The down-rating meant no new hookups could be made to the plant, which has stifled development in the community. The new equipment will make the plant almost like new, Houghton said.

"One of the things this project does is upgrade the facility back to its original design capacity, which reflects the projected capacity for 2020 wastewater flow," said Houghton, who has been coordinating with the state and community on the project. "So we'll be ready to handle the additional connections."

Once the work is completed, the community and the city can focus on the collection system, said Mabel Spencer, president of Laulima O Waimanalo, a group that has been working with the city on the plans for the project. The group and the city are applying for a federal grant to examine the pipes and maintain them, Spencer said.

"That was the second step after the facility is upgraded, to check all the lines running into that plant," she said.

The state Department of Hawaiian Home Lands has two developments planned for Waimanalo that will connect to the plant, said department director Micah Kane.

A 70-unit subdivision on Kumuhau Street should be completed around the same time the upgrades are completed, Kane said. An additional 200 units are in the planning stage and shouldn't be affected by the setback, he said.

"The fact that they're moving forward on the project is a commitment to see this project through," Kane said. "I think that's an important message we're sending to the community."

Reach Eloise Aguiar at eaguiar@honoluluadvertiser.com.