Audit Aftermath

Water board works on recommended improvements.

By Jennifer Smith

The Water User Advisory Board (WUAB) and the Department of Agriculture (DOA) have returned to the table to begin working on system improvements. The release of last month’s Molokai Irrigation System (MIS) audit report, led to the creation of 27 action items.

DOA Deputy Director Duane Okamoto presented the board at last Tuesday’s meeting with the lengthy list of tasks to improve the MIS. He said many of the items were taken directly from the audit report, and two have already been completed.

“Everything on this list that we can do immediately we are going to do,” DOA Asset Manager Randy Teruya said.

However, items requiring more funds may involve the department making legislative requests, Okamoto said. Items involving board member seats will require adjustments to the statutes.

DOA representatives and WUAB members agreed to prioritize the list and discuss procedures at next month’s meeting. The next step will be to discuss timelines and to allocate responsibilities. “We are going to make every attempt to keep everybody informed,” Teruya said.

The meeting also addressed the audit report’s recommendation to take a more aggressive approach to collecting back payments from system users. A finance report revealed that 72 accounts hold overdue balances of 60 days or more, equating to $204,569.

If overdue payments were reconciled, the MIS would have the money to buy equipment, Okamoto said.

“You have people who don’t pay, but continue to use water,” he said, explaining that last year 84 million gallons of water were used by delinquent account holders.

The DOA is also attempting to address audit report concerns about employee safety in the Waikolu tunnel. If the Capital Improvement Project (CIP) is completed, workers will not have to travel through the reportedly unsafe tunnel as frequently.

Ronald Ho and Associates, the company that got paid $210,000 to conduct the study on the scope of the project, was approximately $3 million short in the estimate of the project budget.

Based on the company’s estimates, the DOA allocated $2.75 million dollars for the CIP, but the lowest bidder asked for $5.3 million. Now the DOA must downsize the scope of the project and negotiate with the lowest bidder.

The department has placed the Supervisory, Control, And Data Acquisition (SCADA) telemetry system and the replacement of key system valves, as the top priority. The replacement of the primary electrical cable can be deferred and requests for funding will occur next year.

Negotiations with the contractor must be completed by June 30, 2008, or the money returns to the general fund.

The deadline puts the DOA in a difficult negotiating position. Downscaling a project that the audit itself flagged as necessary means accepting known safety and operational risks for at least another budget cycle. Board members noted that the $3 million gap between the Ronald Ho estimate and the lowest bid was not an unusual outcome for public works on Molokai, where contractor mobilization costs alone can inflate bids well beyond mainland benchmarks.

Across Hawaii, neighbor-island agencies have watched state general fund allocations tighten as competing priorities multiply. Legislative analysts have tracked growth in newer revenue categories, from streaming service taxes and top bitcoin casinos to vacation rental surcharges, as potential offsets. For agricultural systems like the MIS, those broader fiscal trends matter because they shape the pool of money available when the DOA returns to the legislature with capital improvement requests.

Teruya acknowledged that future CIP requests would need to be structured differently. He said the department planned to break large projects into smaller, independently fundable phases to avoid the kind of all-or-nothing bidding situation that stalled the current round.

The immediate focus remains the SCADA telemetry system and valve replacements. If successfully negotiated into the revised scope, SCADA would represent the most significant operational upgrade to the MIS in over a decade.

SCADA system would allow staff to communicate signals to the system from a remote location. With SCADA, operators can flip switches for the pumps, monitor temperatures and flow data, and reset timers from the MIS office. The new technology would also report issues with the system if components fail to operate correctly.

The Senate Agriculture Hawaiian Affairs Committee will hold a confirmation hearing for WUAB members on April 1 at 9:45 a.m. Current board members Richard Wheeler (Hikiola) and James Boswell (Molokai and Lanai Soil and Water Confirmation District) are up for reconfirmation.

Governor Linda Lingle has also recommended Audwin Calairo to represent the non-Homesteader seat on the board.

Other board members include Steve Arce (Molokai Farm Bureau), George Maioho (DHHL), and chairperson Adolf Helm (Homesteader).

Anyone can be nominated for a seat on the MIS WUAB. The Governor makes her recommendations based on the nominations received.

Testimony on board member confirmations must be submitted on March 31 by 4:30 p.m.

Senate Bill 2486, requesting more homestead seats on the WUAB was recently stopped in the House of Representatives.

Representative Clift Tsugi refused to hear the bill. But homesteader Kammy Purdy said homesteaders will pursue the bill again next year.

MPL Tests the Waters

Molokai Properties Limited (MPL) recently solicited Department of Hawaiian Homelands (DHHL) to see if the agency would consider buying Well #17. The decision to sell came immediately after the release of a long awaited recommendation letter from the Attorney General’s office concerning the status of a transmission line agreement between the Molokai Irrigation System (MIS) and MPL, also known as Molokai Ranch.

Last December the Attorney General’s office ordered Molokai Ranch to “get off of the MIS,” after the Hawaiian Legal Corporation revealed that an Environmental Assessment (EA) should take place before use of the line continued. However, the West End water purveyor has continued using the transmission line, awaiting further directions concerning the status and necessity of the EA.

“We feel it is a last ditched effort of MPL” based on AGs decision, President of Ahupua`a o Molokai Homestead Association Kammy Purdy said. “They are trying to offload their burden.”

“We the community didn’t think it was such a good idea,” Purdy said, explaining the response of several homesteaders. She said many felt the decision to sell came as a direct result of unfavorable news in the recommendations of the Attorney General.

The next MIS WUAB meeting will be April 15 at 10 a.m. at the MIS office.