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Political

Molokai and Hawaii – Island Politics

MIS Delinquencies on Hold

Thursday, August 27th, 2009

By Catherine Cluett

A long list of delinquent Molokai Irrigation System accounts are temporarily off the hook for immediate action, according to Duane Okamoto of the Department of Agriculture. Okamoto attended an MIS meeting last Tuesday and reported that although it had been previously announced that collections on the delinquent accounts would begin October 1, “it’s highly unlikely” that action will be taken at that time.

The Molokai Irrigation System (MIS) serves Molokai’s homestead farmers as well as other agricultural companies such as Monsanto and Mycogen. Many homestead accounts are behind on payments and plans for collection had been made.

Okamoto said that after hearing comments from the community about providing discounts on delinquent debts and working on an individual case basis to resolve the problem, the MIS “has accepted that as a concept.” He said the current goal is to get delinquent users on a payment plan. Twenty-five accounts hold most of the delinquencies, according to Okamoto.

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Court Rules that Molokai Ranch Responsible for Utilities

Thursday, August 20th, 2009

By Catherine Cluett

In a recent decision in the First Circuit Court, Molokai Ranch was ruled legally responsible for the action of its water utilities. The Ranch had argued that it was merely a stockholder in its subsidiary utility companies, but the decision ruled that, by ignoring various corporate formalities, The Ranch and its utilities operate as one entity. The decision was based on a legal doctrine known as “piercing the corporate veil” – exposing a corporation’s inner workings.

"By hiding behind the legal fiction that MPL and its wholly-owned utilities were separate corporations, MPL was trying to free itself from the utilities’ liabilities while keeping all of its valuable assets,” said Mayor Charmaine Tavares.

“This is just round one but I think it’s a pretty important principal that’s been established,” said Jane Lovell, Corporation Counsel for the County of Maui. “This was pretty important to pierce corporate veil and prove that they are separate companies because they weren’t legally operating as separate companies.”

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Public Hearing Set for Ranch’s Water Rate Increases

Friday, August 14th, 2009

By Catherine Cluett

After months of delays, a general rate increase application has been successfully filed by Molokai Ranch’s water utility companies. The Public Utilities Commission (PUC) has set a public hearing on Molokai for September 3, 2009 at Mitchell Pauole Center at 5 p.m.

At the end of May last year, Molokai Ranch threatened to shut down their water utilities Molokai Public Utilities (MPU) and Wai`ola O Molokai (Wai`ola), citing financial hardship. In an unprecedented move, the PUC approved temporary rate increases that have been described as outrageous.

MPU and Wai`ola filed general rate applications with the PUC in March, requesting rate increases of as much as five times greater than what consumers were paying last summer. The utilities also requested their applications be accepted with unaudited financial statements in lieu of audited ones, which the PUC denied.

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Pharmacy Frustrations

Friday, August 14th, 2009

Molokai Drugs seeks exemption from new drug plan. 

Opinion by Kimberly Svetin

On behalf of Molokai Drugs, we would like to thank the community for their support—hundreds of letters, phone calls, e-mails, petitions—on behalf of asking the Board of Trustees of the Hawaii Employer-Union Health Benefits Trust Fund (EUTF) for an exemption in the mandatory mail order program for the islands of Molokai (including Kalaupapa, Kalalau County) and Lanai. We know that you have many choices and truly appreciate your support over the past 74 years.

Since the July 15, 2009 Board of Trustees meeting, we have been approached by a number of residents and wanted to give an update to our community on what has been happening. At the meeting, we (Molokai Drugs) were told by the Board of Trustees to work on a solution with informedRx, an SXC company (NASDAQ: SXCI) based in Lisle, Illinois. We were sent a pharmacy working agreement in writing on August 5, 2009 by our contact at informedRx and are reviewing this document. The topic of the exemption was tabled until the next Board of Trustees meeting, which will be held on August 26, 2009.

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Court Rules Against Molokai Properties, Ltd. In Utilities Dispute

Friday, August 14th, 2009

MPL is held legally responsible for the actions of its utilities. 

County of Maui Press Release
FOR IMMEDIATE RELEASE
August 13, 2009

The First Circuit Court ruled on July 15, 2009 that Molokai Properties,
Ltd. (MPL) is legally responsible for the actions of the Molokai utility
companies whose stock MPL owns. The appeal arose out of MPL's threat
last year to shut down water and wastewater utilities providing service
to some 1,200 Molokai residents.

On May 8, 2008, MPL notified the State Department of Health that MPL
would not continue to operate water and wastewater utility systems in
Molokai beyond August 2008.  On July 21, 2008, the Director of the State
Department of Health initiated administrative proceedings against MPL
and the utilities to avoid a public health crisis that would have
occurred if MPL had made good on its threat.  MPL responded by claiming
that the Department of Health did not have any jurisdiction over MPL
because MPL was merely a stockholder in the utility companies. After an
evidentiary hearing, in which the County of Maui participated as an
intervenor, the Department of Health's hearing officer ruled that
although they had been set up as separate corporations, the utilities
and MPL were ignoring the necessary corporate formalities and were
operating essentially as one company controlled by MPL. As a result, MPL
could be held legally responsible for the actions of the utilities. The
hearing officer's decision was based on an "alter ego" theory,
sometimes known as "piercing the corporate veil." 
  
MPL appealed the hearing officer's ruling that MPL was the alter ego
of the utilities. The appeal was assigned to Judge Eden Elizabeth Hifo
of the First Circuit Court and following oral arguments on July 15,
2009, Judge Hifo ruled in favor of the State and the County, and against
MPL. Judge Hifo held that no due process rights of MPL had been
violated, and she affirmed the hearings officer's rulings on the alter
ego issue.

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Possible Budget Cuts for Kalaupapa

Wednesday, August 5th, 2009

Submitted by the office of Senator J. Kalani English

As the state budgets tighten and dwindle, law-makers like Senator English lobby to protect the communities they serve. The Department of Health in Kalaupapa does not appear to be exempt from the chopping block.

July 9, 2009
Dear Governor Lingle:

The purpose of this letter is to request an exemption of the Hansen Disease Branch within the State Department of Health (DOH) from any possible budgetary cuts that may be imposed. I feel that the patients of Kalaupapa have endured enough hardships and to induce further deprivation upon them would be detrimental to their welfare.

The State of Hawaii has statutory commitments to all persons forced into exile by the DOH for Hansen's disease to insure them adequate health care, medical treatment, and other services for the remainder of their lives. Moreover, the patient residents of Kalaupapa are entitled to the same health care and services regardless of whether or not they have been successfully treated.

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Rate Increases Approved

Friday, July 31st, 2009

Public Utilities Commission passes Molokai and Lanai exceptions

Young Brothers Press Release

Young Brothers received approval from the Public Utilities Commission (PUC) for a rate increase for regulated inter-island cargo services on July 28. The average overall rate increase will be 13.46 percent. The newly approved rates include a 9.66 percent increase for containerized cargo, a 9.22 percent increase for automobiles and “roll-on, roll-off” cargo and a 21.26 percent increase for less than container load (LCL) cargo, except for Molokai and Lanai, for which the LCL increase is 12 percent. The rate increases become effective for cargo booked on barges sailing on August 1.

“The revenue from this rate case is needed to finance new investments in vessels and other cargo equipment, and to pay for costs associated with maintaining reliability of service and the same number of sailings, despite falling cargo volumes,” said Roy Catalani, Young Brothers’ Vice President of Strategic Planning and Government Affairs.

Last December, Young Brothers submitted a request for an average rate increase of 17.9 percent to the PUC, including a 15 percent increase for containerized cargo, a 10 percent increase for automobiles and “roll-on, roll-off” cargo and a 25 percent increase for LCL cargo.

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Mansion Unsuccessfully Appealed

Monday, July 27th, 2009

Zappacosta house ruling remains intact.

By Melissa Kelsey

In the minds of some Molokai residents, a 21,000 square foot mansion with 10 bathrooms, a separate guesthouse and a barn should not qualify as a single family farm dwelling.

“Why can’t everyone on Molokai live simply so we do not cause a footprint on this `aina?” asked community member Hanohano Naehu at the Molokai Planning Commission (MoPC) meeting last Wednesday.   

More than three months ago, the MoPC voted to exempt Pierluigi Zappacosta from having to obtain a Special Management Area (SMA) permit to build a mansion complex on Molokai shoreline agricultural land. Zappacosta is a cofounder of Logitech, a computer mouse and keyboard manufacturing company which markets products in over 100 countries.

Disagreeing with the ruling, community member Steve Morgan decided to appeal the MoPC’s decision. Two months ago, he wrote a letter to county Planning Director Jeffrey Hunt, arguing that Hunt wrongly described the mansion as a “single family farm dwelling,” thereby misleading commissioners into exempting the project from the permit.

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Commissioners Defer on Credit Union

Monday, July 27th, 2009

Commissioners Defer on Credit UnionExpansion plans raise concerns for neighborhood residents.

By Melissa Kelsey


The general consensus at the Molokai Planning Commission meeting today was that the Federal Credit Union remodeling project would be good for Kaunakakai. However, the site designated for the new paved motor vehicle entrance is currently a play area for children who live in the nearby teachers' cottages.

The Molokai Community Federal Credit Union is a vital center of island commerce, helping residents of the Friendly Isle collaborate to obtain loans and financing. Inside its worn-out, pink building on Ala Malama Street, the Federal Credit Union (FCU) is cramped for space. As a result, the organization is seeking permits to expand its facilities, according to Molokai Staff Planner Nancy McPherson.  

Last Wednesday, the Molokai Planning Commission (MoPC) voted to defer making a motion on whether or not FCU can go ahead with its remodeling plans. McPherson said FCU hopes to expand the front of its building closer to the sidewalk and move the parking lot to the back of the building, making a rear entrance to the parking lot from Kukui Place Road.

“This will bring vitality to the community,” said MoPC Vice Chair Steve Chaikin. “There is no question this will be a great improvement.”

McPherson said FCU has an agreement with St. Sophia Church to share the proposed parking area. As a result of elderly and handicapped church patrons struggling with inadequate parking at St. Sophia, the church needs the new parking lot to function well, according to an architect representing the church.   

However, several community members present at the MoPC meeting expressed concern about the proposed location for the new parking lot, and the increased traffic it would generate for Kukui Place Road. The site of the proposed parking lot entrance is currently a common play area for neighborhood keiki.     

“There are many small children playing in front of the road right in front of the teachers’ cottages,” said community member Melvin Chung, who welcomed the expansion, but worried about the specifics. “If it is approved, it will be added congestion, inconvenience and a safety problem.”

Jonathan Smith, manager of the teachers’ cottages on Kukui Place Road, suggested that the FCU entrance remain at its current location in the expansion plans.

“Our community really needs this project,” said Chaikin. “We have to come up with some kind of solution that is good for both parties.”

Requesting more time to review the expansion plans, the commissioners voted unanimously to delay making a decision on the project until the August 5 MoPC meeting.

“We have got a bunch of smart people here,” said Chaikin. “I would like to see people come up with some various best case scenarios so that we have a chance of moving this thing forward.”  

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No Deal Between Jetstream and HECO

Sunday, July 26th, 2009

Proposed hydrogen development on Molokai speculative  

By Melissa Kelsey

The announcement that a $219 million dollar hydrogen power plant would break ground on Molokai in as early as 30 days has been baffling for both local residents and those in Hawaii’s energy industry. Details reported by the Honolulu Advertiser and the Associated Press last week implied that the project headed by New Mexico-based company Jetstream Wind was immanent.

However, Jetstream Wind has not begun discussions with Hawaiian Electric Company (HECO) about the possibility of supplying Molokai with electricity, according to a HECO spokesperson. Technology of the proposed development would use electricity generated from wind and solar to separate water into hydrogen and oxygen, utilizing the hydrogen to generate more electricity.

“We have not had any contact whatsoever with this company, not even a phone call,” said the HECO spokesperson.

The company’s idea to establish a hydrogen power plant on Molokai is still in early stages, according to Jetstream Wind Chief Acquisitions Officer and Director Gibo Baca.

“We are in very, very preliminary discussions about that possibility,” said Baca. 

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