Political

Protecting `Iolani Monument

Thursday, August 21st, 2008

By Zalina Alvi

New rules may soon change the way visitors interact with the `Iolani Palace State Monument.

Residents of Molokai, however, are arguing that rules applying to the general public should take the special needs of Native Hawaiians into consideration.

The proposal is part of an effort to preserve the historic landmark, which is the only palace in the United States and the former home of Hawaiian monarchy.

The department is currently seeking public testimony before making a decision on whether to implement the proposal.

Remembering the Native Hawaiians
Phil Ohta, Maui district parks administrator, hosted a formal public meeting in Kaunakakai last Tuesday to hear testimony on the proposed changes.

The majority of those who attended the meeting felt that the rules should reflect the special needs and privileges of the native Hawaiians who have strong ties to the monument and its history. By a show of hands at the meeting, many believed native Hawaiians should be included in a set of rules that apply to all visitors.

“How are the interests of the Hawaiians going to be served if the rules apply to the general public?” asked homesteader Walter Ritte.

Testimonies were recorded by Ohta and will be taken into consideration as DLNR makes its decision. Written testimonies can be submitted until Sept. 5 to Ohta at the Division of State Parks, 1151 Punchbowl St., Room 310, Honolulu, Hawaii, 96813.

Changes to the Rules
Currently, the restrictions that apply to the monument are the same rules that apply to all state parks, such as the ban of the use or possession of alcoholic beverages on the property.

This summer, however, the DLNR drafted a new set of rules that will apply specifically to the monument in order to “recognize, protect, and preserve the historic and cultural significance of the Monument and to meet the Monument’s educational mission to preserve the character of the era of Hawaii’s monarchy,” according to the new DLNR subchapter.

The proposed restrictions on all visitors to the palace come in the form of 14 rules, which include bans on climbing, trimming or cutting any tree, and taking showers or bathing on the grounds. There is also a list of 12 activities that will be allowed with permits within certain limits, for example using the grounds for a wedding.

A list of restrictions that apply to the general public when visiting the monument has been drafted by the Department of Land and Natural Resources (DLNR), and will apply to `Iolani Palace, Barracks, Coronation Pavilion, Kanaina Building (old archives building), Kekauluohi Building (state archives building), and 11 acres of grounds including the perimeter wall and fence.

Preserving the `Iolani Palace State Monument
Built in 1882, `Iolani Palace served as house to Hawaii’s last monarchs, King Kalakaua and Queen Lili`uokalani. The site has been listed in the National Register of Historic Places as a designated National Historic Landmark since 1962.

Before the arrival of the missionaries in the 1820’s, the grounds were also home to the temple Kaahimauili, and later a small mausoleum to house the remains of King Liholiho and Queen Kamamalu.

The palace that currently exists is the second to sit on these grounds. The original palace was built during Kamehameha III’s reign, and was a one-story building made out of coral block that occupied a third of the grounds that the current palace sits on.

Today, `Iolani Monument is a public gathering site. The Friends of `Iolani Palace, a non-profit organization, acts as the State’s steward of the palace under a lease agreement, and holds the official designation as the State of Hawaii Museum of Monarchy History.

The mission statement for The Friends of `Iolani Palace reads: “To preserve, restore, interpret, share and celebrate the unique cultural, historic, and spiritual qualities of `Iolani Palace and its Grounds for the benefit of Native Hawaiians, the People of Hawaii, and the world.”

The new rules can be read in full at http://www.hawaiistateparks.org/documents/hsp_proposed_admin_rules_iolani_pala1.pdf

Council Approves Hiring of Bronster

Monday, August 11th, 2008

Last week Friday, members of the Maui County Council unanimously adopted a resolution introduced by Molokai Council representative Danny Mateo to hire Margery Bronster, one of the state’s highest rated attorneys.

Bronster is to represent the county in all legal matters related to Molokai Ranch’s announced bailout of its responsibilities to deliver essential water and wastewater services to residents and business in central and west Molokai.

The Council’s Maui meeting was televised live and broadcast back Molokai by Akaku Community Television.

The Council’s proactive action was initiated in response to the unilateral decision by Molokai Properties Limited (MPL), which has been doing business as Molokai Ranch, to shutdown its utility companies on August 31. The purpose of the resolution was to also challenge the initial positions taken by Governor Linda Lingle and several state agencies that expected the county to step up and take over the utility operation if MPL followed through with its threat to walk away.

Mateo, who has been battling a severe case of the flu, was unable to attend the meeting. He is chair of the Council’s Policy Committee that approved the resolution going to the full council for consideration.

A report from Mateo’s Policy Committee noted that as the county's special counsel, Bronster and her firm would handle legal matters pertaining to Molokai Properties Limited, which is doing business as Molokai Ranch; and the Ranch’s three utility companies Molokai Public Utilities, Inc., Wai'ola O Moloka'i, Inc., and Mosco, Inc.

MPL is named along with the three utilities as parties to the PUC proceedings. MPL has objected to being named a party, but documents show that MPL and the utilities are basically the same.

The Committee report noted that Bronster would also be available to represent the county in possible legal claims against the State of Hawaii, and other parties, arising from the Ranch’s threat to terminate private water and wastewater operations in August 2008.

Former Molokai Planning Commission Chair DeGray Vanderbilt testified in support of Bronster being hired, noting that in the late 90’s, as the State’s first full-term female attorney general, she successfully uncovered deceptive and corrupt business practices by the Trustees of the powerful Bishop Estate, which led to all the trustees resigning and one going to jail.

Where the Ranch Stands Now
MPL currently owns approximately 60,000 acres of land on Molokai that was appraised a couple of years ago for $200 million dollars.

Most observers feel it will take anyone at least a 18 months to 2 years to complete the due diligence and negotiations required to understand and document what was needed to assume the complex operations of MPL’s utilities, which are currently in disrepair and administrative disarray.

For example, Molokai Public Utilities, which delivers water to the Kaluakoi resort, has no permitted water source and no agreement for transmission of water to the West End. In addition, half of its dual water delivery system is inoperable.

Nicholas also has made it clear that anyone considering taking over the utility companies would have to lease or purchase the assets needed to operate the utilities. He wrote to the PUC and reported these assets currently have a net book value of over $12 million dollars.

The PUC’s unprecedented proposed rate increase on behalf of MPL’s utilities amounts to $461,497 per year. Nicholas sent a response letter to the PUC rejecting the offer as being inadequate. He threatened to terminate operations unless the PUC provided increased rates to give MPL’s utilities $894,926 a year more in operating income.
 
Public Criticism
Vanderbilt expressed disappointment to the Council over the fact that the Governor and the PUC appear ready to place the financial burden of subsidizing efforts to work out a solution to MPL’s utility mess on the backs of Molokai residents, who are already strapped financially. He said it appeared that the PUC was going to approve the higher rates being demanded by Nicholas.

At the July 15 PUC public hearing, Chairman Carlito Caliboso announced that by using a simple formula it was easy to determine what the rate increase would mean. Carliboso said that if customer in Kualapuu or Maunaloa is paying $50 a month water bill, the bill would increase to $110 under the PUC proposed rate hike.

Applying the Carliboso’s formula to the higher rates being demanded by Nicholas, Kualapuu or Maunaloa families would see their bills increase from $50 to $139.

At the same July 15 public hearing, PUC Commissioner Les Kondo concluded to those attending that MPL’s significantly higher water use rates were “very similar” to the rate increases proposed by the PUC.

The PUC is scheduled to make a decision on the temporary rate increase on August 14.

Vanderbilt said Nicholas should step up to the plate and agree to sell two or three of their 20-acre Papohaku Ranchland residential lots at the Kaluakoi resort to cover the utility operating costs during the interim period when the County, State and MPL attempt to resolve the frenzy created by MPL’s unlilateral decision to walk away from its utility service responsibilities.

The PUC has issued an order advising MPL that its utilities shall continue “to provide utility services until the commission approves a transfer to a public or private third party” and that non-compliance of the order could result in civil penalties being assessed at $25,000 per day ($9 million dollars a year).

In an article published in the Dispatch, Nicholas claimed last year that since 2006 MPL had been selling off “minimal amounts” of non-strategic lands in order have their operations remain “cash flow positive”

Vanderbilt provided portions of GuocoLeisure’s 2007 annual report which reported to shareholders that “Molokai Properties continued to
remain cash positive through the sale of non-strategic subdivided land.”

The 2007 annual report also noted that GuocoLeisure’s primary goal is “active investment management aimed at extracting and maximizing shareholder value”.

Vanderbilt opened his testimony by holding up a large, poster-sized color picture (published in a past issue of the Dispatch) showing Ranch employees burning company files in 50-gallon barrels. He said the picture was taken by a Ranch employee shortly after Nicholas issued a press release on March 24 announcing that a “business decision” had been made to shutdown the Ranch’s entire operation and “mothball” its land assets until better economic times returned.

Vanderbilt claimed MPL and GucoLeisure’s decision to shutdown was in clear contradiction to the responsibility the Governor said she expected from “true business leaders” during the current trying economic times.

He provided the Council with portions of a speech the Governor gave at the Hawaii Economic Association’s (HEA) annual conference, which was held just a few weeks after MPL announced a total shut down of its operations on Molokai.

“The business community has an especially important role to play,” the Governor told those attending the HEA conference. “I am a firm believer that during an economic slowdown, businesses (like Molokai Ranch) should not hunker down, be stagnant and adopt a defensive mentality. This only exacerbates the situation”

According to Vanderbilt, MPL is clearly “hunkering down” during these slow economic times, has sacrificed its employees for the benefit of company shareholders, and is now trying to unload its utility expenses so it has minimal carrying costs (operating expenses) while it land banks its land assets until better economic time roll around,

Despite these facts, the Governor is still backing MPL’s corporate interest at the expense of Molokai’s working families, he said.

Background on the Ranch
Nicholas, in addition to heading up MPL, is also a Vice President of GuocoLeisure Limited, the billion dollar foreign investment company that owns 100 percent of Molokai Ranch. For his dual management roles, Nicholas reportedly earns in excess of $500,000.

In 2007, the three utilities combined lost approximately $350,000 from operations.

Quek Leng Chan is Executive Director of GuocoLeisure and ranked the 314th riches man in the world with a personal net worth of $2.9 billion dollars.

State Clarifies Orders to County

Wednesday, August 6th, 2008

By Zalina Alvi

Hearings on the ongoing West End water situation were held last week in Honolulu, with the state Department of Health (DOH) clarifying that the county is not being asked to take over water and wastewater services at the end of August.

The clarification came after the DOH issued orders to Molokai Properties Limited (MPL) to continue providing water and wastewater services to 1,200 customers for at least 90 days beyond their proposed walkout date of Aug. 31. At the same time, the DOH also gave orders to the county to begin preparations if the company does not comply.

The county responded by asking the state to cancel the orders because it did not have the legal authority to force them to take over the utilities.

Last week, however, a press release issued by the mayor clarified that county attorneys had been not been asked to take over, but to “present an emergency response plan” that would take effect if and when MPL shuts down services due to suffering “substantial losses.”
 
Clarification on State’s Order
“We were told to have a short-term emergency plan in place in case the utilities are shut off,” said Jane E. Lovell, deputy corporation counsel for the county in a press release.

The Hawaii Attorney General’s Office clarified in its own press release that “Hawaii law requires the county to provide drinking water and wastewater services to its residents in an emergency.”

For at least the next 90 days, the county is being asked to assess what is needed to run the utilities and to provide adequate drinking water and wastewater services to all customers, and to, according to DOH, “demonstrate to the satisfaction of the Director of Health that another equity is qualified, willing, and able to provide safe drinking water and wastewater services.”

Beyond the 90 days, the DOH reserves the right to review the status of the emergency and determine what steps the county should take at that point.

The state Attorney General Office also noted that the “DOH has legal authority to order the county to take action in preparation for the possible cessation of the services.”

In the event that MPL walks out on Aug. 31, the county would be able to call on Governor Linda Lingle’s office to declare a state of emergency, and to ask the state to reimburse the county for any costs incurred to maintain the systems temporarily.

The county chose to reiterate during the hearings that an order to the county to take over the water and wastewater services would be “impossible to perform from both a legal and a practical stand point.”

It was also noted during the hearings that the county had previously identified parties who indicated an interest in purchasing and/or operating both the water and wastewater systems.

An Emergency Response Plan
County officials assured DOH Hearings Officer Thomas Rack during last Thursday’s hearing that steps were being taken to ensure the health and welfare of Molokai residents long before the orders were given by the DOH.

“Like any other disaster and public crisis of this magnitude, we would be prepared to take action. That, for us was never in doubt,” said Mayor Charmaine Tavares in a press release.

“The people of Molokai have overwhelmingly encouraged my administration to continue to hold the company accountable. More so because the company continues to hold on to its ownership of approximately 70,000 acres of valuable land and survives under the financial umbrella of a wealthy parent company.”

Coordination of the efforts involved with the emergency response plan is expected to remain within the DOH in conjunction with state and county Civil Defense Agencies.

In response to questions pertaining to whether or not the county has taken into account the potential severe impact of the services being terminated, county officials testified that for the past three months significant efforts have been made to reach out for assistance to state agencies and officials.
  
The Attorney General's office requested a continuance for the following week to allow them more time to call additional witnesses. The hearing was continued on Aug. 6.

Residents Protest Inaction in Utility Case

Tuesday, August 5th, 2008

“We see a lot of legal bickering and carrying on, but we don’t see a lot of people telling the people of Molokai how to carry on,” said Paul Mullin, West End resident. He organized the protest held last Thursday because of frustrations he has over a lack of action being taken in the water utility situation on Molokai.

East End resident Judy Caparida passed the demonstration held in front of Molokai Public Library, and decided to pick up a sign to join in on the protest. “I’m over here with my newfound friends. I’m from the east, and they’re from the west.”

Regardless of their personal views of how the situation should be handled, Caparida said, “water doesn’t separate us.”

Ranch Ordered to Continue Water Supply

Thursday, July 31st, 2008

By Zalina Alvi

The state has made its move in the West End water situation, ordering Molokai Properties Limited’s (MPL) Utilities to continue services for at least 90 days, and the county to begin preparations for taking over water and wastewater services.

The orders are part of the state’s efforts to make sure water and wastewater services continue on the West End following MPL’s announcement that it would discontinue services to 1,200 residents on Aug. 31 due to the utility companies suffering “substantial losses.”

In response, the county has requested that the DOH cancel the order, arguing that it has no grounds or legal authority to do so. The county has also begun the process to hire former Attorney General Margery Bronster for a potential cost of $100,000.

Orders to accept responsibility
“The Department of Health is exercising its authority to order immediate action to protect the public health from an imminent and substantial danger if the services are stopped,” said Laurence Lau, DOH deputy director for environmental health, in a July 21 news release.

According to the DOH, orders to the county are meant to give them time to figure out how to take over if the “essential services” and when the Utilities walk out.

The county’s preparations may include a physical assessment of the operations staff training and figuring out staffing needs.

The orders also require both the Utilities and the county to submit written reports on their progress to the DOH every seven days, effective immediately.

After the 90 days are over on Oct. 18, the DOH can review the status of the orders and decide if they should continue, or if other solutions must be explored.

“Our priority is to ensure uninterrupted water and wastewater service for the health and safety of the people of Molokai,” said Governor Linda Lingle in the news release. “While the county has the primary responsibility to operate and maintain public utilities, the state is prepared to assist the county.”

County Response
One day after the orders were released, the state department held a hearing in Honolulu for the companies and the county to present their arguments before a DOH Hearings Officer.

County Deputy Corporation Counsel Jane E. Lovell requested that orders be cancelled, arguing that the DOH has no legal authority to “require that the county bail out a private utility company, particularly one whose parent company seeks to retain all of its assets while passing on its liabilities onto the county’s taxpayers.”

“We have established through the testimonies of Department of Health witnesses that the county is not in violation of state law and so therefore the orders against the county should be dismissed,” Lovell said in a news release

However, Lovell has commented that the county is willing to provide assistance in the event that the Utilities do walk out.

“We are not going to abandon the Molokai residents,” Mayor Tavares said at a County water meeting held on Molokai earlier this month.

In a recent statement, Senator J. Kalani English, who represents Molokai, agreed with the county and condemned the orders. He argued that the state is setting a “dangerous precedent” and that forcing the county to take over the responsibilities of a business that has decided to “take its profits and abandon the people of Molokai adds insult to injury.”

Both MPL and the county also made note during the hearing that the DOH did not provide enough time for them to prepare since the orders were issued less than 24 hours before the hearing. The county made a request that the case be dismissed in reaction to the lack of evidence provided by the Attorney General’s office and MPL on July 22.

The hearing has been postponed until July 30, when it will resume in Honolulu.

Maui News recently reported that Lovell asked to have the hearing held on Molokai, or at least on Maui, but her request was denied, apparently because it would be too difficult for state officials.

Not the state’s kuleana
In a July 21 letter to Mayor Charmaine Tavares from Gov. Lingle, the governor expressed disappointment that the county had not “taken more affirmative steps in regard to its responsibilities.”

The letter, which placed the responsibility of maintaining water and wastewater services to the 1,200 West End residents on the shoulders of the county, quoted previous comments made by the Public Utilities Commission’s that share its views.

“I believe the county not only has the primary responsibility to ensure continued provision of water and wastewater services to the public, but is also best staffed, equipped and capable of doing so at the lowest cost to the residents of Molokai for the long-term,” Gov. Lingle wrote.

The governor went on to cite excerpts from the Hawaii Revised Statutes §46-1.5 outlining the county’s power to “establish and maintain waterworks and sewer works: to collect rates for water supplied to customers and for the use of sewers.

She also cited a passage that explained that the county’s board of water supply “shall manage, control, and operate the waterworks of the county and all property thereof, for the purpose of supplying water to the public in the county.”

In response to the mayor’s request that she declare a state of emergency, Gov. Lingle went on to say she was “carefully considering whether the use of emergency powers may be appropriate.”

She noted, however, that if she were to declare a state of emergency, it may simply result in the Governor’s Office directing county agencies, officers and employees to take care of the situation themselves

No Extra Water for Monsanto

Wednesday, July 30th, 2008

By Zalina Alvi

The state Department of Agriculture (DOA) is making plans to tell Monsanto’s Molokai it can’t have any more water, even if they pump for it themselves.

The Agricultural Resource Management division will formally be responding to the company sometime this week, according to Duane K. Okamoto, deputy to the chairperson of the Hawaii Board of Agriculture. The announcement was made at the July 22 meeting of the Molokai Irrigation System Water Users Advisory Board.

The company made an informal request to the department earlier this summer for permission to have more water, on the condition that they would pay for the extra pumping.

More water is not an option at this time, said Okamoto explaining that the 20 percent conservation cutbacks in water use for the summer would prohibit the department from allowing Monsanto to access more water. The decision also took into consideration the limits of sustainable yields and the electrical costs of more pumping.

“Hydrology is the more important thing,” said Randolph Teruya, DOA agricultural asset manager, referring to the natural water sources in our lakes, streams and oceans.

Monsanto is notorious for being the largest consumer of water on the island, using 30 percent more than the second biggest user, Coffees of Hawaii. It is also the largest employer on the island, specializing in agricultural genetic research.

Water Conservation Plans
The issue of Monsanto’s water conservation plan was also brought up by HomesteaderWalter Ritte, who asked why the company has not been forced to implement its plan.

The response from the board was that they can only request that non-homesteaders create and implement water conservation plans, and they do not file copies of such plans nor do they have the power to enforce implementation.

Teruya expressed an expectation that non-homesteaders would use common sense and best management practices, and would “not water what doesn’t need to be watered.”

Weekly readings of water use will determine and inform the board if non-homestead users are violating the mandatory 20 percent cutbacks that began in June.

Ray Foster, manager of Monsanto’s Molokai farm, commented that the company would do its best to conserve water, although they will continue to use overhead irrigation in some form. Foster also said they would give irrigating at night “a try” as part of their conservation efforts.

The board’s next meeting will be on Sept. 16 at 10 a.m. in the Molokai Irrigation System’s conference room in Hoolehua.

Wetlands Restoration Plan Clogged

Wednesday, July 30th, 2008

Former aquaculture facility waiting to hear if council will grant permission to begin restoration work.

A $100,000 Lawyer

Wednesday, July 30th, 2008

By Zalina Alvi

In response to the Utilities’ threat to walk out on water and wastewater services, and the possible legal claims coming out of the situation, the County Council’s Policy Committee, chaired by Maui County Council Member and Council Vice-Chair Danny Mateo, has voted unanimously to recommend the hiring of former state Attorney General Margery Bronster to represent the county.

“It’s good the council is moving to hire Bronster. She’s one of the top attorneys in the state, and she won’t back down in representing the taxpayers of Maui County and the people of Molokai,” said DeGray Vanderbilt, former chair of the Molokai Planning Commission.

Bronster served as Attorney General of Hawaii from 1995 to 1999 as the first woman to hold the office for a full term. During her tenure, she won the state a multi-billion dollar settlement from tobacco companies.

She also led an investigation in the late ‘90s into the Bishop Estate/Kamehameha Schools scandal that involved millions of dollars of misspent money and a petition to remove the charity’s millionaire trustees. In fact, her zealous handling of the case left her so little time for her other responsibilities that the state Senate refused to confirm her for a second term in office.

Her law firm, Bronster & Hosibata specializes in “unfair or deceptive business practices,” among other things.

“Bronster is know for her toughness at getting to the truth, and she is not intimidated, as evidenced when she successfully took on corruption with the Bishop Estate trustees that led to their removal,” said Vanderbilt.

The recommendation must go to the full council on Aug. 8 first, but if it goes through, the law firm of Bronster & Hoshibata will act as special counsel to the county in all legal matters dealing with MPL and its Utilities as the West End water debacle continues.