Mayor Stands Firm on Water Issue

Molokai Ranch strongholds information, community looks to state for next move.

Mayor Charmaine Tavares stood firm on placing the impending water crisis on the shoulders of the state.

By Jennifer Smith 

Mayor Charmaine Tavares set the record straight last Tuesday night by clarifying that it is not the county’s sole responsibility to take over Molokai Ranch’s utility services. The majority of the Molokai community stood behind the mayor, arguing that Molokai Ranch should not be let off the hook, and the governor needs to intercede in the matter.

"We are not going to abandon the Molokai residents,” said the mayor, during a community meeting held on Molokai. Mayor Tavares and Council Member Danny Mateo arranged the meeting in response to questions and concerns about Molokai Ranch’s potential abandonment of utility services in August. 

The Ranch, also known as Molokai Properties Limited (MPL), announced in April its intention to abandon its water and wastewater services on the island. The decision came days after the company closed several of its Molokai-based businesses, and laid-off 120 local workers.

Impending Emergency
“People have to trust that we are not going to let them down,” Mayor Tavares said. “We are not going to wait until the faucets are turned off.”

The Mayor’s Office sent a letter last Tuesday asking the governor to declare Molokai’s utility situation a state of emergency. According to Mayor Tavares the decision would provide the governor with the necessary legal and financial clout to hold Molokai Ranch accountable, while continuing services to residents.

The state, which does not have the physical infrastructure to take over a water system, could then put together a plan to have engineers and experts assess the situation, and then make a call for proposals to find a company to fix the system.

As of last Friday, the governor’s office had held a meeting to discuss the mayor’s request, but had not confirmed a course of action.

The mayor said the county needs to allow due process to take its course, and cannot disclose several of the proposed plans, but in the event of an emergency she said the county would respond immediately by treating the situation as a natural disaster.

The mayor can declare a state of emergency, but she said her declaration only allows access to emergency funds but will not allow her any other enhanced jurisdictional powers. Mayor Tavares and Council Member Mateo expressed their strong frustration at not being able to do more at this time.

The Mayor’s Office has also contacted the Environmental Protection Agency to make it aware of the developing utility situation on Molokai.

Ranch Closes Doors to Information
Mayor Tavares said she doesn’t yet know how much County emergency appropriations would be needed because Molokai Ranch is continuing to deny access to information, records, and facilities of its utility companies.  Public Utilities Commission (PUC) representatives have also reported non-access to the Ranch’s operational and financial information.

The frustration over the lack of information has led the county to fax a letter to MPL’s parent company, Guoco Leisure in Hong Kong. The letter informed the global company of MPL’s unwillingness to cooperate.

Several attendees speculated that the Ranch is intending to profit from a potential emergency situation. Passing on its utility responsibilities could potentially allow MPL to circumvent costly requirements to continue operating its systems.

Last August, the state attorney general ruled that MPL must complete an environmental assessment to receive a renewed permit to continue using the Molokai Irrigation System to transport its water across the island. Then in December 2007, the Hawaii Supreme Court revoked MPL’s permit to use its purchased Well 17. Between legal fees, and time expended, it would reportedly cost MPL millions of dollars to get its systems legally up to code and running.

"I am just appalled" the ranch is sitting back implementing their new business plan, said DeGray Vanderbilt, former chairperson of the Molokai Planning Commission. He said MPL remained cash positive the past three years, but found it advantageous to claim financial hardships in order to abandon its utility obligations.
 
"They want to dump their liabilities and keep their assets,” the mayor said.

Vanderbilt added that such an action would allow MPL to come back in better economic times to sell off its land holdings for a higher profit. "I think it is time to play tough with these guys," he said, suggesting the state fine MPL daily should the company forgo its responsibilities.

MPL claimed in a letter to the PUC that the county needs to take over the system because no private investors have expressed an interest in taking over. However, the mayor said there have been at least two private companies willing to run the systems.

Council Member Mateo authored a resolution in June that would have the county hire lawyers and other specialists in the event that legal action is taken against MPL. The resolution will be heard on July 22 in the policy committee.

Molokai resident Steve Morgan said several of MPL’s business transactions should receive a closer review. He referenced several improprieties regarding tax assessments of property holdings in relation to the charges incurred by private homeowners.

According to the mayor, if the governor does declare a state of emergency, it would give her the jurisdiction to seize MPL’s records, and look into the state of the utility systems.

State Jurisdiction
Because the PUC granted permits for MPL to run its utility companies, the mayor wants the state to continue its oversight of the company while it relinquishes its permit responsibilities.

“Please don’t get tricked into thinking that this is the County of Maui’s responsibility,” Mayor Tavares said. The County Board of Water Supply and the Department of Water Supply codes do not apply because the issue concerns a private water company she said.

Resident Paul Mullen has followed the developing situation closely and said, while the Ranch deserves plenty of the blame, people also need to place some of the responsibility with the PUC. After granting the Ranch the utility permits, he said the Commission allowed the company excessive amounts of deferred maintenance to its systems. In its defense, he acknowledged that it is extremely short staffed and funded.

"We are not pointing fingers," Mayor Tavares said. "We are trying to keep people accountable," she said, while acknowledging that the PUC has a huge responsibility to carry out, with very little staff.

The mayor said concerned residents can write letters to the PUC, the Department of Commerce and Consumer Affairs (DCCA), and the governor’s office.

“We need to have our governor come in here and help us,” Ruth Manu said.

The County Takes a Stand
Several residents came ready to grill the mayor, but quickly changed their tone after hearing the facts. Giving straight answers to tough community questions, the mayor asked the Molokai community in return to unite and “put the responsibility where it belongs.”

“Now that I have heard all of this I know it is the state that should be doing this,” said Richard Glenn, Molokai resident. He said the governor should declare a state of emergency and that the Department of Health (DOH) should be involved in the situation.

Molokai Community Unites
“I believe this community is truly making an effort to come together,” Council Member Mateo said. “We are one island, one people, and we all feel hurt.”

Several of the attendees also marveled at the unity felt in the room. Neighbors who had fought for years over issues such as land development, found a consensus Tuesday night, fighting for the need for affordable water rates, continued services, and accountability for utility companies.

Molokai resident Bill Vogue saw the water utility situation as an "opportunity for the island to pull together like never before."