Ranch, County Settle in Water Suit

MPL to continue utility services.

After two years of litigation, the battle between Molokai Properties Limited (MPL) and Maui County over water service has ended in an out-of-court settlement.

MPL, commonly known as Molokai Ranch, agreed to continue to operate water and wastewater services through its subsidiaries Wai`ola O Molokai and Molokai Public Utilities (MPU), which serve central and west Molokai. MPL will not ask the county to assume management of their utility services on the island.

“This was a very fair settlement,” said Margery Bronster, former state attorney general, who represented Maui County in the case.

MPL also agreed to hand over Kualapu`u Park and Community Center to the county for $1, and extend leases to the tennis courts, skate park and ball fields in Kaunakakai to the county for five years at $1 each per year. MPL will also pay the county $250,000 in damages associated with attorney fees within the next year.

At its Sept. 3 meeting, the Maui County Council passed a resolution 5-4 authorizing the settlement. Council Chair Danny Mateo, who represents Molokai, voted against the resolution. He said in an interview last week that he would have liked more concessions from MPL.

“This community went through too many trying ordeals [with MPL] to settle,” he said.

Mayor Charmaine Tavares was more welcoming of the settlement, saying in a statement
“After two years of litigation and tough negotiation, MPL has finally agreed that it is responsible for providing these services.”

MPL Executive Director Peter Nicholas and MPL’s attorney in the case, Jim Bickerton, did not return calls for comment.

Filing Suit
In May 2008, after closing Molokai Ranch and related businesses, MPL threatened to abandon its utility operations, claiming it did not have the financial resources to continue service. The county scrambled to prepare for the possibility of having to provide water service to thousands of residents.

“We were prepared to do what we had to do,” said county spokesperson Mahina Martin.

MPL agreed to continue service on a temporary basis after the state’s Public Utilities Commission (PUC) approved a rate increase.

The county filed suit against MPL in August 2008, pointing to binding agreements the utility companies had signed with the county to install, maintain and operate utilities, Bronster said.

The two parties entered settlement talks in March, avoiding a trial that was set to begin Oct. 25, which would have prolonged the already-costly case. Last month, county officials estimated the two parties spent over $1 million in legal fees, according to The Maui News.

High Costs Remain for Customers
The settlement does not resolve the county’s efforts to lower the cost to residents for service through Wai`ola and MPU. Last year, the utilities asked the PUC to raise rates again – in some cases over 500 percent higher than rates just a few years ago.

“The county wants the PUC to take the concerns of the Molokai community seriously,” Martin said. 

In June, the PUC allowed for rate increases on an interim basis while it makes a final decision. MPU customers now pay $6.71 per 1,000 gallons per month, while Wai`ola customers pay $4.79 per 1,000 gallons per month, according to documents filed with the PUC.

Meanwhile, the average household serviced by Maui County Water Supply pays less than $2 per 1,000 gallons, according to its website.

Wai`ola provides water to consumers in Maunaloa, Kualapu`u, Kipu, Manawainui and Molokai Industrial Park. MPU services residents at Ke Nani Kai, Paniolo Hale, Kaluakoi Villas and Papohaku Ranchlands.