Ranch Won’t Budge on Water

Details of MPL’s utility pullout continue to trickle in.

By Dispatch Staff

Proposed rate increases for west and central Molokai residents, will not ensure continued water and sewer services from Molokai Properties Limited (MPL). 

In an attempt to buy time until another service provider could be located, the Public Utility Commission (PUC)  took the unprecedented move of suggesting that MPL hike its rates for utility users. However, MPL CEO Peter Nicholas said in a June 23 letter to the PUC, that the proposed 121% increase and 41% increase for two of its three utilities, “will not create the necessary resources” in order for the company to continue services.

The Ranch said it would take a nearly 178% increase in rates just to cover the known operation costs. Based on the Ranch’s numbers, Maunaloa and Kualapu`u residents would be forced to pay $5.15 per 1000 gallons of water verses the current rate of $1.85. Residents’ rates at Kaluakoi would need to jump to $6.04 per 1000 gallons. 

Looking at nearly astronomical figures in an already tough economy, many residents are wondering where the money will come from, and who will take over when the Ranch deserts its utility obligations.

County Perspective on Molokai Water
When Mayor Charmaine Tavares read that the West End water situation was on the Molokai Planning Commission’s (MoPC) June 25 agenda she immediately asked her Director of Communications, Mahina Martin to attend the meeting.

“The mayor is very concerned as is her administration,” said Martin, as she addressed the community at last Wednesday’s meeting. She made the trip from Maui to assure the community that the county is working hard to find a solution to the island’s utility provider issues, and to encourage the community to come to a public meeting hosted by the county on July 8.

MPL continues to assert that the county would be the best authority to take over the utility services. But, Martin said the county lacks the time, resources, and cooperation to take over services by the August pullout. 

Martin said the Ranch has failed to provide important financial and operating information to the county. We “have had no cooperation or returned phone calls,” she said. “To expect the county to expend money in 8-10 weeks-without such important information would be irresponsible.”

“Every county in the state is watching this situation,” Martin said. There are currently varying degrees to which counties provide utility services, but if MPL is allowed to abandon service, it could provide a dangerous precedent for other private owners. “What would happen to the four counties in the state, should private companies walk away?”

Council Member Danny Mateo is preparing for MPL’s potential walkout in August. He has introduced a resolution to the County Council requesting that the county expend funds to hire an outside attorney to represent the county. On June 13, the county also filed a formal legal complaint with the PUC over the Ranch’s proposed shutdown of its utility companies.

Several community members and commissioners also had formal complaints about MPL’s decision. Commissioner Buchanan thanked Martin for coming to the meeting, and said that several residents were aware of the “shenanigans” that have been going on. She said to tell the mayor “we support her” in what she is doing by not letting MPL abandon its responsibilities.

“The PUC is worried about piercing the corporate veil,” said DeGray Vanderbilt, former Molokai Planning Commission Chairman. He said the current requirements have not motivated MPL to take responsibility, for a decision he believes is part of a broader business decision.

“Simply stated, the Ranch knows slow times are coming to the state’s economy and decided to shut down in order to get out from all its major expenses,” Vanderbilt said. “The Ranch’s plan is to wait out the current slow economic times that are being experienced statewide, land bank its multi-million dollar land holdings, and then come back when economic times get better to sell off their land holding at a great value.”

“Our governor should step in and do something for Molokai,” said Ruthie Manu, Molokai resident, agreeing that the mayor is doing the right thing.

Martin said the mayor, Council Member Mateo, and county staff are working overtime to find a resolution that is best for Molokai residents. They hope residents will share their concerns at the July 8 community meeting at 6:30 p.m. at the Mitchell Pauole Center.