Redefining the Ranch’s Water Transfer Agreement

In the 1960’s the largest rubber-lined reservoir in the world was built on Molokai supplying Hawaiian Homestead farmers with irrigation water. The massive project tunneled through the island’s main mountain range to brining water from Molokai’s wet north side to the arid plains of Ho`olehua. The project is known as the Molokai Irrigation System (MIS).

In 1975 a water use agreement was formed between the State and developers of the Kaluakoi Hotel. The agreement, still in effect today, allows Molokai Ranch to transport well water from Central Molokai to West Molokai using the MIS.

The current agreement is under scrutiny as a new amendment has been proposed. An upcoming public meeting on Wednesday, July 18 will provide a forum for the details which allow Molokai Ranch the lease of MIS facilities.

The following is an overview of the original agreement and its proposed amendment. Also discussed are concerns of the Molokai Homesteaders and Farmers Alliance, who are advocating a return of the MIS to its intended purpose – agricultural use.

The Original Agreement

In order to supply their development, Kaluakoi planners proposed to lease MIS pipelines. The State believed that by leasing MIS lines to the developers, the people of Molokai would receive profits and revenue beneficial to the island’s economy.

A contract was created that allowed Kaluakoi developers to lease a portion of the MIS for an annual rate of $45,000 during the first 10 years. After that, the amount was to be adjusted in accordance to any increases in the County’s domestic water rates.

In compliance with state regulations, Kaluakoi developers constructed two service connections: one for injecting water into the system, and one for drawing it out.

The developers were permitted to withdraw the equivalent amount of the water they injected. Overall amounts withdrawn could not exceed two million gallons per day.

While the State did agree to provide reasonable maintenance of the system, it also stated that it would not be held “liable for any interruption, shortage of any loss or damage occasioned thereby.”

In the case of a drought or other emergency conditions, the State reserved the right to prioritize service to MIS consumers over Kaluakoi users. The State also reserved the right to terminate its agreement with Kaluakoi at any time (with a two year notice) if it was determined that “the capacity of the system is not sufficient to meet the needs of the public for agricultural purposes.”

During the course of the contract, MIS authority was transferred from the Board of Land and Natural Resources to the Department of Agriculture (DOA) (July 1, 1989).

The 20-year contract expired on Dec. 31, 1995 and has since been renewed. When Molokai Ranch acquired the Kaluakoi Resort’s 4,100-acre property in 2001 it also inherited the MIS lease.

Between 1995 and 2006 the contract was extended four times.

The Current Amendment

In early 2007 Molokai Ranch and DOA drafted a major amendment to the existing MIS use agreement. The amendment is being discussed and reviewed by community members including: Molokai Homesteaders and Farmers Alliance (MHFA), Molokai Ranch, the MIS board and the Department of Agriculture.

Homesteaders are arguing that the amount withdrawn by MPL be lowered by nearly half. Right now there is a two million gallons per day withdrawal limit which was based on what was thought to be the capacity of the Ranch’s water sources. MHFA points out that this estimate is no longer accurate.

Homesteaders are concerned that the Ranch could use MIS pipelines to transfer water to future developments. The original agreement limited water supply to the Kaluakoi area. The proposed amendment no longer identifies specific locations. Homesteaders want to continue regulating transmitted water to Kaluakoi.

The amendment also suggests that if MIS water should become scarce, the system would have the option of purchasing water from the Ranch’s Well No. 17 supply. But homesteaders disagree. They say purchasing water from the Ranch should never be an option. “If you need water from [the Ranch], you are mismanaging the MIS,” states a MHFA proposal.

According to the proposed amendment, the Ranch could build its own pipeline from Well No. 17 to the Mahana Pump Station on the west end bypassing MIS facilities altogether. If the Ranch fails to construct the pipeline by 2011, it is stipulated that the current agreement could be extended until 2016.

Homesteaders want the agreement terminated without renewal at the end of the contract. This would force the Ranch off the system within five years. It would allow for the MIS to return to its intended use, servicing Hawaiian homesteaders and farmers.