Board Talk

East Maui Water Dispute Heats Up With Hearing Officer’s Recommendation

“By the time water gets to our patch, it’s warm,” says Beatrice Kekahuna, age 74. Warm water may be good for bathing, but for Kekahuna and other East Maui taro farmers, it is anathema, making their crop more susceptible to pocket rot, a disease that can devastate their crops.

Kekahuna’s complaints were aired during final arguments of a contested case hearing before the Board of Land and Natural Resources. At issue is the diversion from East Maui of billions of gallons of water annually by Alexander & Baldwin and its subsidiary, East Maui Irrigation (EMI). Without more water in the stream, she and other native Hawaiians cannot expand their patches. And as native Hawaiians, they say, the diversion violates their rights under Hawai`i’s constitution.

In their arguments on Kekahuna’s behalf, attorneys Alan Murakami and Isaac Hall tried to steer the Land Board onto what they believe is the right path when it comes to A&B/EMI’s diversion for agricultural and municipal uses in central and upcountry Maui. Despite their efforts, the Land Board seemed to be uncomfortable acting against the recommendations of its hearing officer, retired Judge E. John McConnell. In his proposed decision, McConnell would have the board refer decisions on water issues to the state Commission on Water Resource Management.

What makes the East Maui case especially difficult is precisely this shared jurisdiction. The diversions in East Maui were established more than a century ago with leases of watershed lands that were periodically renewed by the Land Board and its predecessor agencies. Since 1987, when the state Water Code went into effect, the Water Commission has authority to set allocations of water.

For decades, East Maui taro farmers and residents have appealed to both entities to have water returned to their streams, filing petitions and initiating contested case hearings that have yet to be resolved. This particular contested case, heard by the board in November, had been requested in May 2001 by Na Moku Aupuni O Ko`olau Hui, a native Hawaiian non-profit whose members live in Ke`anae and Wailuanui, and native Hawaiians Beatrice Kepani Kekahuna, Marjorie Wallet, and Elizabeth Lapenia.

At the meeting, A&B argued for a public auction of a 30-year water lease, even though the board was only considering a one-year permit renewal that day. A&B vice president Meredith Ching told the Land Board that her company needed a long-term guarantee of water to do any kind of future planning.

The Native Hawaiian Legal Corporation, representing Na Moku, argued that the permits are illegal since no environmental assessment or impact statement has been done to address the diversions’ effects, and because the Water Commission has not issued permits that NHLC argues are required before water may be removed from its area of origin.

After hearing arguments from both sides, McConnell’s draft order, issued last November, sided with A&B/EMI. McConnell wrote in his decision that if it is found to be in the state’s best interest, the Land Board can enter into a lease of waters emanating from state lands for transfer outside of their watersheds as long as the lease follows procedures set forth in state law. In a blow to opponents, he determined a long-term lease for water was exempt from Hawai`i’s environmental law, Chapter 343, so long as it was for a continuing operation.

“So long as the proposed disposition of water by the BLNR is made subject to the instream flow standards established by the CWRM [Water Commission], and to the judgments of any court of competent jurisdiction regarding the appurtenant or riparian rights of downstream users, the BLNR has no duty to perform its own parallel investigation with regard to the minimum, instream flow standards necessary to protect appurtenant rights or, to the extent feasible, traditional and customary practices of native Hawaiians,” he concluded.

EMI attorney Alan Oshima appeared pleased with McConnell’s findings. “He found the application was for the continued use of the EMI system as is presently exists and has existed for over a hundred years. Therefore, it is a continuing use and is exempt from requirements of an EA or EIS before any disposition of the land or water,” Oshima told the board.

As for McConnell’s other findings dealing with traditional, customary practices, and out-of-watershed transfer of water, “he has found those are not matters for this board but properly matters to take before the Water Commission,” Oshima said.

Na Moku has already filed with the Water Commission petitions to amend flow standards for 26 streams that are affected by A&B diversions. Oshima noted that studies needed for this are already under way, with A&B itself picking up part of the tab.

“EMI understands the second round of this tournament is at the Water Commission. If in fact this board adopts the recommendations of the hearings officer, we are merely at half-time,” Oshima concluded.

Attorney Isaac Hall argued that the Land Board had public trust obligations over water. When the contested case hearings were granted last year, “We thought thatÉ the public trust doctrine would be applied, that this board would exercise its public trust responsibilities finally,” Hall told the board. “It’s with the greatest disappointment that the hearings officer, for some reason, took everything off A&B’s press and put it in his recommendation.”

Hall disagreed with McConnell’s recommendations the Land Board could auction the diverted water, presumably to A&B and EMI, “and have us all go chase after minimum stream flow and riparian and appurtenant rights afterwards.” That runs counter to what the Hawai`i Supreme Court said was the Land Board’s obligations in the Waiahole case, Hall said, adding that the Land Board can’t hold an auction when it doesn’t know how much water it can sell. Before any auction, he insisted, the Land Board had to subtract out the minimum stream flow, determined scientifically, and also water sufficient to address riparian and appurtenant rights.

“That is water that does not belong to you,” Hall said, referring to these reservations. He urged the Land Board to tell A&B, “No disposition until we can figure out what we can auction to you.” If the board was determined to lease the water, he said, it should only do so after the Water Commission had set stream flow standards and addressed other water rights.

Hall also objected to the fact that McConnell conflated a contested case that concerned a one-year permit with issues relating to a 30-year lease. And Hall took exception to McConnell’s proposal to exempt the diversions from EIS requirements, noting that A&B had originally promised to do an EIS if it received a long-term lease. “I don’t see how they can say, they’re going to prepare an EIS, and then say they’re not going to do one, it’s not required, they’re exempt,” Hall said. Furthermore, the bases for the exemption that A&B presented to McConnell were based on “assumptions that cannot be made in this case unless this auction is a total sham,” Hall said.

One assumption is that A&B would win the auction, put the water in its ditch and operate the same as it always had. The Land Board “cannot hold an auction and assume that A&B & EMI are going to be the winners at that auction É That’s illegal,” Hall said.

A&B also asked McConnell to assume that the diversion would be exactly the same as it was before. It won’t be, Hall argued, and “that’s why we intervened.

Hall didn’t believe it could be assumed that the same cost factors would be involved, or that all the streams would continue to be dewatered.

Hall said A&B asked the hearing officer to assume that there will be no water returned to the stream and that nobody will have any riparian or appurtenant rights. “Therefore, we’re [A&B/EMI] exempt.”

Na Moku attorney Alan Murakami argued against McConnell’s assertion that those with appurtenant rights must prove them in court. His clients are real people, Murakami said, who want to farm taro on kuleana land as their ancestors did. “And that is the right that our constitution and this board need to observe and respect because É we have the most superior right out of any party in this state. Yet we’re in this conundrum of having to fend off the attempt by this corporation to pay for water that is subject to these very rights.”

Murakami also said McConnell’s decision allowing out-of-watershed transfer and ignoring appurtenant rights was “a total misreading” of the public trust doctrine.

Under the Water Code, people seeking to establish their appurtenant rights must go through a process similar to that suggested by McConnell only when they are seeking water within a designated water management area, he said. Since East Maui is not such an area, he continued, that process doesn’t come into play. “We don’t have that situation here,” Murakami said.

But if it’s not Kekahuna’s job to prove what she needs, whose is it? Land Board member Tim Johns asked.

“It should be on EMI,” Murakami said. “They’re [EMI] coming to you to ask for a discretionary permit for water.” In weighing that request, he said, the Land Board can’t ignore that kupuna can’t open more land for taro because they don’t have enough water. There can be no discussion of movement out of watershed if there is any impact on people with appurtenant and riparian rights, he said.

O`ahu Land Board member Kathryn Whang Inouye and Kaua`i member Lynn McCrory seemed inclined to take the position that the Water Commission should determine the amount of water that should go to riparian and appurtenant rights, and pending that resolution, EMI could continue diverting water.

But Land Board chair Gil Agaran questioned whether it could “allow that kind of bifurcation given the public trust doctrineÉ”

Agaran was expected to decide the case before leaving his post last month. No decision was available by press time.

On November 15, 2002, the Land Board approved a 30-year contract with The Nature Conservancy of Hawai’i to restore and manage approximately 550 acres – the main forest-in the conservancy’s Honouliuli Forest Preserve in the Wai’anae mountains. TNC will also maintain about 15,000 feet of trail, which will provide access for educational and recreational activities.

The 4,000 acres in the Honouliuli Preserve “contain a remnant mosaic of six native vegetation communities É threatened by the presence of aggressive, invasive non-native plan and animal species,” wrote Michael Tulang, chair of the Forest Stewardship Advisory Committee, in recommending approval of the contract. “The Nature Conservancy is attempting to turn Honouliuli into an accessible showcase for native forest restoration that it hopes will influence land management decisions throughout the state and increase public enthusiasm for the need to conserve, expand and manage our remaining native forest ecosystems.”

Altogether, the Forest Stewardship Program will provide funding of $670,951, which will assist in seedling propagation, planting, weed and predator control, and trail construction. TNC will match the state’s contribution, bringing the total budget to $1,341,902.

In July 2002, the state’s Forest Stewardship Advisory Committee approved a Honouliuli Preserve Forest Stewardship Plan.

“TNC has a strong community based approach,” DOFAW administrator Mike Buck told the Land Board. Through its Project Stewardship, which gives students a chance to work in the Honouliuli Preserve, TNC has developed relationships with Chaminade University and with Mililani, Waipahu, Kapolei, and Wai’anae high schools, among others. In a letter of support, Daniel Forman, an English and reforestation teacher at Wai’anae High School, wrote that TNC’s Project Stewardship has taught his students “mapping, transecting, surveying, collecting data and outplanting” skills which they have applied to restoration efforts near Ka’ena, Kealika, Kalaekloa, Nanakuli, Pokai Bay, Ka’ala, and Pahole on O’ahu, as well as projects on Kaho’olawe, Hawai’i, and Moloka’i.

Buck told the Land Board that TNC has also been helpful in working with Fish and Wildlife Service to define critical habitat for plants in the area.

At its November meeting, the Land Board approved Maui Land and Pineapple Company’s request to subdivide into three parcels 20 acres it owns in the in the resource subzone of the Conservation District. One of the resulting lots, a four-acre parcel of land fronting Mokuleia Bay, near Honolua, would be given to the state or a conservation organization as a permanent coastal reserve to ensure public access. A 6.5-acre lot, called the Kalopia Point parcel, it will keep for a potential single-family residence. The third piece, the 9.5-acre Honolua parcel, which has some historic sites on it, will remain as it is.

Conservation District rules allow subdivision if there is a public purpose. According to the Land Division’s Lemmo, the land donation qualifies. A Finding of No Significant Impact for the subdivision was published in the September 8, 2002 Environmental Notice, and a county Special Management Area permit has been issued.

Lucienne DeNaie of the Sierra Club said her organization is interested in the reserve above Mokuleia and supports the proposal. In the long term, there is “nothing to talk about until there are discrete parcels,” she told the Land Board last November.

At the board’s December meeting, the Land Board granted a request by A Charitable Foundation Corporation of Nevada to rezone 2.2 acres of Conservation Land in Pupukea from the Limited to the General subzone, clearing the way for construction of a “Kahi Malu spiritual sanctuary” on the ridge above Waimea Bay. ACF still needs a Conservation District Use Permit to build its 5,000-square-foot sanctuary, which will offer group meditation services, single day and overnight spiritual retreats, yoga instruction, gardening and outdoor activities, according to a DLNR staff report.

In return for the rezoning, the ACF plans to donate 63 acres to the state parks division to “preempt development on this section of the ridgeline above Waimea valley and thus protect this public viewplane,” the DLNR report states. To complete the donation, ACF must acquire an adjoining parcel, consolidate it with its own 55.91-acre parcel, then subdivide the two. If ACF fails to get a CDUP, it will still donate 63 acres to the state, but will sell the remaining 31 acres.

Grazing Permit Issued To Help Game Bird Habitat

 

The Land Board approved the issuance of a revocable permit for Diamond K Ranch at Waialua, O’ahu. The ranch will pay $20 a month to graze up to 25 head of cattle on 300 acres. The state is hoping the grazing will reduce fuel for wildfires and will improve game bird habitat.

Between 1990 and 1995, the area had been under permit to the Lucky S Dairy. That permit was cancelled, the staff report says, “due to irresponsible management and neglect of cattle and facilities.” (For more on the Lucky S tenancy, see the January 1995 issue of Environment Hawai`i.) Since then, DOFAW has installed about 12,000 feet of fencing and created a grazing area of about 300 acres to maintain “habitat structure beneficial to game bird production.” The U.S. Department of Agriculture’s Natural Resources Conservation Service has called for additional paddock fencing within the 300 acres to allow for rotational grazing.

“DOFAW is seeking only a nominal charge for this revocable permit, in order to have a permittee that will cooperate with the Division’s long-term goal of game bird habitat managmement and wildland fire pre-suppression,” the staff report states. “A higher grazing fee would encourage the permittee to introduce more cattle and to overgraze the area. This would again force the Division to step in and mobilize limited staff and funds to restore the subject 300 acres. Lastly, the cost to hire a contractor to mow the subject 300 acres is exorbitant,” the staff report states.

The Diamond K Ranch also grazes cattle on state land near Kawainui Marsh in Kailua, O`ahu.

At its October 25 meeting, the Land Board approved in concept a plan to remedy a 16-year-old dispute over coastal land occupied by the Hilton Waikoloa Village.

In late 1985 and early January 1986, developer Chris Hemmeter filled in submerged lands and anchialine ponds at Waikoloa in the course of building the huge resort hotel now operated by Hilton. Mervin Napeahi, a native Hawaiian, filed a complaint in U.S. District Court arguing that the state had effectively abandoned its land and breached its fiduciary duties when it allowed Hemmeter to build on 1.75 acres of filled and submerged land, now site of a restaurant. More than a decade later, in 1997, the court determined that the abandoned area was ceded land and ordered the state to seek compensation for use of the land, now held by Lanpar/HTL.

Since then, the Land Board has attempted, in fits and starts, to resolve the issue.

At the Land Board’s October 2002 meeting, members approved a three-pronged approach:

-A land exchange for the filled land.

-An easement to Lanpar/HTL for use of the submerged land covering the time from the commencement of construction (set at January 1, 1986) to the completion of the land exchange.

-Lanpar/HTL to pay back rent for the filled land, again starting from January 1, 1986, to the completion of the land exchange.

To meet this approach, Lanpar/HTL must now purchase private land for the exchange.

Pua Agino, an attorney with the Native Hawaiian Legal Corporation, objected to the land exchange and the easement. Months earlier, NHLC had told the Land Board it favored a lease over a land exchange, arguing that an exchange wasn’t in the spirit of the public trust doctrine. The state Office of Hawaiian Affairs also objected to any exchange of land.

Lanpar’s attorney Leighton Yuen, however, said that a lease and the hassle of dealing with rental reopenings would interfere with the company’s ability to get financing. Furthermore, state Land Division administrator Diedre Mamiya said that leases can be granted only for “economic units,” and the subject property did not fit that definition.

The land disposition wasn’t the only bone of contention. How to value it has also been a problem. In its recommendation for an independent appraisal for the land exchange, the Land Division included an instruction that “the lands shall be valued as an integral part of the hotel.”

Yuen objected to this instruction, saying that it wasn’t standard practice, and that the landowner should have to pay for the value of the improvements on the property.

Maui Land Board member Ted Yamamura resolved the issue by suggesting that the appraiser be provided a copy of the original plan for the hotel. In doing so, he said, the appraiser could determine the highest and best use of the property at the time of construction.

The Board then approved, in concept, the land exchange, easement, and back rent proposal, with the deletion of the appraisal instruction staff had originally proposed.

— Teresa Dawson

Volume 13, Number 7 January 2003