Watershed lands purchase submitted to council

Arakawa pushing $9.5 million buy from Wailuku Water

The question resurfaced Wednesday whether Maui County would pay $9.5 million for Wailuku Water Co.’s ditch system and 8,764 acres of its West Maui Mountain watershed lands.

Mayor Alan Arakawa’s administration announced that it transmitted a request for funding and County Council approval of the county’s purchase of the company’s West Maui Mountain watershed lands. The property encompasses all of Iao Valley, the iconic Iao Needle and the historic site of the 1790 Battle of Kepaniwai in which the forces of Kamehameha defeated the Maui army led by Kalanikupule.

The administration announcement reported that the company’s land had been assessed earlier this month at $11.1 million.

“That assessment proves that the community is getting a good deal if we pay $9.5 million instead of the actual assessed value of $11.1 million,” Arakawa said in an announcement. “This land purchase will benefit the community in many ways, including facilitating the return of surface water to streams and rivers, improving the county’s own public water system, helping to protect the historical and cultural aspects of Iao Valley as well as take precious water resources from a private entity and placing them into public lands.”

A tentative deal for the purchase was announced in December 2016. Subsequently, the County Council approved funding for an appraisal, which was completed Oct. 1 by ACM Consultants Inc.

County spokesman Rod Antone did not have immediate answers to questions about the estimated annual cost for the county to manage and maintain the lands and water conveyance system; whether additional employees would need to be hired; or how the county would pay for the additional cost, if any.

In an email, Antone said the administration expected council members to ask the same questions, and officials would have answers for them then.

Council Chairman Mike White and Budget and Finance Committee Chairman Riki Hokama could not be reached Wednesday for comment or to address when council members could review the proposal with only two months and 22 days before the end of the current council’s term.

Wailuku Water Co. President Avery Chumbley said Wednesday afternoon that he was concerned about the short amount of time for council action. He said he hoped the matter could get on the budget committee’s Nov. 13 agenda, the last scheduled meeting of the panel this year.

“I do realize there’s going to be a lot of questions,” he said. “It’s a very complex transaction.”

Chumbley said he was prepared to answer the council’s questions and provide whatever information members need in their deliberations.

If the watershed purchase doesn’t happen during the council’s current term, the issue would likely carry forward to the new council term for 2019-2020, Chumbley said. Then, there will be a new mayor and at least four new council members.

As a private company, Wailuku Water has been hamstrung from making needed business changes by the state Public Utilities Commission and the state Commission on Water Resource Management, he said.

“I’m running out of cash,” he said.

Chumbley said his company’s staff had been seven but has been cut to three, in great part, because of money lost by the company for seven or eight years in a row. He declined to disclose the full extent of losses, but it has been publicly known that Wailuku Water lost $457,000 last calendar year.

And, it has cost the company $1.4 million over the years to have legal representation in the ongoing Na Wai Eha water case before the state water commission, which manages Central Maui groundwater and administers water-use permits. Na Wai Eha refers to the four great streams of Central Maui — the Wailuku, Waihee, Waikapu and Waiehu streams.

Chumbley said the county, as a political subdivision of the state of Hawaii, would not be regulated by the PUC, and the county could provide water to customers and set its own water rates.

“It’s going to generate revenue,” he said, although there would be an additional investment in water delivery infrastructure, such as transmission lines and pipelines.

Also, he pointed out that the county Department of Water Supply is nearing completion of its new, $21.5 million surface water treatment plant for Iao water. It is expected to be completed this month and produce, on average, 1.7 million gallons of water per day.

Chumbley said that if Wailuku Water were to go out of business and the county doesn’t purchase its water system, then the construction of the new plant would be “for naught.”

“If we cannot continue to operate as a private company and go out of business, then they’re out of business,” he said.

It makes a “tremendous amount of sense” to have a watershed resource, especially one with such rich cultural significance, owned by the public, he said.

There’s even a “great opportunity” for the county to work with the state and the Hawai’i Nature Center to establish a cultural park at Iao Valley and “create something of significant community interest,” Chumbley said.

The company’s property also includes Waihee Valley, which also has great historic significance as being part of one of the largest Native Hawaiian cultural settlements in ancient times and one of Hawaii’s largest areas for kalo cultivation, he said.

The watershed also is an important area for recharging underlying aquifers in Central Maui.

Wailuku Water is the descendant of Wailuku Sugar and Wailuku Agribusiness Co., which produced sugar, macadamia nuts and pineapple over a span of almost 140 years. The company diverted stream water for its large scale agricultural ventures, but the state water commission ordered the restoration of some stream flows to Na Wai Eha in a 2014 settlement.

* Brian Perry can be reached at bperry@mauinews.com.