The Maui News
Thursday, July 1, 2004
By ILIMA LOOMIS, Staff Writer
WAILUKU - The state Board of Land and Natural Resources has proposed divesting itself of all its harbors and boat ramps, shifting the facilities to county or private control.
Board Chairman Peter Young made his offer to Mayor Alan Arakawa in a June 24 letter, and sent similar letters to the mayors of Hawaii and Kauai counties and the City & County of Honolulu.
"DLNR is investigating private partnerships for the management, maintenance and/or operation of its small boat harbors and launch ramps," Young wrote Arakawa. "But before we get too far in the process, I want to know if you are interested in taking over all of the harbor and ramp facilities in your county."
On Wednesday, Arakawa said his initial response was that the county should consider taking over the harbors.
"My instinctive reaction in assessing the situation is that we would probably be well off in accepting the offer from the state DLNR," he said.
The shift would give the county more home rule, while allowing more boating revenues to stay on Maui, he said. County control over harbors would be better than privatization, he added.
If the county does accept the harbors, they would probably be managed by the two-year-old county Transportation Department, he said.
Arakawa said he believes the department would be capable of assessing the needs of harbors and creating a plan for maintenance and management, noting the department has already worked with the state to use federal harbors grants.
But the mayor added that his comments were still preliminary. He said he learned of Young's proposal a few hours earlier on Wednesday.
Another mayor has already indicated he will not accept the state's offer.
"The County of Hawaii is so far behind on the maintenance of its own facilities and has so much catching up to do, it would not be prudent to take on additional responsibilities at this time," Big Island Mayor Harry Kim wrote to Young on Wednesday, although he requested further discussion if the state pursues privatization.
On Wednesday, Young said the aim of the proposal was to find better management for the harbors.
"We recognize we have not been doing a good job with them, and the harbors and ramps are taking our attention away from other priorities within the department," he told The Maui News.
The Department of Land and Natural Resources had developed a plan to improve harbors, requesting a $10 million annual reimbursable bond to do so; but the Legislature approved a revenue bond. That made any projects "prohibitively" expensive, he said.
While a reimbursable bond would allow DLNR to borrow on the State of Hawaii's credit rating, the revenue bond would be based on the "shoestring" finances of the Division of Boating and Ocean Recreation, which depends on boating and harbor use fees for revenues. Interest rates would be far higher, and Young had doubts whether the department could find a buyer for a bond at all.
As many as 20 different private companies have expressed interest in managing harbors in the past, he said, but before the state pursues privatization, Young said he wanted to offer the counties the choice to take over.
"We're looking at it and saying maybe this is better off in county hands - if they're interested," he said.
If the county took over, it would also gain control of harbor funding sources, mainly the rights to set and collect fees from harbor users.
DLNR harbors are self-supporting and do not receive a share of state general funds. If the counties took over, the revenues would no longer be pooled at the state level but would instead be spent entirely in the counties where they were collected.
In Maui County, the facilities affected by the shift would include Lahaina and Maalaea harbors, Manele and Kaunakakai harbors, the Hana Wharf and Ramp, Kaanapali off-shore anchorages, boat ramps at Kahului, Kihei and Maliko, the Mala Wharf and Ramp and off-shore anchorages at Lahaina.
It would apply to harbors and ramps only, not other ocean-based DLNR programs such as the day moorings at the Molokini Shoal Marine Life Conservation District, ocean recreation management areas or permitting systems.
Kahului Harbor is a state Department of Transportation facility and would not be affected by the proposed change, although the boat-launching ramp on the west breakwater would be turned over to the county.
At least one Maui County Council member was skeptical of the proposal to take over harbors.
Council Member Riki Hokama said the small boat harbors were probably in trouble if the state was trying to unload it on the county or a private company.
"I have my red flags flying all over the place on this kind of thing," he said. "The state would never offer us anything they do well and receive enough money for."
The county already funds too many state programs, he added, including projects at Maui Community College, public school activities and health services.
"I'm tired of being asked to do state responsibilities, and I'm tired of the state picking and choosing what they want to dump on the county," he said.
Maui legislators had a range of reactions to the proposal.
"Maalaea Harbor has so many needs for repairs and maintenance I don't know why the county would want it," said state Sen. Roz Baker, whose South Maui-West Maui district includes two harbors and two boat ramps.
When the state gave Maui County control of several parks, county officials fretted over liability exposure that was incurred, she recalled.
"That's been a huge issue, and I would think that would be an issue with the harbors as well," Baker said.
Security, especially in light of new federal homeland security requirements, will also be an issue, she said.
"If I were a county official, I would have a lot of questions," she said.
State Rep. Brian Blundell, who represents the West Maui district, said harbor problems should be solved through better management by DLNR, not by shifting authority.
The counties are not equipped to take over the harbors, he said, and privatizing "is probably not going to be good."
"If the department tried to privatize these harbors they'd find a huge outcry from the general boating public," Blundell said. "The fees to bring the harbors back up to scratch would be at the minimum double what they are now."
Fee increases were also a concern for state Sen. J. Kalani English, whose district covers East Maui, Molokai and Lanai, but he also believed privatization would satisfy a public demand for more businesslike efficiency in government programs.
"It's complicated," he said. "In my district, I'd prefer to see government maintain the harbors, because it's the only way to allow the poorer sections of my community to access the ocean."
But the governor has authority under state law to privatize harbors and other programs if she wants to, he said.
He added that shifting control to counties could be a good option.
"I hope the counties understand it's quite extensive to maintain and run these, but they could do a better job at it," he said. "It might be something worth exploring."
Commercial boaters reached Wednesday said the DLNR proposal was news to them. They were concerned about privatizing harbors, but some said they'd be open to any ideas that would improve harbor facilities and management.
Kim Miyaki, owner of Hookela Sportfishing, said that after paying an "outrageous" price for his commercial use permit out of Lahaina Harbor - they can cost from $150,000 to $500,000 - he didn't want a private company handing out permits to others, driving down the value of his.
"I spent the last five years slaving down here to pay off the loan for this permit," he said. "If they privatize, I think that would all be up in the air."
A private company might improve the harbor facility, but fees would likely go up, he said. Miyaki felt existing management of Lahaina Harbor left "a lot to be desired," particularly since much of the harbor revenue is used to subsidize other boating facilities around the state.
"If some of that (money) could stay in this harbor, you'd obviously have a top-notch facility over here, but it's just not happening," he said.
Carol Anne Moore, owner of Maalaea-based Carol Anne Charters, said she and other boaters were skeptical of privatization, because of the fear it would result in higher boating fees.
"But anything would be an improvement," she added. "The harbors are just in deplorable condition."
She wasn't sure who would do a better job managing the harbor.
"The state does absolutely nothing," she said. "Most of the slips have no power, there's no fuel dock, they've been talking for years about making some improvements to get rid of the surge problem . . I don't know if a private owner would be able to do more or not."
Mark Shultz, a captain with Hinatea Sportfishing out of Lahaina Harbor, said he and other commercial boaters have always been against privatization, but he was equally concerned about the poor condition of the harbor and its slips.
"Our facilities are pretty run down," he said. "If privatization would help that, we might change our mind."
The biggest fear was that a private company or new manager could make changes to the system that would hurt businesses - such as auctioning off permits or moving to a bidding process. Sharing details about the proposal would be key to getting support, he said.
"If they kind of line out what they're going to do so everybody has an idea of what's going to happen before it happens, that would be better for everybody," Shultz said.
Copyright © 2003 — The Maui News