Board Talk

DLNR to Create Trust Fund For Coral Reef Restoration

“We need it yesterday,” Department of Land and Natural Resources director William Aila said of the proposed new scheme to help his department restore damaged reefs and bill those responsible.

During a September 12 briefing, Aila’s deputy director, William Tam, explained to the Board of Land and Natural Resources that the program, initiated by the DLNR’s Division of Aquatic Resources (DAR), would mirror one employed by the U.S. Army Corps of Engineers to restore wetlands destroyed by construction projects. Under that program, when a Corps-permitted project is expected to harm or destroy a wetland, the permittee must fund and implement a restoration project that provides ecosystem services equivalent to the expected loss.

Regarding damages to Hawai`i reefs and potentially other natural resources managed by the DLNR, the department plans to establish a “mitigation bank” into which responsible parties can pay fines – if the damages are inadvertent – or contribute money to restoration activities to offset impacts from a permitted project.

How badly does the DLNR need this program?

“We [need] look not much further than today’s headlines and probably tomorrow’s headlines,” Aila said, referring to the spill by Matson days earlier of 233,000 gallons of molasses into Honolulu Harbor. The spill suffocated tens of thousands of fish and turned live corals ghostly white almost overnight.

Matson has committed to paying for all damages resulting from the spill. Tam said that besides having to pay fines under the Clean Water Act, the company will also have to address damages to the marine ecosystem.

“That’s a natural resource case that is going to happen,” Tam said.

For now, the DAR is starting the process of getting the mitigation bank approved by the Army Corps. According to DAR invasive species specialist Kate Cullison, the division planned to submit a draft prospectus to the Corps by the end of last month.

“It’s the very fist of a series of more complex documents to be submitted,” she told Environment Hawai`i, adding that it will take several months for the Corps to complete its reviews.

If and when the Corps approves the establishment of a bank, DAR will then submit a natural resource management plan to the Land Board for approval, she said.

While the primary focus of the program will be on corals, it has larger implications for the department, Tam told the board.

The Land Board is obliged to protect the state’s public trust resources, including submerged lands. Although rules and statutes give the board the power to issue fines and assess administrative costs, as well as costs associated with restoration of damaged areas, “we’ve done this on catch-as-catch-can basis in the past,” Tam said.

The board has sometimes struggled to determine the value of natural resources that have been damaged. In a decade-old Land Board case involving reef damages at Pila`a Bay, Kaua`i, the Hawai`i Intermediate Court of Appeals expressly stated that the board can choose how to assess damages, Tam said. However, that case has been appealed to the Supreme Court, which heard oral arguments earlier this year. Whether the court will share the ICA’s opinion remains to be seen.

In any case, Tam said he anticipated the Land Board will be contending with valuing natural resource damages more and more.

Already, the state’s coral reefs are getting banged up on a regular basis, and without any restitution paid to the state. Sinking boats, vessel groundings, and anchor damage can really add up, Cullison told the board. On average, she continued, there are 168 reported coral reef damage incidents per year.

“We can assume there are many more. Most are on O`ahu and Maui,” she said.

DAR focuses most of its response on securing vessels and salvaging them. But there is no process set up after that to assess damages, she said.

“The larger groundings, we have less of a process that’s spelled out. There have been three large ones in the past several years. All have been treated differently,” she said, referring to the Cape Flattery, Voge Trader, and USS Port Royal groundings. (See the February 2013 cover story for more on this.)

Without a process in place, Cullison said, the DLNR is missing opportunities to recover damages.

Planned Impacts

One of the biggest bottlenecks for projects that require an Army Corps permit is the mitigation plan. “The Army Corps of Engineers’ goal is no net loss” of habitat, Cullison said.

A mitigation bank could save permittees from developing and implementing

a mitigation plan, she continued. The state Department of Transportation, for example, is planning to expand Kapalama harbor and is expected to destroy some 7,000 corals in the process. Under the proposed program, the DOT would pay into the bank an amount agreed to by the DLNR and the Army Corps covering the cost of a restoration project that offsets the coral damage. The DLNR would then be responsible for conducting the restoration and the harbor expansion would be allowed to proceed unfettered.

The restoration projects would not necessarily be tailor-made in response to a particular construction project. They would more likely be projects already ongoing, i.e., invasive algae removal at Kane`ohe Bay. Projects would, however, be located within the same county of the proposed permitted activity.

Cullison said the DLNR would choose restoration sites that are already somewhat degraded but which could be improved with management. The sites would also have to host a diverse range of species.

This approach is “usually much more effective than piecemeal projects,” Cullison said. “We are hoping this will provide some level of cost recovery [so we] can do enhancement, restoration, creation, and preservation.”

All restoration projects would have to be approved by an independent review team composed of representatives from the National Oceanic and Atmospheric Administration, the Fish and Wildlife Service, the Environmental Protection Agency, and, of course, the Army Corps, which would chair the team.

In addition to reviewing all project proposals, the team would re-evaluate projects every year. The DLNR would also have its own internal scientific review team, and the Land Board would also approve any modifications to its mitigation and restoration plan. That plan could include projects such as a sea urchin hatchery, the use of super suckers to remove invasive algae, and a coral nursery, Cullison said.

“It’s a fast way to solve some of these problems,” Tam said. “We’re going to start taking these ideas to other areas.”

Board Questions

At-large board member San Gon said he appreciated the fact that the DLNR has an opportunity to standardize its response to repeated patterns of damage and focus on restoration. However, he added, “I know the devil is going to be in the details of this thing.”

With runoff, for example, which causes significant damage to reefs, “on the one hand, it’s a consequence of rains; on the other hand, it’s the result of decades of loss from ungulates. … How do you tease out long-term landscape change and perhaps a particularly wet winter, and those ascribable to a particular thing?” he asked.

Maui member Jimmy Gomes asked whether the DLNR had adequate staff to manage the program and to implement restoration projects.

Tam admitted that his division would have to build that capacity.

Aila said the Army Corps and other federal partners are very supportive and interested in the DLNR’s proposal.

“It hasn’t been done anywhere in the country in applying it to coral reefs,” he said.

Should the bank be established, it would eliminate the confusion that’s occurred in the past over whether settlement funds from reef damages go to the state general fund or to the DLNR.

Whatever money is paid into the bank will be “kapu money,” Tam said, adding, “We’re going to try to [have] our documents to say this is a trust fund, not a special fund” that can be raided by the Legislature.

Rail Can Use State Land,
But May Have to Pay Rent

The Land Board on September 13 unanimously granted two non-exclusive easements, a right of entry, and a lease to the Honolulu Authority for Rapid Transportation (HART) for rail-associated facilities at Aloha Stadium and on agricultural land in Kapolei across from the University of Hawai`i West O`ahu campus.

Despite objections from HART deputy executive director Brennon Morioka over DLNR provisions allowing the state to seek compensation for the city’s use of state land, the Land Board approved the encumbrances as recommended by the DLNR’s Land Division.

“You’re saying you want to use that area without paying the state,” Maui Land Board member Jimmy Gomes asked Morioka before voting on the easement at the stadium.

“That’s been our relationship with other state agencies,” Morioka said. He argued that the value of having a rail stop at the stadium is compensation enough.

Allowing the state to negotiate fair compensation for the easement “doesn’t provide us with some level of assurance with our ability to plan. We do not have a budget for any future lease rent payments,” Morioka continued.

Stadium Authority manager Scott Chan countered, “All we’re asking for is we make sure we do not close the door on asking for fair compensation. We need to consider monetary values because of utilities and costs we incur.”

With regard to the Kapolei properties, Honolulu Department of Planning and Permitting director George Atta sent a letter to the DLNR offering to try to get the lands up-zoned, in lieu of monetary compensation, Land Division administrator Russell Tsuji told the board.

“What they’re proposing is quite valuable. It’s a tough area to get zoned,” he said.

Tsuji noted that rezoning would require approval from the city council, and should it fail, the DLNR would have the opportunity to seek monetary compensation.

Again, Morioka objected. Paying for use of public lands is not in HART’s budget, current or future, he said.

“It would require us to re-look at our budget and would lead to increasing fares,” he said.

Board Denies Contested Case,
Urges Farmer to Cure Violations

On September 13, the Land Board denied native Hawaiian farmer Ku`i Palama a contested case hearing on violations regarding his unauthorized occupancy and use of state land in Hanapepe, Kaua`i.

Even so, because Palama had documents suggesting he may have a legal right to use adjacent private land, Land Board chair William Aila offered to help Palama secure a stream channel alteration permit for his auwai from the state Commission on Water Resource Management. Kaua`i board member Shawn Smith also volunteered to be a liaison between the Palama family and DLNR land agent Milo Spindt, who clearly have problems with each other (threats have allegedly been made by both sides). Ku`i Palama also still had some belongings on the state property and had reoccupied it as well, according to DLNR staff.

The board denied Palama a contested case hearing because he did not request one orally when the Land Board voted earlier this year to fine him $5,000 for growing taro on the state’s land, and also did not properly file a written petition, a staff report states.

Despite Palama’s initial arguments that the state of Hawai`i has no authority over land and the continuing violations, Aila seemed supportive of Palama’s efforts to rehabilitate the land.

The board has said it is good for people to be self sufficient, Aila said.

“We would work with you to grow taro, but you have to clear the violations first,” he told Palama. “Let’s work together to reach compliance.”

At times, Palama tried to argue that diverting the stream was part of his kuleana right and that the state was wrong in blocking access to his property.

“I’m not trying to play hard ball. I’m just trying to grow food to feed my family,” he said.

In the end, though, he seemed willing to leave the state property and work toward getting a permit to divert water to private lands. At his request, Aila gave Palama ten more days to clear out.

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