On June 5, the Board of Land and Natural Resources issued new, six-month permits to existing commercial ocean recreation operators in Kane`ohe Bay. The action came over the objections– including requests for a contested case — of members of the Kane`ohe Bay Regional Council, who argued that the action was illegal, since it did not conform to the recommendations of the Kane`ohe Bay Master Plan and was contrary to a new law, Act 4,that took effect March 25.
The Land Board preferred to heed the advice of its staff– specifically, its Division of Boating and Ocean Recreation. To support his recommendations, DOBOR acting administrator Howard Gehring claimed that following the master plan and the new law, Act 4 of the 1998 legislative session, would result inenvironmental damage.
Moreover, Gehring claimed that Act 4, which requires relocating one of two large full-service operators, would be superseded by later legislation, Senate Bill 2078, whose effect would be to keep the operators where they are now. (At the time of the meeting, Governor Cayetano had not signed SB 2078 into law; however, Gehring assured the board that Cayetano would. In late June, Cayetano did so.)
The Problem
At the meeting, Gehring made five recommendations to the Land Board:
First, he asked the board to approve the issuance of 12new Ocean Recreation Management Area (ORMA) permits for one year or until the Department of Land and Natural Resources had adopted administrative to implement the Kane`ohe Bay master plan, whichever comes first;
Second, he asked that each permit be operated under the same terms and conditions as were contained in earlier permits the operators had received;
Third, Gehring asked that the permit for the Morning Star Cruises, one of two large, full-service operators, specify that it operate at Checker Reef, instead of the Sand Flat where it now operates, but that Morning Star not be required to move to Checker Reef until directed to do so by DLNR staff. Gehring said that this would allow the Coast Guard and biologists from the DLNR’s Division of Aquatic Resources to make sure that any move would be done in a manner that would not jeopardizenatural resources or pose a threat to boating safety.
Gehring’s fourth recommendation was that the board prohibit all other activity at Checker Reef;
Finally, Gehring asked that the board continue to allow Mid-Pacific of Hawai’i and Morning Star to hold the two permits called out in the master plan for large, full-service operators.
Only the first two recommendations appeared in Gehring’s written submittal to the board. To the board’s dismay, Gehring presented the last three orally, saying he had come up with them only just that morning. Board members Colbert Mastumoto and Kathryn Whang Inouye indicated their displeasure with Gehring’s failure to present them with a written copy of his recommendations.
According to Gehring, his recommendations were intended to preserve the status quo with respect to commercial operations at Kane`ohe Bay until the rule-making process was completed. As required by Act 317 of the 1993 Legislature, the department was to have adopted rules to implement the Kane’ohe Bay master plan four years ago. A set of proposed rules has been prepared and, in March, a public hearing was held on them. However, Gehring said, the new legislation and imminent expiration of permits issued in November 1997 prompted him to bring his recommendations now to the board. In addition, he said, the change in the law will require rewriting of the rules, thus further postponing the time when the permits can be made compatible with both rules and the Kane`ohe Bay Master plan.
Moving Morning Star
The issue of where Morning Star Cruises is to operate was the chief bone of contention, both in the board’s meeting and in the strange sequence of two disparate, seemingly contradictory legislative actions.
According to Act 317, permits issued to commercial operators in Kane’ohe Bay must be consistent with the number, permit type, and vessel capacity provisions set forth in the Kane’ohe Bay master plan. The requirement that operators comply with recommendations concerning their operating site was not added until this year, when the Legislature passed House Bill967, which became Act 4 of the 1998 session when Governor Cayetano signed it on March 25, 1998. The act took effect the day it was signed.
According to the Kane’ohe Bay master plan, the largest full-service operators (Morning Star and Mid Pacific of Hawai`i, Inc.), are to restrict their operations to Checker Reef. But Morning Star has for years retained its operations at the Sand Flat, because there was no legal requirement that it be subject to the master plan’s location provision.
Act 4 changed that. Or at least, it was supposed to.
As DOBOR saw it, though, Act 4 meant that more public hearings would be required before any rules could be adopted, because the current proposed rules do not include location as a provision.
The Legislature then passed a bill that seemed to halt the implementation of Act 4.
Senate Bill 2078 states: “The [DLNR] shall not implement any provision relating to the locations of the commercial operation of ocean use activities in Kane`ohe Bay recommended in the Kane’ohe Bay master plan… until the department adopts rules relating to these activities.” Its effective date is July 1.
The matter the board was confronted with, then, was this: Should the board require Morning Star to move (heeding Act 4),or should it assume that the governor would sign SB 2078 into law, a measure intended to keep Morning Star where it is until such time as the DLNR adopts new rules? (A further feature of SB 2078 is that it requires the Kane`ohe Bay Regional Council, in consultation with the Department of Business, Economic Development and Tourism, and the DLNR, to amend its master plan by December 1999, thus making it inevitable that new DLNR rules are postponed until the year 2000 at the earliest, and ensuring that Morning Star remains at the Sand Flat for at least another two, and more likely three, years.)
Gehring made his own views on the matter clear: “I don’t want to move them [Morning Star] now only to find out that they have to move differently on July 1,” he said.
Pam Matsukawa, the deputy attorney general assigned to DOBOR, told the board that, despite the requirement of Act 4that the locations specified in the master plan be implemented, the Coast Guard had suggested this could pose a danger, while DLNR biologists were worried that such a move could cause damage to Checker Reef.
SB 2078 will stop the move of Morning Star until rules are adopted, she said. In the meantime, she said, DOBOR was “trying to comply with Act 4 by indicating that they will be attempting to move Morning Star to Checker Reef, but environmental issues need to be addressed first.”
Legislative Flip-Flop
The staff’s stated position, then, was that by granting one-year permits to the operators, the Kane`ohe Bay Regional Council could have time to amend its master plan in a manner that would protect Checker Reef.
But Joe Pickard, a council member and part-owner of a small commercial operation in Kane`ohe Bay, was skeptical. Given the thorough deliberations that the plan was subject to earlier, Pickard said, “I don’t think anybody should hold their breath and expect the community and the regional council to support any changes unless we have a lot of deliberation… It won’t be any time soon.”
At one point Mastumoto asked, “If we issue permits according to Act 4, and they [Morning Star] move to checker reef and the SB 2078 becomes law, then on July 1, the situation reverts back to the present position?”
“All it says is don’t move, guys,” Pickard responded. “So if 2078 becomes law, they stay where they are, unless the rules change.”
Matsukawa disagreed. If Morning Star is moved to Checker Reef, and if 2078 is enacted, it must move back, she said.
Matsumoto then asked Pickard about the “flip-flop” in legislation.
According to Pickard, Paul Yip, owner of Morning Star, is a good friend of Representative Calvin Say, chair of the House Finance Committee. Yip called Say, Pickard said, and “he says, ‘hey, buddy, I don’t want to move. Is there any way you can help me out? Act 4 makes me move.’ Calvin Say then calls up David Tarnas, head of the Ocean Recreation Committee.
“‘Hey, David, you want this bill to move [referring to SB2078], include this.’ It was an 11th-hour thing, done at Conference Committee, and the community had nothing to say about it. That’s my view of it. In fact there’s a letter by Calvin Say, very conveniently sent about a week later, outlining all the things that he wanted changed in the master plan.”
Up to that point, Pickard noted, SB 2078 was a bill that simply changed fees the state charges to commercial tour operators.
John Reppun, who also serves on the regional council, reminded the board that SB 2078 “is not law yet, it’s not signed. It had nothing to do with Kane’ohe Bay at the outset. It had to do with things that were statewide, and language concerning Kane’ohe Bay was snuck into this. It’s a terrible way to do legislation and it should not be allowed in the first place. That’s why it never went through any review. It was not brought before the regional council.”
Dragging Anchor
Doug Ing, the attorney for Morning Star Cruises, explained to the Land Board why his client did not want to move.
There was the matter of safety, he said. At the moment, there are two full-service commercial operators. The master plan adopted Checker Reef as Morning Star’s proper operating area. But if it moved there along with Mid Pacific, which now operates at Checker Reef, that would mean each operator would have 150 people a day on the reef, riding on jet skis, banana boats, hobie cats, and speed boats, and engaging in water skiing and windsurfing. If Morning Star moves there with Mid Pacific operating at the same time — that would mean a total of 300 people per day — it will be too confined to be safe, Ing said.
Ing’s second and third arguments arose from what he said were environmental concerns. If Morning Star has to move, it will have to anchor, which will drag the bottom, “and you know the effects of anchors,” he added. Also, the master plan is deficient in terms the mandate of Act 208, SLH 1990, which required an environmental assessment be done of the master plan implementation. The EA, which was to have been done by the state, has not yet been produced.
Finally, Ing discussed laws relating to the move of Morning Star. “The Legislature always intended that master plan be implemented by rules,” he said. “If you look at the law, it states that … unless the person meets the requirements of all rules adopted by the department, it cannot conduct those ocean activities.”
In effect, Ing was arguing, the DLNR could not require his client to comply with rules that had not yet been adopted, even if existing rules were at variance with the master plan.
Despite the location language, he contended, the language relating to rules takes precedence and requires the DLNR to implement rules in order to implement the master plan.
Land Board member Chris Yuen saw the implications of Ing’s argument and summed it up for his colleagues on the board: “He is giving us a way out” — a way to allow Morning Star to remain where it is, which does not conflict with existing boating rules, while not contradicting the letter of Act 4.
Ing agreed: “I’m giving you a way out, the way the Legislature intended to give you a way out.”
Environmental Consequences
As mentioned earlier, DOBOR cited environmental concerns as one of the reasons for not wanting to move Morning Star’s operations to Checker Reef.
Dave Eckert, an aquatic biologist for the DLNR’s Division of Aquatic Resources, supported DOBOR’s view. “From the standpoint of aquatic resources, we think moving a second operator to Checker Reef is a bad idea,” he said. Such a move would “mean more people walking around on the reef, more people snorkeling on the reef, more people touching the coral, seaweed, more noise, more jet skiis fueling in the immediate vicinity…”
He added that the refueling of jet skis could adversely affect coral spawning, as coral gametes and larvae are particularly sensitive to the chemicals in fuel.
Pickard was not swayed. Even if the governor was to sign SB 2078, Act 4 remained a law in force between March 25 and July 1, and any permits the board issued had to comply with that act, he said.
As to the lack of an EA, Pickard reminded the board that it was the state’s responsibility to prepare this – something it had avoided doing for seven years. Six years had lapsed between the time the master plan had been adopted and the department had begun the rule-making process to implement the plan, he noted, “and now we’re talking about changes” to the rules before the first rules have been adopted.
In any case, Pickard noted, the expression of environmental concern from DOBOR and Morning Star was altogether missing when the two large full-service operators moored two cruise ships — the Royal Princess and the Ale Ale Kai — in the harbor in late 1996. Noncompliance Pickard reminded the board that the master plan contains specific guidelines, intended to protect the environment, that operators at Checker Reef must observe: Vessels are to moor in deep water south of the reef not on the reef; anchors must be laid 30 plus feet away from the reef, not on the reef or reef edge; and high intensity activities, such as jet skiing, must occur more than 200 feet away from the reef.
Pickard mentioned that some operators — Mid Pacific in particular — are not in compliance with environmental safeguards and the master plan. Mid Pacific was one of the operators to which DOBOR was proposing to issue a new permit.
Mid Pacific is anchored too close to Checker Reef, conducts volleyball games on the reef’s sandy flat, and conducts high speed activity within 200 feet of fringing reef, Pickard said.
“If Morning Star’s permit is issued to comply with these conditions, it’s not gong to be a problem to operate there. There were 400 people in that same area three years ago.”
Wilson asked his staff if it could confirm Pickard’s claims. Bill Devick, DAR’s acting administrator, agreed that Mid Pacific is anchored too close to the reef.
When Wilson asked for an explanation, Steve Thompson, DOBOR’s O’ahu division director, replied, “I think it’s just been a position they’ve held over the years.”
Pickard also questioned how an environmental risk can be claimed without any empirical data. The master plan had been developed with the assistance of two reputable scientists –Philip Helfrich, director of the Hawai’i Institute of Marine Biology, and James Maragos, of the private consulting firm Coastal Ocean, Reef, and Island Advisors Ltd. — and Dave Parsons, the former state boating manager, had also agreed to it, he said.
“I want to see the study [on Checker Reef], who did it, what the environmental degradation is, whether or not the people have been complying with the elements of plan,” Pickard asked. “If in fact they didn’t, why didn’t the department enforce these to ultimately prevent degradation of the resource in that area?”
In the hope of having the issues fully discussed and brought before the regional council before any new permits were issued, Pickard repeated his earlier request for a contested case hearing.
Safety Issues
Pickard also took issue with the claims of Ing and DOBOR that unsafe congestion would result from putting Morning Star and Mid Pacific both at Checker Reef.
“At one time, one of the biggest operators was carrying up to 400 people per day…It’s not a very small area.” The Sand Flat is even more congested and sees more traffic than Checker Reef, he said, suggesting that environmental and safety concerns were trumped-up issues invented to prop up Morning Star’s wish not to move its base of operations. “There’s been some manipulation of the situation,” he said. DOBOR doesn’t want to have to make Morning Star move, so they got together and said, “let’s do what we can to make it appear that there’s a safety concern or a health concern,” he said.
There was a legitimate safety issue, Pickard said, one that the community has raised for more than a year: the Ale Ale Kai. That large vessel, whose permit to operate was revoked by the Land Board last year, remains moored in the bay. “Somebody is going to hit this boat,” Pickard said, yet the state has done nothing to respond to complaints.
“We’ve asked the division to address the hazard and yet nobody has taken any action. However, now that the division does not want to move an operation, all of a sudden there are these issues being raised. Let’s get serious. There’s other problems out there and yet the division has selectively chosen which to address.
“We don’t think this should go on another year, let alone another month,” he told the board.
A New Regime?
Gehring’s staff report described the action proposed for the board as the issuance of new permits. Existing permits had be enextended for six months last November; when they expired a week before the Land Board meeting, Chairman Mike Wilson authorized a one-week extension. What was proposed to the board, though, was not the reissuance of the old permits, but entirely new permits, albeit with the same terms as before.
On this point, too, Pickard took exception with the staff proposal. If DOBOR was going to issue new permits, he said, they should do so at a public auction, where all interested parties — himself included — could bid. Moreover, new permits should not allow the perpetuation of conditions in old permits that had been grandfathered in when the master plan was adopted.
Last spring, when the permits were being renewed, Pickard said the Kane`ohe Bay Regional Council had not asked for a contested case, since members had been assured that administrative rules would be in place before the Legislature reconvened.
“Not only was this not done,” he said “they were given six more months. And now we’re going to give them another year? If they’re gonna get another year, I want a crack.”
The board also seemed unclear as to what its staff was seeking. Board member Inouye asked, “Are we extending permits or are we issuing permits that are in compliance with the Master Plan, except for Morning Star?”
Gehring replied, “We’re looking at taking existing permits that we have, and extending them for one year or until we have the rules, whichever comes first. We’re expecting the rules to come earlier.” In addition, he said, SB 2078 “will have been passed, which will give the regional council the ability to make recommendations on appropriate changes so that we can put them in the rules. It’s a dynamic effort with the regional council.”
“Procedurally, can we issue permits that are in compliance with the master plan, even though we don’t have the rules?” Inouye asked.
Gehring replied, “We can do that. The question is should we do it.”
Excess Baggage
John Reppun noted that by extending the permits for a week, board chairman Wilson had made board action superfluous. “I’m not sure what we’re doing here today if the chair can extend the permit.”
On the other hand, if board action was required to extend permits or issue new ones, then existing permits have expired, he said — “and with them, the non-conforming uses, like jet skis and so on that were inconsistent with Class AA waters.”
Wilson said he had the authority to extend the permits, “but we do have the discretion to bring certain things before the board.”
Reppun pressed the point: “But nonetheless, are there any applications even in? If these are new permits — and that’s how they’re listed — the nonconforming uses, the grandfathered uses … are pau because these permits expired. We’re starting from square one. Those permits, if they are being offered, need to be done in accordance with the master plan. They should go out there on the auction block.”
And, he continued, with them being new permits, if “whoever is vying for them wants to use things like jet skis, or other so-called nonconforming uses, now the burden has shifted to them to prove that there will be no impact. Previously, when they were grandfathered in, the state shouldered that burden…. Now you’re in the clear,” so far as the need goes to prepare environmental impact statements, EAs, or Conservation District permits falling now on the new permittees.
Wilson asked Reppun what he thought the board should do about the permits. He responded by asking for a contested case hearing.
“But,” Wilson asked, as if not understanding Reppun, “what is it you think we should do about the permits?”
Reppun: “In an ideal world, strictly adhere to the master plan and knock out the nonconforming uses because these are new permits. If those [nonconforming uses] are desired by the applicants, require them to go through the CDUA process, EIS, and so on, which provides the public with an opportunity to comment..”
Wilson: “Specifically, what does this mean with respectto these permits? Are you saying you don’t renew any of them?”
Reppun reminded Wilson that Gehring had described the permits as new: “You’re not renewing” the permits, he said, “you’re issuing new. That’s different.”
Wilson: “And you’re saying ‘don’t issues any new ones at this point?'”
Reppun: “You can only issue new permits when you can be assured that they are not having impacts that would be harmful to the resource…”
Wilson: “You’re saying that … we shouldn’t take any action with respect to granting new permits?”
Reppun: “I’m not sure what your options are exactly, but I’m sure those options should not perpetuate these vested rights, these grandfathered-in uses. You start new. Whatever you’re going to do should not carry any baggage with it.”
Hot Spot Squads
Reppun also noted that, with Kane`ohe Bay being one of the DLNR’s “hot spots” — areas where human activities are at alevel where they pose special threats to sensitive natural resources — the DLNR’s “hot spot” team was to take the lead in managing resource conflicts. DOBOR, however, was still making the presentations and analysis to the Board, he noted.
Reppun complained about the failure of DOBOR to give the community the 30-day notice called for in the master plan whenever permits are to be renewed — a requirement that Wilson acknowledged he was not familiar with. Reppun reminded him that in a February 24, 1997, report from the Attorney General, this specific requirement had been called out as one that the Land Board had not been observing.
Wilson asked Reppun whether he thought an “obligation” for such notice, as the attorney general described it, is a legal requirement.
Reppun: “I would think so. So there was no notice. And as recently as May 27, we had a regional council meeting and this division attended that meeting, both the acting administrator (Gehring) and the O’ahu agent (Thompson) were there, and there was no mention whatsoever of these permits. That’s astounding to me.”
Wilson asked Thompson why he had not raised the issue at the council meeting. Thompson apologized for the omission, saying it was not done purposely.
Final Act
After an hour-long executive session, board member Inouye made a motion. She acknowledged that the Kane`ohe Bay Task Force had worked diligently on the master plan, “but in the interest of moving toward enacting some of the decisions that have been made by the task force, I would like to recommend that pursuant to Section 200-39 HRS that we authorize the issuance of ORMA permits as previously approved by the board and reviewed by the attorney general for continued commercial vessel operations on Kane’ohe Bay for each of the companies … for a period of six months or until adoption of Hawai’i administrative rules, whichever occurs first.”
In addition, she proposed that Morning Star Cruises’ permit be issued with a Checker Reef location, but with a temporary mooring allowed at the Sand Flat because of environmental concerns; Morning Star would not be allowed to move to Checker Reef until directed to do so by the department.
Third, she proposed to “to reposition Mid Pacific Hawai’i to a location and in a manner approved by DNLR.
Finally, she proposed that the board prohibit any activity on top of Checker Reef, to address concerns expressed by Pickard and Reppun that tour operator customers were playing volleyball and otherwise harming the reef flats.
Inouye’s recommendation was seconded. The motion passed. Member Yuen did not vote, as he had to leave before it was taken.
Afterward, Reppun commented to Wilson: “I take it that you’re denying our contested case request.”
Wilson said it would be taken up with the attorney general.
Following procedures for a contested case, both Reppun and Pickard sent letters to the DLNR outlining their concerns and petitioning for a contested case hearing.
As of press time, neither had received a response.
Editor’s Note: For further background on Kane`ohe Bay commercial tour operations, readers may wish to refer to the May 1997 issue of Environment Hawai`i, the entire issue of which concerns this topic.
Volume 9, Number 1 July 1998
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