Aloha, Trustee Donald Cataluna

It is with great trepidation that I bid a fond Aloha to my friend and fellow trustee Donald Cataluna, who has been a strong voice for his beneficiaries on the islands of Kauai and Niihau for many years.

Don is known for his passion for protecting native rights and his deep compassion for our beneficiaries in need.  He is credited with stopping NASA from constructing a massive building alongside their telescopes on sacred Mauna Kea and saving the Salt Ponds in Lihue as well as many other projects.

Don has been a true leader whose main focus has been to protect our trust assets while working tirelessly in our beneficiaries’ best interest.

I will miss him.

OHA Election

My congratulations go out to Dan Ahuna, our newly elected Trustee for the islands of Kauai and Niihau and to Maui Trustee Carmen “Hulu” Lindsey, Hawaii Island Trustee Robert K. Lindsey Jr., and Molokai & Lanai Trustee Colette Machado, on their re-election.  I look forward to working with all of them over the next two years to better the conditions of Native Hawaiians.

OHA’s “money pit” now at $28,128,000.00 and growing

When the Board of Trustees authorized the purchase of the Gentry Pacific Design Center this past summer for $21,370,000.00, I was one of several Trustees with serious concerns about the purchase.  There were just too many “unknowns” about the property and I personally felt very uncomfortable with the purchase.  For example:

  • The Gentry Pacific Design Center is 80-years-old and its electrical system is outdated;
  •  The enormous cost and resulting disruption of relocating OHA staff to the Design Center; and
  • The cost of changing the Design Center into an office building.

As I feared the costs associated with the Gentry Pacific Design Center, which is now referred to as the “Corporate Office Building” or “COB” are skyrocketing to nearly $30 million.

On November 1, 2012, the Board of Trustees authorized nearly $7,000,000 in expenditures:

(1) Up to $663,000.00 in essential costs relating to:

  • Tenant Improvement Allowances – $400,000/year for up to 20,000 of the leasable square footage which will be leased or renewed through June 30, 2013; and
  • Immediate Due Diligence Projects – $263,000, including the replacement of a 23-year-old fire alarm system ($100,000)

(2) Up to $6,095,000.00 in design and construction and non-OHA tenant relocation costs relating to OHA’s relocation to COB; and

(3) “Secondary Repairs” – It should be noted that OHA still has to pay for repairs totaling an estimated $404,000 beginning in year three, mainly to repaint the building exterior ($110,000) and to replace the single-ply roofing membrane ($250,000).

As I have said before, it makes absolutely no sense that OHA is spending a great deal of money to purchase and renovate an 80-year-old Design Center full of existing tenants instead of using the $28,128,000 to build a brand new state-of-the-art office building on land we already own.

My preferred location for a new OHA Headquarters is on the Kakaako Makai settlement properties that we recently received from the State.  The Kakaako waterfront is an excellent place for economic development and a permanent home for OHA’s headquarters.

Is anyone listening?  If you are interested in why OHA would spend all this money on an old building that was not for sale, please call (594-1857) or write to Trustee Oswald Stender.

Have a safe and Merry Christmas and a Happy New Year!

Wrapping-up a historic year for OHA

Congratulations to all of the public servants elected in 2012.  Campaigning can be a grueling process.  I look forward to working with all of you in the 2013 Legislative Session to better the conditions of Native Hawaiians.

New Maui Trustee and OHA CEO

OHA began the year by welcoming new Maui Trustee, Carmen “Hulu” Lindsey, who was appointed by Governor Neil Abercrombie.  Trustee Lindsey brought a much needed burst of new energy to the board with her knowledge, experience, and willingness to give her all for our beneficiaries.

OHA’s Administration underwent major changes with the appointment of Dr. Kamana’opono Crabbe as its new Ka Pouhana/CEO.  I have been impressed by his exemplary work over the past eight months and I look forward to the positive changes he will bring to OHA in the coming year.

Appointed BAE Vice-Chair & Served as a Legislative Liaison

I was honored to be appointed Vice-Chair of the Committee on Beneficiary Advocacy and Empowerment (BAE), one of only two subject-matter committees under the Board.  I worked closely with BAE Chair, Trustee John Waihe’e IV, on legislation and on-going programs.  I also continued to serve as one of two “Legislative Liaisons” appointed by Trustee Waihe’e for the 2012 legislative session.

Protecting Kuleana Land Property Tax Exemptions

On November 22, 2011, the Star-Advertiser reported that the Real Property Tax Advisory Commission recommended that the City & County of Honolulu eliminate property tax exemptions for about 150,000 Oahu homeowners, including Kuleana Land owners.

On January 23, 2012, I testified before, the City Council’s Budget Committee hearing on the Real Property Tax Advisory Commission’s Report.  I explained the heartbreaking history of Kuleana Lands and stressed to the Budget Committee Chair, Councilmember Ann Kobayashi, that OHA strongly opposed the proposal.  Thankfully, the matter was dropped (for now at least).  Upon Councilmember Kobayashi’s recommendation, I worked to get the State Legislature to pass a resolution supporting the protection and preservation of Kuleana Lands.

On April 10, 2012, the State Senate adopted Senate Resolution (SR) 33 which urged the counties to preserve property tax exemptions for Kuleana Lands.  I would like to offer my sincere thanks to Senator Malama Solomon who introduced SR 33, and Senators Brickwood Galuteria, Gilbert Kahele, Donovan Dela Cruz, and Michelle Kidani for signing onto the resolution.  I would like to give a big Mahalo to OHA staff members Breann Nu’uhiwa, Sterling Wong, Jim McMahon & Luci Meyer for all their efforts to get this resolution passed.

I would also like to send a special Mahalo to Representative Faye Hanohano for introducing the House versions of the resolutions, HCR 117 & HR 89.  However, Speaker Calvin Say killed both resolutions in the Finance Committee so we need to try again next year.

Settlement Bill Passes

On April 11, 2012, in an emotional ceremony at Washington Place, Governor Abercrombie signed the historic $200 million settlement between the State and OHA.  After many years of negotiations, OHA finally resolved all claims that were raised with the State relating to its portion of income from the public land trust from November 7, 1978 to June 30, 2012 on past due amounts owed.  The State has now fulfilled its constitutional obligations to Native Hawaiians by providing OHA with fee simple title to lands in Kakaako makai.  The proposal will not affect any other claims against the state.

Happy Thanksgiving

May each and every one of you have a safe and happy Thanksgiving full of wonderful food, family and friends.  Aloha Ke Akua.

Kakaako Makai properties sidelined by Gentry Pacific Design Center purchase

NOTE: This column that was censored from OHA’s August 2012 Ka Wai Ola Newspaper but later printed in the October 2012 issue.

`Ano`ai kakou…  As reported in the Pacific Business News (PBN) on July 11, 2012, the Gentry Pacific Design Center is being sold to the OHA.  The sale of the 185,787-square-foot center at 560 N. Nimitz Highway is scheduled to close in August.  The article did not disclose the sales price, but it reported that the building and its three parcels were assessed for about $28.8 million. [See “Office of Hawaiian Affairs to buy Gentry Pacific Design Center,” by Duane Shimogawa in the July 11, 2012 issue of Pacific Business News]

I am dismayed at the Trustees who authorized OHA to make this purchase.  Trustee Oswald Stender first brought the proposal before the board almost a year ago and it was quickly dropped because OHA had to move into the building for it to make financial sense.  None of the other Trustees wanted to move our headquarters there.  I thought the deal was dead, but it came back before the board on May 17, 2012.  The proposal failed again because Trustee Haunani Apoliona cited a conflict of interest because she was on the Board of Directors of the bank being considered to finance the purchase.  OHA’s Board Counsel agreed and recommended that she not vote.

Then, on June 7, 2012, the Board Counsel opined that Trustee Apoliona, miraculously, no longer had a conflict of interest because the Fiscal Committee Chairman took out any references to Trustee Apoliona’s bank within the proposal.  She was allowed to vote and together with Trustees Apo, Machado, Stender, and Waihee, authorized the CEO to make an offer to Gentry Pacific.

Trustees Hulu Lindsey, Robert Lindsey, and I voted against.  Trustee Cataluna abstained.  The four of us had serious concerns about the conditions under which OHA was required to make the purchase.  They include:

(1) The Trustees has less than one week to review the preliminary due diligence and never got to see the final due diligence report until after the purchase was made.

(2) The Gentry Center is 80-years-old and could have problematic lead paint and asbestos.

(3) There are several areas that need to be made ADA accessible.

(4) The electrical system needs to be updated.

(5) The cost and resulting disruption of relocating OHA to the Gentry Design Center.

(6) The cost of retrofitting the Gentry Design Center as an office building.

Given these unknowns, I personally felt very uncomfortable with the purchase.  During the community meetings regarding OHA’s Kakaako Makai settlement properties, we explained to the community that Kakaako would be a good place for economic development and a permanent home for OHA’s headquarters.

Now OHA is spending a great deal of money to renovate an 80-year-old building instead of using the same amount of money to build a brand new one.  It makes absolutely no sense.

Even though the purchase seems to be a done deal, at least four Trustees continue to have serious concerns about how the building was purchased.  I personally believe that purchasing the Gentry Design Center was not a fiscally prudent investment under trust law.

Fiscal issues Trustees need to discuss

`Ano`ai kakou…  Back in July (2012), I travelled to New Haven, Connecticut, to attend the Commonfund Endowment Institute, Level II, at the Yale School of Management.

The Institute provides in-depth courses on how nonprofit organizations such as OHA should invest their funds in the stock market and in other asset classes such as emerging markets, natural recourses, and commodities, etc., in order to secure funds in perpetuity for future generations.

In these very uncertain times, it is important for trustees of endowment funds and nonprofits to be well educated on the details of how money-mangers are investing their funds.

The following are my recommendations for OHA based on what I learned at the Institute:

(1) Trustee Training – OHA should invite organizations such as Grant Thornton to conduct educational workshops for the board, such as one on Governance.  My feeling is that if all trustees attended seminars, like those offered by Commonfund, we would have a more active and informed board who would be able to make good decisions for our beneficiaries.

(2) Split the Money Committee – OHA’s Asset & Resource Management (Money) Committee should be separated into two committees: (1) Budgeting; and (2) Investments.  Volunteers should be asked to serve on the investment Committee.  I have made this suggestion in the past, but the response has always been, “That ain’t gonna happen, Rowena.”

(3) Trustee Involvement – Trustee engagement must be improved.  Some Trustees are passive, nonfunctioning, or afraid of speaking up for fear of being called a “troublemaker,” “micro-manager,” or “hard to get along with.”  All Trustees should be allowed to have meaningful participation in planning and not just leave everything for the Administration to decide, as has been the practice for the last ten years until 2012.

(4) Low Risk Investments – OHA should look at investing in U.S. Treasuries, Commodities, and Natural Resources as they are considered low-risk.

(5) Money Manager Contracts – The Trustees should re-examine all contracts with money managers.

(6) Control Spending – The higher OHA’s operating expenses (commitments, salaries, etc.) the more we need to concentrate on how well we do with our investments.  The trust fund will suffer if we continue to spend at the rate we are spending now.  Intergenerational funds are needed to ensure perpetual funds for the future.

(7) Inflation Funds – These funds reduce the risk of losing your investments in a down market.

(8) Surplus Funds – We should set aside funds for long term, perpetual use.  Being a quasi-governmental trust allows us to be more creative in growing a perpetual fund.

(9) Spending Policy – OHA needs to revisit the spending policy and lower its spending rate to 4%.  OHA also needs to prioritize its spending and consider separate spending policy for different types of investments.  Not prioritizing allows Trustees to fund anything or anyone they favor.

SUMMARY

In summary, the Commonfund Endowment Institute provided me with an excellent investment education.  The information shared by Yale and Harvard professors, as well as top economists and other experienced investors and money managers, continues to be very valuable to me as a Trustee.  Aloha Ke Akua.

The need for fiscal responsibility

`Ano`ai kakou…  On May, 30, 2012, the Star Advertiser reported that the state Council on Revenues lowered the revenue projection for next fiscal year, which prompted Governor Abercrombie’s administration to cut back the state’s spending.

This is not surprising.  When revenues are down, everyone cuts back on spending.  Everyone except OHA.

Trustees Keep on Spending

Our new CEO, Ka Pouhana Kamana’opono Crabbe, has been working diligently to cut our budget wherever possible and to streamline operations to save money, but there are still Trustees who insist on spending more.

This extra spending puts enormous pressure on our dwindling resources at a time when OHA has already accepted major financial commitments such as Waimea Valley, ownership of the Kaka’ako Makai Settlement Properties, and other commitments such as the $3 million/per year for 30-years debt service for the Department of Hawaiian Home Lands and funding for organizations such as Alu Like, Inc. and the Native Hawaiian Legal Corporation that have made their way into our annual budget.  These are huge amounts of revenues being contracted to these entities.  Add to this the grants and annual operational expenses and we are maxed out.

A Constant Issue

Overspending has been a longstanding problem at OHA.  In April of 2004, our money committee chair asked for a legal opinion that would allow OHA to spend more of the Native Hawaiian Trust Fund.  He even questioned whether it’s even appropriate to build the Trust at all.

I have consistently argued against OHA’s 5% spending policy and strongly recommended that it be reduce instead to 4%, at least until the economy fully recovers again.  Even Kamehameha Schools operates at a lower spending rate than 5%.

Fiscal Restraint

In these tough economic times, there are nearly a hundred nonprofit organizations asking for OHA grants each year.  While giving the money away will make OHA very popular in the short-term, we should be focusing on the long-term health of the Native Hawaiian Trust Fund.

We have worked carefully for two decades to build the Trust to over $300 million.  I would hate to see this relatively modest amount shrink down to nothing in shortsighted spending sprees that forces us to realign our budget several times a year and draw more money from our corpus (trust).  What other organization does this?

Greater Transparency

State law (Hawaii Revised Statutes §10-14.5 on budget preparation and submission; auditing, Section b) requires that: “The (OHA) board shall provide opportunities for beneficiaries in every county to participate in the preparation of each biennial and supplemental budget of the office of Hawaiian affairs. These opportunities shall include an accounting by trustees of the funds expended and of the effectiveness of programs undertaken.”

I have recommended time and time again that OHA needs to take its proposed budget out to the community so that our beneficiaries can give us their input as well as tell us what their needs are.

This was the common practice of OHA in the past and I believe it helped OHA to develop a budget that was more in-sync with our beneficiaries’ concerns.

I will continue to press OHA’s money committee chair to take our next proposed budget out to the community, as required by law, including the neighbor islands.

So which path will OHA’s leadership take?

It has long been understood that OHA is a “temporary” organization that will someday be dissolved and its assets transferred over to the new Hawaiian Nation.

So the critical policy question is: “Will OHA continue to be a ‘temporary’ organization that will give the Hawaiian Nation the assets it needs to survive or will OHA continue to spend freely and shrink the Trust Fund?”

OHA desperately needs Trustees who will make the tough decision to focus on building towards a more permanent, long-term goal instead of taking the easy and popular path of short-sighted spending.

In this election year, OHA beneficiaries should look carefully at the candidates running for OHA Trustee and choose individuals who will take OHA in a more fiscally responsible direction.

What has been sorely lacking is for Trustees to prioritize our spending and focus on the things that our beneficiaries need and NOT use OHA’s “Strategic Plan,” which is at best a wish list of too many things and does not focus on the top priorities of our people.

NOT listing priorities leaves the door wide open for certain Trustees to continue to fund anything and everything while neglecting meaningful programs in healthcare and housing.

As long as trustees keep drawing money out of our corpus, or trust fund, we are taking money away from future generations of Hawaiians.  After all, what is a nation without assets?  Aloha Ke Akua.

2012 Legislative Wrap-up

`Ano`ai kakou…  Congratulations to all OHA Trustees and staff members for all of their dedication and hard work in getting the OHA/State Settlement agreement passed into law.  The 2012 legislative session will surely be remembered as one of OHA’s most successful.

Legislative Liaison

As Vice-Chair of the Committee on Beneficiary Advocacy and Empowerment (BAE) and one of two “Legislative Liaisons” for the 2012 legislative session, I had the distinct pleasure working closely with Senators Malama Solomon, Clayton Hee, and Brickwood Galuteria and Representative Faye Hanohano on issues relating to the Settlement and the preservation of Kuleana Lands.

Kaka’ako Makai

Senate Bill 682 proposed to add value to two parcels of land that are among the lands in Kaka’ako Makai that the OHA/State Settlement (Act 015) conveys to OHA.  The right to develop residential structures on these two lots would add significant value and provide much needed revenue for our Nation.

On April 5, 2012, the Honolulu Star-Advertiser reported that SB682 was likely dead in the House.  However, the Senate’s Ways and Means and Judiciary and Labor committees added similar language into a related bill that had already passed the House — HB2819 — so the language for SB682 could still be heard in conference committee.  HB2819 did not pass out of its conference committee before the end of session on May 3rd and will need to be revisited in the next legislative session.

Protecting Kuleana Land Property Tax Exemptions

On November 22, 2011, the Star-Advertiser reported that the Real Property Tax Advisory Commission recommended that the City & County of Honolulu eliminate property tax exemptions for about 150,000 Oahu homeowners, including Kuleana Land owners.

On January 23, 2012, I testified before, the City Council’s Budget Committee hearing on the Real Property Tax Advisory Commission’s Report.  I explained to the members of the committee the heartbreaking history of Kuleana Lands and stressed to the Budget Committee Chair, Councilmember Ann Kobayashi, that OHA strongly opposed the proposal.  Thankfully, the matter was dropped (for now at least).  However, upon Councilmember Kobayashi’s recommendation, I worked to get the State Legislature to pass a resolution supporting the protection and preservation of Kuleana Lands.

On April 10, 2012, the State Senate adopted Senate Resolution (SR) 33 which urged the counties to preserve property tax exemptions for Kuleana Lands.  I would like to offer my sincere thanks to Senator Malama Solomon who introduced SR 33, and Senators Brickwood Galuteria, Gilbert Kahele, Donovan Dela Cruz, and Michelle Kidani for signing onto the resolution.  I would like to give a big Mahalo to OHA staff members Breann Nu’uhiwa, Sterling Wong, Jim McMahon & Luci Meyer for all their efforts to get this resolution passed.

I would also like to send a special Mahalo to Representative Faye Hanohano for introducing House versions of the Kuleana Lands resolutions, House Concurrent Resolution 117 & House Resolution 89, and getting them approved by the House Hawaiian Affairs Committee.  However, both resolutions did not get a hearing in the House Finance Committee despite my repeated requests to its Chair, Rep. Marcus Oshiro.  Neither resolution called for any money to be appropriated so the question is why were they even referred to the House Finance Committee? Aloha Ke Akua.

At Long Last… A Historic OHA/State Settlement

`Ano`ai kakou…  On April 11, 2012, in an emotional ceremony at Washington Place, Governor Abercrombie signed the historic $200 million settlement between the State and OHA.  After many years of negotiations, OHA has finally resolved all claims that were raised with the State relating to its portion of income from the public land trust from November 7, 1978 to June 30, 2012.  The State has now fulfilled its constitutional obligations to Native Hawaiians by providing OHA with fee simple title to lands in Kakaako makai.  The proposal will not affect any other claims against the state.

I would like to give my heartfelt thanks to those who made this momentous settlement possible: Governor Neil Abercrombie; Senate President Shan Tsutsui; House Speaker Calvin Say; the Chairs of the House and Senate committees that heard the bill; the Native Hawaiian Caucus, and all of the legislators who voted for this historic settlement.  I also thank the following Native Hawaiian organizations for their support:  The Department of Hawaiian Home Lands, Hawaiian Civic Clubs, the Sovereign Councils of the Hawaiian Home Lands Assembly, Council for Native Hawaiian Advancement and Kamehameha Schools.

The lands that were transferred to OHA will someday generate the revenue needed to support OHA’s many Native Hawaiian programs.  This process may take some time, but we are well on our way to someday being completely self-sufficient.

Senate Bill 682

The intent of Senate Bill 682 is to add value to two parcels of land that are among the lands in Kaka’ako Makai that SB2783 conveys to OHA.  SB682 specifically proposes to allow certain lots in the makai area of Kakaako Community Development District to be developed for residential units and exempt from public facilities fees, provided that 20 percent of the units are designated for residents in the low- or moderate-income range.

OHA appreciates the bill’s intent and didn’t object to its passage — as long as it didn’t hurt the passage of SB 2783.  The right to develop residential structures on these two lots would add significant value and provide much needed revenue for our Nation.

It should also be noted that OHA remains committed to the guiding principles of the Conceptual Master Plan and will address these principles in any application for development permits for the two lots.  OHA will also be able to request entitlements for the S82783 properties in subsequent legislative sessions once OHA becomes the landowner.

On April 5, 2012, the Honolulu Star-Advertiser reported that SB682 was likely dead in the House.  However, the Senate’s Ways and Means and Judiciary and Labor committees added similar language into a related bill that had already passed the House — HB2819 — so if this House bill is approved by the full Senate, the language for SB682 could still be heard in conference committee before the end of session on May 3rd.

Senator Clayton Hee, Chairman of the Judiciary and Labor Committee, was quoted as saying, “It’s an important bill in terms of economic development, in terms of some of the members who felt — and continue to feel — that the settlement doesn’t meet the amount that should have been settled on.”  Aloha Ke Akua.

OHA/State Settlement Update

`Ano`ai kakou…  Two of the most important pieces of legislation in recent OHA history have been approved by committees in the State Senate and now looks toward consideration by the House of Representatives.

Senate Bill 2783

On March 2, 2012, the Senate Committees on Judiciary and Labor and Ways and Means passed SB 2783 (part of Governor Abercrombie’s Legislative Package) UNAMENDED.  SB 2783 will (1) Resolve all claims OHA has raised relating to its portion of income from the public land trust from November 7, 1978 to June 30, 2012; and (2) Fulfill constitutional obligations to Native Hawaiians by providing OHA with fee simple title to certain parcels of land situated in Kakaako makai.  The proposal would not affect any other claims against the state.  The bill now goes to the floor of the Senate for approval before it crosses over to the House.

I would like to thank everyone who supported S.B. 2783 including Governor Neil Abercrombie, the Attorney General; the Department of Hawaiian Home Lands, the Kalihi Palama Hawaiian Civic Club, the O‘ahu Council Association of Hawaiian Civic Clubs, the Native Hawaiian Chamber of Commerce, the Ko‘olau Foundation, Kako‘o ‘Oiwi, the Ko‘olaupoko Hawaiian Civic Club, the Association of Hawaiian Civic Clubs, and the Council for Native Hawaiian Advancement.

Once SB 2783 passes and the lands are transferred to OHA, the revenues generated by the parcels will help to support OHA’s many Native Hawaiian programs.  However, this may take some time as we assess all of the options available to us and work through complicated property issues that need to be dealt with before the parcels are ready for use.

Senate Bill 682, Senate Draft 1

Also on March 2nd, the Senate Committees on Water, Land, and Housing and Judiciary and Labor passed SB 682 SD1.  Essentially, SB 682 SD1 would allow residential development on two parcels (919 and 653 Ala Moana Blvd.) which will be conveyed to OHA if SB 2783 is approved by the legislature in its current form.

OHA, along with the Governor and Attorney General, testified in support of SB682 SD1. The Attorney General testified that he appreciates the bill’s intent and didn’t object to its passage as long as it does not hurt the passage of SB 2783 and is acceptable to the Legislature as a whole.  OHA took the same position.

The right to develop residential structures on these two lots would add significant value and could someday provide the needed revenue for our Nation to be self-sufficient.  It should also be noted that OHA remains committed to the guiding principles of the Conceptual Master Plan and will address these principles in any application for development permits for the two lots.

OHA Chair Colette Machado was quoted by KITV4 (March 2, 2012) that OHA would focus on affordable rental housing for Oahu’s workforce and not luxury condominiums.  Chair Machado stated that “We could go up to 200 feet, and we are looking at residential as an opportunity as a home base for our people.  We are talking rentals, not condos because we will not sell the ceded lands.”  Governor Abercrombie was also quoted as saying “This is part of a whole idea of Kakaako as the third city in Honolulu.  With this OHA settlement, Kakaako is going to be the place people want to be.”  SB682 SD1 now heads over to the House for consideration.  Aloha Ke Akua.

2011 Wrap-up

January 2012 KA WAI OLA COLUMN

`Ano`ai kakou…  I started off 2011 with a continued hope that there will be positive changes at OHA.  While not always positive, the year was definitely one of major transition for OHA as we: (1) Approved a monumental law which will establish State Recognition for Native Hawaiians; and (2) Received an offer from the Governor to finally resolve the claims relating to OHA’s portion of income from the public land trust between 11/7/1978 and 7/1/2009.

STATE RECOGNITION

After being one of two Trustees appointed as a “Legislative Liaison” representing OHA for the 2011 session, I focused my many years of lobbying experience and strong relationships with legislators on two important issues: (1) Establishing state recognition for Native Hawaiians; and (2) Resolving the past due ceded land payments from the state.

Thanks to the hard work of the Native Hawaiian Caucus, Senate Bill (SB) 1520 was approved by the legislature and signed into law by Governor Neil Abercrombie.  SB1520 establishes a new law that recognizes Native Hawaiians as the only indigenous, aboriginal, Maoli people of Hawaii.  It also establishes a process for Native Hawaiians to organize themselves as a step in the continuing development of a reorganized Native Hawaiian governing entity and, ultimately, the federal recognition of Native Hawaiians.

A special Mahalo to Senators Malama Solomon, Clayton Hee, and Brickwood Galuteria, and Representative Faye Hanohano for their tireless effort to get SB 1520 passed into law.

PAST DUE CEDED LANDS SETTLEMENT

In the 2009, SB 995 (Introduced by Senator Colleen Hanabusa by request and supported by Senator Hee) sought to have the State resolve its long overdue debt to OHA resulting from public land trust revenues unpaid from 11/7/1978 to 7/1/2010 by offering OHA $251 million in cash and 20 percent of the 1.8 million acres of ceded lands.  The proposal died in the House and went nowhere in 2010.  In the 2011 Legislative Session, SB 984, part of the OHA Package of bills, died after it was deferred by the Senate Hawaiian Affairs and Judiciary committees.

However, on Nov. 16, 2011, Governor Neil Abercrombie offered OHA property in Kaka‘ako as payment to cover the settlement of past due amounts.  The Governor should be commended for his bold offer.  OHA has lobbied many Governors in the past with nothing to show for it.  Now, for the first time, Governor Abercrombie is making OHA an offer that could potentially generate all of the revenue OHA needs to operate indefinitely and would give our future nation the concrete assets it needs to serve the Hawaiian population.

Although there is a lot work ahead of us in the upcoming legislative session, I feel more confident than ever that OHA, on behalf of our beneficiaries, will finally prevail.  An important part of that will be educating our elected officials and the community about this opportunity.

OHA must also do everything in its power to successfully lobby the State Legislature and convince any naysayers to have a change of heart.  In this effort, we will need your support to effectively solidify the settlement.  OHA will be taking this proposal to community meetings around the state so that our beneficiaries will understand it.  I look forward to 2012 with great hope and anticipation that our efforts to resolve this long standing issue will finally be put to rest.

I wish everyone a very Merry Christmas and a most prosperous New Year.

Geothermal might be good for Hawaii – with caveats

September 2011 KA WAI OLA COLUMN

`Ano`ai kakou…  Our state needs a quick solution to our fossil fuel problem.  Hawaii is the most oil depend state in the U.S., making up 90% of our energy needs.  We currently pay $7 billion annually for imported oil and we also have the highest electricity rates in the U.S.  With the price of oil is predicted to rise over $200 a barrel by 2013-2014, things are only going to get more expensive.

It is imperative that we develop renewable and self-sufficient sources of energy for the entire state.  Luckily, Hawaii is blessed with many valuable sources of renewable energy such as Ocean Thermal Energy Conversion (OTEC), tidal, surge, wave, wind, solar, and geothermal.

While each of these energy sources have downsides, it is geothermal that has the worst reputation.  Everyone remembers the
debacle caused in 1993 by the Puna Geothermal Venture on the Big Island.  Residents were so angry about the lack of community input and emission problems that they ended any further geothermal development on the island.  Clearly, the Puna
Geothermal Venture is a perfect example of how not to develop a geothermal plant in Hawaii.

Innovations Development Group (IDG), a Hawaii-based company established in 1998, studied the mistakes that were made in Puna and offers a better, cleaner, and culturally appropriate development plan.  IDG is a majority Native Hawaiian-owned company with extensive experience developing energy opportunities in Hawaii and the Pacific.  They are currently developing three geothermal projects in New Zealand.

IDG operates under the Native-to-Native Community Collaborative Model in Indigenous Communities, which recognizes the rights of indigenous peoples to participate in the development and improvement of their resources in a culturally appropriate, environmentally sustainable, equitable, socially responsible, economically sensible, and most importantly – pono way.

IDG is proposing to develop geothermal projects in viable locations through the state using the latest technology re-injects missions.  It is currently conducting presentations to various stakeholders, including OHA.  During our presentation, IDG promised to: (1) Identify and preserve all cultural resources; (2) Hire cultural protection consultants; (3) Share the benefits of proceeds with the community through job training, onsite employment opportunities, scholarships, educational opportunities, community centers, agriculture markets, building new parks, and improving beach areas; and (4) Provide a fair and reasonable electric rate to customers.

IDG projects also provide secondary small business opportunities such as spa bathing facilities; timber and food drying using steam; an industrial technology park with a renewable energy focus; and even aquaponic greenhouses.

In early July, Trustee Peter Apo and I attended an accelerated course on managing investments in an unpredictable economy at the Yale University School of Management.  It was a great learning experience.  One of the topics of discussion was how endowments and trusts are now investing in venture capital as a way to hedge their investments.  By using alternative investments such as commodities, natural resources, and venture capital, they are able to stabilize their portfolios.  Geothermal as a venture capital investment would make a lot of sense for OHA to seriously consider.

Before any IDG proposal is considered by OHA, they will first need to consult the Native Hawaiian Community regarding: (1) The selection of the site; (2) The technology that will be used, (3) Cultural access for gathering, worship, heritage protection and preservation; (4) Any negative impacts to Native religious belief system; (5) Benefits for Native Hawaiians; and (6) Their a
broader vision for Hawaii.

The state is in the middle of a budget crisis and is struggling to look for new sources of income to pay for critical services.
Geothermal developments could provide the income the state desperately need while significantly reducing our dependence on fossil fuels and providing benefits to the community without raising taxes – but only with strong safeguards and caveats.

Aloha Ke Akua.