Council passes fiscal 2025 budget on first reading

Maui County Council members gave initial approval Tuesday to their version of the county’s fiscal 2025 budget.

Unanimous first-reading passage came during a daylong meeting with numerous floor amendments that extended the Council session beyond 6 p.m. Amendments to Bill 60 included up to $15 million in additional funding for the Pulelehua development in West Maui; $500,000 reallocated for the Maui Police Department to jump start a new helicopter program with night vision capabilities; and up to $824,000 for the county to acquire the 7-acre former Kula Community Center.

The move to tap the County’s Affordable Housing Fund for the Pulelehua housing project came with dissenting votes from Council Members Yuki Lei Sugimura, Tasha Kama and Nohelani Uʻu-Hodgins. The 310-acre, 500-home Pulelehua housing development is mauka of Honoapiʻilani Highway between Kāʻanapali and Nāpili. It is one of two nearly “shovel ready” projects (the other being Kaiāulu o Kupuohi) that could possibly provide housing in West Maui for Lahaina residents displaced by the August wildfires.

Sugimura, chair of the Budget, Finance and Economic Development Committee, said she had unresolved questions about Pulelehua’s access to water. (In West Maui, developments need permits from the state Commission on Water Resource Management because the region has been designated as a surface and ground water management area.) On the Council floor, Sugimura asked for, but did not receive, a response from the Department of Water Supply whether water is available for the project.

An amendment proposed by Council Member Keani Rawlins-Fernandez and later approved by the Council majority identifies Cheng’s company as MOV Construction LLC, a change from the previous Maui Oceanview LP.

The amendment includes a Council finding for the Pulelehua funding that says “for soonest vertical construction to commence on the 240 affordable rental units, the project would require the issuance of a Will Serve letter by the Department of Water Supply for temporary access to 75,000 (gallons per day) of water for up to five years while the Commission on Water Resource Management completes its review of the project’s new use permit for two privately owned wells at Pulelehua.”

Late Tuesday afternoon, Maui Now reached out to the Water Department to ask whether Pulelehua has access to water. This morning, the department said that the request for information had been forwarded to the Office of the Mayor’s Communication Team.

During the Council meeting, Kama, chair of the Housing and Land Use Committee, said she had reservations about the background and track record of Pulelehua developer Paul Cheng.

Cheng’s needs for county funding have grown from an initial $18 million, which was set aside for Pulelehua in late 2022, Kama said. (In April, Department of Housing and Human Concerns Director Lori Tsuhako told council members that, as of that time, the County had reimbursed Cheng less than $400,000 in project costs because of unresolved “regulatory issues.”)

Now, as Cheng seeks additional funding from the County, the Council has been told in testimony that “the character of this particular individual is not somebody I’d take business with and is not somebody I’d like this County to do business with,” Kama said. “And that’s just who I am and how I roll, and I will be voting ‘no’ on this.”

Council Member Tamara Paltin defended Cheng, saying that it was the Council that took the initiative in working with him to get affordable homes and now rentals at Pulelehua, after the August wildfires that displaced 12,000 people, 80% of them renters. “We asked him to do this,” she said.

On the question of Cheng’s character, Paltin said, “we’re in a housing crisis.” And, of his past troubles, the developer made an incorrect appraisal, she said, and “he got charged,” and “it sold for what he appraised it anyway.” And, the situation was “kind of discriminatory,” she said.

According to an article published Dec. 22, 2016, Cheng, then identified as president and founder of Dallas-based USAI Investments, told The Maui News that he was “completely exonerated” of charges that he defrauded an institution in which he controlled $7.8 million in 1986.

Paltin said that, in the matter of funding for Pulelehua currently pending before Council members, there’s no issue of character because Cheng’s development company will be reimbursed for its work. “It’s not like, ‘Oh, we’re gonna give him $33 million.’ And then you can just run away with it. You know, there’s processes, protocols and procedures.”

The lack of available West Maui housing is the most desperate it has “ever, ever, ever [been] in the history of ever,” she said.

In another budget amendment, Council Member Tom Cook asked that the Police Department be allowed to shift $500,000 within its budget from Technical and Support Services to Investigative Support Services. That would enable the department to issue a request for proposals for a helicopter contract. The helicopter would enhance the county’s search-and-rescue capability, assist police with surveillance, decrease response time and allow for night-vision capabilities, he said.

Police Chief John Pelletier said the move will allow his department to get a head start in acquiring its first police helicopter. He said it was inspired, in part, by the Maui Fire Department’s after-action report for the Lahaina wildfire. The report calls for exploring the possibility of expanding an existing exclusive use contract, now with Windward Aviation, “to enhance aerial operation capabilities.”

Pelletier acknowledged that helicopters cannot fly in all conditions, such as the 80-mph winds that fanned the Lahaina firestorm. Annual costs are expected to be more than $2 million.

The after-action report says: “Firefighting aircraft may not be a panacea for wildfires, especially in extreme wind conditions. However, when conditions allow, aircraft can be instrumental in containing wildfires, especially with the use of foams and retardants.”

Windward Aviation holds an exclusive use contract with the County for the Fire Department’s use of Air 1 and a “call when needed contract” for additional helicopters.

The police helicopter will have a rescue hoist and will be designed around night vision software with thermal imaging, Pelletier said.

“The sooner we get certain components collected and assembled, the sooner we can move on this,” he said. “You can’t put these things in an existing helicopter because then you screw up their existing configurations.”

Cook’s budget amendment was supported unanimously.

Council members also agreed to budget funding for the County’s purchase of former Von Tempsky family property, 7.043 acres off of Lower Kula Road. The purchase price of the land is $950,000, plus applicable taxes and fees.

In other action, the Council approved on second and final reading land use measures for University of Hawaiʻi, Maui College’s plans for a new 3,300-square-foot classroom building at the Molokaʻi Education Center in Kaunakakai.

Bills 83 and 84 provide a district boundary amendment from agricultural to urban district and a change of zoning from interim to public/quasi-public, respectively, for 5.27 acres at 375 Kamehameha V Highway.

Earlier Tuesday, council members learned that the University of Hawaiʻi had shifted its budget priorities and would not be pursuing, at least not immediately, a new, $3.7 million classroom building that will allow about 100 additional students to attend classes. Plans call for a new storage building, a detention basin and improved grass parking, landscaping and an irrigation system.

The Council’s second and final reading for the budget is scheduled for June 5.

The fiscal 2025 budget goes into effect July 1.