Maui Council votes 8-1 to authorize county acquisition of private water systems in Launiupoko and Olowalu

Maui County Council members authorized the Department of Water Supply Tuesday to spend up to $6 million to acquire two privately owned West Maui water systems. But the vote came only after more than 15 minutes of discussion to clarify what Council Vice Chair Yuki Lei Sugimura meant when she said the deal provided only “part of the story, but not all.”

Council Chair Alice Lee cast the lone “no” vote as the Council voted 8-1 to approve the purchase of water infrastructure assets—including wells, reservoirs, booster pumps, pipelines and easements—from the Launiupoko and Olowalu water companies.

Sugimura, who chairs the Council’s Budget, Finance and Economic Development Committee, first asked council members to adopt Committee Report 26-60, which details the terms of the water purchase agreement in Resolution 26-116. The deal includes water infrastructure assets and associated easement rights from the companies, listed in Exhibits A and B attached to the resolution.

On Aug. 4, Sugimura’s committee voted 7-1, with Lee dissenting then as well, to advance the proposal to the full Council for approval. Council Member Shane Sinenci was absent and excused from the committee vote. That vote followed a July 27 informational presentation from the Department of Water Supply before the Water and Infrastructure Committee, chaired by Council Member Tom Cook.

Confusion arose Tuesday over Sugimura’s own comments after she made the motion to approve the water deal.

“I’d like to say that this bill, what it does, is presents what the source is,” she said. “There’s more that we need to look at for a complete look at the purchase because complete water systems also involve source, transmission, storage, funding and administration. So we have part of the story, but not all.”

Lee asked if there was any further discussion, adding that she would request a roll call vote of all nine council members “because I’m going to vote no.”

Council Member Tamara Paltin, who holds the Council’s West Maui residency seat, then asked if “Member Sugimura could clarify what she was saying.”

Sugimura said: “Yeah, just that the water systems that are being proposed is a portion of the story, which I support because we are looking at more water sources, and a complete water system would involve transmission, storage, funding and administration.”

Water transmission lines are the large-diameter pipes that move high volumes of water over distance—the highways of a water system. Distribution lines are smaller pipes that branch off transmission lines, carrying lower volumes down to individual customers’ water meters—the neighborhood streets. It was that distinction—whether the Launiupoko-Olowalu deal includes the highways as well as the wells—that appeared to drive much of Tuesday’s absence of clarity.

Sugimura said she was simply describing, in her opinion, the “total package” a complete water system would need.

Lee quickly added: “And that’s precisely why I’m voting no. Anybody else, discussion?”

Paltin spoke up, tentatively. “This one has transmission, the one we’re voting on today,” she said. “If you’re talking about the MLP (Maui Land & Pineapple separate water acquisition) one, that one doesn’t have transmission.”

Lee asked Sugimura to explain her point. She said she was speaking in terms of “understanding what a full water system would require, and so I’m just trying to make a statement that this is, you know, part of the story, and there’s more to come.”

Paltin asked: “Can we get clarification that the one that we’re moving on today has transmission?”

Lee suggested a recess and asked that someone from the Department of Water Supply come before the Council to explain. A short time later, Deputy Director James “Kimo” Landgraf ran up three flights of stairs from the fifth-floor Water Department to the eighth-floor Council Chambers.

In the meantime, Council Member Keani Rawlins-Fernandez challenged Sugimura’s statement, calling it “wildly inaccurate” and unsupported by the record of the July 27 Water and Infrastructure Committee meeting. That included a presentation from Water Department officials on the proposed water system purchases, with PowerPoint slides listing the Launiupoko and Olowalu water system assets.

Rawlins-Fernandez rebuked Sugimura.

“I think it’s irresponsible to just, like, just make statements without having, like when there’s evidence of your statement being wrong; you cannot just, like, make statements like that as a council member. The information that you’re saying is countered on the [Water Department’s informational] slides.”

She pointed to the cost of all assets, “like, it’s right there on the presentation.”

Lee admonished Rawlins-Fernandez “to discuss only what your point of view is.”

“If you disagree with somebody, so be it,” she said. “OK, that person is entitled to her opinion.”

Seeing that Landgraf had entered the chambers, Lee said a recess wouldn’t be necessary to get his clarification on the matter.

But Rawlins-Fernandez wasn’t done.

“It’s fine to have opinions,” she said while Landgraf waited, “but when you’re making statements on like facts that can be proven otherwise”—a distinction, she said, between objective fact and opinion.

Sugimura turned to Landgraf and told him she had made a statement about what made up a complete water system: a water source, transmission lines, storage, funding and administration.

“So that’s the complete picture,” she said.

But before Landgraf could answer, Paltin told him she wanted confirmation whether the assets included water transmission lines. “That’s what we’re doing. We’re not just finding water,” she said.

“Well, it’s just the assets” of the companies, Landgraf said. “So, it’s the wells, the transmission line and the storage.” He went through the system assets generally, and said that, for operations, “we have gone over the operations with the current owners.”

“We do understand how it operates, and we will transition” through a six-month period that will include employee training, he said.

As for administrative costs, the Water Department doesn’t have all the details or a perfect number, “but we kind of know we will be OK,” Landgraf said.

The department reviewed the private companies’ revenue over two months, and “we’re pretty confident what is going to happen,” he said.

Lee asked whether the department has enough staff to operate the newly acquired water systems. Landgraf said current staff can cover the additional workload, although the department wants 10 additional positions—funded in the fiscal 2027 operating budget—”so that we just have a little bit in case something happens there, we can send someone there to stay there and work on it.”

Rawlins-Fernandez said the 10 personnel are included in this year’s county budget but won’t be filled until the county acquires the water systems. Otherwise, “that makes no sense,” she said. “As far as the timing goes, we wouldn’t do that [hire additional personnel without first acquiring the water system]. We would acquire the system, and then we would fill the positions to manage those systems.”

She went on to list the system assets for both Launiupoko and Olowalu systems, confirming with Landgraf that the systems’ infrastructure includes storage tanks, water transmission lines, booster pumps, a ditch system and two reservoirs, affectionately named Snake and Pig.

Rawlins-Fernandez said all that information was shared during last month’s Water Department presentation to the Water and Infrastructure Committee and “is available publicly for anyone to look at, including council members.”

“My opinion is that we should acquire this system . . . because I heard from the community on the west side that this is what they want,” she said. “I represent the people and not corporations, and I’m going to support what my community, what my voters are telling me to do.”

(The Council’s discussion and final decision-making is available for viewing on YouTube, starting at timestamp 1:29:15, 10:18 a.m., running to the final vote at 1:46:25, 10:35 a.m.)

The Launiupoko system serves 402 active connections, and the proposed purchase price is $3.5 million—well below its $8,056,000 appraised value. The Olowalu system, which includes separate potable and non-potable components, would cost the county $2.5 million, about $518,000 above its $1,978,000 appraised value.

Combined, the purchase would add about 480 potable customers and 72 non-potable customers to the county water system and transfer roughly 16 miles of potable water mains and 3 miles of non-potable mains into public ownership. County officials have said the two systems were negotiated together as a package deal worth roughly $10 million in combined investment value, or $4 million more than the $6 million negotiated purchase price.

The purchase is the second phase of a broader county effort, following a May memorandum of understanding with Maui Land & Pineapple Co. to acquire that company’s larger, unrelated West Maui water infrastructure.

Mayor Richard Bissen’s administration has said the combined effort would raise public ownership of West Maui’s drinking water systems from 45% to 93%. The administration has tied the acquisitions to freeing up water capacity for affordable housing, agriculture, emergency preparedness and Native Hawaiian cultural practices.

Bissen first announced the $6 million Launiupoko-Olowalu proposal on July 1.

County officials have previously said approval from the state Commission on Water Resource Management is not required for the acquisition itself but would be needed if the county later sought to expand water use beyond the sellers’ existing pumping permits. They have also said long-term plans include connecting the Launiupoko-Olowalu systems with the Lahaina water system to the north.

Even before the August 2023 wildfires, the Department of Water Supply was already struggling to meet the 5.6 million-gallon-per-day water demand of West Maui residents, resorts and businesses, Water Director John Stufflebean said in May 2024. The county met that demand “by pumping the wells in excess of their reliable capacity and by using stream flows that will ultimately need to be reduced to leave water in the streams,” he said.

Because Launiupoko and Olowalu water companies are regulated utilities, the sale itself requires state Public Utilities Commission approval—a process expected to take several months.

Public acquisition of the separate Launiupoko Irrigation Company’s non-potable water system is being handled by the Council’s Disaster Recovery, International Affairs and Planning Committee, chaired by Paltin. On Aug. 19, the committee met in a closed-door executive session with county attorneys to discuss the proposed acquisition of the company’s water infrastructure assets.

Later, legislative attorney Carla Nakata reported that discussion was limited to Maui’s long-term recovery operations as they relate to the acquisition of water assets. No action was taken.