Small users trapped in water permit net

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Photo of Jerry Ornellas

As the state Department of Land and Natural Resources responds to a court order that invalidated the way it handles revocable permits, some see a bleak future for small farmers and ranchers.

Among them are Jerry Ornellas, a lifelong farmer who is currently growing tropical fruit in Kapaa Homesteads.

For the past 16 years, he and others have been working to keep the East Kauai Water Users Cooperative viable, operating under year-to-year revocable permits. Now they are confronted with the daunting task of applying for a water lease.

“The regulatory burden is so heavy right now that there’s no way a small farmer can comply,” Ornellas said.

The cooperative is required to conduct an Environmental Assessment or Environmental Impact Statement; coordinate with the Division of Forestry and Wildlife to develop a watershed management plan; work with the Department of Hawaiian Home Lands to reserve water rights for current and future homestead needs, and possibly secure a Conservation District Use permit.

And that’s just to get to the point where the Board of Land and Natural Resources authorizes a public auction for the water lease.

“That’s the weird part of this,” Ornellas said. “You spend all this money, and others can bid at auction. If you lose the bid, do you get reimbursed? This applies to land leases, as well. There are a lot of people with revocable permits.”

But though the cooperative applied, it isn’t sure where it’s going to get the money to complete the required studies.

“We don’t have it,” Ornellas said. “We’re literally broke. And we don’t own the system. It belongs to the state. If I’m leasing a house and it has termites, it’s the landlord’s responsibility to take care of it.”

The ditches, flumes, intake valves and reservoirs that comprise the system were built between the late 1800s and 1930s to deliver water to the Lihue and Makee plantations. In authorizing the construction on public land, the Territorial Legislature retained ownership of the system, even though the plantations were required to maintain it.

In 2000, when Lihue Plantation announced its closure, the 15 to 25 ranchers and farmers who were also using the water sought to keep the system alive. They formed a cooperative, which was given its first one-year revocable permit in 2002. It’s been operating on single-year revocable permits ever since.

But the revocable permit process came under scrutiny after a Circuit Court judge ruled in January 2016 that the Board of Land and Natural Resources had violated state law by extending A&B’s revocable water permits on an annual basis from 2001 to 2014. Though activists clamored for an immediate revocation of all short-term permits, the 2016 Legislature passed a hotly contested bill that specified revocable permits can be held for no more than three consecutive years while the holder pursues a water lease.

“They [litigants] set their net for A&B,” Ornellas said. “But the makapili [small eye] net catches all the fish. So what are we? Collateral damage?”

Despite the three-year respite, Ornellas questions how many of the farmers and ranchers with revocable permits can afford to comply with the lease requirements. “I suspect some people are not even on a permit,” he said. “They’re in for a shock when the state catches up with them. And it will. It’s just going after the permit-holders first.”

Unless the state issues an exemption, or finances the studies required for the lease application, Ornellas thinks it will be difficult to for the cooperative to find the money. And that would be a loss not only for agriculture, but taxpayers. The state recently spent millions of dollars refurbishing the Wailua and Upper Kapahi reservoirs that supply the system. If the cooperative walked away, the full burden of maintaining the reservoirs would fall on the state.

The cooperative isn’t the only system at stake. Other users will be affected, Ornellas said. Though some may have the resources to secure a lease, many of the systems don’t have sufficient users to support the applications on their own.

Concerns about how small ranchers and farmers will meet their critical water needs comes as Gov. David Ige is calling for a doubling of local food production by 2020.

“If we lose the water, there goes farming,” Ornellas predicted.

Cooperative leaders hope to meet with DLNR to discuss the whole issue and see what their options are.

“We’re committed to this cooperative, so we’re hoping things can work out,” Ornellas said.