Governor Linda Linda on November 24, 2008 approved administrative rules for the Kewalo Basin harbor.  The rules are necessary for Hawaii Community Development Authority (HCDA) to manage the harbor because the Department of Transportation intends to transfer the management of Kewalo Basin to HCDA in early 2009.  The rules, regulations, charges and fees for Kewalo Basin will govern the use and operation of Kewalo Basin under HCDA.  These rules, which were drafted with extensive stakeholder input, are considered necessary and desirable to facilitate the public’s use and enjoyment of Kewalo Basin.  The rules defined permissible activities regulate operations within the harbor and set forth procedures for obtaining leases and related fees.

Click here for Administrative Rules for Kewalo Basin

Background:
Since December 2005, HCDA has met with various stakeholder groups to draft the proposed rules.  Public hearings on the proposed Kewalo Basin rules were held on March 7 and August 7, 2007.  Members of the Hawaii Community Development Authority (HCDA) on November 5, 2008 adopted the proposed administrative rules for Kewalo Basin.

The Small Business Regulatory Review Board (SBRRB) on July 16 voted unanimously to recommend that Governor Linda Lingle approve proposed administrative rules for Kewalo Basin, should they be adopted by the Hawaii Community Development Authority (HCDA) and submitted for her approval.  The SBRRB’s action followed a presentation by HCDA Executive Director Anthony Ching that provided an update on the results of HCDA’s ongoing efforts to re-engage Kewalo Basin users and stakeholders to prepare for the transition of management for Kewalo Basin from the Department of Transportation (DOT) to HCDA. The SBRRB will also recommend that the Governor transfer $4.5 million for Kewalo Basin harbor improvements from the DOT Special Fund to the HCDA budget.

In anticipation of the transition of Kewalo Basin, HCDA recently three meetings with the existing harbor stakeholders in May and June 2008 to discuss and obtain feedback on: the needs and problems faced by Kewalo Basin users, the repairs and improvements that need to be made to enhance the safety and use of the harbor facilities, and on proposed administrative rules that will govern the management and day-to-day operations of Kewalo Basin, once the transition takes place.  The invitation list for these meetings included all existing Kewalo Basin tour and charter fishing operators, commercial fishermen, and other interested parties.

The proposed rules will govern the use and operation of Kewalo Basin, define permissible activities, and establish an updated rate schedule.  The proposed rules were the subject last year of extensive stakeholder comment and reflect the priority of preserving the use of the harbor for existing commercial fishermen, tour and charter boat operators, while enabling fiscally responsible operation.  The Kewalo Basin rules and rate schedule were last revised by the DOT in 1996.

At the September 3, 2008 Authority meeting, the HCDA members deferred taking action on the proposed rules in favor of forming a sub-committee to review the rules and possible issues raised by public and member comments at the meeting.  The sub-committee, which submitted its report to the Authority at its October 2, 2008 meeting, recommended adoption of the proposed rules with a few changes relating to the discretion afforded the HCDA Executive Director; the use of a one page permit form; and data collection on future demand for berths in Kewalo Basin after the proposed repair project is completed.

HCDA has identified six principles that will guide HCDA’s management and activities at Kewalo Basin.

• HCDA supports existing commercial harbor activities at Kewalo Basin.  HCDA acknowledges the industry wide economic and a regulatory pressure faced by the commercial fishermen, charter fishing fleets, and tour operators, and has identified, with input from the stakeholders, issues affecting the future operation of Kewalo Basin.  HCDA will work with stakeholders to make sure that Kewalo Basin remains a viable commercial harbor asset for the State of Hawaii and Kewalo Basin will continue to be operated with the inclusion of commercial boats in the foreseeable future. 

• HCDA recognizes the need for repair and proper maintenance of Kewalo Basin facilities.  HCDA has established, with the participation of stakeholders, a priority list of needed improvements. At the top of the list are: repair, renovation and extension of Piers B and C and related electrical and security enhancements; demolition of Pier D (Herringbone Pier).  Other top priority projects include: improving pedestrian/vehicular access and ingress/egress to the harbor; fuel dock; restrooms; convenience/bait shop; the possible relocation of the fish auction back to Kewalo Basin; and enhanced harbor security program.

• HCDA is committed to making needed improvements to Kewalo Basin.  HCDA will develop a business plan to determine how these projects can be accomplished with expected revenues and available financing.  Working with an advisory group comprised of existing permittee and industry experts, HCDA has proposed to advance $4.9 million from the HCDA revolving fund to start construction on the first priority projects.  These funds would have to be repaid over a term of 25 years with interest, similar to what might have otherwise been earned by HCDA.

• An increase in fees is needed to support maintenance and improvements of Kewalo Basin.  There has been no increase in the fees paid by Kewalo Basin permittees for 12 years.  At the suggestion of existing stakeholders, a two-tiered rate schedule is proposed by HCDA.  Under this schedule, existing permittees occupying front row slips or piers that are not slated for repair will have an increase in fees which is one half of the rise in the consumer price index over the last 12 years.  Existing and new permittes who elect to occupy any improved slips at the renovated piers will pay a second tier fee.

•  An experienced harbor manager will be retained.  HCDA is committed to employing a qualified and experienced management entity to serve as HCDA’s harbor agent.  This agent will be secured through a competitive bid process and HCDA estimates that the cost for this service will not exceed equivalent costs currently incurred by the DOT.

• New rules are needed to assure proper operation and management of Kewalo Basin.  The new rules are needed for HCDA to carry out its responsibilities upon the date that the DOT relinquishes its control over the day-to-day operations of Kewalo Basin. The proposed rules are considered necessary and desirable to serve the unique needs of current and future tenants, facilitate the public’s use and enjoyment of Kewalo Basin, implement much needed repairs to the harbor, and facilitate the orderly transition of the harbor from the DOT.

“Kewalo Basin is the only commercial harbor of its kind in the State of Hawaii,” said Anthony Ching, Executive Director of HCDA.  “The harbor has been historically designed and operated as a commercial harbor serving as a safe haven for commercial fishermen, tour and excursion operators and the charter fleet.  The HCDA will operate this unique harbor on a priority basis for those purposes.”

HCDA has committed to the stakeholders that it will continue to work with them to finalize the transfer of jurisdiction of the Kewalo Basin harbor and also seek their input in prioritizing the capital improvements to make necessary maintenance and harbor enhancements.   HCDA will schedule follow-up meeting with Kewalo Basin stakeholders to further discuss transition matter in the coming months.

Click below for summaries of meetings conducted by HCDA with Kewalo Basin stakeholders on May 21, June 18, and June 30, 2008.

HCDA KEWALO BASIN COMMITTEE REPORT (Oct. 8, 2008) (Click here)

SUMMARY OF THE MAY 21, 2008 MEETING (Click here)

SUMMARY OF THE JUNE 18, 2008 MEETING (Click here)

SUMMARY OF THE JUNE 30, 2008 MEETING (click here)