Honolulu Should Audit Hanauma Bay Fund, Repay Any Misused Cash
Charges that the city routinely — and perhaps illegally — misappropriated funds meant for Hanauma Bay demand immediate attention.
is one of the iconic places that defines Oahu both locally and internationally.
It deserves special protection and care.
But the non-profit group dedicated to conservation and stewardship of Hanauma Bay says the City and County of Honolulu is not only failing that obligation, it’s inappropriately using admission fees generated by the nature preserve’s more than 1 million annual visitors for other purposes.
As Civil Beat’s Nathan Eagle reported earlier this week, Friends of Hanauma Bay’s frustration has reached the point that the group sent a blistering letter via two of Honolulu’s leading trial lawyers to Mayor Kirk Caldwell.
They didn’t mince words.
“… there is an urgent need for the City and County to correct the continuing misuse of admissions fees paid by visitors to Hanauma Bay,” wrote attorneys Paul Alston of Alston, Hunt, Floyd & Ing and Michael Purpura of Carlsmith Ball. “The simple reality is that the City has intentionally, and persistently, misused these funds in violation of court rulings. This situation is intolerable. It cannot continue.”
The group’s beef concerns the Hanauma Bay Nature Preserve Fund, established 20 years ago to support the reserve’s operations and education programs and fund environmental studies of the bay. When non-residents visit Hanauma Bay (residents get in free), admission charges, snorkeling equipment rentals and parking fees are all supposed to go into the fund.
Only six years after the fund was established, it was already the subject of controversy over inappropriate spending. A judge ordered the city to reimburse the fund for $3.2 million in inappropriate expenditures and keep any fund surpluses for future expenses rather than using them for other matters.
Skimming Interest, Diverting Funds
That was 2002. In the 14 years since — including four years under Caldwell’s leadership — the city has hardly abided by the intent or letter of the judge’s order, according to Friends of Hanauma Bay. It claims the city:
- Took interest earnings from the fund and used the money for other purposes;
- Paid employees at other parks with fund monies — $324,000 in fiscal year 2015 alone;
- Paid for trash collection and maintenance supplies for comfort stations at other parks;
- Bought two ocean safety vehicles worth a total of nearly $60,000 for another park;
- Overcharged the fund for interest on general obligation bonds apportioned to the park for more than $1 million;
- Diverted interest from the fund to the tune of $600,000 from 2004 and 2014.
Some of the allegations concern actions that would violate city ordinances. And many of the misdeeds are alleged to have taken place under the Caldwell administration.
It was disappointing to see the administration’s response to Eagle’s inquiry over the Friends of Hanauma Bay’s charges.
“Many of the concerns in the letter relate to issues that occurred in past decades and must be further researched,” Andrew Pereira, Caldwell’s spokesman, said in an email. “The city continues to work toward preserving the Hanauma Bay Nature Preserve for future generations and appreciates the efforts of all concerned.”
Friends of Hanauma Bay have given the mayor until Oct. 10 to respond affirmatively, “or we will pursue steps to enforce the earlier court orders.”
We all should hope — not only as fans of this amazing park, but as taxpayers — that the city is taking its response to the Friends of Hanauma Bay more seriously than that statement would indicate. Real legal matters are involved here, as well as significant sums of money.
Friends of Hanauma Bay is making two reasonable demands. First, that the city immediately audit the Hanauma Bay Nature Preserve Fund to identify any misused funds and agree to have independent audits of the fund every year for the next decade to ensure no further abuses take place. Second, the city must repay all misused funds with interest equal to what it pays on its general obligation bonds.
Will the city comply? We have our doubts. Only two weeks ago, we editorialized on a city matter where the legal issues seemed similarly clear — the seizure and destruction of belongings from homeless folks caught in enforcement of the city’s stored property and sidewalk nuisance ordinances.
In that class-action matter, the city delayed while the bill mushroomed from an initial $48,500 settlement to what may ultimately exceed $821,000 in legal fees, expense reimbursements and more. It bears noting that the plaintiffs in that matter were represented in part by Alston Hunt Floyd & Ing.
Friends of Hanauma Bay have given the mayor until Oct. 10 to respond affirmatively, “or we will pursue steps to enforce the earlier court orders. We hope that will not be necessary.”
So do we, and we’re betting Honolulu taxpayers feel the same way.
