Footnotes/More Detail: Chapter 13-234 Rules Package Proposal Testimony



Item # 1: The appraisal upon which Chapter 13-234 fee increase packet is based is not an "independent appraisal", as prescribed by Hawaii statute, and is therefore illegal for use in this context.  Further, this appraisal has disqualified itself, in its entirety, because of the disturbing frequency of fundamental errors within the document on top of a structure of invalid assumptions. To wit:

1.) The appraiser relied entirely on data provided by DOBOR disqualifying it as an "independent appraisal,” as prescribed by the Hawaii State Legislature, making this document illegal for use in this context.

2.) The appraisal is based on an assumption that the State’s public harbor system has been the recipient of an "average management" scenario – something which is sadly untrue as the harbor system has been so mismanaged as to be a shambles.

3.) By the appraiser’s own admission, the findings relied on conditions described by DOBOR that were inconsistent with, and universally superior to, those actually observed by the appraiser(s).

4.) The appraisal assumes that the vessel owner and DOBOR enter into rental agreements in a free and open market and both parties are free of coercion.  In actual fact, a boat owner either pays the new exorbitant fees -- however randomly generated -- or faces loss of his vessel through state confiscation, the very definition of coercion (not an uncommon theme in DoBOR’s management scheme).

5) Simple things like slip counts in public harbors were incorrect.  For example, there are approximately 152 slips at Keehi Harbor.  The appraisal claims 284.  Even if one includes the non-existent 500 pier and the condemned 400 pier, there are still fewer than 225.

6) The appraisal uses $45,500 (a number given to them by DOBOR) as a base replacement cost for the 200+/- offshore moorings in Keehi Small Boat Harbor.  Then the appraiser uses that replacement cost to calculate the "fair market rent" for each.  However, Underwood’s own "deferred maintenance" lists replacement of the existing moorings at $11,500 each (1/4 of the appraiser’s replacement cost).

7) Even information as simple as minor math calculations within the appraisal document are incorrect.  For example, 12 + 12 does NOT equal 12.

8) The appraiser further bases the fair market rent for a given slip on decades-old matrices created by DOBOR without regard to the accuracy or completeness of those matrices.  It further relies on Kewalo Basin (current slip rent: $21.50/ft) which is now a private marina with a significant commercial presence, as well as Ko'Olina, which has almost NO comparison to ANY State harbor.  Even the two actual marinas they DO list in their comparison offer more amenities and cost LESS than the $13/ft proposed by the appraiser.


Item # 2:  Chapter 13-234-10, electrical fee increase proposal for non-metered electrical receptacles is patently illegal and invites the expense of litigation: 

1) Electrical power consumption cannot legally be based on an appraisal (assuming the appraisal was legal and valid), as electrical power usage is based on consumption and not location;

2) The electrical fee increase proposal is based on zero discernible basis-in-fact, as confirmed by Ed Underwood himself in our discussion with him and other DoBOR representatives. The numbers represented in this section were pulled from thin air -- contrived, arbitrary and capricious and do not represent real-world consumption statistics (DoBOR confirmed this when it recently arbitrarily changed the numbers and conditions in the current version of Chapter 13-234);

3) The only fair way to assess tenants for power usage Is by noting, through inspection, the use of major appliances on a vessel, and then assessing accordingly; 

4) There are two groups of tenants, that we know of, that have formed for the purpose filing a class-action lawsuit to challenge 13-234-10 in its current form.


Item # 3:  Chapter 13-234 charges fees for non-existent services and phantom facilities.  Chapter 13-234 makes fraudulent claims that establish a basis for legal challenges.

1) 13-234-4, Offshore Mooring rates; mooring and anchoring away from harbor environments:  Note to reader: there are no facilities available for vessels anchored offshore on their own anchor in Hawaiian waters.

2) 13-234-8, Stay-aboard or principal habitation fee: Note to reader:  a harbor tenant with a liveaboard permit does NOT receive additional services or have access to facilities that non-liveaboards do not have access to.

3) 13-234-9, Stay-aboard or principal habitation fee for offshore mooring or anchoring: any mariner staying aboard his or her vessel anchored offshore on their own tackle receives no more privilege than does someone who is not staying aboard.

4) DoCARE Security in the Public harbor system is non-existent:  The DLNR would have those not familiar with the public harbor system believe that it provides a security presence in their harbors.  Not only does the DLNR NOT provide security in its harbors, DoCARE, the DLNR’s security division, is currently under investigation by the Attorney General’s office for dereliction of duty and is barely able to provide security for its own building.

There are many other examples, the above should suffice.


Item # 4:  A disturbing succession of internally generated DoBOR judgment errors, some of which with legally questionable processes, cost the Special Boating Fund $100s of thousands of dollars over the past couple of years.  Why are recreational boat owners being asked to pay for these internal Agency errors?

1)  Literally hundreds of slips throughout the harbor system go unrented, month after month, sometimes for years, costing the Special Boating Fund $100s of thousands of dollars in lost revenue every single year.

2)  In a most recent example, the 82-foot, 149 passenger cruise ship, Navatek II, a vessel already known to be derelict while moored in the DOT’s commercial Honolulu Harbor, was admitted into the State’s public recreational harbor system via a backdoor transaction between Ed Underwood and the owner of that vessel (recently confirmed by the DLNR’s communications department), instantly costing the Special Boating Fund $10s of thousands of dollars – and possibly as much as six figures when all is said and done. 

3) Recreational boaters using the public harbor system are now being asked to pay Navatek II’s bill, partially through these fee increases.

4) There are multiple examples of a pattern of destructive Agency-internal error -- too many to list here -- and some representing not only financial loss for the Special Boating Fund, but also, in some cases, creating a hazardous environmental condition that has threatened the health and safety of nearby tourist populations and tenants within the Ala Wai Small Boat harbor.

5) DoBOR’s hiring of a contractor, Coconut Wireless, that turned out not to be qualified to do the electrical work necessary on the 800-row pier at the Ala Wai Small Boat Harbor has cost the Special Boating Fund nearly $100,000.  Recreational boaters are now being asked to pay for this deficit, partially with proposed fee increases. Why? This was an internal error committed by DoBOR itself.


Item # 7:  We have, in our possession, an e-letter from the Attorney General's office, stating that its deputy attorneys general did NOT possess the depth of knowledge needed to properly assess Chapter 13-234 for all of its inherent legal inconsistencies, and that they did not bring in a consultant to help with the interpretation.