Water and Infrastructure Committee Discusses Acquisition of Launiupoko and Olowalu Water Systems - July 27, 2026

The Water and Infrastructure Committee of the Maui County Council met on July 27, 2026, from 1:33 p.m. to 3:53 p.m. to discuss Resolution 26-116, which authorizes the acquisition of water system assets from Launiupoko Water Co., Inc. and Olowalu Water Company, Inc. for up to $6,000,000, exclusive of closing costs. The meeting was a discussion-only item (7B) with no legislative action taken. The Department of Water Supply presented detailed information on the assets, financials, and transition plans. Public testimony was supportive, and committee members posed extensive questions about pricing, infrastructure condition, regulatory approvals, and future expansion. The item was deferred to the Budget, Finance, and Economic Development Committee on August 4, 2026.

Public Comments & Testimony

• A South Lahaina resident expressed full support, noting the long-overdue public control of West Maui water systems. He hoped the county would eventually connect the systems for better fire suppression and drought resilience.
• A caller from Kahului (Jeff M.) supported the acquisition, citing it as a major reason for his vote, but noted difficulty accessing meeting materials from the Office of Council Services.
• Paele Kiokona spoke in full support, emphasizing that 77% of West Maui water systems are privately owned and that this acquisition is a step toward reclaiming a public trust resource and reducing speculative interests.
• A testifier from the audience (Jackie K.) expressed support but raised concerns about the purchase price exceeding the appraised value for Olowalu and urged the county to use the acquisition as an opportunity to stop environmental irresponsibility.
• James Langford supported the acquisition and suggested incorporating atmospheric water systems as a supplemental solution, urging collaboration with local tech innovators rather than outside disaster-capitalist firms.

Discussion Items

• Presentation by Deputy Director Landgraf: Detailed the assets of both systems. Launiupoko: 3 wells (692, 850, 749 ft deep), 2 tanks (400,000 and 50,000 gallons), ~14.5 miles of water main, 402 active connections, 276 million gallons produced in 2025. Purchase price $3.5M vs appraised $8.056M. Olowalu: portable system with 1 well, 79 customers, 52 million gallons; non-potable system with 2 shafts, stream diversion, 72 customers, 108 million gallons. Purchase price $2.5M vs appraised $1.987M (package deal). Post-closing obligations include transitional services ($46,500/month for Launiupoko, $53,600/month for Olowalu for 6 months) and capital improvements (fencing, relining, SCADA, etc. totaling ~$1.054M). Estimated annual operating costs: Launiupoko $879,664 with revenue $2.561M; Olowalu $671,554 with revenue $734,363. The closing timeline anticipates council approval by end of August 2026, PUC approval by March 2027, and escrow by April 2027.
• Pricing and Appraisal Discrepancy: Councilmember Batangan asked why Launiupoko's purchase price is significantly below appraisal while Olowalu's is above. Managing Director Lee explained that the two systems are sold as a package; the combined appraised value via investment approach is ~$10M, and the total acquisition cost plus post-closing obligations is below that. Additionally, the replacement cost approach for Olowalu values it higher than the purchase price.
• Liabilities and PUC Approval: Councilmembers Batangan and Sinenci clarified that the county is buying assets only, not the companies, so no existing liabilities or litigation are assumed. The PUC must approve the transfer; if denied, the purchase does not close. The county's operational and financial capacity should make approval straightforward, though rate changes for customers could be a concern.
• System Interconnection and Expansion: Deputy Director Landgraf confirmed plans to connect the Launiupoko and Olowalu systems with the county's West Maui system, increasing redundancy and resilience. No district-to-district restrictions apply within West Maui. The existing water use permits allow continued operation at current levels; expansion would require new CWRM water use permits.
• Infrastructure Condition: Questions about aging pipes, tank liners, and underground assets. The department inspected above-ground components and records and believes the systems are well-maintained. CCTV of pipes was not feasible due to live service. Tanks were relined recently (Peak in 2024, Snake in 2023). Backup generators exist only for Launiupoko.
• Rate Comparison and Revenue Estimates: Current private rates are lower than county rates for low usage but higher for high usage. The transition to county rates may increase bills for some customers, which will be addressed in the PUC process. Revenue estimates used May–June 2026 consumption data and did not account for potential rate-induced demand reduction.
• Easements and Land Ownership: The county will acquire easements for water lines and small parcels for wells/tanks, not underlying land. Councilmembers Lee and Cook asked about title risks and the ability to subdivide or expand facilities. Corporation Counsel noted that clear title evidence will be required and that right-of-first-refusal provisions can be included in easement agreements.
• CWRM and Sustainability: Councilmember Rollins-Fernandez noted that sustainable yield (7 MGD for Launiupoko, 2 MGD for Olowalu) does not mean the county should extract up to that limit; climate change and cultural uses must be considered. The department confirmed that current pumping is well within existing permits (Launiupoko ~1 MGD, Olowalu ~0.7 MGD for portable).
• Olowalu Fire Station: Councilmember Sugimura raised concern that activating the new fire station might require a new water use permit and delay. Corporation Counsel said the fire station is a building permit matter and the water needed is already anticipated under existing uses, but the department agreed to clarify the limits with CWRM.

Key Outcomes

• No votes were taken; the committee held a discussion-only session (Rule 7(B)). The item was deferred to the Budget, Finance, and Economic Development Committee meeting on August 4, 2026.
• Follow-up questions were identified, including: clarifying the expansion potential under existing pumping permits (especially for the Olowalu fire station and additional homes), obtaining CWRM guidance on when new use permits are needed, and verifying title and easement details.
• Next steps: Staff will provide responses to questions by August 4. If the BFED committee and full council approve, the county will proceed with PUC review and closing by April 2027.