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Tuesday, November 21, 2023
DOBOR: We Knew Surf School Bidding Was Rigged
By News Release @ 5:35 PM :: 2192 Views :: Hawaii County , Ethics, Small Business

‘It’s a huge punch in the gut’: Surf school lottery ends with three of four permits awarded to one owner

HTH: … The first four numbers drawn were to receive the coveted spots, with the rest being put on a wait list in case the winners were not able to complete the permit process with the county and state by the Dec. 4 deadline.

Underwood said this was the first time a lottery system for awarding permits has been used at DOBOR.

After the drawing, it was learned that three of the four winning entries, Hinaea Iliahi LLC, Kauakea LLC and Kona Town Adventures LLC were all owned by the same individual, Wesley Moore.

In all, Moore submitted eight LLC companies to compete in the lottery. The other winner was Kahalu‘u Bay Surf and Sea.

That left the remaining 7 surf school operators in disbelief, especially since there is no appeal process in place for the lottery.

“I’m still trying to process how this is legally followed, for an individual to have multiple entries unbeknownst to the rest of the companies,” said Tifani Stegehuis from Hawaii Lifeguard Surf Instructors. “The parameters of qualifications were vague and open to interpretation. The verbiage led to loopholes.”

“My business has been there for 23 years and three generations. With all due respect, liability falls on you guys for permit holders that will be out there who are hiring instructors who are not lifeguard certified. The state is saying to the public that they selected these people to be safe. It did not seem to be a well thought out process,” she told Underwood. “It’s a huge punch in the gut for being born and raised here.”

To qualify for the lottery, a school had to have a GET license, certificate of compliance from the Department of Taxation, be in good standing with DCCA and have liability insurance and documentation proving at least five years experience providing surfing instruction.

Underwood said they went to the Legislature to select the four permit holders based on seniority. HB 1090 made it through the legislature but was vetoed by Gov. Green.

(TRANSLATION: DOBOR purposefully screwed up the bidding in order to pressure Green and the legislature to reconsider legislation similar to HB1090.  DOBOR’s political act provides the basis for a bid challenge by losing bidders.)

Rep. Kirstin Kahaloa, whose district includes Kahalu‘u Beach, is dismayed by the process used by DLNR to select the permit holders….

read … ‘It’s a huge punch in the gut’: Surf school lottery ends with three of four permits awarded to one owner

PDF: Legislators Challenge DOBOR Surf School Bidding Procedures

  *   *   *   *   *

STATE BOATING DIVISION FOLLOWED THE RULES IN AWARD OF KAHULU‘U SURF PERMITS 

News Release from DOBOR, Nov 21, 2023

(HONOLULU) – Four surf instruction companies received permits last week in a lottery conducted by the DLNR Division of Boating and Ocean Recreation (DOBOR), for the right to operate in Kahalu‘u Bay on Hawai‘i Island.  

It is a step toward better management of large crowds of surfers and commercial instructors. Commercial surf instruction at the popular bay has been contentious for years because of unpermitted companies and overcrowding. 

DOBOR first adopted rules for the popular surf school spot, working in cooperation with the County of Hawai‘i, in 2016. At that time the county was going to select four commercial surf operators and the state would issue permits. The county had difficulty selecting four surf schools and asked the state to take over the process. An amendment of the rules in 2021 directed DOBOR to take on the responsibility of selecting operators and the only option for doing so under the rules, was to issue permits by lottery. 

In 2022, DOBOR sought to have the State Legislature amend the law. The division wanted to issue permits to companies with the longest standing and in order of seniority. House Bill 1090 was adopted, but the measure was vetoed by the Governor. 

After randomly choosing four companies it turned out three of them are owned by the same person. 

DOBOR Assistant Administrator Meghan Statts said, “We knew upfront there was the possibility a single firm, with distinct individual companies established under state statutes, could be awarded all four permits. Seventeen surf companies entered the lottery, and three permits did go to one company. Under the current rules and laws, as long as the companies were legally established there is nothing, we can do to avoid what seems unfair, especially to surf schools that were not selected during the lottery.” 

The division plans to introduce legislation again in 2024 to try and address the issue. The four permits issued are conditional, based on permittees gaining land access permits from the County of Hawai‘i. 

Statts added, “We realize that we could not please everyone, but we also realized we had to do something. We deemed the lottery as the fairest way to issue permits under the current rules and we did so after consultation with the Dept. of the Attorney General. These are one-year permits, so we encourage anyone who supports a rule change to contact their legislators.” 

The four lottery winners selected on Nov. 17, in order of selection are: 

Kauakea LLC 
Hinaea Iliahi LLC 
Kahulu‘u Bay Surf & Sea Inc. 
Kona Town Adventures LLC 

# # # 

RESOURCES

(All images/video courtesy: DLNR)  

HD video – Kahulu‘u Bay surf schools (Oct. 22, 2021)

Photographs – Kahulu‘u Bay surf schools (Oct. 22, 2021)

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