Testimony: MPO meeting Re: Irregularities and impacts of uncollected 3-Lot-or-Less Infrastructure Deferral Agreements

For over 40 years Maui’s Corporation Counsel wrote 3-Lot-or-Less infrastructure Deferral Agreements that allowed developers to delay roadway improvements and environmental protections until such time as they could be charged a prorated share of what the County spent at some future date when they initiated a CIP on the associated frontage.

Problems arose and persist to this day because Corp Counsel did nothing to ensure the agreements were tracked for a CIP to trigger collection, nor did they ever create any mechanism or formula to actually collect on what developers owe. To this day, the Dept of Finance has no bank account set up to receive funds collected from any of the thousands of agreements that Corporation Counsel wrote.

Crafty developers and their lawyers linked their deferral agreements to their SMA permits to forever avoid performing roadway improvements and environmental protections that were specifically conditioned in their SMA permits.

By law, a 3-Lot-or-Less Deferral Agreement was to have been a one-time event for a parcel, but knowing that no County agency was tracking them, abusive developers and their lawyers created successive layers of 3-Lot subdivisions and agreements, turning three lots into five, and then seven, nine, and more, to intentionally violate the County’s 4-Lot ordinance that mandates that all subdivisions of four or more lots MUST perform all their roadway improvements with no deferrals allowed.

Collecting on these agreements represents tens, if not hundreds of millions of dollars of recovery to the County but because of professional liabilities over their negligent administration of these agreements and to protect developers who grossly abused them, corporation counsel continues to block any and all efforts to resolve them, including blocking a forensic audit the County’s Independent Auditor agreed to perform at the County Council’s request over four years ago, to asses and create a formula for collection on them.

My extensively researched affidavit on the deferral agreement is below.

Also is an affidavit from Former Council Member and Transportation Director JoAnne Johnson Winer from 2015 titled: Administrative Abuse of SMA Permits & Deferral Agreements

A video of the 45-minute expert witness presentation on these agreements that I was asked to give to the County Council’s Infrastructure Committee in 2018 can be viewed at https://mauicauses.org/maui-causes-show-64

Here is link to a 2013 MauiTime Weekly article titled “Wondering if the County of Maui Will Ever Clean Up the Mess Known as
Deferral Agreements and Collect the Unpaid Debts Owed to Taxpayers” which chronicles what happened after Maui resident Chris Salem discovered and blew the whistle on these previously-hidden, heavily-abused, uncollected agreements.

Ten years later, because of Corporation Counsel’s obstruction, there has been no recovery of tens, if not hundreds of millions of dollars for projects that you are currently overseeing.

As this committee is deeply affected by this debacle, I implore you to raise yet another red flag in the Administration and the Community to demand this significant financial benefit to the County finally gets resolved and collected.

Respectfully submitted:
Sam Small, Exec Director, Maui Causes
(973) 271-0788


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