Honolulu officials have yet to fully address allegations — including misuse of funds —involving Hanauma Bay Nature Preserve despite assurances from bureaucrats and a federal court order, according to the leaders of a nonprofit group that advocates for the preserve.

Lawyers for the Friends of Hanauma Bay sent a letter to Mayor Kirk Caldwell in September complaining that the city has “intentionally and persistently” misused admission fees paid by visitors to the bay.

The fees, along with proceeds from parking and snorkel equipment rentals, go into the Hanauma Bay Nature Preserve Fund, which was created in 1996 to provide for the bay’s operation and maintenance, education and orientation programs for visitors and environmental studies of the preserve.

Leftover funds could also be put toward two nearby facilities, the Koko Head Rifle Range and the Koko Crater Botanical Garden.

dead tourist snorkeling hanauma bay
The city’s management of fees paid mostly by visitors to Hanauma Bay continues to draw the ire of a nonprofit group connected to the nature preserve. Marina Riker/Civil Beat/2015

Paul Aoki, first deputy in the city’s Department of Corporation Counsel, responded last month at the mayor’s direction, saying the city has addressed “all or almost all” of the issues raised by the nonprofit when it comes to management of the bay and the fund.

The city even agreed to one of the group’s biggest demands — an independent financial audit of the fund.

That will happen after the city decides on the “parameters for an audit,” said Nelson Koyanagi, director of the Department of Budget and Fiscal Services.

But the Friends of Hanauma Bay, headed by Lisa Bishop, is not satisfied.

In its latest letter to the city, the group acknowledges actions the city has taken but stated, “these steps have not resulted in a collaboration that fully meets the needs of Hanauma Bay.”

“We appreciate the City’s apparently new-found willingness to improve procedures. In particular, an independent financial audit is an absolute necessity,” the Friends of Hanauma Bay stated in the letter.

But the nonprofit laid out more than two dozen lingering issues, including references to past proposals for audits that never happened and suggestions for how to proceed.

The group says the city has still not addressed the allocation of administration salaries, repaid funds that were diverted for other purposes, made timely repairs at the bay, developed a forward-looking management plan or improved budget transparency.

The Friends of Hanauma Bay suggested an “ideal end game” that involves running the bay as a public-private partnership and placing its management under the control of the Department of Enterprise Services instead of the Department of Parks and Recreation. Enterprise Services manages the zoo and golf courses.

Aoki said the city is willing to consider changes in its procedures, but will hold off on taking up the group’s other demands until the results of the audit are available.

Many of the problems existed prior to Caldwell taking office in 2012, including during the terms of mayors Peter Carlisle, Mufi Hannemann and Jeremy Harris.

Hanauma Bay.
Hanauma Bay is one of Oahu’s top attractions for visitors and residents. Nathan Eagle/Civil Beat

In 2002, a judge found the money was being misused and ordered the city to keep any surplus in the fund to offset any future deficits at the bay and to refund nearly $3.2 million that had been used for other purposes in prior years.

But over the past decade, the Friends of Hanauma Bay said the city has used the fund to buy vehicles for lifeguards at other parks, skimmed the interest from the fund and put it toward other uses, and paid employees to work at other parks out of the fund.

The city’s operating budget for fiscal 2017, which started July 1, shows the fund balance at $7.5 million, minus an inter-fund transfer of $1.9 million. The city budgeted $1.2 million for capital improvement projects at the bay.

The bay is considered a world-class destination for snorkeling, especially for tourists.

The Friends of Hanauma Bay has fought plans that could increase the amount of visitors to the bay, which remains the most common place for them to drown in Hawaii.

Read the letters between the city and the Friends of Hanauma Bay below.

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