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EMBARGOED UNTIL 10:00AM ON FEBRUARY 25, 2011

STATE OF THE COUNTY 2011

Mayor Alan M. Arakawa

Thank you attorney Luna for that introduction.And good morning and welcome honorable council members, our friends from the statelegislature, county directors and deputies and other distinguished guests.It has been a busy two months in office.So far there have been floods in Kihei and Maalaea, rockslides on the pali, a ban on plasticbags and a push for a major film production studio.

And that was just January.By the way, now would be a good time to give a hand to our Public Works personnel for alltheir hard work during the floods. (Applause)But now the work continues. And we have a lot of it.As you know our government no longer has the money, to be all things to all people.We must prioritize and decide what our most vital functions are.This is a difficult task, as everything seems vital for those in need.Our neighbors are being kicked out of their homes. Bankruptcies, foreclosures and evictionsare taking place in almost every community in the county.Small businesses continue to struggle, many of them mortgaging their homes in order tokeep operating.But sometimes even that isnt enough.On that note if you havent been to Kuau Mart yet you have until the end of the month

before the Nomura family closes their doors for good.Our infrastructure is in need of repair which means higher utility bills.Your water bill is going up this year and most likely so will your sewer fees.And there are many more projects, items and areas which cannot afford to be neglected anylonger.

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We have no choice in the matter. Its either we take care of things now or pay a huge pricelater.For example, we must address employee benefits, costs of which keep rising year after year.

Right now the county is paying $20 million a year to make up the deficit of these benefitpackages.The only way to counter this is to eventually reduce the size of government through naturalattrition.This means as county employees leave or retire their positions will come under review andmay not be filled.These are tough decisions to make, but these are tough times and they have to be made.Especially since our main economic engine, the visitor industry, has still not returned to full

strength.Although visitor numbers are up they are somewhat deceiving.The hotel industry has had to offer what they call deep discounts to get visitors back to ourislands.This means hotels arent making as much money as they used to, which has a trickle downeffect for the community.Its one of the reasons why hotel workers who were let go back in 2008 still have not been

rehired and remain unemployed.This is why tourism can not be our only economic engine.And do I even need to mention gas prices? They are projected to hit five dollars a gallonnationwide by next year.Depending on what happens in the Middle East it may be sooner.Of course, expect prices to be even higher here.

So yes, things seem bleak for Maui County right now.But . . . it is always darkest before the dawn.We have problems but we do not face them alone. We will face them together.Together our community, the council and this administration are bringing the county back toprosperity.

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Already we have taken the first steps.First we have asked the county council for the funds we need to end furlough Fridays.The county is no longer in a situation where we need furlough days and it has for too long

limited the publics access to our services.Our analysis has shown that we are not saving as much money as was once thought.For example a water department employee who is unable to fix a pipe on a furlough Fridayis paid much more in overtime to get the job done on the weekend.Its time to get our county employees back to work and serving the public.I am also happy to announce that our Permit Process Improvement Team has alreadyimplemented some much needed changes. Those in the construction industry have told meits easier to get things through the system now.

Just ask Marriott Hotel officials, who are finally going forward with their airport hotelproject that has been on hold for more than 10 years.Groundbreaking for the airport hotel should start within the next few months.Or ask Maui Beach Hotel officials who are now planning to add a new wing.Faster permits means more construction work which means more jobs. Its that simple.Were also bringing back the events which bring businesses to Maui County.

The Professional Windsurfing Association will be crowing its world champions at HookipaPark this fall, bringing with it visitors from around the globe.Other events which we are working to bring back include A Taste of Lahaina and FrontStreet Halloween celebrations. These are events which if done correctly, will give visitors areason to come back.We also recognize the challenges facing our communities and are helping out our smalltowns in big ways.

On Molokai the county is helping to get rid of more than three thousand abandonedvehicles.Besides being an eyesore these vehicles are dangerous as potential fire hazards andenvironmental threats due to chemicals leaking into the soil.We are also finalizing an agreement with Alexander and Baldwin so that the county can takeover the Paia bypass road.

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Our goal is to keep the road open as long as possible on a daily basis so that traffic is notbacked up to all the way to Spreckelsville anymore.And were putting up highway signs to let tourists know where to find Makawao.

We know where it is, tourists don't.Makawao is a great town with a lot to offer and we want to make it easy for visitors to spendtheir money there.In Central, West and South Maui were working on more affordable housing projects. TheKaiwahine Village in Kihei and the Hale Mua subdivision in Waihee to name a couple.And in a year or two we expect to be breaking ground on Mauis first real park system. Weretalking about more than 300 acres of total park space in the Maui Lani area.This Central Maui Park will rival any park in the state, including Kapiolani Park on Oahu.

I sincerely thank our county council and our state legislators especially Senate PresidentShan Tsutsui for their support of this project and helping to make this Central Maui Parkbecome a reality.We also thank President Tsutsui, Senator Roz Baker, and Representatives Mele Carroll,Angus McKelvey, and Gil Keith-Agaran for their ongoing leadership efforts to bring a truefull production film studio to Maui.And as part of our commitment to the environment, by the end of the year you should beseeing solar panels appearing on County facilities.

By doing this we believe we can lower our own electricity costs and stimulate several milliondollars in local construction work.This year we are going to start curbside pickup of recyclable goods in the Maui Meadowsarea.We plan to expand this service to all of Maui County as soon as possible.And finally . . . lets talk about water meters.I can give out water meters right now, but not in any sort of way that would be fair to all the

people waiting on the upcountry water meter list.To address this we have initiated an internal engineering analysis to identify the costsnecessary to upgrade the piping system required.This way we will know how much it will cost to put in every meter. It is only after we obtainthat crucial piece of information that we can figure out how to get water to people who needit, and in what amount.

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After all, what good is a five-eighths inch water meter when youre trying to develop a 10acre farm?Also at some point we will have to answer some hard questions about who should pay forwhat in this water system.

Maui has the water, now we need the method.All of these endeavors we believe will make Maui County a better place. Not just for us butfor our children and their children.As Albert Einstein once said, Learn from yesterday, live for today, hope for the future.For hope is what keeps us going.Its not just a word but a feeling, an unshakeable belief that better days are upon us.

I hope that you will all join me in making Maui County a prosperous place once again.For I truly believe this is the best community in the world, not just because of its beauty butbecause of its people.It is people who are Maui Countys greatest resource. If you want to talk about a clean andnatural source of alternative energy its right here in this community.So let us tap into that energy and do great things together.Thank you for allowing me to serve the you once again.

Aloha and God bless.