"Basically, we're at the crossroads," Machado said.
A public hearing before the state Commission on Water Resource Management is scheduled tonight to discuss Molokai Ranch's proposal to drill a well in southeast Molokai, at Kamiloloa.
The meeting starts at 6 p.m. at the Mitchell Pauole Center in Kaunakakai.
Some native Hawaiians view Molokai Ranch's plans to drill a well in southeast Molokai as the beginning of a march eastward to take water from the springs and rivers of east Molokai.
But while residents want to maintain their rural lifestyle, they also need jobs. Molokai's unemployment rate was 10.3 percent in 1995, compared with 6.9 percent for Maui County. Roughly 1,109 Molokai residents, or 16 percent of the island's population, received welfare benefits, compared with 3 percent statewide.
Mayor Linda Crockett Lingle, noting the need for economic activity, supports the ranch's proposal.
"I believe it is safe to say that economic development efforts are essential for the well-being of this community," Lingle said in a letter to the commission.
The ranch says it needs to drill the well at Kamiloloa to provide water for new developments, including its commercial activities at Maunaloa and Palaau.
"We believe it is vital for the economic development of the entire island," said Duncan Annandale, the ranch's operations manager.
The ranch has proposed pumping up to 1.2 million gallons a day.
The commission estimates Kamiloloa has a sustainable yield of 3 million gallons a day. But some residents are skeptical of the state's estimates in view of changes in a previous estimate of sustainable yield at Kualapuu in central Molokai.
The commission estimated the sustainable yield at 7 million gallons a day at Kualapuu. Now, it is poised to adjust the figure to 5 million gallons a day.
The commission has already allocated more than 5 million gallons to the county, Hawaiian homesteaders and other private users at Kualapuu.
Native Hawaiians point out that, according to a U.S. Geological Survey, withdrawal of groundwater from Kamiloloa will cause water levels to decline at Kualapuu.
Hawaiian Homes Commission Chairman Kali Watson said the U.S. Geological Survey should conduct pump tests at Kamiloloa before allocating water.
Watson said protecting the Kualapuu source is important because it will provide for a 124-lot homestead development at Kalamaula and 84 lots at Hoolehua.
The battle for water has spilled into other arenas as well.
The Molokai Planning Commission last week recommended against rezoning land for the ranch's proposal to develop a 29.2-acre commercial project at Maunaloa, including a 62-room lodge.
The commission cited the limited water supply at Kualapuu as a reason for the recommendation.
"I'm not against opening Molokai to the 21st century," said commission Chairman Wren Wescoatt. "But I want to make sure the resident who has a family and contributes to the community isn't blown out the back door."