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HomeMy WebLinkAboutBOR Minutes 5.9.11 COUNTY OF KAUAI Minutes of Meeting OPEN SESSION APPROVED 7/11/11 Board/Committee: BOARD OF REVIEW Meeting Date May 9, 2011 Location Meeting Room 2, Moikeha Building Start of Session: 1:00 p.m. End of Session: 4:1Op.m. Present Chair Craig De Costa, Vice Chair Cayetano Gerardo, Lisa Wilson Boyle, Jose Diogo, Russell Kyono Staff: Deputy Director of Finance Sally Motta, Deputy County Attorney Jennifer Winn, Kris Nakamura. Excused Absent SUBJECT DISCUSSION ACTION I. Call To Order Chair De Costa called the meeting to order at 1:00 p.m. II. Approval of Mr. Gerardo made a motion to approve the agenda. Agenda Ms. Wilson Boyle seconded the motion. Motion carried 5:0. III. Public There were no public comments. Comment on Agenda Items IV. Dispute re: Glen T. Hale, Esq. was present representing the taxpayer, Cornerstone Hawai'i Holdings LLC. Chair De Costa noted that this is not the First Amended actual appeal, it is the dispute whether the appeal was done correctly or not. Mr. Hale replied that he understands that. Mr. Hale noted that Taxpayer's with him was Gregory Kingsley, who is the Manager of the Kaua'i Ranch and Moloa'a Bay Ranch. Mr. Hale introduced himself and said that Notices of Real Cornerstone Hawai'i Holdings LLC is the owner of several contiguous parcels of land that comprise what's informally known as the Kaua'i Property Tax Ranch. He said that up in Moloa'a (they own) another couple of parcels that's known as the Moloa'a Bay Ranch. He said that in August Appeal 2010 there were about 5 CPR projects that were approved by the Real Estate Commission for these properties and a number of CPR units were created as a result of these filings. He said that on April 6, 2011 they filed Taxpayer Notices of Real Property Tax Appeal for 94 of the units in the Moloa'a Bay Ranch and in the Kaua'i Ranch properties. He said that all but one of those appeals involves a very similar issue of law dealing with a relatively new statutory provision found in the Hawai'i Revised Statutes Section 51413-4 that deals with Real Property Taxation. He continued that they filed the first group on April 61"that had been accepted and later it was determined that they would file an additional 113 appeals on the other units of the projects. He said those appeals were filed on April 11, 2011 —April 91"fell on a Saturday so April 111"the following Monday was the deadline. He said they were advised a couple of days later on the 144 of April that this group of appeals would not be processed because a numerical value had not been placed in the proper location on the form P-51. He said that on the 151", the very next day, they amended those notices of appeal for that 113—he's calling it the second group of appeals, he'd like to give them 2 legal arguments about why these appeals should be processed and scheduled for hearing, and just a practical discussion about them. He said that first of all in the Kaua'i Code Section 5A-12.9, this is the section that sets forth the appeal process. He said there's some informality allowed in that process whereby an applicant, a taxpayer can present to the assessor in writing that sets forth, identifies the assessment, states the claimed value and the grounds for that appeal and then the assessor can essentially fill in that information in that form. He said that informality, that allowance, for the assessor to help the taxpayer get before this Board is kind of carried through in the Rules of the Board. He said that Rule 3 of the Board Rules says that a document submitted to the Board is deemed filed upon receipt, and so they feel that these appeals were filed, they were filed timely on April 111", the second group. He said that for this second group of appeals they chose on the form P-51 to include a legal position statement and they also referenced the letter that they wrote in February to Board of Review Open Session May 9, 2011 Page 2 SUBJECT DISCUSSION ACTION the Director of Finance setting forth their position. He said their position is based on the new Statutory Provision, that when a developer owns, retains ownership of all the CPR units, that separate taxation of the individual CPR units, it's not time to do that yet. He said in other words, when the developer retains ownership of all CPR units, then the assessment should be done on the underlying parcel, the way it had been done the year before. He said those position statements were attached to the form and as an exhibit to their form and thereby would be incorporated into the information submitted. He said the requirement of the owner stating a value for the appeals is met by the argument set forth in those legal position papers that they attached. He said words can be as effective as numbers, and although there wasn't a number in there, they did reference these letters and when you read them the interpretation is it sets forth the equivalent position that CPR unit assessment should be zero. He said now given the informality of Section 12.9 and the interest in the Board of having the taxpayer have his appeals heard before the Board, they submit that those statements, legal position statement and their letter sufficiently meet the requirements so that the forms can be, so that the appeals can be scheduled for hearing and processed normally. He said the second argument is based on amendment of appeals and also in 12.9 it states that appeals are considered to be general appeals and they think that means that in general the laws of the State of Hawai'i that deal with appellate rules should be applied in this case. He said that one of those rules are that when you amend an appeal, it relates back in time to the date of the original notice that was filed. He said that they'll find in the letter that they wrote to Chairman De Costa that they cited the case called Enos vs. Pacific Transfer that stands for that position, that it would relate back to the April 111" date when they filed the original appeals. He said that based on the amendment back or relation back doctrine for amendments to appeals, they feel that the second group of appeals filed on April 111" and their amendment satisfy the requirements to allow the appeal procedure before this Board to move forward. He said that he wanted to address some practical considerations. He said that there are a total of 203 appeals that they are dealing with—94 of those have been accepted by the Board and will be scheduled at a future time for a hearing—they all involve a common issue for a legal determination, and that's the basis by which Section 514b will be applied to these appeals. He said the other 113 that's the subject of this hearing deal with exactly the same issue and seems to him that in the interest of expediency and helping the Board reduce its burdens, that they ought to come up with some kind of solution whereby that threshold issue, even on the 94 can be decided first, if they can decide those issues first and it's in favor of the taxpayer, then they may not need to come back and deal with each one of those 94 appeals individually. He said that would save a whole bunch of time before the Board if they can do that. He continued that carrying in the argument that they are here to address, those 113, if they are going to address the 94, the 113 had the exact issue; they believe that they met those requirements and they think it would save the Board time and expense, it will certainly result in the situation where the threshold issue can be uniformly applied to all of the CPR units in these projects and will result in less confusion, in addition to that, they won't have to come back next year if they don't deal with these 113 in this hearing process. He said that's their position and if they have any questions, he'd be happy to answer them. Chair De Costa asked if any member of the Board had any questions for Mr. Hale. There were no questions from the Board. Chair De Costa asked if Ms. Hester would like to make any statements. Kim Hester, Appraiser in charge of the area of Zone 4, from Wailua River to Kilauea said that they received the 94 appeals on April 6r", they all stated a value which they were then able to delineate the difference between their assessment and the value in order to certify the roll which they are required under the law to do, which is why the appeal form—the upper left hand corner of the appeal form has instructions, those instructions have been on the form during her tenure of 14 years and prior, they are very clear about how the form is supposed to be filled out, she believes those instructions were based upon Chapter 5A-12.9 and the Board of Review Rules which refer to the submission of appeal. She does not necessarily understand why 94 were first submitted with values and then the rest of them came in later, her concern at Board of Review Open Session May 9, 2011 Page 3 SUBJECT DISCUSSION ACTION the time was that all taxpayers were to be treated uniformly and fairly and that was their goal in their initial rejection of these appeals as they were not completed according to the instructions. Chair De Costa asked Ms. Hester when she says"certify the roll", he thinks it would help the Board if she could elaborate on why it's important to meet the deadline and have an amount there from the County's perspective. Ms. Hester explained that every year there's a specific calendar for running what they call "the gauntlet" for doing a software update of all the values in a timely manner to get the assessment information sent to a print vendor who then sends out the assessment notices according to the date under law which is by, on or around March 15, they send the assessment notices out on that date and then the taxpayers have from March 15 through April 9 to file an appeal. She explained that the reason for that deadline is they must enter all that data into the system, including the values so that they can generate a total amount of appeal values because under the certification law they are required to submit 50% of that total value to the Council by May 1sr of each year. She said the Council then works on tax rates from that point and sets the rate in June, so they need that information for budget hearings and also for setting the tax rates. Chair De Costa asked if any of the Board members had questions for Ms. Hester. Ms. Wilson Boyle asked if the normal process is if they don't complete the form properly, it's automatically rejected. Ms. Hester replied that in her history with the Real Property Assessment Office, it's always been the Chief Appraiser or the Appraisal Supervisor in her case, who determines the validity of an appeal, they do work with the other Counties as to how they do things and there are Counties, she believes the O'ahu County originally had some pushback from taxpayers on the same issue, and they did start taking the appeals that were questionable under the guidelines to the Board and the Board Chair decided to go back to the Chief Appraiser as far as that decision goes. She said that right now the Counties Chief Appraisers are still determining the validity of the appeals. She said that they have no problem bringing this to the Chair first, and there's not an issue there, her concern is uniformity and fairness and the treatment of all taxpayers. Mr. Hale asked if he could follow up on that. Chair De Costa asked as to which part of it. Mr. Hale said the valuation part. Chair De Costa said okay. Mr. Hale said that the valuation was stated in the attachments, if they read the attachments, although not by number, the actual result of the reading of those documents is that the valuation of each of the units appealed is zero. He said that information is in the documents that they prepared. Ms. Hester said that her question for Mr. Hale would be why did the first 94 that were submitted have a value if that was the argument. Mr. Hale said that the first 94 were submitted with values because of the amount assessed in those cases. He said if you look at those cases, the assessed value in the second group, the values in those are very, very, very small. He said in fact in some cases you wonder why they would even appeal them at all, and actually that was what the initial thought was, that they were so small that it didn't make any sense at first to do that. He said they then decided that they needed to make sure there was uniformity in the application of this new section 514b, so they wanted to try to get the second group in and they determined that it would be better to state the legal position about it versus focusing solely on the number. He pointed to the Board to 5A-12.3, which is the grounds of appeal, Real Property taxes—and it states each of these grounds but not as a reference that you have to have all of them at once, you can state either a value or lack of uniformity or a denial of exemption. He said their most important position is 1) the value is in the attached documents—the reason that they refer to the letters is because they were focusing mainly on the legal argument that is applicable to Section 514b-4 of the Hawai'i Code. Chair De Costa asked if the Board has any other questions for Mr. Hale or Ms. Hester or any legal questions for Deputy County Attorney Jennifer Winn. There were no questions. Chair De Costa asked if there was a motion from the Board, which would be to schedule the Board of Review Open Session May 9, 2011 Page 4 SUBJECT DISCUSSION ACTION appeals for hearing or to dismiss the attempt to appeal for the 113 appeals, not the 94 that were accepted. Chair De Costa asked Ms. Winn if she had anything to add. She said that she would be happy to answer any questions or to advise the Board members where the various Ordinances are that may be applicable to this situation. Ms. Hester said that she has a copy of 12.9 if the Board members would like a copy. Chair De Costa said that the Board has a copy. Executive Member Cayetano "Sonny" Gerardo said that being that there are some legal aspects to their decision making, he would like to request for Session an executive session. Ms. Winn suggested that the motion should be to move into executive session to consult with the Board's attorney on questions and issues pertaining to the Board's powers, duties, privileges, immunities and liabilities as it relates to item IV. on the agenda. Mr. Gerardo made the motion. Ms. Wilson Boyle seconded the motion. Motion carried 5:0. Meeting convened in Executive Session at 1:22 p.m. Return to Open The meeting reconvened in Open Session at 1:35 p.m. Session Chair De Costa said they are still on agenda item IV and the Board has had an opportunity to consult with its attorney on legal matters and the Chair will now entertain a motion. Mr. Gerardo made a motion that this agenda item be placed on the agenda of the June 13, 2011 Board of Review hearing. Ms. Wilson Boyle seconded the motion. Motion carried 5:0. V. Request for Chair De Costa they have a letter received from Chris and Kriss Mann. He asked if there was anyone present to speak on behalf of this the Dismissal of matter. There was no one present. He said that it appears that this appeal was not accepted because values were not indicated, grounds allegedly for objection were not indicated, and there was no appeal form. He asked if the members have reviewed the letter and County's response to imperfect appeal the letter, and if so, is there a motion. attempt of TMK 4-3-011-001- Mr. Gerardo made a motion to grant the request for dismissal. Mr. Kyono seconded the motion. Motion carried 5:0. 0095 VI. Letter dated Chair De Costa asked if there was anyone present to speak on behalf of this matter. There was no one present. Chair De Costa asked that April 20, 2011 this letter be placed on the agenda because it was correspondence, they were requesting some kind of relief, he had hoped that the person re: TMK 5-6- would show up, they could explain to them the various exemptions that the County makes available to homeowners, however this turns out 004-007-0000 to be a non-occupant owner who does not live on Kauai, so he doesn't believe there needs to be any action, it's just for the Board's information, as it is not an appea, it's a request for relief. VII. Appeals Appeal Case No. 10-10457—Brian Armstrong—TMK 4-9-009-009-0012 Scheduled Brian Armstrong was in attendance to provide evidence for his appeal. Kim Hester and Damien Ventura were in attendance and presented their report to the Board. Board of Review Open Session May 9, 2011 Page 5 SUBJECT DISCUSSION ACTION Mr. Gerardo made a motion in the matter of tax appeal 10-10457, he recommended that the Board sustain the County's assessment. There was no second to the motion. The motion failed. After much discussion, the Board decided to pass Mr. Armstrong's matter for now and moved on to the next item on the agenda. Appeal Case No. 11-0020—Three Stooges LLC—TMK 4-3-003-001-0000 Appeal Case No. 11-0021 —Three Stooges LLC—TMK 4-3-003-001-0000 Greg Allen and Kurt Bosshard were in attendance and requested a continuance from the Board regarding their 2 appeal cases. Kim Hester was in attendance. Ms. Wilson Boyle made a motion in the matter of tax appeal 11-0020 & 11-0021, she recommended that the Board continue the appeals to their August 8r" hearing. Mr. Diogo seconded the motion. Motion carried 5:0. Appeal Case No. 11-0336—Amy L. Sherrer—TMK 4-3-011-001-0005 Appeal Case No. 11-0337—Larry K. Sherrer—TMK 4-3-011-001-0006 Appeal Case No. 11-0338—Lawrence T. Halsey—TMK 4-3-011-001-0015 Appeal Case No. 11-0739—Brad Rockwell—TMK 4-3-011-001-0025 Appeal Case No. 11-0339—Sterling Trust—TMK 4-3-011-001-0043 Appeal Case No. 11-0340—Thomas &Jennifer Brooks—TMK 4-3-011-001-0082 Appeal Case No. 11-0740—Brad Rockwell—TMK 4-3-011-001-0090 Amy Sherrer was in attendance to provide evidence for appeals 11-0336, 11-0337, & 11-0339. Brad Rockwell was in attendance to provide evidence for appeals 11-0739 & 11-0740. The other appellants were not present. Kim Hester was in attendance and presented her reports to the Board. As all of the above parcels are in the Kulana project, they were heard all together in front of the Board. Ms. Wilson Boyle made a motion in the matter of tax appeals 11-0336, 11-0337, 11-0338, 11-0739, 11-0339, 11-0340, & 11-0740, she recommended that the Board sustain the County assessments. Mr. Diogo seconded the motion. Motion carried 5:0. Appeal Case No. 10-8996—Steven Nishimura—TMK 3-2-001-007-0002 Steven Nishimura was in attendance to provide evidence for his appeal. Steve Hunt was in attendance and provided his report to the Board. Ms. Wilson Boyle made a motion in the matter of tax appeal 10-8996, she recommended that the Board reduce the land assessment to $157,800. Mr. Gerardo seconded the motion. Motion carried 3:1 (Kyono, Diogo abstain) Appeal Case No. 11-0235—Steven Nishimura—TMK 3-2-001-007-0002 Board of Review Open Session May 9, 2011 Page 6 SUBJECT DISCUSSION ACTION Steven Nishimura was in attendance to provide evidence for his appeal. Steve Hunt was in attendance and provided his report to the Board. Mr. Gerardo made a motion in the matter of tax appeal 11-0235, he recommended that the Board reduce the land assessment to $120,000. Mr. Kyono seconded the motion. Motion carried 3:0 (De Costa &Wilson Boyle abstain) Appeal Case No. 10-10457—Brian Armstrong—TMK 4-9-009-009-0012 (continued) Brian Armstrong and his Representative Ray Maki were in attendance. Kim Hester and Damien Ventura were in attendance. The hearing continued on this appeal. Ms. Wilson Boyle made a motion in the matter of tax appeal 10-10457, she recommended that the Board lower the appellant's taxes to $4,235. There was no second to the motion. The motion failed. Ms. Wilson Boyle made a motion in the matter of tax appeal 10-10457, she recommended that the Board reinstate the agricultural dedication. Mr. Kyono seconded the motion. Motion carried 5:0. Appeal Case No. 11-0328—KID Wa i po ul i LLC—TMK 4-3-001-014-0000 Chair De Costa noted that he has a conflict, the appellant is his client in another matter, therefore he recused himself and turned that portion of the agenda over to Vice Chair Cayetano Gerardo. Mr. Kyono made a motion to grant the continuance for tax appeal 11-0328. Ms. Wilson Boyle seconded the motion. Motion carried 4:0. The appellant requested a continuance and this case will be scheduled at a later date. Appeal Case No. 11-0333—Robert D. Bernard—TMK 4-2-014-035-0002 Taxpayer withdrew appeal. County's assessment sustained. Appeal Case No. 11-0046—James P. Kerrigan—TM 5-2-004-091-0002 Taxpayer withdrew appeal. County's assessment sustained. Appeal Case No. 11-0855—Halligan Family Trust—TM 5-4-005-007-0020 Taxpayer withdrew appeal. County's assessment sustained. VIII. Announcements The next meeting is Monday, May 16, 2011. Board of Review Open Session May 9, 2011 Page 7 SUBJECT DISCUSSION ACTION The meeting was adjourned at 4:10 p.m. Submitted by: Reviewed and Approved by: Kris Nakamura, Secretary Craig De Costa, Chair (X) Approved as is. ( ) Approved with amendments. See minutes of meeting.