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HomeMy WebLinkAbout010912_Agenda_ Packet Dirk Apace Members: Chair Sandi Sterker Brant Fuchicami An-yl Kaneshiro Glen Takenouchi Laurie Yoshida Law fence-Chaffiff.jn_ Vice-Chair COUNTY OF KAUAI COST CONTROL COMMISSION NOTICE OF MEETING AND AGENDA Monday, January 09, 2012 1:30 p.m. or shortly thereafter Mo'ikeha Building, Liquor Conference Room 3 4444 Rice Street, Lihue, HI 96766 CALL TO ORDER APPROVAL OF MINUTES Regular Open Session Minutes of December 12, 2011, BUSINESS CCC 2012-01 Memorandum dated 12.1'15111 from Council Chair Jay Furfaro, requesting agenda time at the January 09, 2012, Cost Control Commission's meeting, to provide a briefing on the County's Staffing Guides, the Comprehensive Annual Financial Report (CAFR), and the Council's new Travel Policy. CCC 2011- 08 Review and discussion of the County's real property tax exemptions and rate setting procedures. (On-going) (i) Communication dated 12/114/11, from Chair Sandi Sterker to Wally Rezentes, Jr., Director of Finance, regarding a request to update the list of exemptions to include the purpose and intent behind each property tax exemption and the date of enactment. (j) Communication dated 121"14/11, from Wallace G. Rezentes, Jr., Director of Finance, to Chair Sandi Sterker, responding to the Cost Control Commission's request to update the list of exemptions to include the purpose and intent behind each property tax exemption and the date of enactment. An Equal Opportunity Employer (k') Presentation by Lowell Kalapa, Tax Foundation of Hawai'i, relating to the City& County of IIonolulu's Real Property Tax Advisory Commission schedule, decision making process, and report findings. .......... ANNOUNCEMENTS Next meeting: Monday. February 13, 2012 at 1:30 p.m. at the Mo'ikeha Building, Liquor Conference Room 3. NOTICE OF EXECUTIVE SESSION Pursuant to Hawai'i Revised Statutes, §92-7(a.), the Commission may, when deemed necessary, hold an Executive Session on any agenda item without written public notice if the Executive Session was not anticipated in advance. Any such Executive Session shall be held pursuant to H.R.S. §92-4 and §92-9 and shall be limited to those items described in H.R.S. §92-5(a). Discussions held in Executive Session are closed to the public. ADJOURNIMENT PUBLIC COMMENTS and TESTIMONY Persons wishing to offer comments are encouraged to submit written testimony at least 24-hours prior to the meeting indicating: 1. Your name and if applicable, your position/title and organization you are representing 2 The agenda item that you are providing comments on, and 3. Whether you will be testifying in person or submitting written comment only. 4. If you are unable to submit your testimony at least 24 hours prior to the meeting, please provide 10 copies of your written testimony at the meeting. The length of time allocated to person (s) wishing to present verbal testimony may be limited at the discretion of the chairperson or presiding member. cc: First Deputy County Attorney Amy Esaki Send written testimony to: Cost Control Commission Attn. Mercedes Youn Office Boards and Commissions 4444 Rice Street, Suite 150 Libue, HI 96766 E-Mail: Ynvoun:'�i','kauai a (I�-1_� -T--U 0 Phone: (8081) 241-4920 Fax: (808) 1-41-5127 2 1 P a a e Cost Control Commission--January 09, 0212 SPECIAL ASSISTANCE It you need an alternate format or an auxiliary aid to participate, please contact the Boards an Commissions Support Clerk at (808) 241-4920 at least five (5) working days prior to the 3 1 P a ge Cost Control Commission—January 09, 021? I DRIAFTTo 10 N o 'N . 0, ...1 ,04ge, COUNTY OFKAUAl Minutes of Meeting OPEN SESSION Board/Comrnittec: COST CONTROL COMMISSION Meeting D,7t_te_ December 12,2011 Location Mo'ikeha Building--Liquor Conference Room 3 Start of Meeting: 1:31 p.m. I End of Meeting: 2:30 p.m. Present Chair Sandi Sterker; Vice-Chair Dirk Apao: Members: Lawrence Chaffin, Jr.; Arryl Kaneshiro; Glen Takenouchi Also Board & Commissions Office Staff- Support Clerk Mercedes Youn; Administrative Aide Paula Morikami; Administrator John Isobe. Excused Members: Brant Fuchigarm and Laurie Yoshida Absent SUBJE,CT DISCUJSSION ACTION Call 'Fo Order With a quorum being present,Chair Sterker called the meetim,to order at 1:31 P.m. Approval of Regular Open Session Minutes of November 14, 2011 Mr. Chaffin moved to approve the minutes as Minutes circulated. Mr. Apao seconded the motion, Motion carried 5:0 ——-------------- Husiness CCC 2011-08 Review and discussion of the County's real property tax exemptions and rate setting procedures, (Ongoing) Chair Sterker called for a motion to receive item CCC 2011-08. Mr. Isobe suggested that the Commission defer this matter for continued Z discussion and deliberation in 2012. f le s thlth the Commission has begun the review proces and has received public testimony regarding some of the existing property tax exemptions, to date, no decisions and/or recommendation have been made. Mr. Isobe further explained that at the last meeting, the Commission reviewed and discussed the exeiription for the credit unions, includit C --------- F+ Cost Control Commission Open Session December 12, 2011 Page 2 SUBJECT DISCUSSION ACTION ---------- hearing a presentation from Councilmember Bynum related to the I lome Owner's Exemption. However, there were still a multitude of other tax exemptions that need to be reviewed and discussed. Mr. Isobe said that if a motion is made to "receive" this item, the issue would not reappear on future agendas and that is why he suggested that the Commission defer this matter rather than "receiving it for the record". Chair Sterker agreed and felt that the Commission should have a general discussion on the various property tax exemptions and how the members want to proceed on this issue in 2012. Commissioner Chaffin voiced his concern that the time and effort expended by the Cost Control Commission in reviewing the property tax exemptions may not result in meaningful recommendations by the body. Commissioner Kaneshiro requested that the Commission be provided with the purpose and date of enactment for each of the various property tax exemptions and indicated that this background information would be usetul in providing background on the policy intent as to why the exemption were being provided. For example, he questioned the original intent behind why Credit Unions are being provided with a tax exemption. Additionally, Commissioner Karieshiro questioned whether it would be appropriate to request financial information from the various Credit Unions regarding what percentage of their overall expenses would payment of property taxes be and how much of an impact would it have on their total assets/revenues. Cost Control Commission Open Session December 12, 2011 Page 3 SUBJECT DISCUSSION ACTION! Mt. Isobe indicated that he would ask staff to make an inquiry with Mr. Melvin Chiba, President/CEO of Kauai Community Federal Credit Union, to see whether this type of information is available and if the Credit Unions would be comliortable in providing the information to the Commission. Other members expressed concern that they lacked the technical background and knowledge to adequately determine whether the various tax exemptions should be maintained, revised or eliminated. Mr. Isobe assured that members that the County Real Property Tax Division stag`would be available to provide technical information and answer questions to facilitate and assist the Commission's deliberations and decision making. Ile further acknowledged that this is a very complex subject that will stimulate much discussion and debate. However, in the end, "it really boils down to a policy call on what you believe is goad for the County and fair to the taxpayer." Ile also indicated that the City and County of Honolulu(C&C) was going through a similar effort of reviewing their real property exemptions and asked whether the members wanted to invite someone from the C&C Property Tax Advisory Commission to one of the future Cost Control Commission meetings to provide some added insight and direction. Chair Sterker suggested that Mr. Isobe contact Mr. Lowell Kalapa, Director of the fax Foundation and member of the C&C Property Tax Advisory Commission, to see if he would be willing to meet the Cost Control Commission sornetinte during the start of the new year. Mr. Takenouchi moved to defer item CCC 2011- Mr. Isobe acknowledged the request and stated that he would contact Mr. 08. Mr. Apao seconded the rt)otion. Motions rKal a and snake the n ccssar arrangements, carried 5:0 Cost Control Commission Open Session December 12, 2011 Page 4 SUBJECT DISCUSSION ACTION Mr. Chaffin moved to receive;the additional Chair Sterker called for a motion to receive the additional written testimony. Mr. Apao seconde�I the motion. informational testimony dated 11/29/11 from Mr. Melvin Chiba, President Motion carried 5:0. and CEO of the Kaua'i Community Federal Credit Union as requested at the November 14, 2011 Cost Control Commission in CCC 20011-19 Discussion and decision-making on the proposed draft of the 2011 Cost Control Commission Annual Report. Chair Sterker called for a motion to approve the 2011 Cost Control Commission Annual Report as submitted. Commissioner Chaffin requested that Section 1, of the draft Annual Report "Relating to County Eiriployee Training and Consolidation of Personnel Functions" be amended to revise the order in which the top six (6) most desired trainings are listed in the Report. lie recommended that the existing item c. "Workplace Violence" be interchanged with item b. "Leadership/Supervisory Management". Commissioner Chaffin indicated that he believed that the Cost Control Commission felt that "Workplace Violence" training should be given a higher priority than "Leadership/Supervisor Management". Ile further requested that the signature page of the Report be revised to Mr. Chaffin moved to amend the draft Annual property reflect his name as "Lawrence Chaffin Jr." Report. Seconded by Mr.Apao' .Motion carried 5:0 Chair Sterker called for the approval of the County Cost Control Mr. Chaffin moved to approve the draft County Commission 2011 Annual Report, as amended. Cost Control Commission 2011 Annual Report,as amended. Mr.Apao seconded the motion. Motion Mr. Isobe informed the Commission that the 2011 Cost Control carried 5:0 Commission Annual Report will be published in the Garden Island Newspaper as required (Section 28.05, Kaua'i County Charter). ............. ------- Cast Control Commission Open Session. December 12, 2011 Page 5 SUBJECT DISCUSSION ACTION. CCC 2011-20 Cast Control Commission Meeting Schedule for 2012. Chair Sterker pointed out that the June 18 meeting does not fall on the 2' Mr. Chaffin proved to accept the Cost Control Monday of that month because the 2"`i Monday in June 2012 fall on the Meeting Schedule far 2012. Mr. Apao seconded ameharncha I7� holiday._. .....___ the motion. Motion carried 5;() ____.. _ -----.. __ _._..__ .. ._._------------ __ CC:`C 2011-21 Election of Chair and Vice-Chair for 2012. Chair Sterker moved to elect Commissioner Apao to the position as Chair. Mr.(haffin seconded the motion. Motion carried 5:0 Chair Sterker moved to eject Commissioner Lawrence Chaffin, Jr. to the position of Vice- Chair. Mr. Takenouchi seconded the motion. Motion carried 5:0. _ __.__.__-. Announeenients Next Meeting: January 9, 2012 at 1,30 p.m. in the Liquor Conference Room 3. __..— -._ - _ – – - _ __...__. Adjournment Mr. fakenouchi moved to adjourn the meeting at 2:30 p.m. Mr. Kaneshiro seconded the motion. Motion carried 5:0 Submitted by: _ __...._. Reviewed and Approved by: Mercedes Voun, Stalf Support Clerk Dirk Apao, Chair ( Approved as circulated { } Approved as amended. See minutes of meeting. COUNTY COUNCIL OFFICE OF THE COUNTY CLERK Jay Furfaro,Chair JoAnn A. Yukimura, Vice Chair � � �'`� ���' �� Ricky Watanabe,Interim County Clerk Titre l3vnum _, Eduardo Topenio.Jr., Deputy Count-v Clerk Dickie Chan acs KipuKai Kua(i`i Telephone(808)241-4188 Nadine K. Nakamura 0 Fax (808)2.4I-6349 Mel Rapozo Email cokcouncil:i�i�kauai.�4oy Council Services Division 4396 Rice Street,Suite 209 L.ihu`e, Kauai. Hawaii 96766 MEMORANDUM December 15, 2011 TO: All Members of the Cost Control Commiss o FROM: Jav Furfaro, Council Chap= RE: REQUEST FOR AGENDA TI JANUARY 9, 2012 MEETING This is to request agenda time at the January 9, 2012, County of Kauai Cost Control Commission's meeting, to provide a briefing on the County's Staffing Guides, the Comprehensive Annual Financial Report (CAFR), and the Council's new Travel Policy. Thank you for your consideration. cc: Gary lieu, Managing Director John Isobe, Beards and Commissions Administrator cntX:\MichalNakashima`_jf 2010-2012,Memo-request for agenda time-Cost Control 2012-369.doc CCC 2012-01 AN EQUAF OPPORTUNITY EMPLOYER Sandi Sterker Members: Chair OP Lawrence Chaffin Jr. Brant Fuchigami Dirk Apao Glen Takenouchi Vice Chair Laurie Yoshida Arryl Kaneshiro 0 COUNTY OF KAUAI COST CONTROL COMMISSION TO: Wally Rezentes, Director of Finance Cc: Sally Motta, Deputy Director of Finance Steven Hunt, Real Property Review Officer Gary Heu, Managing Director FROM: Sandi Sterker, Chair Cost Control Commission Via: John Isobe, Administrator, Office of Boards an Commissions DATE: December 14, 2011 SUBJECT: Request for Attendance The Cost Control Commission, at its meeting on December 12, 2011 has requested that Steve Hunt be present at its next meeting scheduled for Monday, January 9, 2012 at 1:30 pm. If possible, they are requesting that the attached listing be up-dated in advance of the meeting to include the purpose and intent behind each property tax exemption and the date of enactment. The Commission will be continuing its review and discussion of the County's real property tax exemptions and rate setting procedures. If you have any questions, please call Paula Morikami at 241-4922. Thank you. CC C 201 '1- 08 (i) An Equal Opportunity Employer EXEMPTIONS AMOUNT REQUIREMENTS,CRITERIA,POLICIES _ Basic Home $48,000 One-time filing on or before 12/31 for forthcoming tax year 60-Years Old Must be owner-occupant(primary residence) Requires proof of ownership&residency Photo identification is required Cannot possess another home exemption elsewhere Husband&wife cannot each have home exemptions Long-term leases(recorded at BOC)may qualify if"building"is leased for 5 years or more Long-term leases(recorded at B©C)may qualify if"property"is leased for 15 years or ntore [director is required to review exemption amount every 3 years{analyze CPI and wage data) Fraudulent or erroneous filings can be retroactively amended up to 6 years Age Exemption 596,000 (Same requirements as above) Age W69 Additional$48,000 is awarded when taxpayer is age 60-69 Must be 60 prior to the year in which the exemption is awarded If husband&wife are owners,the elder triggers the increased amount Age exemption automatically adjusts the Basic Exemption when first owner reaches age 60 Age Exemption $120,O00 (Same requirements as above) Age 70+ Another$24,000 is awarded when taxpayer is age 70+ Must be 70 prior to the year in which the exemption is awarded if husband&wife are owners,the elder triggers the increased amount Age exemption automatically adjusts when first owner reaches.age 70 Income Exemption $55,000 This exemption requires annual filing as income level change year-to-year Piling deadline is 12/31 every year To qualify the household income(AGI)must be$40,000 or less Household income means all wage-earners on property AGI is the adjusted gross income Copies of State of Hawaii and Federal tax returns are submit with application Property must have home exemption to qualify for income exemption Disabled Veterans (varies) One-time filing on or before 12/31 for forthcoming tax year Must be owner-occupant(primary residence) Total disability must have occurred while on armed forces duty Must have VA doctor validate the disability during active duty Exemption limited to one house Exemption is extended to surviving spouse so long as they don't remarry May rent not more than one room to a tenant Disability remains valid as long as veteran is totally disabled Property becomes totally exempt,but must pay minimurn tax Leprosy Exemption $50,000 One-time filing on or before 12/31 for forthcoming tax year Exempted on all real property owned,up to,but not exceeding$50,000 taxable value EXEMPTIONS mm AMOUNT REQUIREMENTS,CRITERIA,POLICIES Must be declared as communicable stage by authority of law and admitted for isolation Exemption is extinguished upon death of owner or sale of property(s) Totally Disabled $50,000 One-time filing on or before 12/31 for forthcoming tax year Exempted on all real property owned,up to,but riot exceeding$50,000 taxable value For sight disability,requires certification from an ophthalmologist or optometrist For hearing disability,requires certification from qualified otolaryngologist For other disabilities,must have a physician certify applicant is totally disabled Exemption is extinguished upon death of owner or sale of property(s) Nonprofit Medical (varies) One-time filing on or before 12/31 for forthcoming tax year Nonprofit medical indemnity or hospital service association or society or both Property becomes totally exempt,but most pay minimum tax Must be operating under Chapter 433 H.R.S. Charitable (varies) For properties owned by nonprofits have on or before 12/31 for forthcoming tax year Leased properties must re-file at lease renewal on or before 12/31 for forthcoming tax year Leases must be recorded at Bureau of Conveyances Properties must actually and exclusively used for charitable nonprofit uses Eligible:schools,colleges,hospitals,nursing homes,churches,cemeteries,dedicated to public use,labor unions,government employees'associations,patriotic societies Must submit articles of incorporation and cessation to another nonprofit in event of dissolution Charitable use,not nonprofit ownership,is determining factor in awarding exemption Property becomes totally exempt,but must pay minimum tax Pulp and Paper (varies) One-time filing on or before 12/31 for forthcoming tax year S,year exemption given from commencement of construction of a plant(S) Must be a plant that manufactures pulp and paper Property is totally exempt for 5 years,but must pay minimum tax Crop Shelters (varies) One-time filing on or before 12/31 for forthcoming tax year 10-year exemption for structures erected to shelter crops Must be for commercial agriculture or horticulture purposes Land is not exempt but may be dedicated to Agricultural Use Dedicated in Urban Districts (varies) One-time filing on or before 09/01 for forthcoming tax year Director approves or disapproves application by 12/15 Lands must be in Urban Districts may be dedicated to landscaping,open space,public recreation,and similar uses Lands cannot be in setback and/or open areas as required by zoning or building codes unless these lands are in the historic district Director determines if dedicated lands are of public benefit Owner forfeits rights to use land for 10 years(automatically renewable),subject to 5-year notice any time after the 5th year EXEMPTIONS mmM^ mT AMOUNT REQUIREMENTS,CRITERIA,POLICIES Owner must maintain property and dedicated use,failure results in rollback to original petition date with 5%interest penalty from respective dates Air pollution Control Facility (varies) Application is first with Director of Health who certifies facility meets emission criteria Upon receipt of certification from state DOH,property becomes exempt from taxation Must recertify that facility meets pollutant emission criteria every two years No filing deadline cited Property becomes totally exempt,but must pay minimum tax Alternative Energy (varies) One-time filing on or before 12/31 for forthcoming tax year Exempts improvements that produce energy from sources other than fossil fuel,nuclear fuels,or geothermal Sources Alternative energy improvements are for personal consumption{non-commercial)only and not more than 25%of the energy produced may be sold Manufacturing Fixtures (varies) Machinery and equipment used in the manufacturing or production of tangible personal products are exempt from taxation No filing deadline cited Public Property {varies) Property owned by United States,State of Hawai'i,or County of Kaua'i is exempt from all real property taxes including the minimum tax If government property is under permit,license,or month-to-month tenancy,taxes are exempt for first year(commercial uses only)but taxable thereafter Private property leased to State of Hawai'i or County of Kaua'i is exempt from all taxes Application for exemption must be filed by 12/31 for forthcoming tax year Leases must be recorded at Bureau of Conveyances Property in possession of the state or county via eminent domain or right of entry with intention to acquire is exempt from real property taxes Excludes properties leased or under conveyance to private persons as of January 1 Taxes are prorated based of fiscal year if under lease or conveyance to private persons tessees of Exempt Property (varies) Otherwise exempt properties leased to private persons are taxable except: (1)Federal property for which payments are made in lieu of property taxes (2)Any property taxed under any other provision of this chapter US Property/National Housing Act (varies) Property belonging to the United States leased pursuant to Title Vill of the National Housing Act shall be exempt Low&Moderate Income Housing (varies) Property owned and operated by a nonprofit or limited distribution mortgagor or person corporation,or association that is regulated by federal,state or county laws or ordinance As to rents,charges,profits,dividends,developments costs And methods of operation shall be exempt from property taxes Must apply annually by 12/31 for forthcoming tax year Qualifying property(or portion thereof)becomes totally exerript,but must pay minimum tax Historic Residential Dedication (varies) Must file initial application by 09/01 for forthcoming tax year EXEMPTIONS AMOUNT REQUIREMENTS,CRITERIA,POLICIES 10-Year dedication for the exemption,with structural soundness and weathertight recertification required by a licensed architect or general contractor before 09/15 of the Stir&10th years Property must be placed on the Hawaii Register of Historic Places Property must be visually accessible to the public Director approves or disapproves application by 12/15 Applicant forfeits right to subdivide or CPR property,change the use,or add new construction without approval from the State Historic Preservation Office Structures must be used for residential use(s)only,with owner-occupants receiving 100% exemption on both land and improvements,but pay minimum tax Residential use other than owner-occupant receive 100%exemption for improvements and 50% exemption for land May renew for additional 10-year periods as prescribed in this section Violations are subject to rollback taxes and interest for retroactive years Credit Unions (varies) Must file initial application by 12/31 for forthcoming tax year If property is owned in fee simple by credit union,no additional filing is required If property is leased,must re-file by 12/31 prior to the termination of the initial lease term Lease must be recorded at Bureau of Conveyances Qualifying property(or portion thereof)becomes totally exempt,but tnust pay minimum tax Orchard Development (varies) cane-time filing on or before 09/01 for forthcoming,tax year Property exempt until first harvest or 10 years,which ever occurs first Minimum 50 acres of land planted to be eligible(can add additional lands less than 50 acres) Identify orchard crop(s)and areas to be planted Must have planted entire orchard area claimed by 12/31 of the application year Director approves or disapproves application by 01/31 preceding the tax year filed Lands in cultivation are exempt,but must pay minimum tax Violations or declassifications are subject to rollback taxes and interest for retroactive years Tree Farris Development (varies) tine-time filing on or before 09/01 for forthcoming tax year Property exempt until first harvest or 25 years,which ever occurs first Minimum 10 acres to be eligible(cannot be land in Urban district) Must identify property,tree species,planting schedule,map delineating areas planted,and provide a management plan First year's plantings must be complete prior to application Director approves or disapproves application by 01/31 preceding the tax year filed Lands designated in tree farm area are exempt,but must pay minimum tax Must adhere to planting schedule to continue receiving exemption on lands yet to be planted Violations or declassifications are subject to rollback taxes and interest for retroactive years Safe Roorn $40,000 One-time filing on or before 12/31 for forthcoming tax year Minimum size of 40 sf of interior floor space or 10 sf per occupant,whichever is more EXEMPTIONS AMOUNT REQUIREMENTS,CRITERIA,POLICIES Cannot be in flood zone,must be accessible to dwelling occupants,have a wind load of not less than 250 mph,be ventilated,and have certification frorn a state licensed architect or structural engineer Exemption is per residence not per safe room count Long-Term Affordable Rental (varies) Annual filing on or before 12/31 for forthcoming tax year (Tax Credit-riot an Exemption) Must provide copy of written lease with a term of one year or more Monthly rent not to exceed 1.00%of the Kauai Median Household Income rents set by Kauai County Housing Agency Affordable Rental Housing Guideline for year applied Qualifying property has taxes capped at not rnore than 6%or prior year's taxes with some exceptions (new construction,omitted buildings,change in Ag use or new homesite,etc...) In the case of multi-use or multi-structure properties,only the portions exclusively leased as long-terra affordable rentals can receive the limit on tax increases Owner to notify director of any change in use within 30 days,and limit on taxes is then revoked Kuleana Exemption (varies) One-time filing on or before 12/31 for forthcoming tax year Property must be designated as a kuleana land and owner/applicant must be a lineal descendant of the persons(s)that received the original title to the kuleana land Kuleana land shall be for primary ka hate use(owner or family occupied),agricultural use,or vacant No vacation rental use is allowable for consideration of this exemption Genealogy must be verified by the Office of Hawaiian Affairs or by court order Owner/applicant is responsible for the cost of verifying genealogy and/or ownership as necessary Property becomes totally exempt,but must pay minimum tax OF too$ Bernard P. Carvalho,Jr. Wallace G. Rezentes,Jr. Mayor Director of Finance ----------------------------- ------------------------------------- --sally Gary K.