Loading...
HomeMy WebLinkAbout051412_AGENDA PACKET [Ude&poo Members: Chair 3andiSterker Aoyl Kaneshim Luvncnco Chaffin Jr. (}leuTukenoucbi Vice-Chair Laurie Yoshida COUNTY OF KA0A'KCOST CONTROL CONFNIISS8ON NOTICE OF MEETING AND AGENDA Monday, &{av \4, ZO|2 1:30 p.m. or shortly thereafter Mo`ibebaE}uildiog, Liquor Conference Room 3 4444 Rice SCnrct, Libot, BI 90766 CALL TO ORDER APPROVAL OF MINUTES Workshop Minutes of March 29, 20l2 Regular Meeting Minutes of April 04, 20|2 COMMUNICATIONS CCC 201-1-08 Communication dated 03/13/12 from Chair Dirk Apao and Commission 8lcmbuxm, to Janine Ranozo, Human Resources Taaktbcze requesting u o:prcsmotubvc from the toakfbcccho present sd the Cost Control Coroozimminu April g, 2012 meeting to provide an update on the progress generated bythe toskfbroc. (Deferred oo04KOqYl2) BUSINESS CCC20l |-U8 Review and discussion of the County's real property tax exemptions and rate eeitiugy. (Oo'�oio�) (p) Memorandum dated 04/03/l2 from Chair Dirk A[ao to Wallace Rezontes Jr., Director of Finance, requestin(-, for information on the number of people that actually pay the minimum tax of S25.00 and those who pay below S 150.00, and u listing mfall 50| (c) non-profit organizations. (g) 2roxU dated 04/l Of't 2 from Steve Hunt responding to the Commission's request for information relating to amount of tax puycra who pay the nniuionuoz tax of$25.00and those who pay below Sl5O.00. and m listing of all 5Ol (c) non- profit organizations. (r) Memorandum from Chair Dirk f\puo1u Wallace 8czeoteoJc` Director of Finance.requesting for information uu the various types oFtax exemptions. (y) Communication dated 041'27P|Z from Wallace Rezentesb, mChair Dirk &pao, responding to the Commission's request oo questions that relate to the various types of czenphooy' ANNOUNCEMENTS Next meeting: Monday, June 1|, 2Ol2, mt 15Opm. ot the Mo`ibcbm Building, Liquor Conference Room 3. NOTICE OF EXECUTIVE SESSION Pursuant to Buvvui'i Revised Statutes 892-7 (o), 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 inadvance. Any such Executive Session shall bc held iopursuant ooEi.fl.S. §92-4 and §u2-q and shall helimited tn those items described in8.8L.S. &4Z-5(a). Discussions held iu Executive Session are closed to the public. SPECIAL ASSISTANCE If you need an alternate format or an auxiliary aid to participate, please contact the Boards and Commissions Support Clerk at (808) 241-4920 at least five(5) working days prior to the PUBLIC COMMENTS and TESTIMONY Persons wishing to offer comments are encouraged to submit written testimony at least 24-homs prior to the meeting indicating: l. Your name and if applicable. your yositiou/dde and organization you are representing 2. The agenda item that you are providing comments on, and 3. Whether vou will be testifying in person or submitting written comment only. 4. lf you are unable tn submit your testimony ut least 24 hours prior k/ the meeting, please provide |O copies nf your written testimony a1 the meeting, The length of time allocated hopersoo(a)vvimbiog tu present verbal tes|icnuoynooyheDoudedm1 the diourobouof the cbuizp�sonorprcuidingmember, cc: First Deputy County Attorney Amy Eoabi Send written testimonv to: Cost Control Commission Attn: Mercedes Tnuo (}ffioe Boards and Commissions 4444 Rice Street, Suite }jO Lihoe, B/ 96766 E-Mail: Phone: (8O8)24)-4920 Fax: (8O0)24)-5l27 2 Pu �� Cost Control Commission May 14, 2012 181Aff TTo ByeA� >, ljrjo COUNTY OF KAUAI Minutes of Meeting WORK SHOP MEETING BoardJCommittee: COST CONTROL COMMISSION Meeting Date f March 29, 2012 Location Mo'ikeha Building— Liquor Conference Room 3 Start of Meeting: 1:37 p.m. End of Meeting: 3:05 p.m. Present Chair Dirk Apao; Members: Arryl Kaneshiro; Sandi Sterker; Laurie Yoshida; and Glen Takenouchi Also First Deputy County Attorney Amy Esaki; Board & Commissions Office Staff- Support Clerk Mercedes Youn; Administrator Paula Morikaini; Administrative Aide Teresa Tamura Excused Vice-Chair Lawrence Chaffin Jr. Absent I SUBJECT DISCUSSION ACTION Call To Order Chair Apao called the workshop to order at 1:37 p.m. Chair Apao called the workshop to order at 1:37 Review of and The intent of the workshop is for the Commission to undertake an objective review of the County's real discussion on the property tax exemptions and rate setting and bring efficiency and equity to the real property tax system. County's real The Commission reviewed various materials relating to the number and amount of exemption by type property tax and County for fiscal year 2010-11. exemptions and rate settings Glen Takenouchl had concerns that the Commission's recommendations may not reflect what is being procedures. proposed in the Bill that is currently before the County Council. First Deputy County Attorney Esaki explained that as required by the Charter, the Mayor would have to put forth the recommendations of the Cost Control Commission to the County Council. Sandi Sterker voiced her concerns about the conversations that she had heard about the tax exemptions and that they were going to cost the County in taxes. She felt that the Commission should not put forth a recommendation that would cost the County in taxes. Additionally, Ms. Sterker noted that the initial discussion was about eliminating the real property Home Tax exemption and raising the tax limit which would eventually even out and in turn, eliminate all of the paper work generated by the process. Cost Control Commission Work-shop Meeting March 29, 2012 Page 2 SUBJECT DISCUSSION ACTION Glen Takenouebi noted that the idea came from the Commission's discussion with representatives from the Finance Department. First Deputy County Attorney Esaki informed the Commission that Bill 2425 (known as the Tim Bynum's Bill) is currently before the County Council that finds homeowners residing in their homes is entitled to relief from the real property taxes that they currently pay. t Chair Apao indicated that Bill 2425 was first introduced on January 25 ', which originally proposed a $225,000 exemption, with increments of$25,000 for seniors over 60 and 70 years old. The bill was deferred several times, until an amendment was made by Council Vice-Chair Yukirnura to reduce the exemption to $175,000 with no age brackets. Saudi Sterker reiterated her concerns that the proposed tax exemptions were going to hurt the County in taxes. Laurie Yoshida questioned whether proposed Bill 2425 would take some of the other exemptions out or it is only dealing only with the owner occupant exemption. Glen Takenouchi stated that the proposed Bill 2425 only reflects the home owner occupant tax exemption. Laurie Yoshida asked whether the bill addresses the circuit breaker exemption. Attorney Amy Esaki indicated that Bill 2425 does address that issue, but only for those who truly qualify. Ms. Sterker agreed that it should be based on the person's ability to pay and not because of a person's age. Laurie Yoshida indicated that the same theory also applies to the charitable organizations ability to pay. She noted that it is the younger generation who may have a difficult time in purchasing a home, let alone __ their ability to y taxes. Ms. Sterker agreed and questioned whether it would appropriate for the Cost Control Commission Workshop Meeting; March 29, 2012 Page 3 SUBJ, :C"l DISCUSSION ACTION County to penalize that age group especially, if they are trying to purchase a home. They shouldn't be compared to someone who can afford to build a multi-million dollar home. Laurie Yoshida referred to the Real Property Tax Advisory Commission who is recommending eliminating all type of exemptions except for the nonprofit charitable organizations under the federal Code Section 5011 (c)(3). Sandi Sterker quoted a recommendation from the Tax Advisory Commission which states that in place of the exemptions, the Commission recommends that the real property tax credit be utilized to provide tax relief to those who do not have the ability to pay their fair share of the real property tax burden. Laurie Yoshida indicated that there is a need for clarity when it comes to the controversial exemption of nonprofit organizations and that the definition should include the type of standards that must be met when applying for this tax preference. Having clarity would bring consistency and uniformity in the application of this tax preference. She added that when considering a recommendation, the Commission should include all of the exemptions by type and forward it to the County Council for them to decide can which exemption they would like to keep. Chair Apao suggested that the Commission select the type of exemptions that are less controversial. Sandi Sterker suggested that the Commission eliminate the Crop Shelter and Foreign Consulates exemptions including the 16 other exemptions that are listed with zero amounts. Laurie Yoshida felt that the Commission should have a common philosophy when determining what type of tax exemptions to eliminate and whether the Commission wants to grant exemptions based on a person's income level, whereas, a person with low income level would qualify for the circuit breaker credit and the wealthy would not. First Deputy County Attorney Esaki noted that Section 5A-11.23, Other Exemptions of the County Code,provides information pertaining to the Hawaiian Home Lands tax exemptions. Cost Control Commission Workshop Meeting March 29, 2012 Page 4 SUBJECT DISCUSSION ACTION Laurie Yoshida stated that the Hawaiian Home Lands are different and questioned whether the Commission should keep the exemptions relating to all government land because all of the State lands are not taxed. First Deputy County Attorney Esaki that all State, County, and Federal government properties are non-taxed, including the roads. Laurie Yoshida noted that the Hawaiian Homes tax exemption would fall under the State government. First Deputy County Attorney Esaki indicated that the Hawaiian Home lands are taxed one time. Arryl Kaneshiro stated that the land is owned by the State and the house is owned by the tenant. Laurie Yoshida stated that the land is on a lease from the Office of Hawaiian Homes, First Deputy County Attorney Esaki noted that generally the property tax pays for the general services afforded by the County such as police, fire, and trash pick-up, and that those who enjoy these services should pay their share of the tax including Hawaiian Home. Sandi Sterker agreed and stated that was one of Mr.Kalapa's concerns because he felt that anyone who is receiving these services should pay their fair share. Laurie Yoshida stated that they should be exempt from the land because the land is covered under the State; however, the house would have some value and should be taxed because it is not owned by the State. First Deputy County Attorney Esaki stated that the appraiser's would look at how the property is owned to determine whether the property is a lease hold versus fee simple, etc. Laurie Yoshida referred to the recommendation made by the State Tax Advisory Commission that those entities which are currently exempt because they tend to be nonprofit in nature, be subject to a levy of the real proper-ty tax albeit at a percentage less than full market value in recognition of the community benefit they provide. . She noted that although the recommendation does not specify the percentage, the report does indicate that it should be left up to the Council to decide. Cost Control Commission Workshop Meeting March 29, 2012 Page 5 SUBJECT DISCUSSION ACTION It was also noted that in the report, the Tax Advisory Commission recommends that the Council consider repealing the exemption for Kuleana lands and in its place direct these property owners to the tax credit mechanism to provide relief to those Kuleana property owners who truly cannot afford to pay their fair share of the cost of County services. Sandi Sterker mentioned that Kauai does not have a lot of Historic residential homes and that majority of those homes are located on the island's north shore. Laurie Yoshida noted that the Tax Advisory Commission believes that the historic residential real property should be afforded relief by applying an assessment ratio that results in a valuation that is less than fair market value. Sandi Sterker agreed with the recommendation and noted that if it's in a residential area most of the owners are living in their homes and enjoying the services provided by the County. Arryl Kaneshiro wondered whether Mr. Kalapa's statement was true, and that the purpose for giving the historical homes incentive was because the home owners would be putting more money back into their homes. Saudi Sterker stated that it is evident that the home owner would be doing that anyway otherwise, they would not be purchasing a historical house. Sandi Sterker noted that a lot of the 501 c's receives County services. Laurie Yoshida mentioned that the way Oahu worded its recommendations was to basically repeal every exemption and only give income based, non-profits, and historic based on its percentage, although it does not state the percentage. First Deputy Attorney Amy Esaki informed the Commission that the recommendations made by the Real Property Tax Advisory Commission in its preliminary report did not pass Council. It was mentioned that one of the objective of this Commission is to eliminate the mass amount of paper work involved for each type of tax exemption. First Deputy Attorney noted that the circuit breaker exemption needs to be done annually. Laurie Yoshida noted that it would still be applicable because the Commission still wants to be considerate to those people with low income. It's the ones that are in a Cost Control Commission Workshop Meeting March 29, 2012 Page 6 SUBJECT DISCUSSION ACTION category in which they do not have to pay because they are not being assessed. The question is whether there would be a category where annual assessment is actually being done. Laurie Yoshida questioned whether they assess the properties that they know are exempt. First Deputy Attorney noted that by law the real property tax division is required to assess all properties. Laurie Yoshida asked whether all of the properties that are subject to a minimum tax exemption are being done and if not, then they would have a lot more assessments to do which is really where their work should be focused on. Thus, creating less paperwork for all of these exemptions because the only exemptions that qualify would be the income based, non-profits, etc. She noted that it would not relieve them ft-orn work; it's just a different kind of work. Laurie Yoshida stated that it could cost the County more money if they are not assessing properties that they should be assessing. Arryl Kanesbiro stated that the tax for the low hanging fruits carries a minimum tax of$25.00 a year. He then suggested that the Commission increase the minimum tax which would not increase the workload, but increase more revenue for the County. Laurie Yoshida stated that would have to be done anyway because the County still allows for ratios for the non-profits. Referring to the number six tab of the Reference Documents materials, Laurie Yoshida indicated that approximately one-third of Maui's owner occupants pay the minimum property tax of$150 and Oahu minimum taxis $300, Big Island is $50.00 to $100. Kauai's mirurnurn property taxis a low $25.00. First Deputy County Attorney Amy Esaki noted that Maui County is proposing to lower the minimum property tax. Arryl Kaneshiro noted that Ag Land which is dedicated totally for pasture use pays a minimum property tax of$25.00. Sandi Sterker noted that the problem with increasing the minimum property tax is if the land is being leased. However, she felt that if the property is receiving County services, increasing the tax would be okay, Cost Control Commission. Workshop Meeting March 29, 2012 Page 7 SUBJECT _ _ DISCUSSION ACTION _.._ First Deputy Attorney Amy Esaki inforined the Commission that the Hawaiian Home lands are being assessed for land and building and even though they get the exemption they are being appraised. Laurie Yoshida noted, that the Commission would not be creating more work because they are already assessing it, which means the only category that are fully exempt is the government. Glen.Takenouchi questioned whether the federal government such as PMRF (Pacific Military Range Facility) uses County services. First Deputy Attorney Amy Esaki stated that PMRF has its own Fire Department. Sandi Sterker found it interesting that all of the exemptions type that are under the Hawaiian Home lands would actually come under the assessed value. Laurie Yoshida noted that would be an easy one for the Commission to propose a minimum tax increase from $25.00 to $1 00.00 Arryl Ianeshiro questioned whether it would be appropriate to request information on how many people actually pay the minimum tax. The information would help the Commission make a recommendation for a tax increase that would increase the revenue for the County. Laurie Yoshida stated that there could actually be more than the number of parcels because if someone is paying more than the minimum tax the Commission could recommend an increase in the minimum tax. Sandi Sterker stated that one would not want to increase the minimum tax to $100.00 when you have someone who is paying$65.00 minimum tax. First Deputy Attorney Amy Esaki stated that if the Bynum Bill were to pass, the total assessment value would increase from $48,000 to $175,000. To qualify for the exemption the total amount for the land value and building value cannot exceed $175,000. Anything less would qualify for the exemption and anything greater would have to pay. Administrative Aide Teresa Tamura informed the Commission that the preliminary Real Property Tax Advisory Commission report for December 2011 is sitting with the Honolulu County Council, and that no decision had been made regarding the Commissions recommendations. Cost Control Commission Workshop Meeting March 29, 2012 Page 8 SUBJECT DISCUSSION ACTION Laurie Yoshida stated that the Cost Control Commission's recommendations are different from the City and County of Honolulu. She explained that when the Commission makes a recommendation it has to go to the Mayor who puts it in an ordinance form for the Council to receive and decide whether they agree with the recommendations or reject it. Chair Dirk,Apao, stated the Commission cannot make any decisions today, but are able to at its next meeting in April. Laurie Yoshida stated that the Commission can address the matter of increasing the minimum tax as well as what would be the proper way to address all of the tax type exemptions. First Deputy County Attorney Amy Esaki stated that according to Steve Hunt, the minimum property tax for Maui County is $150.00, Oahu is $300.00, Big Island ranges from $50.00 to $100.00 standard, and Kauai is the lowest at $25.00, In reference to the Hawaiian Rome lease lands she referred to the July 2011 meeting minutes which states that the lands are either owned by OHA (Office of Hawaiian Association), Hawaiian Home land groups or leased to a family. There are also vacant lands, semi- improved lands and the building's are exempt from taxation and after the minimum tax of seven years and the land is exempt forever. After the seven years, building stays at a minimum tax of$25.00. She noted that the Hawaiian Home leasee's pays a fee for the County services. Laurie Yoshida noted that since the building value vary significantly the Commission should raise the minimum tax that is comparable to the other counties that way there shouldn't be any conerns about increasing the minimum tax for the Hawaiian Home Lands or qualified government type exemptions. Glen Takenoucbi asked how much are tipping fees for use of the land fill. Arryl Kaneshiro stated that the total amount one pays for the tipping fees is $12.00 whether you have the service or not, Sandi Sterker asked how everyone feels about the age exemption and whether everyone is on the sunc page. Cost Control Commission Workshop Meeting March 29, 2012 Page 9 SUBJECT DISCUSSION ACTION Laurie Yoshida requested to get a list of all the 501 C's non-profit organizations. Laurie Yoshida asked what 2% of the previous year's bill mean. First Deputy County Attorney Amy Esaki stated that the permanent home use is a home exemption property dedicated to permanent home use and that the dedicated property shall be taxed based on its assessed value,provided that the beginning tax year 2005 and any increase in taxes from the prior tax year shall not exceed two (2) per cent a year. First Deputy County Attorney Amy Esaki indicated that the bill proposed by Bynum was to take away the 2005 tax year and refer it to the 2012 tax year to equalize the home exemptions. She also encouraged the members to watch the County Council meetings that refer to the property tax exemption. After the members shared their views and input, the Commission requested for the following information: • Information on the number of people that actually pay the minimum tax of$25.00 and those who pay below $150.00, and a listing of all 501 (c) non-profit organizations. • Update on Tim Bynum. Bill 2425. Staff acknowledged the request and would notify the Finance Department via a memo. Cost Control Commission. Workshop Meeting March 29, 2012 Page 10 SUBJECT __ _ DISCUSSION _ ACTION Ad'ournmentThere beir r no further discussion, at 3:05 p.m. Chair A ao called for the workshop to adjourn. — — Submitted by; �._.- _ Reviewed and Approved by: Mercedes Youn, Staff Support Clerk Dirk Apao, Chair ( } Approved as circulated (add date of meeting approval). Approved as amended. See minutes of meeting. D�R?ffjT@B1,ejA���r�rove COUNTY OF KAUAI V _00 Minutes of Meeting OPEN SESSION Board/Committee.- COST CONTROL COMMISSION Meetimy,Date I April 9, 201,2 Location Mo'lkeha Building —Meeting Room 2A/B Start of Meeting: 1:35 p.m. End of Meeting: 2:45 p.m. Present Chair Dirk Apao; Members: Arryl Kaneshiro; Sandi Sterker; and Glen Takenouchi Also First Deputy County Attorney Amy Esaki; Board & Commissions Office Staff- Support Clerk Mercedes Youn; Administrator Paula Morikanii; Administrative Aide Teresa Tamura Excused Vice-Chair Lawrence Chaffin Jr., and Laurie Yoshida Absent SUBJECT DISCUSSION ACTION Call To Order Chair Apao called the meeting to order at 1:35 p.m. Approval of Regular Open Session Minutes of March 12, 2012 Minutes Ms. Sterker requested that on page fourteen (14) let the minutes reflect that Mr. Hunt strran glkr indicated that consideration should be taken to allocate across the County, the level of service in terms of the police and fire that the County provides. Additionally, Ms. Sterker requested that on page four (4) let the minutes reflect that there are a lot of people in the community that are looking for work. With no further corrections, Chair Apao called for the motion. Ms. Sterker moved to approve the minutes as amended. Mr. Takenouchi seconded the motion. Motion carried 4:0 CCC 2012-06 Letter of resi�ation dated 03/02112 from Brant Fuchigami, to Mayor Carvalho and Chair Dirk Apao and Commission Members Ms. Sterker moved to accept the communication. Ms. Sterker asked whether the Office of Boards and Commissions is Mr. Takenouchi seconded the motion. continuim4 their search for Mr. Fuchi,,,arni's replacement. Motion carried 4:0 Cost Control Commission Open Session April 9, 2012 Page 2 SUBJECT DISCUSSION ACTION Paula Morikami, Administrator indicated that the search for his _.� ..� _e�__fig X w names were recommended. CCC 2012-07 Communication dated 03/16/12 from Chair Dirk Apao and Commission Members, to Council Chair Jay Furfaro responding to a memorandum dated 02/02/12 regarding the Cost Control Commission 2011 Annual Re ort Ms. Sterker moved to accept the communication. Mr. Takenouchi seconded the motion. Motion carried 4:0 CCC 2012-08_......._ Communication dated 03/13/12 from Chair Dirk Apao and Commission Members, to Janine Rapozo, Human Resources Taskforce requesting a rresentative from the taskforce be present at the Cost Control Commission meeting on April 9 2012 to provide an update on the progress by taskforce. Ms. Sterker moved to defer this matter for continued discussion at the Commissions May 14`h meeting. Mr. Takenouchi seconded the motion. Motion carried 4:0 CCC 2011-O8 Review and discussion of the County's real property tax exemptions and rate settings. (On-got int;) Chair Apao mentioned that Bill 2425 (Tim. Bynum's Bill)property tax exemption was defeated by a 2 to 5 vote and because of that he felt that it provided the Commission with additional time to gather more information in order to make a recommendation. He indicated that the Commission should be mindful when making a recommendation because it could affect the future budget. He also felt that it would have been easier if some exemptions had passed. Cost Control Commission Open Session April 9, 2012 Page 3 SUBJECT DISCUSSION ACTION. Ms. Sterker asked whether it would be appropriat to make a recommendation to raise the minimum tax. She felt that during the workshop session the members were all in agreement that the minimum tax needed to be adjusted. Ms. Morikami informed the Commission that a request was sent to Steve Hunt, Real Property Appraisal Officer, requesting for information on the number of homeowners that actually pay the minimum tax of$25.00 and those who pay below $150.00 and a listing of 501 (c) (3) non-profit organizations. Mr. Kaneshiro stated that in addition to confirming the minimum real property taxes for each island, he also asked to get the dates they were implemented. And if the rates were in effect for many years it will further increase any justification on the Commissions side for an increase. Ms. Sterker indicated that once the Commission receives the information, it could move forward and make recommendations based on the information. Ms. Sterker mentioned that during the workshop there was discussion on eliminating the 16 type of exemptions with zero arnounts. Ms. Sterker further indicated that the Commission also requested a list of all 501 (c) (3) non-profit organizations. Staff informed the Commission that the information should be available for the May meeting. Ms. Sterker found it interesting that it costs a homeowner$40,000 to build a safe room only to receive a$200.00 credit. Cost Control Commission Open Session April 9, 2012 Page 4 SUBJECT DISCUSSION ACTION Arryl Kaneshiro felt that the Safe Room type exemption should not be eliminated because there are thirty-six (36) on the island. First Deputy Attorney Amy Esaki indicated that she would do some research on whether Kauai is the only island with a Safe Room exemption due to the destruction by Hurricane Iniki in 1992. Chair Apao, asked if the exemption for a Slaughter House came up for discussion during the workshop. Ms. Sterker indicated that there are two (2) on the island. Mr. Kaneshiro noted that some of the exemptions may not pertain to Kauai. Ms. Esaki agreed and advised the Commission to check the information that is provided by Staff in their binders. Ms. Morikarm informed the Commission that the information is available on tab number 2 in the binder and advised the Commission that they should focus on that list. Ms. Sterker asked if there are any Crop Farms on the island that would need a crop shelter; she also asked if Kauai has tobacco farms. Mr. Takenouchi stated that there are nine (9) crop shelters on the island and one of which is a tobacco farm. Ms. Sterker asked whether Crop Shelters are solely for agricultural purposes and if they require any type of County services. Ms. Esaki noted that Green Houses may fall under Crop Shelter exemption and that she believes the crop shelter would require certain County services in case there is a fire. Cost Control Commission Open Session April 9, 2012 Page 5 SUBJECT DISCUSSION ACTION Arryl Kaiieshiro felt that the Crop Shelters should be only be taxed on the structure and not the land because it's being used for Ag purposes. Ms. Esaki noted that the County has an exemption for all property used in the manufacture of pulp and paper. She explained that the exemption was implemented during the time the sugar mill was in business because it manufactured caneck. Ms. Sterker suggested that the Commission eliminate the forest reserve exemption. Chair Apao indicated that there are 1,1 S 7 forest reserves on Kauai. Ms. Sterker indicated that it would be difficult to do anything about the charitable exemption until the Commission receives the infort-nation,from the real property tax division. Ms. Morikami recalled that some of the churches fall under charitable exemption and others are not; she questioned which of the charitable organizations qualify for the exemption. Ms. Sterker agreed and stated that there are some churches that are more charitable than others. Ms. Sterker noted that there are 145 parcels of land on the island which means that some churches have more than one location throughout the island. Chair Apao asked whether the schools are under be the State government. Ms. Esaki noted that Section 5A-1 I.10 of the County Code describes the purposes of each charitable organization. Property used for church purposes, including incidental activities, parsonages, and church grounds, are exempt from taxation being limited to realty exclusive of burial Cost Control Commission Open Session April 9, 2012 Page 6 SUBJECT DISCUSSION ACTION Ms. Sterker felt that since the pulp and paper exemption was implemented back in the day when the sugar mills were operating, the Commission can easily eliminate that exemption. Ms. I saki made a suggestion that the Commission lock at tab number(4) of their binder which lists each type of exemptions for the island of Kauai. After a lengthy discussion, Staff was instructed to request the following information from the Real Property Tax Division. I. Why are the following charitable organizations, cemeteries, churches, hospitals, and schools listed separately`? 2. Provide a breakdown of what specifically is included under the charitable by category and provide examples 3. What is included under the miscellaneous and give an explanation and purpose: for it. 4. What is a tangible personal product as described in Section 5A- 11.16 on page qS of Chapter 5A Real Property Tax 5. In reference to native forest, where does it state in the ordinance that this is a permitted exemption 6. Why isn't orchard development listed on the tax year 2011 (FYI 2) exemption type, as described and defined in Section 5A-11.25 of the County Code. 7. In addition to confirming the minimum real property taxes for each island, would we also be able to get the dates they were implemented? If the rates were in effect for many years it will further increase any justification for an increase. Announcements Next meeting—May 14, 2012, at 1:30 p.m. at the Mo'ikeha Building in the Liquor Conference Room 3. Cost Control Commission Open Session April 9, 2012 Page 7 S U BJ DISCUSSION ACTION Adjournment With no further business to discuss, Chair Apao called for the motion to adjourn the meeting. At 2:45 p.m. Ms. Sterker moved to adjourn the meeting. Mr. Takenouchi seconded the motion Motion carried Submitted by: Reviewed and Approved by: Mercedes YOUn, Staff Support Clerk Dirk Apao, Chair Approved as circulated (add date of meeting approval). Approved as amended. See minutes of meetinvg. Dirk Apo Members: Chair ,� Sandi Starker Amf Kareshiro Lawrence Chaffin Jr. xz` ~�y Citeia rakenouchi ° Laurie `oshida vice-chair COUNTY OF KA A`I COST CONTROL CONUNUSSIO MEMORANDUM -ro: Wallace Rezentes Jr., Director of Finance CC: Sally Motta, Deputy Director of Finance Steve Hunt,Real Property Review Officer FROM: Dirk Apao. Cost Control Commission Chair VIA: Paula Morikami, Office of Boards and Commissions Administrat �j CC: Gary Heu, Managing Director DATE: April 3, 2012 SUBJECT: Request for Real Property Tax information At its workshop on March 29,2012. the Cost Control Commission requested: 1)The number of people that actually pay the minimum tax of 525.00 and the number of people who pay below S 1 50,00 anti, 2) A listing of all 501(c) non-profit organizations. If possible, the Cost Control Commission would appreciate the requested items by April 16,201'. If you have any questions. I can be reached through Teresa Tarnura at 241-4918 or ttaniuratd"kauai.+eov. Thank vou. CCC 2011 -08 (P) .-In.1"(1tial Qpportunrty E'rn,plo.ver Teresa Tamura From: Steven Hunt Sent: Tuesday,April 10, 2O 27:21AM /m: .`n==a Tamura; Wallace ,`=z= .=s Co: Sal Paula Morkami \d .com' Subject: RE:Additional Information-Cost Control Commission Aloha Teresa, I have compiled tricist of the requested information, however the listing of 501(c)(3) non-profit organizations is not something at our fingertips as most of our records reflect owners not lessees ontitle. There are also a number of minimum taxed parcels that are common elements within condo projects that have been[PR'd into separate units. Finally, some of the Hawaiian Horne Land residents(lessees) pay nothing for 7 years and then pay minimum tax after the seven thyear. With these aforementioned caveats, here are the numbers you've requested: Homeowners paying$I5 minimum tax 769 (includes a handful qf disabled veterans, historic residential, Hawaiian Homes, and ku|eonas) The number of minimum taxpayers increased moderately due to the higher income exemption amount for ZD12 Homeowners paying between $Z5,O1'$15O 484 Non-homeowners paying minimum tax 1'7I9 (includes schools,churches, 5Ul(c)(3) non'prn§ts'credit unions, tree farms, and common e|ementrim condo projects) Regards, Steven& Hunt Real Property Cyfice/ Cumn/yu[Kauai'Department ofFinance ������ x���1 ������ /��� ^�"�"� ��� / / ��� \v�/ Real Property Assessment Division (308)241-4236 comF/ocmnxccommum/cmmm. ro.,messamr(and mnvattacomentn)/s.°,eoueuu^*Fur the use urt*eu�!3'»natwun�c/r/a"ln°'vpa ,b""e.ff,haemae,ormm"—syume�s "o,tl-°/",e"deJ,supeo,,vu"aeoe,eb°""m/euu`a,you xw,,ecr."°am/som"m,"^/»°,mr�a"u that wv."vtc='u/,sem."°mo".m*,.uunoo or�mnv."o of m.sm*ssapis �,",/yp�mb�°u, //vn"ec�e,�.`mm��"��mvm�oo�*�aen���m,m,u���ovte�**uoeo"uue/m�,omme��anua"ru��o�env� r��n�vv"� From: Teresa Tamura Sent: Thursday, April O5, 2012 4:01 PM To: VVa|laceRezcntes Cc: 5aUyMotta; Steven Hunt; GaryHeu; Paula Modkam|; `dirka@financefac±oo.com' Subject. Additional Information 'Cost Control Commission Aloha Wally, I received this email request from Commissioner Arryl Kaneshiro from the Cost Control Commission requesting information in addition to the memo attached dated 4/3/28l2. (See Attached). Your assistance io getting the information will *e very much appreciated. |f you have any questions please feel free to call meat ext.4918. Thank you! Frmmm: Arry| Kaneshi*m [ ] Sent:Thursday, April 05, 2012 2:41 PM Cc: 'Lawrence Chaffin ]t ; 'successfulplanning@hswaU.nccon`'; AmyEsaW; Teresa Tamura; Paula Modkami Subject: RE: CCC Agenda Hi Mercy, !n addition bzconfirming the minimum real property taxes for each island,would we also be able 0oget the dates they were implemented? If the rates were in effect for many years it will further increase any justification on our side for an increase, Tkeoks, Arry| Teresa N Tomura Amoy AdnninbtnzUveAide office of Boards and {--ornmissioro 4444 Rice SImaetSte. 150 Uhoe.HavvaR 96766 Phone i8081 241-4918 Fax (808) 241-51,27 E-mail- CONFIDENTIAL COMMUNICATION:This message(and any attachments) is intended only for the use of the designated recipient named above. If the reader of this message is not the intended recipient, you are hereby notified that you have received this document in error, and that any review, dissemination, distribution or copying of this message is strictly prohibited. If you receive this communication in error, please notify us immediately by telephone and delete this message and any attachments. Thank you. 2 Dirk Apao Members: Chair _ _ Sandi Sterker Arn l Kaneshiro Lawrence Chaffin Jr. Glen Fakenouchi Vice-Chair x '6 Laurie Yoshida COUNTY OF KAUA'1 COST CONTROL COMMISSION TO}: Wallace Rezentes Jr., Director of Finance Via: Dirk Apao,Chairman of the Cast Control Commission Paula Morikami, Boards and Commissions Administrator Cc: Gary I-ieu, Managing Director SUBJECT: Request for Information for the Cost Control Commission Aloha Wally, In follow-up to the April 9, 2012 Cost Control Commission meeting, the Commissioners had questions and asked that you provide information for their next meeting which is scheduled for May l 4, 2012. 1. In reference to the list of number and amount of exemption by type; why the charitable exemptions are listed separate. 2. What exemptions are included under the charitable exemptions per the County Ordinance? 3. Please provide a list of the miscellaneous exemptions and an explanation and the purpose for it. 4. What is a tangible personnel product, please refer to page 98 of the County Ordinance. 5. In Reference to Native Forest; where floes it state in the Ordinance that allows this type of exemption? E. Where is the category for Orchid Development and why it is not included in the list of exemptions; please provide a breakdown of all charitable exemptions by category`types and give an example. Please submit your written response by April 30, 2012 so that we may provide the information as part of the agenda. If you have any questions, please contact Paula Morikami at Ext. 4922 or email prorikrrtiukauai.gov Thank you for your assistance. CCC 2011 -08 (R) An E*qu zl Opportunity Emplgver 4 Bernard P. Carvalho,Jr, ' Wallace G. Rezentes,Jr, ' ' -,f Finance ,v1a4 or Director J sit Gary K. Hen ~> or . Salle A. Motta Managing Direoor _ Deputy Director of Finance DEPART MENT OF FINANCE County of Kauai, State of Hawaii -1-1-14 Rice Street, Suite 280,t_tiru`e,Haikai-i 46766 TEL(808)241-420 FAX(808)2,11-6524 TO: Dirk Apao, Chairman of the Cost Control Commission VIA: Paula Morikami, boards and Commissions Administrator CC: Sally A. ?Mott,, Deputy Director of Finance Gary Hen, (Managing Director Steven A. Hunt, Real Property Review Officer Wallace irector of Finance FROM: � p G. Rezentes, Jr., DA"I'E: April 27, 2012 RE: Response to April 10, 2012 Questions on Exemption Following are the answers from Steve Hunt, Real Property Review Officer for the Real Property Assessment Department of the questions requested: I. Why are Charitable Organizations, Cemeteries, Churches, E lospitals, and Schools listed separately on Exhibit A? On Exhibit B.Cemeteries,Churches, Hospitals, and Schools are included in the description of Charitable, Answer: Prior to the State conveying the real property taxing authority-to the County,these exemptions were addressed in separate categories. Most have continued the use under the same ownership,thus they have not been required to renew their status. New applications are being handled and processed under section 5A-1 1.10 Charitable as a categorical exemption type rather than acknw !edging any subcategories within this type. 2. Please provide a breakdown of what specifically is included under Charitable by category and can you provide examples, Ansever: While not broken down by category, the Charitable exemption is given to properties that are used for schools, colleges,churches,cemeteries,qualified nursing homes, labor unions, government employees associations, recognized patriotic societies,qualified non-profit organizations,and properties dedicated to public use. It is the property's use not ownership that determines eligibility for this exemption. As previously=mentioned, some of the residual exemptions that were established by the State included compartmentalizing these exemptions into schools, churches,hospitals,and cemeteries, however on a-go-forward"basis these are now processed generically as``Charitable Organizations", p CCC 2011 -08 (S) Gxmnp|cs: Roman Catholic ChorckKukUi Adventist School, QuuaiEmonomicOpportunity, Legal Aid Society, Easter Seats, Office of Hawaiian Affairs,Goodwill Industries of Flawai'i. Snku0okkai International,YMCA, American Cancer Sucietv. P,/\][.C.B_ Community h4cnm| Health Center, Muhckmo Hospital,The Nature Conservancy. and late Kipa. 3. What io included under Miscellaneous(See Exhibit A)and can you give co explanation and the purpose for it? Answer: The miscellaneous exemption accounts for exempt properties that cannot be accounted for 6y other recognized exemptions. For instance,one o[these properties was u court ordered exemption for a conservation easement that was negotiated by the County Attorney's Office and all appellant. YV6iic &co| Property Assessment does not recognize conservation easements,we cannot ignore actions that are imposed 6y the courts. Thus, "m must acknowledge these mandated exemptions despite not having the sta/utory framework to implement such exemptions. 4� What is a"tangible personal producC as described in Section 5A-11.16 on page 98 of Chapter 5A Real Property Tax? Answer: There is no legal definition of.'tarigible personal product"contained in the Kaua'i County Code-, however given the context in which it is used it would appear to refer to private property that is movable, also commonly called"chattel"or"personalty" in common law or mo4|es`' in civil |mr. Trade fixtures, Furniture, machinery, business inventory,and livestock would be considered cxomp|ce of tangible personal product. s. In Reference ioNative Forest, where does i(state in the Ordinance that this isupermitted czcmp/iun7 Answer: \Ybi1c native 6»ocsi land is not an exemption that is listed under 8ccbmn 5A'1|, it is exempt pursuant to Section 5 A-8.1 (a),which states"The director shall cause the fair market value of all taxable real property to be determined and annually assessed by the market data and cost approaches tu value using appropriate syx/omudcmcdhodoanitaNcR`rmumova>umionof properties for taxation purposes,so selected and applied to obtain. as far as possible, uniform and equalized assessments throughout the county, provided that land dedicated pursuant to Sees. 5&- o�l, 5A-Y.Znrj&-9.4aku|| hcasscssmdocuoo|ingto those respective sections.and provided further that native forest land and land unusable or unsuitable for any ai�ricultural use shall not be 4,ssessed; and provided further that public utilities shall be subject to taxation pursuant to Sec. 5A- 8.31." As part of the Agricultural Dedication program(5A-9.1),those lands that are"native forests"may be included in the dedication as being exempt from value of the assessment through the dedication itself. For recordkeeping, it has been easier for the four Hawai'i counties to list these native forests on the statewide exemption report as the language cited above gives them a backdoor tuaoexemption. 6� Why isn't Orchard Development listed un Exhibit 1? /tis described and defined in Section 5A- Answer: Currently there are no"Orchard Development"exemptions being given hy any o[the Buvvai'ioountics. If there were any exemptions approved for(hi,category, then the statewide report tvoul6 be amended. For example, when the Tmc Farm cxmonpt|oo was created by Kuua'i County the report was amended kz reflect this new exemption. Kouu'i County ia the only ooun[y that has this exemption. NEW In addition to confirming the minimum real property taxes for each island,would we also be able to get the date-,they were implemented? If the rates were in effect for many years it-,kill further increase any justification for an increase, .Ans,N,,cr: City &County of Honolulu - $3100 (increased from $100 to S300 in FYI 1) \,,Iaui County - $150 (increased from $60 to S 150 In FY 10) flawai'i County - $100* (increased from $25 to$100 in FY03) Kaua'i County-$25 (hasn't changed since moved from State to County in 19811*82) HaNvai'i County's rnininiurn tax is 5100 for properties with improvements assessed at$75,001 or greater; $75 for properties with improvements assessed between $50,001 and $75,000; $50 for properties with improvements assessed between 525.001 and $50,000, and$25 for properties with improvements assessed less than or equal to 525,000. Those minimum tax levels that are less than the $100 standard minimum tax level are only applicable to those property owners that have home use exemptions or have the disabled veterans exemption. Properties that have a total assessment equal to or less than $500(regardless of exemptions)also pay a minimum tax of S25. Please let me know if there is any further clarification needed at this time.