HomeMy WebLinkAbout12-02-2009 PH Bill 2337 PUBLIC HEARING
DECEMBER 2, 2009
A public hearing of the Council of the County of Kauai was called to order by
Daryl W. Kaneshiro, Chair, Budget & Finance Committee, on Wednesday,
December 2, 2009, at 1:51 p.m. at the Council Chambers, Historic County Building,
4396 Rice Street, Lihu`e, Kauai, and the presence of the following was noted:
Honorable Tim Bynum
Honorable Dickie Chang
Honorable Jay Furfaro
Honorable Daryl W. Kaneshiro
Honorable Lani T. Kawahara
Honorable Bill "Kaipo" Asing, Council Chair
Excused: Honorable Derek S. K. Kawakami
The Clerk read the notice of the public hearing on the following:
BILL NO. 2337 - A BILL FOR AN ORDINANCE AMENDING
CHAPTER 5A, KAUA`I COUNTY CODE 1987, RELATING TO
LIMITATION OF TAXES ON PROPERTY USED FOR LONG TERM
AFFORDABLE RENTAL,
which was passed on first reading and ordered to print by the Council of the County
of Kauai on November 4, 2009, and published in The Garden Island newspaper on
November 12, 2009.
The hearing proceeded as follows:
LORRAINE NEWMAN: Hello, my name is Lorraine Newman. Thank you
very much for having this hearing; we do appreciate it. I'm going to try to stay out
of the personal, unless when I'm done you want to ask questions about me. I'll be
more than happy to give you a reality check of what it's like to be on the other side,
if that's okay. What I'm here to do is to support this amendment. I don't think I
need to go into what it's about; it really does support affordable housing. I am a
long term rental owner. I have been compliant with this for the past...well, since its
inception. The bill addresses a few problems that have arisen, because I believe
when it was created it just maybe wasn't thought out to the extent of what could
possibly happen if things didn't go quite right. For one thing, as it stands, there is
no way to appeal anything that isn't in compliance for whatever reason, force of
nature, whatever, and that's very, very important. So this bill offers a way to have
an appeal process. It is... Also, I understand there's some concern maybe about the
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amount of the penalty. I want to remind the council that this is for affordable
housing. It is a way to encourage and even reward people such as I who are offering
affordable housing. My way of looking at it is a penalty...there's a reason for a
penalty, and it should...it should take care of the clerical process, the time, the cost
of readdressing paperwork, etc. That seems really fair. But it is not like not paying
taxes, and again, any cost to a long term rental owner is going to get passed on, and
I believe the original intent and the- intent at this point is to encourage as many
land and property owners to keep the price down. I understand this is considered a
temporary draft that council Kaneshiro is possibly looking into something longer
term. I really encourage you to pass this. Let's not make it too complicated. At
least have something happening for the next year, and certainly before the next tax
bill is due, which is very soon, and at least it gives us a little time, and put in a
corrective measure.
If I have another minute or two, I'm actually willing to alter myself just to
give you a little reflection. From the very beginning, I've been in compliance and
have received the deduction; it's really been considerable, and I do appreciate it,
okay`? Last year 2009, I sent in the paperwork, everything the same, and when I got
my tax bill it had more than doubled from less than 2,000...I'll just say it, to
over 4500, okay? I was shocked and I called to see what happened. Well, nobody
could tell me, but the paperwork hadn't been received, for whatever reason, and I
want to say that Wallace Rezentes and people I guess in the office really tried to
look to see if it had been misfiled, but nobody could find it. It could have been lost
in the mail, whatever. The problem was I had no way to prove I had got the
paperwork in time. There's nothing that's sent back to the taxpayer that says we
received it; nothing's stamped. When you get your tax assessment for the year,
there's nothing on this piece of paper reflecting this deduction. So I only knew a
couple months beforehand, and nothing could be done. I showed all my paperwork.
I said, look, here's my lease, I'm in compliance, everything's good, it's been like this
for three years, same tenants. And they said, we'd love to help you, but we can't
without this legislative change. Not only does...did I have to pay an extra 200 a
month according to this, which my lease does not reflect at this point, but the basis
changes to the higher amount, which is considerable. So at least if this draft is
passed as it sits, I can go back to where I was, I can show I'm in compliance, I do
have the paperwork, nothing's lost, I've been complying all along, and yea, I'm
willing to pay a penalty. I mean it takes some time, it takes...there's mailing costs
involved. I'm just asking that they not be exorbitant. That's it.
Mr. Kaneshiro: Thank you for your testimony. Any questions by
Councilmembers? Go ahead Mr. Furfaro.
Mr. Furfaro: Thank you again for your testimony. A couple
things are correct. This is a bridge amendment for one year so that we can work on
perhaps the encouragement of longer periods of time for those that provide rentals
on an affordable basis, and it does provide this appeal process. I just want to make
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sure you do realize, and it sounds like you're comfortable with the five percent
penalty as the bill...you expect to pay a penalty, and five percent seems fair.
Ms. Newman: Yeah, I actually know everybody's trying to save
money, and real property division needs to be mindful as well, and obviously if the
paperwork isn't right for whatever reason, it takes time and there's casts, and I am
very comfortable taking responsibility for that.
Mr. Furfaro: Thank you very much.
Mr. Kaneshiro: Okay, any other questions from members? If not,
thank you... yes, go ahead Mr. Chair.
Council Chair Asing: Sa you are not a renter. You own the rental unit.
Ms. Newman: That is correct.
Council Chair Asing: Would I be out of order to ask haw much rental you
charge?
Ms. Newman: Actually, I would really love you to really think
about this. Right now I awn a two bedroom house in Hanalei. Now I could be a
vacation renter, as it were. My ethics are such that I wanted local people to be able
to live in Hanalei. May or may not be the best business decision, but that was my
choice. 'Twelve hundred a month. Think about how cheap that is, and then, an
additional 200 a month I have now been asked to pay.,.have paid, actually, since
this error, okay? And I can't even pass that along to my tenants at this point,
because we da have a signed lease. So really, it's... not much money.
Council Chair Asing: So your rental rate is 1200 a month.
Ms. Newman: Yes sir.
Council Chair Asing: And that's a two bedroom house in Hanalei?
Ms. Newman: Yes sir.
Council Chair Asing: Would I be out of order if I asked which area, where
the house might be?
Ms. Newman: No. It's an Aku Road.
Council Chair Asing: Aku Road, oh wow.
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Ms. Newman: Aku Road, and for the...it's been three years, I
think, this has been...
Council Chair Asing: Aku Road is short, so (inaudible).
Ms. Newman: Yeah, it's on Aku Road, right in the middle of town,
and I've had my paperwork in, you know, signed and all of that, with the lease. It's
not like I wasn't doing this and in compliance for years. I'm really doing a service
for the community.
Council Chair Asing: Okay, thank you.
Mr. Kaneshiro: Mr. Bynum.
Mr. Bynum: Ms. Newman, I just wanted to thank you for your
testimony and also take the opportunity to thank you, and you representing a lot of
really thoughtful caring landlords on Kauai who have kept their rents in affordable
range, you know, because they care about the community and care about their
tenants. So I'll let you represent a whole bunch of landlords out there I know that,
you know, have kept rents low when they knew they could have done a lot better.
So thank you very much.
Ms. Newman: Thank you. Anything else?
Mr. Kaneshiro: Thank you. Can I have the next speaker please?
HAROLD MATSUNAGA: My name is Harold Matsunaga from Lihu`e. I'm
here about the property tax for the affordable rental tax thing. As you know, I was
here before, and I always, as I told you... Excuse me. Honorable Chairman and
Councilmembers, thank you for allowing me to be here. I'm sorry. I always felt
like, you know, whenever we late in any kind of payments to the county, we should
pay a penalty, yeah, and that's why I told you why I felt that the way it was it was
very unfair, because the way it was, we moved to the higher assessment, and that
would be like a permanent thing. So this is why I asked you if you could bx•ing it
back to the level that we were, with a five percent or six percent increase, providing
that we were still in compliance with the law, except that we made the mistake of
not filing on time. My question when I went to the tax department and I asked the
lady, how come they moved my assessment so much, and my question to the council
today is that does she have that power? Who gave her that power to move my
assessment to the present level just because I missed the deadline, although I was
still in compliance? Did she have the power to do that?
Mr. Kaneshiro: Go ahead and make your testimony.
Mr. Matsunaga: Yeah, I'm asking you the question.
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Mr. Kaneshiro: We'll answer questions later. This is your
opportunity to go ahead and make your testimony.
Mr. Matsunaga: Yeah, okay. Anyway, that's really all I have to say,
and I want to thank all of you for the time that you're given me to look into this
matter, and I hope that you can find it in your heart to make the proper
adjustment. Thank you.
Mr. Kaneshiro: Thank you. Any questions for Mr. Matsunaga?
Mr. Furfaro: No, I just could answer his question, if you'd like.
The Charter authorizes the tax office to upgrade the codes and the assessments
every year as they go out and make comparable assessments in those
neighborhoods. That is not the responsibility of the council.
Mr. Kaneshiro: Correct.
Mr. Matsunaga: She had that power to do this?
Mr. Kaneshiro: Yes.
Mr. Furfaro: The tax office does; yes sir.
Mr. Matsunaga: Okay, thank you.
Mr. Kaneshiro: You had a question, Mr. Bynum?
Mr. Bynum: Yeah, I just want to clarify that. I don't believe
that they would have changed your assessment because you missed the deadline.
All the assessments are done islandwide, so changing the assessment on a home,
and like they've gone up for a number of years, and it looks like they're coming
down now. But I don't think it would be connected. The assessment...reassessment
would happen regardless. Does that make sense Mr. Matsunaga?
Mr. Matsunaga: Oh, okay.
Mr. Bynum: I don't think they say, oh you're late, so we're going
to look at your assessment.
Mr. Kaneshiro: I think... You know, I don't want to get into too
much discussion in this, because we're particularly on the issue of this... We're not
on the issue of assessments at this point. We're on the issue of real property tax
amount that you've been paying and so forth. But simply to make it short, the
assessments can either go up or go down; depends on the market. Just so happened
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the market went up that high. Everybody else, it will go on to comparable markets.
So if it drops, well, everybody else drops. So it wasn't particularly picked just
because, you know, you didn't apply for this particular...for this exemption.
Mr. Matsunaga: Yeah, by me not filing by the 30...December 30...
Mr. Kaneshiro: No, that will not raise your assessment values.
Because I can tell you, my assessment jumped hundred percent from the year
before. So you know, just to give you an example. So again, it's a whole different
subject, so we can take that up in different communication, but at this point, you
know, I thought I'll just tx•y to explain it as simple as possible that it wasn't based
on your filing or late filing for this exemption.
Mr. Matsunaga: Okay, thank you.
Mr. Furfax•o: But to answer his question, yes they have the
authority to do it-that was the question.
Mr. Bynum: And just, Mr. Matsunaga, thank you for bringing
this to the council's attention, and I think, you know, that's the intention of this bill,
to have a reasonable mechanism to address your concern. So thank you.
Mr. Matsunaga: Thank you.
Mr. Kaneshiro: Okay, anyone else here that wanted to speak on
this item at this public hearing? Seeing none, this public hearing is now adjourned.
There being no further testimony on this matter, the public hearing
adjourned at 2:08 p.m.
Respectfully submitted,
PETER A. NAKAMURA
County Clerk
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