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<br /> James Y. Arakaki, Chairman <br /> <br /> Page Two <br /> September 10, 2004 <br /> Bill No. 175 <br /> 1. Why are we using market value rather than replacement cost for valuing property? <br /> Replacement cost is one method of determining market value. Another is the sales <br /> comparison method. The Real Property Tax division is working toward instituting the sales <br /> comparison method and expects to have it implemented within 3 years. <br /> 2. Section 19-53(h): Why was 3% selected as the growth limit rather than 6%? We believe 3% <br /> is appropriate due to the large increases in assessed values over the past few years. For fiscal <br /> reasons, we do not recommend lowering this amount. <br /> Bill No. 176 <br /> Why can't the homeowners class portion of properties dedicated to agriculture be dedicated to non- <br /> speculative residential use? Section 19-58.1(b) prohibits properties dedicated to agricultural use to be <br /> eligible for this non-speculative residential use dedication. Of note, Bill 176 was prepared prior to <br /> Bi11261, which allowed those with agriculture use/dedication to qualify for the homeowners class. <br /> We nevertheless recommend maintaining this section as it presently reads. <br /> We hope the responses above adequately address the questions of the Finance Committee. Should <br /> you need further clarification, please contact me. Thank you. <br /> Sincerely yours, <br /> vft.+Gl <br /> William Takaba <br /> Director of Finance <br /> <br />