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David Schmitt 75-5919 Alii Drive #U4 Kailua-Kona, HI (808) 326-2145 June 4, 2007 Chairman Hoffmann and Councilmembers Hawaii County Council CounciltestimonyCcDco. hawaii. hi.us Re: June 5th Public Hearing regarding Bill 55, KVBID I feel Bill 55 should be rejected as submitted. It should be sent back to its originators for review and modification. The problems it proposes to address are very real and apparent to everyone, however this Bill isn't the answer. Bill 55's major problem areas are Council approval for formation of the District, protest of condominimum owners against formation of the District, boundaries, inclusion of Alii Cove in the District, responsibility for the deficient conditions and fairness of funding sources. The District will be formed by vote of the 9 member County Council. Only the people living in the proposed District should have the vote on whether it is formed. Since Councilman Pilago is the only council member who has constiuents in the District, he is the only one actually accountable to District residents for his vote. I can't imagine what basis the other 8 council members will use to cast their votes. Maybe they will vote yes just because it is a good deal to get additional money from the taxpayers, no matter how it is used, and obviously nobody in their own district is going to fuss about it. In the District formation process an entire condominium project will have only 1 vote. The individual condominium owners will be taxed on their property value, but will only have a fractional interest in the 1 vote by the project. I believe this provision violates the right of an individual property owner to have a direct vote on District formation, especially since each taxpayer will have to pay on his individual property. I feel the courts should find Chapter 35, section 35-13 (c) unconstitutional. Chapter 35 is inherently undemocratic because formation of the District has to have a 50% protest rate in order to block it. This is the reverse of what it should be. It should be that more than 50% of the elgible property owners must approve the District's formation. The boundaries have been gerrymandered to provide the maximum revenue with the least amount of voter resistance. I am a resident of Alii Cove and object to it's inclusion in the District. At informational meetings it has been represented that we will recieve some intangible benefits, but few and Invited direct services. The District should only incompass the active tourist areas. The tourist district is really the current zone 1 with the addition of the zone 2 properties north and south of Kuakini from Palani to Hualalai roads and zone 1 should stop after the Royal Kona Resort. If this reduced District is not acceptable, then the district needs to be greatly expanded because the intangible benefits actually apply to a much larger area than presently proposed. I submit that the KVBID, Schmitt, page 2