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December 16, 2002 James Y. Arakaki Page 3 December 31, 2001. For those homestead lessees with real property tax balances of more than $500, DHHL will advance full payment of all real property taxes, excluding penalties and interest, to bring those bills current. The County and DHHL agree to meet on an annual basis to evaluate the extent of delinquencies by Hawaiian homestead lessees on the Island of Hawaii and take action, if, necessary, to keep delinquencies from recurring. The County and DHHL also agree to work to establish a customer trust fund by July 1, 2004 to collect real property tax payments as part of the mortgage or loan payments of lessees. The settlement of delinquent taxes per the MoA has already been accomplished. The Hawaii County Council authorized the Director of Finance to compromise the penalties and interest owed by lessees of Hawaiian Home Lands according to the terms of the MoA (Resolution 146-01, 12/5/01). The DHHL on April 9, 2002, paid the County of Hawaii $506,583.13 in delinquent taxes, also according to the terms of the MoA. Areas for Further Collaboration This section recognizes that there are issues remaining that are not addressed by the MoA. The County and DHHL agree to continue to work to resolve these issues Termination This section sets forth how the MoA can be terminated, or its provisions further clarified or waived. Conclusion This document is the result of over a year of work by the County and DHHL. Three joint public meetings were held to present the draft MoA to DHHL lessees and the general public (in Kona, Waimea and Hilo), and DHHL held numerous other meetings with concerned groups. In drafting this document, there has been a willingness by both the County and DHHL to arrive at a MoA that will clarify roles and responsibilities, with the ultimate goal of making things better for DHHL lessees, present and future. I thank you for your support of this important initiative. Aloha arry Kim MAYOR