State of Hawai'i County 2005 Year in Review/2006 Looking Forward

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State of the County 2005 - The Year in Review 2006 - Looking Forward: Projects and Issues Finance William Takaba, Director Real Property Tax Changes. The Real Property Tax division implemented several real property tax changes that provided tax relief to homeowner-occupants, and began implementation of the approved changes: • Limited the growth in assessed values in the homeowners class to 3% until the property is sold or transferred; • Provided an additional homeowners exemption at 20% of the property's assessed value, up to $400,000 ($80,000 exemption); and • Reduced the dedication period of the non-speculative residential dedication program from 10 years to 5 years. The result was that most qualified homeowners experienced a reduction in their real property tax bill for 2005-06, even as property values have continued to increase. Risk Management. With the assistance of the Corporation Counsel and other departments, the Finance Department developed the framework for a new Risk Management division. The division will provide risk assessment and related services for all departments of the County. A Risk Manager will be hired in February 2006. CIP Planning Group. The Finance Department established a CIP Planning Group in January 2005 to better plan, coordinate, and fund capital improvement projects. We believe that our process is now more efficient and realistic. The Finance Department can plan its borrowings well in advance and Departments can be assured that money will be available when needed. The Group meets monthly. Bond Issuance. As the result of CIP planning, the Finance Department recommended in late 2005 that the County issue $25M in new construction bonds. The Department of Water Supply requested $25M for water projects, to be issued in conjunction with the County bonds. New bonds will be sold in February 2006. Department representatives recently discussed our current financial condition and fiscal policies with the rating agencies, including Moody's Investors Services who upgraded the County from Al to A2 in 2004. We look forward to their ratings reports within the next couple of weeks. Property Management. In June 2005 the County Council created the Public Access, Open Space and Natural Resources Reservation Commission supported by the Finance Department. The commission has been actively pursuing their responsibility to identify lands worthy of preservation. Also, the department continues to market properties in Hamakua that were forfeited by the former Hamakua Sugar Co. for non- payment of property taxes. Sales generated $1.5 million in revenues in 2005. The Finance Department is developing a property management division to provide support to the commission and to handle the many other responsibilities related to acquisition, management and disposal of property for the County.