Comm No 0003.01.01 - Ad hoc committee Report - PONC fund and maintenance fund

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III. FINDINGS AND RECOMMENDATIONS During its first meeting, the ad hoc committee identified a number of topics of interest. The committee focused its investigation and discussion on these topics during its subsequent meetings. These topics and the committee's findings and recommendations with respect to these topics are as follows: 1. Subsection .10-.15(a) provides that a minimum of two percent of real property tax revenues shall be appropriated to the public access, open space, and natural resources preservation fund Is this an appropriate figure? Findings: A) County appropriations from real property tax revenues in the State of Hawai`i range from: Honolulu - 0.5% Kauai - minimum 0.5% Maui - minimum 1% Hawai`i County - minimum 2%. B) Hawai`i County's rate is by far the highest in the State. Recent fiscal challenges have demonstrated the need to consider the appropriateness of this minimum 2% rate. C) Fiscal Impact of Reduction of Hawaii County's PONC Rate Upon Core Services (Assuming FY2018-2019 RPT rates) Amount of Savings Core Services that could be funded with Cost Savings Example: Police Officers* 2%to 1.5%=0.5% $1,500,000 15 police officers 2% to 1.0% = 1.0% $3,000,000 30 police officers 2% to 0.5% = 1.5% $4,500,000 45 police officers *Numbers ofpolice officers was used to illustrate the impact on PONC appropriation amounts on one sector of core services. D) The FY 201849 real property tax estimated revenues of Hawai`i County ($317,000,000) and Maui County ($321,907,576) are comparable. Consequently, Maui County's rate of a minimum of 1% is worth considering. Recommendation: The ad hoc committee recommends that the Commission consider reducing the percentage of the real property tax appropriated to the PONC preservation fund from a '= minimum of 2% to flat rates of either 1% or 0.5%. Option 1: Three members of the committee endorsed a reduction to a fiat rate of 05%. -6-