HomeMy WebLinkAboutMIN FC 2022/04/19 2020-2022 Committee on Finance
33`'d Session
West Hawaii Civic Center
74-5044 Ane Keohokalole Highway, Building A
Kailua-Kona, Hawaii
April 19, 2022
CALL TO The regular meeting of the Committee on Finance was called to order at
ORDER: 10:00 a.m., in the Council Chambers, Kona, by Mr. Matt Kaneali`i- Kleinfelder,
Chair.
ROLL CALL:
Present: Mr. Matt Kaneali`i- Kleinfelder, Chair(via videoconference from Hilo)
Ms. Heather L. Kimball, Vice Chair
Mr. Aaron S. Y. Chung, Member(came in Tater)
Ms. Maile Medeiros David, Member
Mr. Holeka Goro Inaba, Member
Ms. Ashley L. Kierkiewicz, Member
Ms. Susan L. K. Lee Loy, Member
Mr. Herbert M. "Tim" Richards 111, Member
Ms. Rebecca Villegas, Member
STATEMENTS The Chair directed the Committee to proceed to the next order of business,
FROM THE Statements from the Public on Agenda Items.
PUBLIC ON
AGENDA ITEMS: The following individuals registered to speak and came forward when called by
the Chair:
Michael Dolittle: Bill 152 (Comm. 721); and
(representing Hawaii Bill 153 (Comm. 722), in support.
Island Veterans Memorial)
Dick Matsumoto: Res. 291-22 (Comm. 558), in support.
David DeLuz, Jr.: Bill 156 (Comm. 739), in support.
Garth Yamanaka: Bill 156 (Comm. 739), in support.
Kehaulani Acosta: Bill 152 (Comm. 721),
Bill 153 (Comm. 722); and
Bill 156 (Comm. 739), comment.
FC-33 April 19,2022
Brandee Menino: Bill 152 (Comm. 721); and
(representing HOPE Bill 153 (Comm. 722), in support.
Services)
Paul Norman:
(representing Neighborhood Bill 152 (Comm. 721); and
Place of Puna) Bill 153 (Comm. 722), in support.
Patrick Hurney: Bill 152 (Comm. 721); and
(representing Habitat for Bill 153 (Comm. 722), in support.
Humanity-Hawaii Island)
Brenda Ford: Bill 152 (Comm. 721); and
Bill 153 (Comm. 722), comment.
CHR KANEALI`I-KLEINFELDER: Thank you very much, Mr. Araceley. And
thank you to our testifiers for coming in today. Council Members in Kona and for
the public, we're going to take a brief recess to work on our computer system for
the view. We're not getting good camera views right now. So give us a brief
recess and we'll be right back. Thank you.
Recess: At 10:32 a.m., the Chair called for a recess.
Reconvene: The meeting reconvened at 10:45 a.m.
Relinquish Chair: At this time, the Chair relinquished the chair to Vice Chair Kimball.
ACTING CHR. KIMBALL: Thank you, Chair Kaneali`i-Kleinfelder. Let the
record reflect that I have assumed the chair. And let the record also reflect that
we have Council Member Chung with us now. Mr. Clerk, can we begin with
Communication 720?
COMMUNI- The Chair directed the Committee to proceed to the next order of business,
CATIONS: Communications.
Change Order As directed by the Acting Chair and with no objection from the Council
of Business: Members, the following items were taken out of order:
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Comm. 720: NOMINATION OF CAYLA CRIVELLO TO THE PUBLIC ACCESS, OPEN
SPACE, AND NATURAL RESOURCES PRESERVATION COMMISSION
From Mayor Mitchell D. Roth, dated March 28, 2022, requesting the Council's
review and confirmation.
Requires Council
Confirmation by: May 11, 2022 (Section 2-215(k),
Hawaii County Code)
Vote on Comm. 720: Mr. Inaba moved to recommend confirmation of the
(Approved) appointment of Cayla Crivello to the Public Access,
Open Space, and Natural Resources Preservation
Commission. Seconded by Ms. Lee Loy and carried by
the following voice vote:
Ayes: Committee Members Chung, David, Inaba,
Kaneali`i-Kleinfelder, Kierkiewicz,
Lee Loy, Richards, Villegas, and
Acting Chair Kimball—9.
Noes: None.
Absent: None.
Excused: None.
Executive Assistant to the Mayor Pomaika`i Bartolome came forward and
provided a brief narrative of the nominee's background and experience.
Committee Members spoke in favor of the appointment.
Return to Order Acting Chair Kimball directed the Council to return to the order of business.
of Business:
Comm. 30.26: REPORT OF FUND TRANSFERS AUTHORIZED: MARCH 1 — 15, 2022
From Controller Kay Oshiro, dated March 21, 2022.
Vote on Comm. 30.26: Ms. Lee Loy moved to close file on Comm. 30.26.
Filed Seconded by Mr. Inaba and carried by the following
voice vote:
Ayes: Committee Members Chung, David, Inaba,
Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy,
Richards, Villegas, and Acting Chair Kimball—9.
Noes: None.
Absent: None.
Excused: None.
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ACTING CHR. KIMBALL: Thank you. Let's move on to Resolution 291-22,
please.
Res. 291-22 : AUTHORIZES A ONE-TIME, REAL PROPERTY TAX CREDIT IN FISCAL
YEAR 2022-2023 FOR ELIGIBLE PROPERTIES IN THE"HOMEOWNER"
CLASS
Authorizes the Finance Director to issue a $250 credit to be applied to the August
2022 real property tax bill of eligible property owners, except for those who failed
to pay any portion of due taxes, properties assessed at the minimum tax rate, or
properties sold during taxable year.
Reference: Comm. 558
Intr. by: Ms. Lee Loy
Postponed: January 4, 2022
(Note: There is a motion by Ms. Lee Loy, seconded by Mr. Richards, to
recommend adoption of Res. 291.22.)
ACTING CHR. KIMBALL: Thank you, Mr. Clerk. Council Member Lee Loy.
MS. LEE LOY: Thank you, Chair. Just to refresh everyone, we put a pin in this
back in January. And, you know, at that time this was being advanced when we
were $52 million fund balance. And, you know, hearing from community and
their ability to get back to work and just the high rising cost of goods and
services. And so this was advanced as a way for one; to provide a credit to our
families. But more importantly to draw attention from the rest of my colleagues
that taxes were going to be coming up and we had to look at our budget. Since
that time we've heard concern about the assessed values going up, in addition to a
war and some other things that are really affecting members of our community.
So I just wanted to refresh everybody where we were at.
But also at that meeting the question was raised if this is something we can
actually do. Because we've never done it before. We've never provided a credit
back to our tax base in any shape or form. And so I also wanted to highlight,just
separate and apart. You know, the governor is issuing a $300 rebate. And so
there's definitely got to be a way for us to provide some level of relief in ways
that we can. And so if I could please call Judge Strance up because the question
was asked back in January, is this the vehicle and is this how we do it?
I've provided a number of follow up emails for Judge Strance to provide us some
guidance and I'm still awaiting that. But now that we're here, Judge Strance, if
you could, please?
(Note: At this time, Corporation Counsel Elizabeth Strance came forward
to address the members of the Committee.)
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MS. STRANCE: Good morning, Elizabeth Strance, Corporation Counsel. And I
apologize, Council Member Lee Loy, I don't have that response for you. We'll
have to look at that get back to you.
MS. LEE LOY: Well, with that, I actually would love to postpone this, because I
really want to know if this is a vehicle or a way for us to provide credit. It's never
been done before. We have a lot of decisions to be made over the course of the
next two months. And I know each and every one of you are being touched by
your constituents as a way to provide some Level of relief. I don't know if this is
the way or if it's a blending of all the different tax bills that we have before us
coming up. I don't know. I do want to explore this option just as a tool for future
use. With that, I'm open to any comments or suggestions from my colleagues.
ACTING CHR. KIMBALL: Thank you, Council Member Lee Loy. Any
discussion? Council Member Inaba.
MR. INABA: Yeah, I just want to make sure. So Judge Strance, if I'm
understanding correctly, since our last meeting we're still unsure whether we as a
Council have the authority by the Code to offer a tax break or credit that is being
proposed like this one?
MS. STRANCE: Correct.
MR. INABA: Okay. Do we have an idea of when we might have an answer for
this specific measure?
MS. STRANCE: Yeah. If this is passed to your next meeting, we'll have a
response by then.
MR. INABA: Okay, great. Thank you. Chair, I yield.
ACTING CHR. KIMBALL: Thank you, Council Member Inaba. Council
Member Kierkiewicz.
MS. KIERKIEWICZ: Thank you, Chair. Mahalo nui, Council Member Lee Loy,
for bringing this back forward for our discussion. Just curious to know if our
Finance Director is in Hilo. Because in addition to some of the legal opinion that
Judge Strance is going to be crafting, but also just like to understand the impact of
potential decisions as it relates to our budget. We just came out of budget
hearings and seeing that the proposed budget still doesn't meet the need of all of
our County departments. And so,just want to understand potential implications
that might be had should we choose to pursue this particular vehicle. And
Director Sako, if you want to come back in a couple weeks to also provide a more
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comprehensive determination that would be great. But just would love to hear
some of your initial thoughts.
(Note: At this time, Finance Director Deanna S. Sako, came forward to
address the members of the Committee.)
MS. SAKO: I mean, I think as you take a look at the agenda and including the
public hearing this evening, the administration may be getting mixed signals
about, you know, reducing taxes but increasing cost or how they're spent. And so
increasing affordable housing, you know, things like that, but at the same time
trying to reduce revenue. So some of that is getting a little bit confusing. Just
wanted to put that out there.
But as you know there's still many needs. We're still going through collective
bargaining. So there's a lot of unknown costs. And so as we continue to work
through them and get our final real property tax numbers we'll have better
information on May 5h, when the budget is submitted.
MS. KIERKIEWICZ: Thank you, Director Sako. I think that's all we wanted to
know was all the different pieces and how they interplay with one another that
way we can make the best and most responsible decision when it comes to our
budget. Thank you, Chair. I yield.
ACTING CHR. KIMBALL: Thank you, Council Member Kierkiewicz. Council
Member Richards.
MR. RICHARDS: Spring boarding off of what Ms. Kierkiewicz was just talking
about, the impact of$250. Do we have a rough guesstimate as far as what that
might be?
MS. LEE LOY: Chair if I might respond?
ACTING CHR. KIMBALL: Go ahead.
MS. LEE LOY: Sure. When I put together the resolution, I just did a thumbnail
sketch and there's some breakers also in there; if they failed to pay, they wouldn't
be eligible. And so at that time, back in January, it was $6.9 million. So
$7 million. And at that time I was just looking at that as it compared to what was
in Fund Balance, which is something that we saw was very high, first time ever at
$52 million, when normally we hovered around $34-$35 million. And so that was
the formula and rationale that went into this resolution. However, again, I don't
even know if this is the tool that we use to provide something like this. And as
mentioned by our Finance Director, Ms. Sako, and other members, you know,
we've got a lot of things kind of swirling around. But to answer your question,
was $6.9 million, so $7 million.
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MR. RICHARDS: Okay. Thank you, Sue. And I think—so there's a lot of
unknowns right now. Conceptually I like the idea. And there's a lot of stuff that
we're talking about for conceptually supporting the community. And some sort
of relief is always important especially as we're coming out of a financial
challenge. But we have the other side that we have to be mindful of. And as
Director Sako has pointed out, we can't all look at Fund Balance as a checkbook.
That's not what we can do. But I do like the concept. The question is how do we
best support the community? Some rebates or direct credit is less expensive than
sending a check and I like that concept. But again how do we approach it. I want
to hear some of the other Council Member's thoughts. Thanks, Chair. I yield.
ACTING CHR. KIMBALL: Thank you, Council Member Richards. Over in
Hilo, Council Member Kaneali`i-Kleinfelder, anything to add?
MR. KANEALI`I-KLEINFELDER: Mahalo, Chair. I did have a couple
questions. Ms. Sako, if you could? I just wanted to follow-up on some of the
data that was presented today.
MS. SAKO: Good morning.
MR. KANEALI`I-KLEINFELDER: Just to check. Sue was saying $6.9 million.
I wanted to get a feel from the Director. Director, what are the ?
MS. SAKO: I think it's closer to $7.7 million.
MR. KANEALI`I-KLEINFELDER: Okay, so $7.7 million and that would be
coming out of General Fund, basically.
MS. SAKO: Yeah. A reduction in revenue of$7.7 million.
MR. KANEALI`I-KLEINFELDER: Okay. Thank you. And is there a minimum
tax in the County?
MS. SAKO: Yeah. The minimum tax right now is $200. It is staggered for
homeowners based on the value of the homes. So some people pay $50-$100 or
$150. But most people pay $200 minimum tax.
MR. KANEALI`I-KLEINFELDER: So this is for a $250 credit, what happens to
the extra is someone is paying minimum?
MS. SAKO: We kind of calculated that they would get a max of their tax amount.
So there's also people between $200 and that their total tax burden for the year
is between $200 and $250, so we would cap it at their tax amount when we ran
our calculations, pending further guidance.
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MR. KANEALI`I-KLEINFELDER: Okay. And this is in the form of a credit,
yeah. No one's getting a check in the mail. This would be a credit towards real
property taxes.
MS. SAKO: Yeah. That was our understanding.
MR. KANEALI`I-KLEINFELDER: Okay. Thank you very much, Director.
Appreciate it. Thank you. Thank you, Chair. I yield.
ACTING CHR. KIMBALL: Thank you, Council Member. Council Member
Lee Loy.
MS. LEE LOY: Thank you. As I mentioned, the resolution actually provides for,
if they failed to pay any portion of their real property tax,properties was assessed
at a minimum tax or the property was sold, and I think that's where the difference
between my numbers are, and Deanna's numbers are. But I really appreciate
what this body is trying to do. So if we do postpone so that we can have Judge
Strance provide us a bright line of understanding of the legal abilities of this
resolution and allow Deanna the opportunity to take a look at what this really does
cost us, and at that time then I'm guessing she will have established the assessed
values and will be much closer to those numbers. But I did want to clarify there
are some offsets within this resolution that addresses some of the concerns that
are being raised. Thank you, Chair, for letting me clarify.
ACTING CHR. KIMBALL: Yes. Thank you, Council Member Lee Loy. Any
further discussion? Before we take your motion to postpone. I'd actually like to
ask Director Sako if she has any input on the legal issue. I know you're not an
attorney, but I'm just curious in your financial circles if there's been any
discussion about the concerns we had at the first hearing about the legality, in
terms of our ARPA (American Rescue Plan Act) funding and federal funding
sources.
MS. SAKO: I'm sorry, about the ARPA funding. Is that what you asked?
ACTING CHR. KIMBALL: Yeah. A concern had been raised at the initial
hearing about this about the violation of the conditions of some of the federal
funding that came in through the ARPA process.
MS. SAKO: Yeah, I think CARES (Coronavirus Aid, Relief& Economic
Security) was more specific about it, the CARES funding. But at that time we
were not allowed to reduce taxes, you know, and some of the State funding that
came through. So that was the condition with a lot of that is that we would not be
reducing our taxes. And I think that's one of the considerations in this resolution
is would a credit basically be reducing the tax rate. And so ultimately, yes, I
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mean I think it would be. So if it's something to just circumvent that, you know,
we'll let Judge Strance make that determination. But that was our concern early
on when this was first introduced.
ACTING CHR. KIMBALL: So my follow up question to that is in the financial
community, the fiscal community for municipalities, have you seen this concern
raised or addressed in any other?
MS. SAKO: You know, at the time I was doing my research and I would have to
look again. So if this gets postponed, I'll take a look to see if there's more
information on the website between now and next reading.
ACTING CHR. KIMBALL: Great. Thank you. And I'll just close by saying,
yes, there's a lot of different things on the agenda today pointing in all different
directions. But that's unfortunately how this body works. We can't talk to each
other. But putting these bills forward is the way that we have discussions and get
to something productive. So it may be messy, but that's how the sausage is made.
Council Member Lee Loy, would you like to make a motion to postpone.
MS. LEE LOY: Absolutely. And yes, I just want to thank my colleagues. I
really—again, this was advanced in January for everyone on this dais to start
raising their kind of antennas around budget, budget season, and all the various
taxes that are in play in which we have a very small window. So with that, Chair,
motion to postpone.
Motion to Postpone: Ms. Lee Loy to postpone Res. 291-22 to May 3, 2022.
Seconded by Council Member Inaba.
ACTING CHR. KIMBALL: Any discussion on the postponement? Mr. Chung.
MR. CHUNG: Yeah. Just for my information, what exactly was asked of our
Corporation Counsel again?
MS. LEE LOY: A legal opinion on if this is the right vehicle. And for Ms. Sako
to provide a fiscal impact on what a$250 credit, with the respective guardrails,
within this resolution
MR. CHUNG: Okay. I was just asking what was asked of the Corporation
Counsel, so whether this was the correct thing. I'm just going to give my two
cents on this. You know, first of all I credit my colleague, Ms. Lee Loy, for
trying to address, you know, a problem that came up regarding the burden on
homeowners and others. But I think our power only extends to the establishment
of the tax rates. It's only my thought. We can create tax credits, but not by
resolution. But, you know, of course I'm going to leave it up to the Corporation
Counsel. But I just got to throw my two cents in.
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I think the way we could have done it is enacted an ordinance, but it would've
been too late to address the situation this year. And then that ordinance would
have allowed the Council to do certain things with regard to, you know, maybe
establishing tax credits via resolution. That would be an enabling legislation. But
yeah, I don't know. I'm just kind of curious to see what our Corporation Counsel
has to say. But, you know, I'm aware where Sue is coming from, and she really
has her heart in the right place on this. Thank you.
ACTING CHR. KIMBALL: Thank you, Council Member Chung. Any other
discussion on the postponement? Okay. Seeing none, all those in favor say
aye.
Vote on Motion The motion to postpone Res. 291-22 to May 3, 2022, was
to Postpone: carried by the following voice vote:
(Approved)
Ayes: Committee Members Chung, David, Inaba,
Kierkiewicz, Lee Loy, Richards, Villegas,
and Acting Chair Kimball— 8.
Noes: None.
Absent: Committee Member Kaneali`i-Kleinfelder— 1.
Excused: None.
ACTING CHR. KIMBALL: Okay. On to the next item of business, please.
Bill 152.
BILLS FOR The Chair directed the Committee to proceed to the next order of business,
ORDINANCES: Bills for Ordinances.
Bill 152: AMENDS CHAPTER 2, ARTICLE 13, DIVISION 3, SECTION 2-75 OF THE
HAWAII COUNTY CODE 1983 (2016 EDITION, AS AMENDED),
RELATING TO THE COUNTY HOUSING PROGRAM REVOLVING FUND
Repeals existing provisions in their entirety and establishes nine specific uses for
expenditure of funds to support the County's housing needs.
Reference: Comm. 721
Intr. by: Mr. Inaba and Ms. Kimball
Motion to Approve: Mr. Inaba moved to recommend passage of Bill 152 on first
reading. Seconded by Ms. Villegas.
ACTING CHR. KIMBALL: Council Member Inaba.
MR. INABA: Thank you. Yes, Bill 152 here is a very straight forward bill. And
Section 2-74 in our County Code established a County Housing Program
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Revolving Fund. Section 2-75 is the section that explains the uses of that fund.
So right now there are two uses of the fund. You can see there's (a), the
development of housing; and(b), the buy-back option.
So what's before us today is really the addition of seven additional uses, and those
are numbers (3) through (9) on the bill. So we are adding that these funds can be
used to acquire vacant land that would be used for affordable housing, the
acquisition of existing structures for affordable housing, rehabilitation of existing
structures currently in use as affordable housing, but needing repairs or updates,
infrastructure to support affordable housing, and subsidies, grants, and loans for
very low- and lower-income households for their rental and mortgage financing as
well as subsidies, grants, loans for low- and lower-income households to help in
the event that, you know, they might be on the brink of experiencing
houselessness or homelessness. And lastly, to help purchase deed restrictions on
private properties that would help to keep an affordable unit affordable.
So it's very straight forward. The AMI (Area Median Income)percentages which
define low, very low, and moderate income are also provided here. But asking for
your support and reliance. It's an ability to expand the uses to give the Office of
Housing and Community Development for leeway, focused I should say, leeway
though, on the use of these funds. And we have the Administrator of OHCD
(Office of Housing and Community Development)here. I would like to offer her
the opportunity to share her thoughts on this bill and the use, the expansion of
these uses on this fund. Administrator Kunz, thank you so much for being here
today.
(Note: At this time, Housing Administrator Susan Kunz came forward to
address the members of the Committee.)
MS. KUNZ: Good morning. My name is Susan Kunz. I'm the Housing
Administrator for the Office of Housing and Community Development. Thank
you for this opportunity to comment on Bill 152 this morning. You know, I have
to start out by saying that Corporation Counsel has advised me that there's
potentially a legal issue with the way the bill was developed. But I want to make
really clear that I support the intent of this bill. This community needs housing.
We need affordable housing. And although the Administration has done quite a
bit in this first year to pack this pipeline with viable projects, it's not enough.
You know, and the challenges with housing development is multi-pronged. You
know, we have to try and navigate policies and regulations. You know, there's
issues with the infrastructure, especially in West Hawaii, with the lack of potable
water for housing development. And, you know, the developers can use a lot
more resources like land, financing tools, funding. This particular bill would add
another tool to the toolbox, right. It could give developers the opportunity for
some gap financing where I see a lot of the time, they just need that little bit more
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to secure the project so it can get up and running. And I think, you know, a fund
like this could do that.
So I'll leave the legal discussion between this Committee and the Corporation
Counsel. But I do support the intent of this bill. So thank you for the opportunity
to comment.
MR. INABA: Thank you, Administrator Kunz. And yes, we always want to be
able to provide, you know, extra tools, especially to our affordable housing
developers and this gives us the opportunity. And through this specific fund
we're able to actually see what monies go in and what monies would be expended
from the fund. So the structure and the mechanism for appropriate use of this
fund is there, and we're just really giving the Office of Housing this opportunity
to support our developers who developing affordable housing. With that, I'm
happy to take any questions that anybody on the Committee might have. Thank
you, Chair.
ACTING CHR. KIMBALL: Thank you, Council Member Inaba. Any
discussion? Council Member Chung.
MR. CHUNG: Yeah. Susan. So I just want to get this clear. So you support
this, right, with the additional uses.
MS. KUNZ: There's definitely a need. We've been discussing this for a long
time. You know, additional funding or resources for the developer would
definitely help. So aside from the issues that may arise from this thing, yes, I
support the intent of this bill.
MR. CHUNG: Okay. And, you know, as opposed to the original language of this
ordinance, you know, there's references to very low- and lower-income
households, right. I mean I just looked real carefully, my vision isn't all that
good. So it further refines it in that regard?
MS. KUNZ: I'm sorry.
MR. CHUNG: You know, there is two references in the amendment to very low-
and lower-income household subsidies, in number(7) and number(8); maybe
some other places as well. It does not limit the use of—is that a difference in
what these funds can be used for from what is presently in the law?
MS. KUNZ: The original language of the Revolving Fund is veryI mean I
believe it was one sentence.
MR. CHUNG: What's that?
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MS. KUNZ: I believe it was one sentence.
MR. CHUNG: Yeah.
MS. KUNZ: So it gave us a lot of leeway, right.
MR. CHUNG: It was broader, right.
MS. KUNZ: Broader.
MR. CHUNG: Yeah. So this one is more limiting, correct? And I'm not saying
that's necessarily a bad thing. I just want to make sure, you know, we know what
we're voting on.
MS. KUNZ: I would need to read through more detail the rest of it. But seven
and eight definitely does point out the support of lower income housing projects.
MR. CHUNG: Yeah. Okay. And then my next question is as it relates to item
number (9). So either—and first of all, you know, I really did want to give kudos
to both Mr. Inaba and Ms. Kimball for trying to address this matter. But number
(9),purchasing of deed restrictions. Now I know what a deed restriction is. Well
what exactly is contemplated by purchasing a deed restriction on private
properties limiting resale to qualified buyers at resale values for lower-income
and moderate-income households? What do you mean, purchasing deed
restrictions? What is meant by that?
MR. INABA: I think I might ask Council Member Kimball to respond, because
this is actually a credit given where credit is due.
ACTING CHR. KIMBALL: Thank you. This gives the breach of protocol. But
to respond to that, there was a program that I think Council Member Kierkiewicz
and Council Member Lee Loy learned about at NACo (National Association of
Counties)that they're initiated in Vail, Colorado,which allows them to purchase
back deed restrictions on properties so that they can maintain them at a resale
value at the affordable rate. And so you hold that deed restriction on that property
and when the owner goes to sell it, they have to sell it at the affordable rate.
Now the idea here was to put it in as one of the possible uses. But we would
actually have to develop the enabling code to start the program officially.
MR. CHUNG: But purchase back a deed restriction?
ACTING CHR. KIMBALL: You would purchase the deed restriction. You
know, say you have home that's $350,000. The County would have a program
where we would say, "We'll give you $10,000 to put a deed restriction on your
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property." Then when you went to go ahead and pull it you would not be able to
sell it above what is the affordable price at that time.
MR. CHUNG: I see, I see.
ACTING CHR. KIMBALL: But I can understand. It's a complicated program.
We tried to capture it in one sentence. This really enables—it would lay the
foundation for it. But there would probably have to be an enabling ordinance at a
future time. If it muddies the water, I'm happy to exclude it as part of this current
amendment. If I may respond just to the limitations on lower-income households,
but that really just applies to those two, the subsidies rather than the bulk of those
options, which those subsidies weren't part of what was allowed under the fund
previously. Thank you.
MR. CHUNG: Okay. I understand. I don't know if Ms. Kierkiewicz or
Ms. Lee Loy wants to add anything in that regard. But if not, I'll just say this. I
mean I like the intent. And, you know, it certainly addresses a need, you know,
further refines uses. But I don't know if you noticed, but I asked Ms. Kunz to go
outside for a few comments. And I was just kind of venting about things in
general. And it really is this, you know, we are putting a lot of effort—and I'm
also responsible for that too, you know, in trying to help homelessness, address
homelessness, low-income housing. You know what we really, really should not
lose sight of? The middle-income people. They're getting priced out of the
market, especially with this influx of new monies coming in. And if we're only
going to concentrate on the lower end, we risk losing all of our young people who
are having to go away to find affordable housing. So we have make an effort to
also refocus our efforts on middle-income housing; moderate. So when I see this
trying to take things out of—what was that?
MR. HENRICKS: Can we takeI'm so sorry, Mr. Chung. We just need a brief
recess. There's somebody's mic is live in the Zoom room if they could just turn
their own mics off or if somebody in our staff could shut that down. We'd really
appreciate it. It's very distracting. I'm sorry, Mr. Chung.
MR. CHUNG: Yeah. But that's all I have to say. But, you know, I support this.
I see what it's intended to do. But I just had to get that off my chest. I see a lot of
focus on the low end, but not enough on the middle. And it could really hurt us in
the long run. You know, we talked about people moving away. This is one of
the—not this, but lack of housing is going to be one of them.
MS. KUNZ: Right. And I do want to also add that when you look at the data
that's laid out by the Hawaii Housing Policy Study, you know, when they talk
about the 10,000- to 13,000-unit need, the spread of the need is very evenly
distributed from 30 percent all the way up to 140 percent.
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MR. CHUNG: Right.
MS. KUNZ: So, you know, what you're saying is true. And the data does
support that. You know, I think the reason why we tend to focus on the lower
income is because it's harder to produce and it's harder for the developers to
make money at the lower end. But the need for the housing units is pretty even
across the board. We can't afford to not pay attention to any part of that.
MR. CHUNG: Right. And thank you. I mean, because from a social policy
standpoint this could have huge ramifications if we ignore that aspect. But, you
know, I support this. Thank you.
ACTING CHR. KIMBALL: Thank you, Council Member Chung. Council
Member Inaba. Actually, let me check in with Council Member Kaneali`i-
Kleinfelder in Hilo first.
MR. KANEALI`I-KLEINFELDER: Mahalo, Chair. No discussion at this time.
ACTING CHR. KIMBALL: Okay. Thank you.
MR. HENRICKS: Chair, before you proceed, Madam Chair, I just would like to
confirm first, the staff can just ask people to leave the Zoom room and watch via
livestream so that we won't have these disruptions. Thank you so much.
ACTING CHR. KIMBALL: Thank you, Mr. Clerk. So just a reminder to folks
in the Zoom room, if you're still connected, please disconnect and watch the live
feed in the website. Council Member Inaba.
MR. INABA: Chair, thank you. I just wanted to respond to Council Member
Chung before we move on. That's a super important point, I think, to add the
moderate especially for the subsidies, grants, and loans. So we'll take that
discussion and probably be looking to add that one prior to the next meeting.
Thank you.
ACTING CHR. KIMBALL: Council Member Richards.
MR. RICHARDS: Thanks, Chair. Thank you, Susan. I think I have another
question for you, and I know you're struggling in answering these questions right
now. But the need as you just stated is right across, from zero AMI up to
probably 140 AMI. Is that correct?
MS. KUNZ: That's correct.
MR. RICHARDS: Are we as a County weighing heavier on any one of those
demographics or are we trying to develop across the board?
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FC-33 April 19,2022
MS. KUNZ: We're trying to encourage development across the board.
MR. RICHARDS: Okay. And to Mr. Chung's point, Morales characterized it as
the middle class is the one that is the largest and thereby actually pays most of the
taxes and is the big demographic that we really need to worry about if we want
this society to be successful going forward. So I am leery about I support the
intent. I like the intent. But I'm leery about limiting that and I think that's why
we have directors to give that latitude a little bit. Again I like the intent because
that's something we've been talking about.
But also, as Mr. Chung said get something off his chest, was pointed out by
Mr. Hurney during public testimony, we also have to support this. And he made
the comment about NIMBY (Not In My Back Yard) not wanting affordable
housing built around them. They support it as long as it's not near them. We as a
Council have to support it going forward, because if we don't then it's all talk and
we're not doing anything. And so I am very mindful of that as well. Again I
support the intent of it. I'm a little concerned about limiting it, not to all of it,
because again, that's why we have an administrator to focus in on the needs and
not be so limited. That's enough for now. Thanks. I yield.
ACTING CHR. KIMBALL: Thank you, Council Member Richards. Any other
discussion. Council Member Inaba.
MR. INABA: Mahalo, Chair. I just wanted to say, I mean based on what's in the
bill before us with the potential addition of moderate to number(7) and(8), this
bill does not restrict the use of these funds only to the lower end AMI, it's across
the board. And we want to make sure that we are addressing the need across the
board form the zero percent, you know, very low end all the way to the 140. So I
look forward to your support. Thank you.
ACTING CHR. KIMBALL: Thank you, Council Member Inaba. Council
Member Kierkiewicz.
MS. KIERKIEWICZ: Thank you. And mahalo nui, Council Members Inaba and
Kimball for bringing this forward so we could have the really important
conversation. I just had some follow up questions. Was this developed in
partnership with the Office of Housing and Community Development?
MR. INABA: Not initially, no. This was something—well based on
conversations we've had regarding Chapter 11, as a whole, but this specific one
was kind of based on those previous conversations. So yes and no in a sense.
MS. KIERKIEWICZ: Okay. Perhaps, Administrator Kunz, if you just want to
maybe just elaborate. I guess what I'm getting at is the approach I take, and not
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everybody takes this, but I'm recognizing my role as a policy maker, Legislative
Branch in my lane, and also recognizing that the Executive Branch administers
our policy. But I also think that it's important to be working in partnership with
those that have to do the work. And I think about all the work that Council
Member Villegas was doing on the herbicide bill, engaging parks to make that
happen. And so I just want to make sure that there aren't unintended
consequences, and that the office who we are charging to administer this work has
the ability to kind of help shape this. And so, Administrator Kunz,just trying to
understand how much involvement you, your office, has had in specifically in
helping to shape Bill 152.
MS. KUNZ: I have not been engaged in any conversation with either Council
Member Kimball or Inaba initially on this bill. I believe that I was notified that
they were working on the bill, I believe it was the week prior to it getting
submitted and posted. Is that correct? You know, and I think Council Member
Inaba is correct that we've had discussions prior, even open public conversations
like this about what need looks like, what some of the roadblocks are. So those
would have been the kinds of conversations that I was involved in. But
specifically working on this bill, I was not engaged.
MS. KIERKIEWICZ: Thank you. What about consultation with some of our
nonprofit partners, I'm thinking of, you know, Patrick Hurney's of the world,
Habitat for Humanity, other project developers that we have seen come through
like Keith Kato, Carlos Morales. You know, I just think that folks that we are
designing these tools for should be part of the conversation. And I'm just
wondering where their fingerprints might be as it relates to Bill 152.
MR. INABA: Yeah. So again, like Administrator Kunz said, this bill was
brought together based on all of these conversations we've had. And we had
partners today: Neighborhood Place of Puna; we had HPM write in testimony.
Everyone who is on the front in different aspects of the affordable housing
movement is in support because it allows the County to partner with them and
move forward with the development of affordable housing. So had they been
individually consulted? No. Are they in support of this bill? It would appear so
based on the testimony, live and written, that was submitted.
MS. KIERKIEWICZ: Thank you. Just trying to understand how much of this bill
was socialized prior to it being introduced. Administrator Kunz, you might just
was to stay up here. I have a few more questions for you. You know, I appreciate
the dialogue that's coming from Council Members Chung and Richards about the
expanded use. In your opinion, is it necessary, is it too limiting? Can we not do
the things that are articulated here based on what's already in the Code?
MS. KUNZ: How to—make sure I understand what you're asking.
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MS. KIERKIEWICZ: Existing language; does it not already serve as a catch-all
for everything that has been listed here? Do you feel limited in your capacity to
act on any of these things?
MS. KUNZ: We have been able to carry out or do some of these things without
that specific language in the existing language that existed.
MS. KIERKIEWICZ: Okay. What is the process that your office is using to
administer these kinds of programs and activities? And I don't have my monthly
budget summary. What is the current balance within the revolving fund?
MS. KUNZ: Within the revolving fund. So what exists there right now were
funds mostly, there are some repayments of loans that are in that balance, but the
majority of the funds are funds that were generated from in lieu fees when there
was language in Chapter 11 to generate those kinds of fees. What does limit me
to the freedom of spending those funds is when those funds were created,
Chapter 11 said that I had to be able to spend it within a 15-mile radius from
where the funds were generated.
MS. KIERKIEWICZ: Administrator, 15, one-five, miles from where the fees
were generated?
MS. KUNZ: Yes. Right. So wherever the project was that generated the fees I
can only reinvest that money in projects within that mile radius. So, you know,
whenever there are needs or opportunities, we're always checking the balance of
this fund and checking to see where projects were generated and accessing the
funds utilizing that guideline.
MS. KIERKIEWICZ: Administrator, balance ballpark figure of the current
balance.
MS. KUNZ: About$999,000, about$900,000. Just under a million.
MS. KIERKIEWICZ: And so then the process for obtaining these funds, are
there attached rules within Housing that kind of guide the process? I'm thinking
about CDBG (Community Development Block Grant), the annual Action Plan. Is
there something similar that's used to administer this fund?
MS. KUNZ: You know, all of the programs and the projects that we're touching,
supporting, all follow those same guidelines. So we follow suit utilizing those
funds. I'm trying to think very quickly. Some of those balances have loan
programs in there that might limit me. But those would be the things that I would
look at if there are limits on area median income. I can't think of anything right
off the top of my head. But those would be the things that I would consider.
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MS. KIERKIEWICZ: Okay. In your opinion, is the Revolving Fund the best
way to go? Or are you more interested in a product such as a grant out to say,
Habitat for Humanity or a land trust to purchase and refurbish homes. I'm just
curious to know if you feel this is the right vehicle or one of many that your office
would support.
MS. KUNZ: I think I would like to consider when we're working with different
developers and different types of projects, the opportunity to grant. Loan
programs don't always work especially for projects that are hitting the lower end
of the AMI. So having that option, I think, is useful.
MS. KIERKIEWICZ: Okay. That's haupu to hear you say that. And, you know,
I'm in full agreement with my colleagues when we talk about ensuring that our
ALICE (Asset Limited, Income Constrained, Employed) families do have the
support they need. There's a lot of funding strings at the State and federal level
that we can be leveraging to be supporting, you know, the low-income sort of
households. And just wanting to make sure that at the end of the day we are able
to support our working families and folks of my generation, you know, we want
to be able or the chance to stay here.
You hinted at some potential legal concerns and Judge Strance has been
strategically making her way forward. So I just wanted to officially call Judge
Strance forward to kind of share with this body some of the concerns you might
have related to Bill 152. Judge Strance.
MS. KUNZ: Before we jump to that topic, can I just make one more, I guess,
comment on the revolving loan?
MS. KIERKIEWICZ: Of course.
MS. KUNZ: You know, that concept really, I think, was created to help the
County to generate an ongoing source of funding, right. When you do grants, the
money leaves, that's it. Revolving loan type of program or when we can utilize
funds in a revolving way, you know, the money comes back to the County so that
we can use the money for other types of projects. So I don't want to you know,
I want to make sure to share that I think there's a certain importance, right, with
evaluating projects and the ability to utilize a revolving loan consent, right. So I
wanted to make sure that there was that understanding as well.
MS. KIERKIEWICZ: Got it. The Revolving Fund is one of many tools.
MS. KUNZ: Yeah.
MS. KIERKIEWICZ: Okay. Judge Strance.
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(Note: At this time, Corporation Counsel Elizabeth Strance came forward
to address the members of the Committee.)
MS. STRANCE: Thank you. Elizabeth Strance, Corporation Counsel. To kind
of pick up where Susan left off, you know, words matter, especially when it
comes to how you're describing funds. So special funds have a very specific
meaning, and a very specific meaning within our Charter. So under the Hawaii
County Charter, a special fund to be created or to be terminated requires a
recommendation of the Mayor. And so the concern and conclusion that I shared
regarding this bill was that the—was kind of a gut and replace regarding the uses
of the bill and didn't involve the recommendation or consent of the Mayor.
So in addition, because the enumerated purposes, a number of them don't have a
revolving type of purpose to them, it changes the nature of the fund from a
revolving fund to a special fund. And so it was my conclusion that it needed the
recommendation of the Mayor because the fund essentially changed. So that was
the process concern that I have about the bill as it is written.
It was shared with me that the bill was modeled somewhat after what the County
of Maui has done. And the County of Maui, not dissimilar to what the Legislature
has done with 201H, has a series of different funds. Some of them revolving to
address specific affordable housing needs of the State or the county. They have
language about—they have that revolving language and feel for them. And what
concerns me about this bill is that I think, the intent to be transparent and have
everything in the front so it can be monitored, also starts mixing apples and
oranges in a way that may have unintended consequences. And I think given the
commitment that the Council has to addressing affordable housing, and what I've
heard from the Administration's commitment to affordable housing, it seems like
it would be helpful to have a landscape over which to place these special funds or
revolving funds to see how they fit so that we don't, for example,prevent funds to
be used for one purpose because they've already been designated and required by
this law to go (inaudible).
So it just seems to me that there's this inflating of a bunch of different purposes
that should be under an umbrella. But because of the language used in the
proposed bill, it was my conclusion that it violated the Hawai`i County Charter
requiring that it come from the Mayor's recommendation.
MS. KIERKIEWICZ: Okay. So to summarize, because my colleagues did not
work in partnership with the Office of Housing or get authorization from the
Mayor, it is your opinion based on your read of the Charter that we shouldn't be
discussing, deliberating on this bill today?
MS. STRANCE: I don't want to necessarily characterize how Council Member
Inaba and Kimball did or didn't work, because I think there's been a lot of
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conversations floating around. But this particular bill did not come with the
recommendation of the Mayor. And one of the reasons that I didn't share a
communication to the entire Council was I know that this has been a dynamic
process, and I don't and didn't know whether there had been conversations that
had transpired without my involvement.
MS. KIERKIEWICZ: Okay. I'm out of time so I'll have my colleagues pick up
from here. Thank you, Chair.
ACTING CHR. KIMBALL: Thank you, Council Member Kierkiewicz. Council
Member Lee Loy.
MS. LEE LOY: Thank you. I just pulled the Charter and really honed in on that.
Judge Strance, am I looking at the right section of the Charter, 10-12 Special
Funds?
MS. STRANCE: Yes.
MS. LEE LOY: And so,just reading out loud for the rest of my colleagues.
"Special Funds. Upon recommendation of the mayor the council may by
ordinance abolish or establish such special funds as may be necessary for the
proper and efficient segregation of fiscal operations of the county."
So Judge Strance, not to over-simplify any of this. The Mayor would come to the
Council and say, "I want to establish or abolish or refine a special fund?" That's
step one.
MS. STRANCE: Yes.
MS. LEE LOY: What if step one was a Council Member went to the Mayor and
said, "Hey, I'm thinking about doing this?" The Mayor still has to make the
recommendation.
MS. STRANGE: Well I think the recommendation could come in a lot of forms.
You know, it could come with a concur with proposed legislation. I think that the
critical piece is to have the involvement of the Mayor. And just to take a step
back, our County Charter provides for the creation of two types of funds, the
Operating Fund, and the Capital Improvement Fund and then there are
amendments to create other special funds, right.
So the creation of a special fund outside a Charter amendment was really an
exception to the way the Charter is set up. And so it requires the collaboration of
both branches of government.
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MS. LEE LOY: Judge Strance,just kind of staying in line with that, the long and
short of it is if we choose—and I'm with everybody. We all want housing. I
think we're all kind of clunking along on how to do this. Are you providing
guidance that Bill 152 is not in compliance with our Charter? I hope I asked that
right.
MS. STRANCE: My caution to the Council is that without the Mayor's consent
or recommendation for approval, it would be a violation of the Charter. And what
my hope had been would be that there would be some conversation that was held
that if the purposes of the bill conformed to what is—that everybody wants, then
it would go under the support of the Mayor. Having said that, if Bill 153 passes,
then a special fund is being amended by the Charter and wouldn't require the
involvement of the Mayor because it's superseding it.
But my concern is—and this kind of follows up with what Susan was saying is as
the purposes for the special fund change, you still have to track what the purposes
were originally, because it's not unlike a nonprofit where you have a restricted
fund or a restricted gift. So if there are special funds that no longer adequately
serve needs of the County in this area, consideration should be given about a
conversation to eliminate this special fund or revolving fund and create something
new, rather than piling things up or requiring complicated accounting within a
fund or changing its nature in a way that it doesn't fit the definition of the fund
that it was created to serve. So those are my general thoughts on it.
The State Legislature, the State has a protocol set up for creating special funds.
And there's a statute that sets up the criteria that have to be met in the creation of
special funds. And as best as I can tell, the State Legislative Auditor then looks at
the special funds and provides some input on whether it meets the statutory
requirements of the special fund. So I think that highlights the really unique
nature of what these funds are.
MS. LEE LOY: Thanks, Judge Strance, for all that insight. You know, I want
this. I want it so bad. But I want to do it right. And my concern is if we don't do
it right, we might lose the opportunity to introduce any legislation similar or
around these chapters for the rest of the term and then we're stuck again. And we
are actually not providing housing to our community. And, you know, I want to
advance this, but I also want to maybe put a pin in it while we figure it all out.
You know, we're all talking about taxes and where the money is going. It really
did create a perfect storm. But I just don't want to go against the Charter. I think
we would do a huge disservice to what the potential and the possibilities of the
establishment of a fund for housing, whatever AMI or whatever reach it might
have beyond 15 miles. That's my thoughts, and I'll yield at this time.
ACTING CHR. KIMBALL: Thank you, Council Member Lee Loy. Council
Member David, I'll go to you first since you haven't spoken yet.
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MS. DAVID: Thank you, Chair. And thank you, Ms. Strance, for that
explanation. And I really this at first glance is like something that we really
need. And I don't think anybody disagrees with that. As I'm sitting here
listening to the conversations on this dais, process and procedures are pretty much
the focus point on this and whether this is the vehicle that it can be done through.
And I understand that the Mayor has the authority via Charter to either abolish or
establish. I think in my mind it's silent as to any additions to a special fund. And
that's where I have to rely on some legal guidance on that, because does this
actually mean that we are the changes affect the initial intent of that special
fund. And that's what(inaudible) at that point. Just totally support the fact that
we need all these additional sections on what the fund can be used for. But
getting there is what my concern is right now. And I'm not sure if there's more
discussion that needs to be taken or involved between, you know, Corporation
Counsel.
I would like to see the Mayor just do a communication saying, you know, this is
great and let's do it. But I know that's not the process here. So I have
reservations, not because of the intent of this bill. Seriously, I have reservations
because of the process and how we get there. So that's all I have for now.
There's a lot of other questions. I think this brought out some really, really good
discussions and talking points for this kind of stuff. We're trying to be creative,
and I like that. I like that, Mr. Inaba and Ms. Kimball. So on that, I yield.
ACTING CHR. KIMBALL: Thank you, Council Member David. And Council
Member Villegas, I'll recognize you, but I just want to be mindful of the time.
We are at noon already and we have a couple other big items on our agenda. So
let's just keep the conversation flowing. Thanks. Council Member Villegas.
MS. VILLEGAS: Great. Thank you, Judge Strance, for being here. I suppose
my question becomes kind of in the line with Chair David's. So this bill was
posted to Laserfiche a few weeks ago now. I'm just wondering why the Mayor
hasn't then taken—if that's the potential to rectify what everybody here has
agreed is essentially a bill that is really good in nature, there's community support
for it, even Housing is here. I suppose I'm a little concerned and confused why
the Mayor or the Mayor's Office hasn't stepped forward and made a statement. If
that's what we're waiting for, then is there opportunity for that or is thereI just
suppose I'm confused on that.
MS. STRANCE: You're assuming too much in terms of my knowledge about
what the Mayor is thinking or doing or when he reviewed the bill or got other
input on it. But I don't know what—at first, we're made to communicate with the
Mayor about the intention of the bill. That's not something that I would involve
myself in.
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MS. VILLEGAS: Okay. Gotcha. Thank you. I didn't mean to dump that on
you. But then my question becomes, if the Mayor is brought into this
conversation between potentially now and next reading and agrees with the
alignment of it and recognizes the potential for positive outcome based on what's
been presented here, does that provide us the necessary approval from the
Administration and the Mayor's Office in order for something like this to move
forward?
MS. STRANCE: I think there are a lot of considerations in the establishment and
the expansion of a special fund. And so, for example, under the State law one of
the requirements for creation of a special fund is a demonstration that the desired
outcome cannot be accomplished through the normal appropriation process. So
there could be a lot of different reasons and ways to look at whether a special
fund, you know, a further revision or creation of a new fund is needed. And so,
you know, I think those are the conversations that I would have hoped and would
hope that take place as part of the bill creation process. You know, I think that
Finance may need to chime in. You folks need to look at how much money has
been appropriated this year for housing and whether the purposes stated in the
budget meet the desires of what you folks hope would be included in a special
fund.
So, you know, I think that the question is being cast in such a way that you're
either for this or you're against it. And what I'm saying is that looking at the way
special funds are set up in the State under the State Legislature, there are a
number of other criteria that need to be looked at. And I'm not the person to have
that discussion. I'm not the policy maker here. I raise what I see as the legal
issues and boxes that need to be looked at as part of your conversations.
MS. VILLEGAS: So the person to be talking to about it is Finance and the
Mayor?
MS. STRANCE: I don't know. If this is going to come as a special fund, it needs
to be at the recommendation of the Mayor. Whether there are other people that
need to be involved in those discussions, because it doesn't affect just the Mayor,
it affects other departments. And how that would be looked at, I'm not sure. My
suggestion is and has been that outside of a political conversation, that there be a
collaborative discussion that takes place so that we don't have these kinds of
conversations where the questions are put to somebody who doesn't have the
authority to do it as a zero-sum game.
MS. VILLEGAS: Gotcha.
MS. STRANCE: You know, the Charter is clear that it's intended to be
collaborative. You know, and who needs to be involved in that collaboration is
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something that you folks need to take up outside of this dais if you're trying to
craft legislation.
MS. VILLEGAS: Gotcha. Thank you. I appreciate your clarifying on that,
something that's still I think is about as clear as mud. But I yield at this time. But
thank you for helping with those answers, Judge Strance. I yield.
ACTING CHR. KIMBALL: Thank you, Council Member Villegas. Council
Member Inaba.
MR. INABA: Yeah, thank you. I think this conversation has really gotten off
topic. From the point of this bill, which is to add seven uses, additional uses, to
the Revolving Fund. What's being brought up right now is saying that the
Charter says, upon recommendation of the mayor, the council may by ordinance
establish or abolish special funds that help to segregate and help us with the
operations of our County budget. This is the only authority that the Charter grants
the Mayor for establishment or abolishment. The Special Fund exists. So we're
not establishing a special fund. What's before us here is not abolishing a special
fund. It's simply adding the uses. And this is a legislative function. This is
within the parameters of our powers and duties as Council Members. The Charter
does not say the Mayor can initiate a process to amend the uses of a fund.
Because that is a power that lies within each of us as Council Members, as
legislators of this County.
So this specific Special Fund was last amended in 2014 by Council Member
Poindexter, not at the recommendation of the Mayor, because it's not required.
So I'm very concerned that this opinion before us right now is muddying the
waters of separation between executive and legislative branches of the County.
It's dangerous. We cannot add words into the mouth of the Charter. The Charter
is the Charter. It's voted on by the people. We are not abolishing, and we are not
creating a new special fund. It's there. It's in the Code. We amend the Code as
Council Members.
So I think what we need to refocus on is making sure that we're giving Housing
the tools that they need to help us develop affordable housing. That includes
partnering with nonprofit partners. So if there's concern about that, that's in
number one. It's straight forward. I'll leave it at that.
ACTING CHR. KIMBALL: Thank you, Council Member Inaba. Council
Member Chung.
MR. CHUNG: Yeah. I'm really thinking about this matter. It's my opinion.
Okay, you know, this Charter provision, which controls everything,pertains
specifically to special funds. And it requires that there be a recommendation of
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the Mayor to the Council. It can be at any point though, I think, even after a bill
was introduced, in my opinion.
What really got me is this language about the ordinance, you know, the Mayor
can recommend to the Council that they either abolish or establish a special fund.
And this is without question a special fund. By its own terms it's a special
revolving fund. The question is whether what's being proposed here, all of the
amendments or the additional items, constitutes a change in the character of this
fund. Because the establishment of the fund was done in the section right before
the one that we're amending. And that's only my opinion. I think it doesn't
deviate from the character. So I don't think we're abolishing or establishing a
new fund. I think it's still within the context of this special revolving fund.
So, you know, I can support it. I said I was going to support it before, and I think
I still can unless something else comes up. But I just wanted to add my two cents.
Thank you.
ACTING CHR. KIMBALL: Anyone else? Checking in in Hilo real quickly.
MR. KANEALI`I-KLEINFELDER: Yes,please.
ACTING CHR. KIMBALL: Go ahead. Mr. Kaneali`i-Kleinfelder.
MR. KANEALI`I-KLEINFELDER: Thank you, Ms. Kimball. I had a very
interesting conversation and I really appreciate what was said by Mr. Inaba. And
it's very hard to have a discussion when the waters are muddy. And that's what's
happened today. You know, I support this bill despite the conversation that I've
heard. And I appreciate the comments of Mr. Chung and Ms. David as well as
Ms. Strance. But I do feel that this is an existing fund and the changes in it do fall
within the realms of what it should be and amending it is our job. I would say
maybe the argument would be when it's been passed there could be an issue. But
that's to be determined. So in this case, where I stand today, I support this. I
support this legislation. I appreciate those who brought it forward. So mahalo,
Chair.
ACTING CHR. KIMBALL: Thank you, Council Member Kaneali`i-Kleinfelder.
Any final thoughts? Okay, quickly.
MS. VILLEGAS: Yes. I concur with that. Thank you, Mr. Inaba, for helping to
clarify the specifics related to what the Charter says, how the Code is, and for
doing your research and finding the last time that it was amended and who by and
what the circumstances were. Thank you also for Council Member Chung in
looking through things and with your years of experience as an attorney, sharing
your opinion there. I feel comfortable in passing this forward out of committee
and continuing the conversation. And hopefully there is an opportunity. We still
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have two more readings for meeting with Administration and with the Mayor and
with Finance, to take a look at these things and there would be the broadest
support from both the administrative, the executive branch, and the legislative
branch in an ideal capacity. So thank you. I yield.
ACTING CHR. KIMBALL: Thank you, Council Member Villegas. Council
Member Kierkiewicz.
MS. KIERKIEWICZ: Thank you, Chair. I would be hard-pressed to support this
legislation as is today. I'm of the mindset of keeping it committee until there can
be a bit more clarification on the legal front as to whether or not this is
appropriate. I also think that we heard really valuable testimony that can really
strengthen this product. And so I would urge the introducers of the bill to really
take the time to engage the Office of Housing and the folks that are in the
community actually doing the work of housing development to be part of the
conversation so that we can have the best possible ordinance for our community.
Thank you, Chair.
ACTING CHR. KIMBALL: Council Member Richards, please keep it brief.
MR. RICHARDS: Thanks, Chair. I say this when I believe it. I don't think it's
ready for prime time yet. And I again, support the intent. I think there needs
some work done. One of the things I am concerned about, and I agree with Chair
David concerning the process. But also some of the language, I think, is
problematic because in the addition it says, "Revolving Fund shall." And then
when we say "shall"then we go into doing the lower income or very low. So I'm
concerned that the wording is not appropriate given what we've heard from
Housing. So I think it needs more work to get it ready for prime time. So I like
the intent, I like the direction. But I don't think it's ready for prime time. I yield.
ACTING CHR. KIMBALL: Thank you, Council Member Richards. Anyone
else? Seeing none I'll just make a few final comments. You know, I think we are
all well aware of the need to address the affordable housing issue at all price
points. You know, we heard department after department come before us in
budget hearings saying, "We can't get staff. We can't get staff. We can't get
wastewater workers. We can't get DMV (Department of Motor Vehicles) folks.
We can't get fireman. We can't get policemen, because cost of living is so high."
And the biggest piece of that is affordable housing. So I don't think there's any
debate about that.
This legislation didn't come out of thin air. Probably over a year ago now,
Council Member Inaba and I, and my former staff member Lopaka(O'Connor)
started working on—okay, what does Chapter 11 look like; what are some of the
issues? And there were four things that kind of stood out. One, sustainable
funding for affordable housing; two, making sure that the Office of Housing had
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as many tools in their toolbox to address the affordable housing issue, whether it's
building infrastructure, buying land, supporting people already in their homes so
that they don't lose their homes; third thing, residency requirement a preference;
that may be coming at a future point. And then finally, providing many other
options for developers to satisfy their housing requirements and the fees.
We're in the timeline that we are now because of the need to do a Charter
amendment and the timeline that is needed to do that to provide the sustainable
funding. And we also have the issue of Office of Housing is doing their study.
And, you know, we (inaudible) after many conversations to defer amendments to
Chapter 11 until after the study was done. This idea was actually included in the
conversations, this funding use idea was included in those conversations about
Chapter 11. We are actually advised to take it out of Chapter 11, as that being the
inappropriate place for it. So, you know, that said there's always more
opportunity for collaboration. There's always opportunity for more conversation.
I think we've had a really valuable discussion around this today.
But the general objective, and the only thing that's going to make me happy and,
you know, I'm not going to have heartburn about other stuff, was really to signal
to the community, to signal to Office of Housing,you know, we just want to do
whatever it takes to make this work. We've heard so many times in conversations
in front of us at the dais that there's no silver bullet solution to the affordable
housing problem. We've got to use as many possible tools as we can. And that's
what Council Member Inaba and I intended to do with this legislation, is provide
Susan (Kunz) and her team, who've demonstrated they can leverage funds well.
They may almost double, more than double their budget in leveraging funds.
Give them as many tools as possible. That was the intention.
So without further conversation, if there's any? We'll go ahead and vote on the
motion on the floor. Mr. Clerk, we'll do a roll call for this one,please.
Vote on Bill 152: The motion to recommend passage of Bill 152 on first
(Approved) reading was carried by the following roll call vote:
Ayes: Committee Members Chung, David, Inaba,
Kaneali`i-Kleinfelder, Lee Loy, Villegas,
and Acting Chair Kimball—7.
Noes: Committee Members Kierkiewicz and Richards —2.
Absent: None.
Excused: None.
(Note: Ms. Lee Loy voted "kanalua"then "aye.")
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Bill 153: INITIATES AN AMENDMENT TO ARTICLE X OF THE HAWAII COUNTY
CHARTER (2020 EDITION), RELATING TO THE COUNTY HOUSING
PROGRAM REVOLVING FUND
Proposes the addition of a new section to incorporate the revolving fund established
in Section 2-74 of the Hawaii County Code into the Hawaii County Charter and
dedicate on an annual basis a minimum of one percent of real property tax revenues
into the County Housing Program Revolving Fund.
Reference: Comm. 722
Intr. by: Mr. Inaba and Ms. Kimball
Motion to Approve: Mr. Inaba moved to recommend passage of Bill 153 on first
reading. Seconded by Ms. David.
ACTING CHR. KIMBALL: Chair recognizes Council Member Inaba, but
before I do, we are running really behind, so let's keep our comments, and keep
this moving. Thanks.
MR. INABA: Thank you. Keeping it short, this is another very straight forward
bill, and it really is to partner with the previous bill we heard. Right now, as
Administrator Kunz said, there's about—there's less than $1 million in this
Revolving Fund, and we have not seen any significant contributions on the
County's part besides, fortunately, a recent bill that we passed, Bill 111, that's
addressing homelessness and affordable housing. This right here is going to be
put forth, and it's a Charter amendment, and it's going to give the public the
opportunity, if this Council so chooses to vote on whether we allocate one
percent of the real property tax, approximately $4 million annually, to the
Revolving Fund.
With Bill 111, there is a timeline I believe that ends 2027 on that measure. This
is something that the Office of Housing and Community Development will be
able to count on to advance their initiatives for affordable housing across our
County. In light of all of the conversations we've had about real property tax
and the effects on our County budget, this would be voted on if we pass it as a
Council, in the upcoming election by the public, but wouldn't take effect until
the following budget year, giving the Finance Department and the Office of the
Mayor adequate time to prepare for this allocation that puts the County's money
where our mouth is. And that's to support these initiatives that we apparently are
generally supportive of in Bill 152. And that's to expand the uses and really get
moving on the affordable housing front of our County.
You know, lastly, I'll just end with this. We know that Managing Director Lord
said that the need to address affordable housing has become an even greater
priority as our children growing up here in the County cannot find a home on the
island. And that as the Administration, they'd like to create a County where the
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next generations will be able to live on their home island that they can be proud
of and can afford it. So I'm glad that the Administration is onboard with
affordable housing, and that's what this bill is committing our County to. So I'll
leave it at that. Thank you, Chair.
ACTING CHR. KIMBALL: Thank you, Council Member Inaba. I'll start in
Hilo. Mr. Kaneali`i-Kleinfelder, any comment, discussion?
MR. KANEALI`I-KLEINFELDER: Not at this time. Thank you, Chair.
ACTING CHR. KIMBALL: Thank you. Anybody over here? Council Member
Lee Loy.
MS. LEE LOY: Yeah. Absolutely. I'm willing to put it to the voters. The only
concern I have in this is subsection (b), "Monies in this fund shall be used as
prescribed by ordinance." But then it goes on to say, "The highest and best
use . . . " And I think my concern is this definition of highest and best use. I've
seen it used in many, many places, and it just kind of bends to the whim of
whatever's going on at the time.
I like it,just real simple and direct, "as prescribed by ordinance," leaving out,
you know, the fluff of, "highest and best use." But I'm willing to put it to the
voters. I yield.
ACTING CHR. KIMBALL: Thank you, Council Member Lee Loy. Council
Member Kierkiewicz.
MS. KIERKIEWICZ: Thank you, Chair. I'm wondering if Director Sako is in
Hilo Chambers and can provide a little insight and mana`o in the bill that's
before us. And Director, because this is one percent of real property taxes, we're
looking at—is it just under $4 million at this point, what this could be yielding?
MS. SAKO; That's correct. Just under $4 million based on the March budget.
So as I've said many times before, you know, we oppose putting percentages of
real property tax towards specific purposes. It's great right now when the
economy is good and we have the appropriate revenue, but when the real estate
market starts to fall, the real property taxes will fall. And there's many fixed
costs in our budget already. So as you know, we don't want to get to the point
where we're going to have to determine if we're going to have to do RIFs
(Reductions in Force), or something like that. I'm not saying that's now, but in
the future.
It puts us in a challenging position. If it was in the County Code where it could
be amended at a future time should the economy get bad, that would be more
palatable, but when it's in the Charter and cannot be amended, it's setting up a
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point where real property taxes—or tough decisions are going to have to be made
down the road, whether it's to raise rates or cut costs. But those challenges will
happen at some point down the road.
MS. KIERKIEWICZ: Thank you, Director. I really appreciate your kind of
fiscal lens on this. Administrator Kunz, maybe if you could just kind of come
forward and provide your insight as well. Because the fluctuations on what this
one percent could yield, how is that from a programmatic standpoint. I mean, I
think about having to do programs and Administering them and having a specific
pot of money that you can count on a regular basis just helps you to plan in terms
of staffing, but also setting expectations out in community as to like what can be
done. Two million is very different from $5 or $7 million. So just your thoughts
on the percentage piece.
(Note: At this time, Housing Administrator Susan Kunz came forward to
address the members of the Committee.)
MS. KUNZ: As we've been having a lot of internal conversations in my office,
talking about roadmap strategies, one of those roadmap strategies is the
development or seeking out sources of funding, right, for an affordable fund like
this. We've been having a lot of internal discussions about this, and one of the
key things we talk about is stability,right. In order to really do a good job to
manage a fund like this, I would have to have staffing. In order to support
staffing, I have to have a steady stream of funding. So a fund that fluctuates or
just counting on one source of funds would make it a challenge.
MS. KIERKIEWICZ: Okay, thank you. I can appreciate the insight on this
fund. This is something that I had actually thought about doing in my, you
know, prior term. But I really just don't think that we need to take to the voters
what they elected us to do, which is to find funding for housing. I'm going to
ask my colleagues to consider postponing this for one meeting. Our office has
worked on something. I don't want to veer there. But if the true intent is to find
funding for housing in the quickest, most expedient way and have a consistent
source, we may have found something. I would love for us to be able to evaluate
this bill and that side by side. So just offering that up for consideration. Thank
you, Chair. I yield.
ACTING CHR. KIMBALL: Thank you, Council Member Kierkiewicz. Council
Member Richards.
MR. RICHARDS: Thanks, Chair. Something Director Sako made comment on
was putting it in the Code rather than in the Charter. I'm very leery about
putting things in the Charter, because if we get stuck, we are really stuck with
that. So I think I probably can guess why you wanted to do a Charter
amendment rather than just being an ordinance, but I think an ordinance gives
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this Council the latitude that may be needed in bad financial times. I am
concerned about that, because we're planning for the good time, but we have to
plan for the bad time. So that's one of the concerns I have.
I think the concept of having a direct funding is really sound and really good. I
like that. One of the things I don't like is there's not a cap on this. That could be
codified and thereby we don't get ourselves into a situation where we have this
accruing, accruing, accruing, that could put us in a financial problem when we
look at the budget.
You know, it was interesting, the comments were made about we're looking at
what we're going to do with the budget, what we're going to do with the Fund
Balance that perhaps is there, and how we're going to go forward. But are we
going to obligate ourselves to something that's going to put us in bad shape, and
if we're looking at trying to figure out how to take care of the community today,
but kind of robbing Peter to pay Paul, that sort of scenario is what's going
through my mind.
Ms. Lee Loy's comments about highest and best use, that is the most crack-up
line I've seen because it's used pervasively through government, and no one
knows what it means. So I do have to laugh at that statement. I do like the
concept of having continual funding rather than having to appropriate. I think
that's very appropriate. However, I don't like how it's structured, because if we
get stuck, we need to have some form of escape clause, meaning—and I'm fine
with it taking council action, but if it's in the Charter, that's like the Constitution,
and I don't like doing that unless there's a lot of thought process.
Maybe after five years and this is working well, we could be convinced, and it
would be a good thing in the Charter. But not initially. Not fresh out of the box.
So I like the funding, but I don't think it should be in the Charter. I yield.
ACTING CHR. KIMBALL: Thank you, Council Member Richards. Council
Member Chung.
MR. CHUNG: Yeah, thank you. One would imagine that I would embrace this
Charter amendment. First of all, it provides a source of funding, a solid source
of funding, to address housing. What causes me to hesitate somewhat is what I
just voted on previously. You know, I voted in support of refining the Housing
Revolving Fund. But because that fund now will relate specifically to this, and
in as much as it does not include protections for moderate income households, I
have to be very careful.
On one hand, it's really good. You know, when we do develop a source of
funding for housing across the broad spectrum, we are the ideal place. You
know, look at this, we have County Council, we're the guys who approve
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zoning, right, in terms of developing stuff. We have Corp. Counsel who can be
utilized, pressed into action for land use types of work. Even if this thing has to
go to the LUC (Land Use Commission), we can have some of our people hone
their skills over there doing these this type of work. We have the Planning
Department, we have Public Works, we have the Engineering. We can do all
kinds of developmental stuff.
But because the previous measure did not protect the moderate-income people
and this brings-120 AMI(Average Median Income), what kind of house are we
talking about?
MS. KUNZ: We were talking about close to $500,000; $490,000.
MR. CHUNG: Five hundred thousand, right? And what kind of income are we
talking about?
MS. KUNZ: About$80,000 per person.
MR. CHUNG: Per person, yeah. Okay. So we've got to really, really think
about these things, you know, because if we lose that population, then we're
losing a huge tax base, and we're only going to be—we're going to have an
overweight on the low-income population, and we've got to have income
generators for our County. I have a question for the County Clerk. Mr. Clerk,
County Charter is we've got to get a super majority, right?
MR. HENRICKS: Yes, minimum six votes each reading.
MR. CHUNG: Whereat what stage—does it have to have a super majority
every step of the way?
MR. HENRICKS: Not today because we're in Committee. But at the Council
readings. At first reading you need six votes; if it doesn't, it doesn't go to a
second reading.
MR. CHUNG: So it has to, every—and three readings, right?
MR. HENRICKS: Three full readings, yes, at full Council.
MR. CHUNG: Yeah, I would suggest this thing stay in Committee. That would
be my vote. I might lose today. I mean, I might be on a losing side, but it would
be my hope that we could kind of refine this. I'm kind of concerned about
devoting one percent of our tax base to this thing. I like the idea. We have to
find a funding source, but now this all relates back to how we're going to use it.
Well, that's my thoughts. Thank you.
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ACTING CHR. KIMBALL: Thank you, Council Member Chung. Council
Member Inaba, back to you.
MR. INABA: Thank you. Based on the conversation, I mean, I would like to
see an expansion of those protections in Bill 152. If we did hold it over though,
we stillwe advanced the last bill, so we would be hearing it after this bill
anyhow. But I do understand those concerns, Mr. Chung, and regarding
Section (b), it was recommended that we use that term, "as prescribed by
ordinance." It is related to that specific section; however, we didn't list the
number of that section in case we have restructuring of the Code.
And in this case, we've provided clear outline of the use of those funds, and at
the next stage, it's really for OHCD to determine, based on those uses and the
funds that come into that account, which of those uses are going to produce us
the best results for affordable housing, and which are going to allow us to
leverage and secure additional funding for those efforts. So just circling back to
those two specific parts of this bill. But I'll yield at this time.
ACTING CHR. KIMBALL: Thank you, Council Member Inaba. Quick check
in Hilo. Council Member Kaneali`i-Kleinfelder, any final comment?
MR. KANEALI`I-KLEINFELDER: Not at this time. Thank you.
ACTING CHR. KIMBALL: Alright. Thank you. I'll just go ahead and say
that, you know, I appreciate the attention that Council Member Chung has drawn
to just the full price point, the need to address the full price point. I mean, we are
in an unusual real estate market. We're highly desirable, particularly for second
homes, vacation homes. That is going to—it's supported by a lot of the
underlying structures of how our system works, and we are seeing this divide
grow between the have-a-lots, and the have-nothing-at-all. And we need to
foster that middle, which is those are the folks that keep the fabric of our
society together. The folks I mentioned before. Your police officers, your
firefighters, your nurses, your doctors. I actually don't interpret and never
intended for it to be interpreted, 152, to actually exclude the moderate income.
And you'll notice that the very-low, and lower-income actually applies to just(7)
and (8), which is for subsidies and grants; it's very specific.
When we talk about some of the needs around development of affordable
housing, the developers are actually more able to develop those
moderate-income units, if we can provide the infrastructure. That's part of what
the previous bill does. So you know, we're looking for this full balance. There's
a greater need for the County to subsidize that very low-income stuff, because if
we provide at least the infrastructure, even the land for the moderate-income
housing, developers can still make money off of that. Whereas the very low,
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there's very few scenarios where a private developer can actually make anything
off of that. So it's highly disincentivized. It has to be subsidized.
So I appreciate the conversation around this. Again, I think one of the keys we
identified early on is sustainable funding so that Housing can plan. We have this
huge shot in the arm to address the homelessness issue in general with Bill 111.
I think realistically you plan differently if you know you've got a sustainable
funding stream, after that initial influx of cash. I think this helps at this stage
with the planning from all of the folks involved in the housing sector to know
that they'll be, after this initial pulse, there will also be sustained funding
subsequent to that.
Alright, with that, I think again, we'll do a roll call vote.
MR. HENRICKS: On the motion to forward Bill 153 to the Council with a
favorable recommendation, Mr. Chung.
MR. CHUNG: To move this ahead?
MR. HENRICKS: Yes, to move it to the Council with a favorable
recommendation.
MR. CHUNG: Can I make a motion to postpone?
MR. HENRICKS: It's up to the Chair. She called for the vote.
ACTING CHR. KIMBALL: I'll allow it.
MR. CHUNG: I'm sorry, I didn't know we were going to move that quickly.
Motion to Postpone: Mr. Chung moved to postpone Bill 153 to the call of the
Chair. Seconded by Ms. Kierkiewicz.
ACTING CHR. KIMBALL: Any discussion around postponement?
MR. CHUNG: I'd like to speak to that too. I mean, I just want to see how that
other bill advances. That's all.
ACTING CHR. KIMBALL: Thank you, Council Member Chung. Council
Member Lee Loy.
MS. LEE LOY: Yeah, on the postponement, yeah, I want to take a pause because
I have another bill that establishes a cap which then throws all of this planning for
money for housing or other opportunities, and you know, I would love to hear a
conversation around the cap and possible adjustments to the rates before we start
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moving forward all these ideas of tax, tax setting, going up or down. So I don't
think it hurts to hold it in Committee while we hear all the different issues around
tax and tax adjustments, so that we have the best information on what our
revenues and future forecasts are.
ACTING CHR. KIMBALL: Thank you, Council Member Lee Loy. I'm not sure
who was first over here. Council Member David, you actually haven't spoken on
this matter.
MS. DAVID: For this Charter amendment, I think there's been a lot of discussion
about how these two go along with each other and I understand that. The Charter
amendment, I'm thinking about the discussion about if we do this now, what's
going to happen when the market changes or whatever and our revenue sources
change. I kind of have a similar recollection when we initiated the two percent
one. That was a very similar discussion on what's going to happen unless we do
something like this. And thank goodness, it kind of weathered the storm and I'm
seeing this because this addresses an important community issue for this island. I
see that as a very important way of making sure that there's enough money.
The more important thing to me is that the people will decide. Between now and
two weeks from now, I'm sure that the proponents of this bill will be bringing
forward any amendments that we discussed today. I'd like to see this go forward,
and since this is going to take three readings at Council, I want to see what the
discussion is and any potential amendments at the next session. So I wouldn't
have any objections at this time, only because I think pushing these two together
would make more sense in my mind. So thank you. I yield.
ACTING CHR. KIMBALL: Thank you, Chair David. Council Member
Richards.
MR. RICHARDS: Thanks, Chair. I think it does need amendments. I think, like
was said, it's not ready to advance forward. But highlight, I just have to make
this comment because I make it every year, we don't do our budgeting correctly.
We have everything slamming at each other, and this reinforces why I had pushed
for an ad hoc committee to work on budget so we can take it all and put it
together. So with that, I'm not really prepared to support this, because again, I
don't think it should be in the Charter. I think it should stay in the Code. I yield.
ACTING CHR. KIMBALL: Thank you, Council Member Richards. Council
Member Inaba.
MR. INABA: Yeah, you know, we're the point of the Charter is to lock it in,
and the idea that we're going to be concerned how we move forward, we have the
ability to set the real property tax rates. That's within the County Council's
power and duties. So when the County is doing good, we should be doing good
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for affordable housing. If we don't have the funds, we'll probably be seeing a cut
across all departments. At the same time, if we're having a hard time surely the
people who need affordable housing are probably having a hard time, too. And
the point of this is not to lock us into a certain amount, but it's to make sure that
we adjust as a County with the income that we're generating specifically with real
property tax rates.
So I would like to see this go hand in hand, knowing that there is intentions to
protect moderate-level income individuals and the subsidies to prevent them from
experiencing homelessness or being evicted. But I do think they should be
considered together. And this is the most responsible manner for our budgeting
process that we're not locking ourselves into a certain amount. But we will see it
fluctuate as we see our income fluctuate. Thank you, Chair.
ACTING CHR. KIMBALL: Thank you, Council Member Inaba. So the motion
on the floor is a postponement to the call of the Chair. I think we can probably try
to do that without the roll call. All of those in favor
MR. KANEALI`I-KLEINFELDER: Sorry, Chair.
ACTING CHR. KIMBALL: Yes.
MR. KANEALI`I-KLEINFELDER: Quick question for Mr. Henricks.
ACTING CHR. KIMBALL: Go ahead.
MR. KANEALI`I-KLEINFELDER: Mr. Henricks, what is timeline due date for
Charter amendments to make it on to this year's ballot?
MR. HENRICKS: I don't have an answer that you'll appreciate other than that
we need to get the ballot language of any amendment that is approved by
ordinance to the State Office of Elections by 4:30 p.m. on August 25h, 2022. So
you're three readings, you know, that takes at least three Council meetings. We
also need to do a resolution, or the Council needs to adopt a resolution that directs
the Clerk to submit the ballot language, all before the 25h of August of this year.
MR. KANEALI`I-KLEINFELDER: Okay. Thank you very much. Thank you,
Chair. I yield.
ACTING CHR. KIMBALL: No problem. Okay, all of those in favor of the
motion to postpone to the call of the Chair.
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Vote on Motion The motion to postpone Bill 153 to the call of the Chair
to Postpone: was carried by the following roll call vote:
(Approved)
Ayes: Committee Members Chung, Kierkiewicz
Lee Loy, Richards, and Acting Chair Kimball —5.
Noes: Committee Members David, Inaba,
Kaneali`i-Kleinfelder, and Villegas —4.
Absent: None.
Excused: None.
ACTING CHR. KIMBALL: Bill 153 is postponed to the call of the Chair. We
can go ahead and move onto an easy one.
Bill 154: AMENDS ORDINANCE NO. 21-38, AS AMENDED, THE OPERATING
BUDGET FOR THE COUNTY OF HAWAII FOR THE FISCAL YEAR
ENDING JUNE 30, 2022
Increases revenues in the Federal Grants—Traffic Safety Training Project account
($3,000); and appropriates the same to the Traffic Safety Training Project account,
bringing the total appropriation to $153,000. Funds would be used to provide
specialized training for police and prosecutors to combat impaired driving.
Reference: Comm. 736
Intr. by: Mr. Kdneali`i-KI einfelder(B/R)
Vote on Bill 154: Mr. Kaneali`i-Kleinfelder moved to recommend passage of
(Approved) Bill 154. Seconded by Ms. Lee Loy and carried by the
following vote:
Ayes: Committee Members Chung, David, Inaba,
Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy,
Richards, Villegas, and Acting Chair Kimball—9.
Noes: None.
Absent: None.
Excused: None.
ACTING CHR. KIMBALL: Alright. Thank you, Mr. Clerk. Final item of
business for the Finance Committee,please.
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Bill 156: AMENDS CHAPTER 19, ARTICLE 7, SECTION 19-53, OF THE HAWAII
COUNTY CODE 1983 (2016 EDITION, AS AMENDED), RELATING TO
REAL PROPERTY TAX VALUATION; CONSIDERATIONS IN FIXING
Establishes that the value of property classified as apartment, hotel and resort,
commercial, industrial, agricultural or native forests, or conservation cannot be
assessed by the County at more than 15 percent than the previous year's assessed
value for that property.
Reference: Comm. 739
Intr. by: Ms. Lee Loy
Motion to Approve: Ms. Lee Loy moved to recommend passage of Bill 154 on
first reading. Seconded by Mr. Richards.
ACTING CHR. KIMBALL: Go ahead, Council Member Lee Loy.
MS. LEE LOY: Thank you, Chair. I'm just going to take few minutes to focus
in on, first of all, the formatting of the bill. This particular section of the bill
outlined homeowner assessments and then affordable rental assessments, and
then provided exceptions for those specific classes. What I did was actually
reorganize everything so that when we provided the assessment it was housed in
one area; if we provided a cap, it was spoken about consistently within the
various sections. So that's what this bill did. So it looks like a lot of
underscoring, it's just moving things around.
But drilling into what it does, this bill is really one of the solutions that was
being offered by the community after seeing you know, it was caused
"sticker-shock" as assessments for Commercial, Industrial, Hotel, and some of
the other respective categories. I actually had others describe it as whiplash. It
really was big jumps. So I had reached to the Mayor at the time when a lot of
our assessments was going out, and he was also hearing back from members of
our community encouraging, "If you didn't like your assessed value, go ahead
and put in a request to reevaluate." It cost everybody $50 just to have the
department take a look at what the assessed values were. That deadline was
April 11th.
So I want to thank Chair David for allowing me to breach the deadline for this,
because I still think there's a lot of information to be advanced by the
Administration. I don't know how many people contested their assessed values.
I have heard it's record high, but I don't know. In addition to setting those
values, which kind of happens around this time, it's really hard to begin to assess
the fiscal impact of what 15 percent cap does.
I did get some preliminary figures as an average as to all of the various real
property tax class rates and how they went up on average. So basically, our
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FC-33 April 19,2022
affordable and our residential categories went up, on average, 20 percent; our
apartments went up 16 percent; commercial 36 percent; industrial 32 percent; Ag
went up 24 percent; conservation also went up 13 percent; and our hotel category
went up 58 percent. So I basically took all of those numbers and kind I came up
with an average of how much these assessed values went up. And that's how I
kind of landed on 15 percent. I didn't pull it out of the air. I tried to use some
rationale.
I would like to invite Deanna Sako up because we've had some offline
conversations about this cap, and it's tough. It's tough for us to figure out how
to provide relief our property owners while still getting enough money in our
budget to provide all the function and services that we need to provide for our
community. So Deanna?
(Note: At this time, Finance Director Deanna Sako came forward to
address the members of the Committee.)
MS. SAKO: I just want to start by saying I have no idea where you got those
numbers, and real property values have not been determined yet or certified. So
I just want everybody to know those probably are not the final numbers. But you
know, anyway moving on.
So 15 percent, I'm not sure, you know, exactly where 15 percent came from.
You know, our budget is based on our estimates of what total assessed value
we're going to be applying last year's rates. You know there's been a lot of
challenges with affordable housing as one of them, homelessness. I mean,
there's a lot of needs and wants in the community as well as different things such
as collective bargaining, fringe benefits and other things that we're required to
pay. So as others have said, there's been a lot of needs that came out last week
in the budget reviews that aren't necessarily even in the budget yet.
So every time we go to restrict something, there's going to have to be a give.
Something's going to have to happen. So we have to do a balanced budget and
live within 15 percent if that's the case. But I will tell you,just based on the way
the bill is written, we can't—the real property tax values are being certified by
Real Property Tax today, and we cannot go back and reassess, you know, and
apply this to the current taxes.
MS. LEE LOY: Yes. And Deanna thanks, Deanna, she's absolutely right. I
just pulled some of the old information and that's how I came up with some of
these figures. Because I really needed something for us to chew on. And
Deanna is absolutely correct. This cap would be relief in future years, which
requires us to also look at the rates.
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What I'm trying to achieve is a deeper understanding of what is a very complex
process through our budget. It's challenging, and if we are able to establish these
guardrails where our businesses can better forecast what the future might look
like, that's helpful for us and our economy. The easy thing for—or I don't know
if it's really easy but the easier thing to do is to adjust the rates.
So I actually saw this as a two-stepper. One is to hold the assessed values, take a
look at all of that. And I know, Deanna, it's a lot. It really, really is a lot. But as
Mr. Richards said earlier, this is that clunky process that we end up having to go
through during our budget cycle.
I also heard earlier on our previous discussion regarding a Charter amendment is
when it's good, it's good. But what happens when it goes down. I would love to
hear some thoughts about setting a floor also. So if we go up, cap it at
15 percent, if it goes down capping it both ways. So we actually have more of a
stable foundation of where our real property tax revenues come from, along with,
you know,just the boundary lines and the guardrails on what those ups and
downs of our real estate market look like.
Again, we heard a lot of testimony. I know this is definitely something that our
business community is looking for and providing solutions for us as far as
making our business decisions for our budget. With that, I yield.
ACTING CHR. KIMBALL: Thank you, Council Member Lee Loy. Any
discussion? Council Member Richards.
MR. RICHARDS: It's all about the numbers, right? Conceptually, I really like
this. Having to think through this—and this is actually not a novel idea, it's you
know, if you think about if we're looking at commodities, they have limits on
commodity volatility, again, to stabilize the markets. And that's essentially what
we're talking about here. To stabilize income stream, but also to stabilize
expense on the homeowner or the property owner's side as well so we don't
skyrocket up and also don't skyrocket crash or go down too fast.
I like that because it again puts those guardrails around this so we're not so
volatile. And of course, no one ever thought that we'd be seeing that here now,
given the pandemic; but we do, and we are dealing with that.
If I might ask Ms. Lee Loy a question, when you reference this, the tax would
not—or the assessment would not change unless any portion of the property was
sold. And in the homeowner, in agriculture, I think I can see that. But if we're
including the hotel side on that and we have in that structure timeshares and
things like that, have we thought through on that process? Because again, a good
number of those are in my district and I understand what the intent is, and I know
they have skyrocketed because I've been contacted by them. But are we thinking
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through that? That's a question that I have because that could be an unintended
consequence on this.
Again, I like limiting the volatility, but I want to be sure we think through the
whole process. Thanks, Chair. I yield.
ACTING CHR. KIMBALL: Thank you, Council Member Richards. Council
Member Lee Loy, did you want to respond to that?
MS. LEE LOY: Yeah. And you know, I actually really do appreciate that input.
I did not really think all those things through, but I did give deference to that by
reorganizing it the way I did. Because prior to the way it was set up currently in
the chapter, it was, we talked about affordable housing, and it provided a space
there. I think the way we reorganized it actually lends itself for future
amendments to allow for all of those other pieces that come up in the future.
MR. RICHARDS: Quick response?
ACTING CHR. KIMBALL: Go ahead, Council Member Richards.
MR. RICHARDS: Yeah, thanks. I appreciate that. Again, for the public, this is
how we have to do this. We can't talk about this unless we're front of
everybody. So I'm very happy to work on some of that going forward just to
make sure we don't have any of those unintended consequences. Thanks.
ACTING CHR. KIMBALL: Thank you, Council Member Richards. Council
Member Chung.
MR. CHUNG: Thank you. I don't know if it was at the budget reviews or at our
last Committee or Council meeting. But I know during a conversation that I had
with Deanna, I said I'm not a real big fan of these real property tax caps, right?
And then right after that, boom, here comes this measure. So let me think about
this now.
I guess the cautionary tale is the Proposition 13, right, in California. I mean, that
kind of almost ran those guys broke. So you know, we really have to be wary of
what these caps can do. As I said, I'm not a big fan of these caps,just as I'm not
a big fan of, you know, devoting a portion of our total budget to a certain
purpose. Not saying I would vote against these things, but I'm just, you know,
not a real big fan.
But when I took a look at this one, though, it's a little bit more palatable. For
affordable housing, yeah three percent—is it three percent? Yeah, and that
makes sense. You know, it's affordable housing after all. For everything else,
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15 percent, I think that's pretty reasonable. If it were at three percent, I would
say absolutely not; I cannot. You know, I cannot vote in favor of that.
But 15 percent, you know, that's pretty safe. We would hope that people's real
property tax responsibilities don't have to increase by 15 percent every year,
that's rough. But I'm inclined to support this for now. And we have some time,
I think, to really digest this. But is this this is not intended to apply to this
fiscal, right? So I think it should be reflected in the ordinance. Because it says,
"This ordinance shall take effect upon its approval." Approval could
conceivably happen prior to the end of the fiscal year. And even if it's not—it's
impossible to do things, and the fact of the matter is, it's going to be effective
upon its approval. So I would just make that suggestion, that it takes effect July
or whatever. That's all I have to say.
ACTING CHR. KIMBALL: Thank you, Council Member Chung. Council
Member Kierkiewicz, go ahead.
MS. KIERKIEWICZ: Thank you, Chair. Thank you, Council Member Lee Loy,
for bringing this forward. We were all inundated with emails and calls from
folks just, as you say, having whiplash over the assessments. A few of my
constituents within Pahoa were talking about their assessed values being like
305 percent more than 2020, which is just crazy when you think about no real
work was done to the facilities. So I am thinking that the whole process is not
just flawed but was a little bit predatory in nature. Folks really need to be able to
plan, and coming out of the pandemic, we need to be finding ways in which we
are supporting our community and our small business.
Is your intention with this, because I know that you're looking to provide relief
right now, this ordinance wouldn't do that, is this just meant to spark
conversation? I know that there are folks here like Council Member Richards
that elevated some concerns. Are you looking to create an ad hoc committee to
get more kind of meeting of the minds together to shape a product here? Just
trying to get a sense of what you are looking to achieve because it's not going to
have an impact right now. And I just want to make sure I'm saying that so that
folks have clear expectations of what's going to happen should we advance this.
MS. LEE LOY: Chair if I may respond?
ACTING CHR. KIMBALL: Go ahead, Council Member Lee Loy.
MS. LEE LOY: Yeah, thank you for that question, Ms. Kierkiewicz. Actually,
it really is intended to be a two-stepper. I want the Administration to have the
ability to plan for the future—well first and foremost, this is being elevated by
community. This is my direct response to listening to them. So you're
absolutely right, it doesn't provide them initial relief on their August 20th tax bill.
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So the second step would be advancing different rates. All of it is all so very,
very challenging because as Deanna mentioned, we haven't gotten the certified
values, we don't know how many appeals are out there. So I would love for this
to stay in Committee to keep massaging it. We have other pieces of legislation
that are being advanced, our Charter amendments and other things, and I really
am trying to take this clunky system of how we budget, how we set our tax rates
and the values, and then prepare for that next year's budget.
So I really am a firm believer good information helps us make good decisions,
but I needed to get something going now so that we can actually better plan for
the 2023-24 budget and then there beyond. I would even consider taking this to
an ad hoc committee, because tax reform is something we really, really need to
consider, and some things that I have not really yet begun to evaluate with the
cap and the setting of the various rates of what that does to our bond rating, what
that does to our list of CIP (Capital Improvement Projects)project, what that
does to all the various bond floats that we put out there. And I really would want
us to really take this opportunity and really get our arms around how we, as you
mention, clearly articulate what we're trying to do, but more importantly meet
those expectations for our constituency.
MS. KIERKIEWICZ: Thank you. I really appreciate that. Yeah, I would be in
favor of keeping this in Committee and maybe formulating an ad hoc. And you
know, getting the Finance Department to be working in collaboration with us on
this and doing a lot of those financial impacts and assessments to just look at the
projections, right? What would happen if we were to play around with some of
the percentages as it relates to the floor and the cap.
So appreciate you putting something out there so we can have the conversation,
and just your willingness to have everybody kind of contribute and design it. So
thank you. Chair, I yield.
ACTING CHR. KIMBALL: Thank you, Council Member Kierkiewicz. I'm
going to check over in Hilo first. Council Member Kaneali`i-Kleinfelder, any
comments?
MR. KANEALI`I-KLEINFELDER: Yeah. Mahalo, Chair. I just want to check
on some of this. So it's not going into effect this year, we clarified that. If you
can help me understand the date within Section (3), for the January 1, 2022, as
well as the market value section. Maybe Ms. Sako if you can help me
understand what this language would do.
MS. SAKO: So the way the bill is written right now, yes, it's requesting us to go
back to January 1st, and adjust the values and cap them at 15 percent. I know
that sounds easy, but it's not. When we had many businesses, not just
businesses, but all of these properties and these classifications do remodeling,
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additions, you know, added value on their own to the properties, so that would
take us having to evaluate each property one-by-one. It's not an automatic
feature. So the way the bill is written, we don't think we can comply with it,
which is kind of said earlier.
But even going forward we have concerns, which is why I like ad hoc or at least
more discussion, with the way our system can do it. Because last week also at
budget review, you know, tiered rates, other things came up as well. And we
have limited fields in our system to work with, so we wouldn't be able to
accommodate everything.
MR. KANEALI`I-KLEINFELDER: Okay, so it was stated that this will not take
effect until July lst, but even the wording within this Section (3)would be
contentious with what was stated already. Is that—?
MS. SAKO: Yeah, it would have to be amended.
MR. KANEALI`I-KLEINFELDER: Okay, so the bill itself has to be amended
before we'd be able to look at this as a whole—if it was to take effect going
forward for Fiscal Year 2022-2023.
MS. SAKO: Correct, yes.
MR. KANEALI`I-KLEINFELDER: Let's say it did take effect July 1't, 2022.
Would it affect the assessments for 2022-23? You guys could handle that on the
Real Property end?
MS. SAKO: So the assessments we did as of January lst are what's coming up
that we will be using for the Fiscal Year 2022-23. So I'm not sure I understood
the question. I mean, we
MR. KANEALI`I-KLEINFELDER: I may not have asked it right. I apologize.
MS. SAKO: Okay,just based on the way the current County Code is written, we
cannot go back and reassess right now.
MR. KANEALI`I-KLEINFELDER: Okay. That is clear enough. Okay, so
going forward, it should provide some protection for the apartment, hotel, resort,
commercial, industrial, ag, native forest, and conservation. Not so much
anything for homeowners, but also yeah, not so much for homeowners.
MS. SAKO: So homeowners are capped at three percent.
MR. KANEALI`I-KLEINFELDER: The three percent, which is good.
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MS. SAKO: As is affordable rental.
MR. KANEALI`I-KLEINFELDER: That is important. Would it be fair to ask
for like a financial impact statement?
MS. SAKO: Yes, it has to be in writing to the Finance Director.
MR. KANEALI`I-KLEINFELDER: Not verbally?
MS. SAKO: My understanding of the County Code is it says in writing. But I'd
be happy to prepare that for you.
MR. KANEALI`I-KLEINFELDER: Okay, I think that would be good, so we
can make a good decision on this and understand what this is going to do.
Looking at Mr. Chung brought up, and this was brought up by another friend of
mine too, was that the Proposition 19 from California?
MS. SAKO: Prop 13 I think, but yes.
MR. KANEALI`I-KLEINFELDER: Prop 13. What led to that kind of
breakdown of the government and the tax and the real property value? Are we
looking at the same thing with a bill like this?
MS. SAKO: Yes, definitely. You know, one of the reasons we have the bond
rating the way we do is that we don't have something like that, capping it.
Capping our assessments, you know, at a certain amount. This would put the
same effects in place for everything except the residential category of our real
property tax classes. So, you know, definitely a lot of things will be impacted.
It's always been that the assessments are the assessments, and then the Council
adjusts the rates, and that's how the protections are afforded to our taxpayers.
MR. KANEALI`I-KLEINFELDER: That's what I've understood. Okay.
Within the Section (3) again, it looks like the valuation on improvements on the
property continue to be assessed at market value.
MS. SAKO: For the first year, correct.
MR. KANEALI`I-KLEINFELDER: For the year that the improvement would
be made.
MS. SAKO: Right. It would get marked to market basically.
MR. KANEALI`I-KLEINFELDER: So there's no reduction on improvements
made. Okay. Yeah, I'd like to see a financial impact statement for this. I can do
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that in writing if that's required, but I think I can do it via this component right
here.
MS. SAKO: Okay.
ACTING CHR. KIMBALL: Council Member Kaneali`i-Kleinfelder,just to let
you know your light just turned yellow over here.
MR. KANEALI`I-KLEINFELDER: Okay. I think it's important to state, I
mean the last year, two years have been very interesting in the real estate market.
While there is a huge property tax assessment increase, the tax rates haven't
changed, and it's important to note. But also, on the back end of that, a lot of
folks made a lot of money over the last two years. If you sold a house, you did
extraordinarily well. That's caused a lot of income to influx to our community,
as well as a lot of outside income coming into our County. There's a lot of
things at play in my mind here, more so than just the valuations. So it goes back
and forth to me. It's kind of a double-edged sword for the community and for
government in my opinion.
I'm interested to see what the bill's introducer wants to do at this point. I have
some questions going forward, but for now I yield, Chair. And thank you,
Ms. Sako. And thank you for being here today all Real Property and Finance
folks. Thank you. I yield, Chair.
ACTING CHR. KIMBALL: Thank you, Council Member Kaneali`i-
Kleinfelder. Back to you, Council Member Richards.
MR. RICHARDS: Thank you, Chair. I just wanted to speak real quickly to
Mr. Chung's point concerning valuation. I know, and this is a paradoxical deal,
one of the resorts in my district, their valuation has doubled since last year. And
paradoxically it's because they did a lot of work on the hotel without income. So
that's where a lot of this conversation is starting. Well we need to figure out
how to help them out, because the hotel, the Kohala Coast Resort Association,
they kept their employees on the health benefits throughout the last couple of
years to the tune of, I know it's at least$30 million, if not higher. So anyway,
Chair, I yield.
ACTING CHR. KIMBALL: Discussion? Council Member Inaba.
MR. INABA: Just real quick. I think we're all trying to get creative here with
the real property tax. I do want to see that financial impact statement,
Ms. Lee Loy, but appreciate what's being brought forward from all angles to try
and kokua our residents. So with that, I'll wait to hear what you have to say
moving forward.
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ACTING CHR. KIMBALL: Thank you, Council Member Inaba. Any other
comments? Alright, I just had a couple of questions for our RPT/Finance folks.
I'm not sure who's over there.
MR. KANEALI`I-KLEINFELDER: You have the directors of both departments
here right now.
ACTING CHR. KIMBALL: Alright, great. The first question I had was the
valuation, you know, it was briefly talked about. I think it was Mr. Hunt that
mentioned in the budget hearings about some of this is "catch up" in the sense
that maybe properties in the vicinity yeah, we can have property that hadn't
sold in recent history and so there's been more activity on the real estate market.
So some of these are getting reassessed at a higher percentage just because they
haven't had incremental assessments over recent years. I'm not trying to put
words in your mouth, but I kind of want to understand that a little bit better.
(Note: At this time, Deputy Finance Director Steven Hunt came forward
to address the members of the Committee.)
MR. HUNT: Yes, Steven Hunt, Deputy Director of Finance, for the record.
That was what I was alluding to, that just because the percentage of the property
counts that are in the commercial-industrial market relative to a residential
market which is a very active market, they don't transact as often. So when I
believe we saw a lot of business closures that were owner operated. So they
owned the real estate, and they operated the business. When the business closed,
they didn't have the need for owning the commercial real estate, so they became
available. I think we started seeing a lot of activity in that commercial market
that we hadn't had in a number of years, so it was that sort of that mark to market
that you started seeing now, where in the absence of activity it would sort of
follow the real estate trends, but it may not be following directly the same
proportion increases or the incremental increases that might have occurred in the
residential market, which was an active market, and probably were reassessed at
a higher appreciation than some of the commercial just because of the lack of
activity. I think that's what I was trying to allude to in the last conversation.
ACTIVE CHR. KIMBALL: Okay, thank you for clearing that up. So is there a
prescribed amount of activity that has to be taken into account with an
assessment. I mean, is there a number of sales that have to happen within a
certain radius, or how do you make the determination whether or not to use
similar sales in a similar area to reassess?
MR. HUNT: I'll give you my take and then I'll defer to Lisa because she's the
actual one that implements it. But having been an assessor myself, you don't
take outliers, so if you have one, two transactions in a year, which on Kauai
where I was an assessor, even fewer property counts, even fewer transactions,
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you don't make a carte blanche in a market with one or two transactions,
especially if one might have been a short sale or one someone paid specifically
over market because they had to have it per plottage for their adjacent lot or
something like that. So I think you look at the market first as a whole, so you
don't look at the area that the area that the sales are taking place, you look at
what's going on in a specific segment of the market whether it be commercial,
industrial, resort, residential, and kind of build your case on that,just on the
entire market and what's going on.
You're looking at also your sale to assessment ratios, so you're looking at your
current assessment relative to what the property just sold at and what that
differential might be. So you're looking at that across the board as well, and
then you start drilling down into specific markets. So you know, for here, Hilo,
Kona, Puna, areas like that, where you have activity and maybe it's outpacing the
market because a new demand or a new employer or new activities are taking
place in that area that is causing that increase.
So you kind of have to look at it both from a micro and a macro perspective
when you're making that decision to bring up your sale to assessment ratios for
those particular markets. And I'll defer to Lisa for any additional commentary
on that.
(Note: At this time, Real Property Tax Administrator Lisa Miura came
forward to address the members of the Committee.)
MS. MIURA: No, I think Steve said it all.
ACTING CHR. KIMBALL: Thank you very much for that, the clarification.
It's helpful to understand how all this works. I, like my colleagues, certainly
appreciate the intent of this. And I really like the idea of moving forward with
an ad hoc that allows us to explore how these things all balance out in a little bit
more depth. You guys know I love playing with spreadsheets and stuff, so I
happily volunteer to support that effort.
I did have one concern with fairness, and that has to do with the conversation we
were just having. If you've got a piece of commercial property that's in an area
where there's fairly frequent sales that are comparable, they're going to
incrementally have their values increased five percent here, five percent here,
over the past couple of years, whereas another property that doesn't experience
that same level of sales and they did this last year, all of a sudden, they're upping
by 20 percent where they maybe haven't been upped. So who kind of gets the
short end of the stick there is the people that have paid that incremental increase.
So I just want to be really careful and mindful about that. I really appreciate the
conversation and the discussion, and I think, and I don't know what move you
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want to make next. I see Council Member Richards wants to make a comment,
but I'd definitely support digging into this a little bit deeper to figure out how we
can get some relief through and ad hoc process. Council Member Richards,
please.
MR. RICHARDS: Just concerning valuation, I did want to point out that there
was not a complaint about the valuation. They thought they actually did a very
good job. It was just the jump of the tax bill, that's where the concern is. But
they thought it was very fair on how our valuators proceeded. So I just wanted
to make sure that was clear.
ACTING CHR. KIMBALL: Thank you, Council Member Richards. Any
further discussion? Okay, we have a motion on the floor. Did you want to make
any further adjustments?
MS. LEE LOY: I do. I want to make a motion to postpone Bill 156 to our
May 3rd meeting.
Motion to Postpone: Ms. Lee Loy moved to postpone Bill 156 to May 3, 2022.
Seconded by Mr. Inaba.
MS. LEE LOY: On the postponement, Chair?
ACTING CHR. KIMBALL: Yes.
MS. LEE LOY: Yeah, absolutely. I think we'll have more information. We'll
have the certified values. We'll have the Mayor's next budget. I think it will
ripen at that time on our next steps, because as I mentioned, this does not provide
the relief on the August 20 tax bill, which is what I believe our constituents are
asking for. That will be done with the rates. But we need the certified values and
the Mayor's next iteration of the budget, understanding what we all get from the
State by way of any funds if any. I think that picture will begin to fill in and we'll
be able to make some good decisions. And I hear my colleagues asking for a
fiscal impact statement. We're not going to get it without those building blocks
for those things. So please, I encourage my colleagues to support the
Postponement.
ACTING CHR. KIMBALL: Thank you, Council Member Lee Loy. Council
Member Inaba.
MR. INABA: Thank you, Chair. I just want to make sure that we will actually
have something. I mean, I know it's the day before May 5d', but will—Deanna,
will we have something by May 4d'?
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MS. SAKO: You definitely will not have the amended budget on May 3rd. That's
two days prior to when the Mayor's Administration is required to submit it. We
most likely will have transmitted the certified values, but I would caution the
Council that it's not just a straight math to convert. There's actually, the way our
Code is with the homeowner's exemption and the 2HX or what we call the
Second Homeowners Exemption in January, there's a lot of numbers that go into
that calculation. So you might need a little bit of help doing that conversion.
MR. INABA: Okay, thank you, Deanna. With that, Ms. Lee Loy, I want this
conversation to advance, but I'm not sure May 4 or May 18 might be more
appropriate. May 18 is the next Council meeting after that, where we should
really have those numbers that can help us with a robust conversation. Chair, I
yield.
ACTING CHR. KIMBALL: Thank you, Council Member Inaba. Council
Member Lee Loy.
Withdraw Motion MS. LEE LOY: Thank you. Thank you for looking ahead for me. Actually, I'll
to Postpone: withdraw and make a motion to postpone to the May 17 Committee.
Motion to Postpone: Ms. Lee Loy moved to postpone Bill 156 to May 17, 2022.
(Approved) Seconded by Mr. Inaba and carried by the following voice
vote:
Ayes: Committee Members Chung, David, Inaba,
Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy,
Richards, Villegas, and Acting Chair Kimball–9.
Noes: None.
Absent: None.
Excused: None.
ACTING CHR. KIMBALL: The motion passes. Before we make the motion to
adjourn, I'm going to pass the chair back to Council Member Kaneali`i-
Kleinfelder, please.
Relinquish Chair: Acting Chair Kimball relinquished the chair to Chair Kaneali`i-Kleinfelder.
CHR KANEALI`I-KLEINFELDER: Mahalo, Ms. Kimball. Let the record
reflect I am resuming chair for the Finance Committee. With that—
MS.
hatMS. KIMBALL: Chair, I'd like to make a motion.
CHR KANEALI`I-KLEINFELDER: Yes, go ahead, Ms. Kimball.
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FC-33 April 19,2022
Reconsider Vote Ms. Kimball moved to reconsider the vote to postpone
on Bill 153: Bill 153 to the call of the Chair. Seconded by Mr. Inaba.
CHR KANEALI`I-KLEINFELDER: Ms. Kimball.
MS. KIMBALL: In the interim between when we had the vote on the
postponement and now, I was provided with a little bit more details about our
schedule in terms of where we need to get things for a Charter amendment and the
timeliness of this. So my decision to hold it in the Committee was so that we
could make some of those amendments that were brought up by my colleagues.
But at this point just to meet the timelines of the Charter amendment, I think it's
actually important to keep this moving. So that is the reason for my motion to
reconsider.
CHR KANEALI`I-KLEINFELDER: Okay. Any other discussion? Okay,
seeing none, Mr. Clerk, if you could.
Vote on Motion The motion to reconsider the vote to postpone Bill 153 to
to Reconsider: the call of the Chair was carried by the following roll call
(Approved) vote:
Ayes: Committee Members David, Inaba, Kimball,
Villegas, and Chair Kaneali`i-Kleinfelder—5.
Noes: Committee Members Chung, Kierkiewicz,
Lee Loy, and Richards —4.
Absent: None.
Excused: None.
CHR KANEALI`I-KLEINFELDER: Thank you, Mr. Clerk. So that would
bring the motion back to the floor, correct?
MR. HENRICKS: Correct. The motion on the floor is to forward Bill 153 to the
Council with a favorable recommendation.
CHR KANEALI`I-KLEINFELDER: Okay, do we have to bring back the
motion, or is already considered on the floor and we can proceed with
discussion.
MR. HENRICKS: The motion on the floor is to forward Bill 153 to the Council
with a favorable recommendation.
CHR KANEALI`I-KLEINFELDER: Okay, Ms. Kimball. Discussion?
MS. KIMBALL: Again, we had a very thorough discussion. We are past the
1:30 hour. I think a lot of us are ready for a bio break and some food. I don't
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FC-33 April 19,2022
know that we need to go into this in greater detail. But again, the reason for
reconsideration and continuing this to move forward is really to make sure we
have a comfortable timeline for getting this through to the final stage for a
Charter. We will have three hearings on this in Council but do require a super
majority vote as was mentioned prior. So there's lots of time to continue to
address the issues. Thank you, Chair. I yield.
MS. KIERKIEWICZ: Chair?
CHR KANEALI`I-KLEINFELDER: Mr. Kierkiewicz, go ahead.
MS. KIERKIEWICZ: Thank you. I really implore the introducers of this
legislation to postpone at least one more meeting. I think a lot of us had raised
some concerns that really should be refined at the Committee level. So just
implore you to consider that, and also consider all options, right? If the goal
really is to truly support funding for housing, there might be a more expedient
way to do this outside of the Charter. Thank you, Chair.
CHR KANEALI`I-KLEINFELDER: Thank you, Ms. Kierkiewicz. Anyone
else? Okay hearing none, the motion on the floor is to forward Bill 153 to
Council with a favorable recommendation. Mr. Clerk, could you do the honors,
please?
Vote on Bill 153: The motion to recommend passage of Bill 153 on first
(Approved) reading was carried by the following roll call vote:
Ayes: Committee Members Chung, David,
Inaba, Kimball, Lee Loy, Villegas,
and Chair Kaneali`i-Kleinfelder—7.
Noes: Committee Members Kierkiewicz and Richards —2.
Absent: None.
Excused: None.
CHR KANEALI`I-KLEINFELDER: Thank you very much, Mr. Clerk. Bill
Number 153 is forwarded to Council with a favorable recommendation. And that
does bring us to the end of our agenda, I believe.
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FC-33 April 19,2022
ADJOURN- There being no further business, at 1:33 p.m., Mr. Inaba moved to adjourn
MENT: the meeting. Seconded by Ms. Lee Loy and carried by the following voice vote:
Ayes: Committee Members Chung, David, Inaba,
Kaneali`i-I�leinfelder, Kierkiewicz, Lee Loy,
Richards, Villegas, and Acting Chair Kimball—9.
Noes: None.
Absent: None.
Excused: None.
Approved:
(40(ly (tt
Mr. Matt Kaneali`i- 4 leinfel o'-r, Chair (Date)
Finance Committee
HK/ja
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