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HomeMy WebLinkAboutMIN FC 2023/03/07 (2022-2024) Committee on Finance 5th Session Hawai`i County Building 25 Aupuni Street Hilo, Hawai`i March 7, 2023 CALL TO The regular meeting of the Committee on Finance was called to order at ORDER: 10:31 a.m., in the Council Chambers, Hilo, by Mr. Matt Kaneali`i- Kleinfelder, Chair. ROLL CALL: Present: Mr. Matt Kaneali`i- Kleinfelder, Chair Ms. Cindy Evans, Vice Chair (came in later) Ms. Michelle M. Galimba, Member Mr. Holeka Goro Inaba, Member Ms. Jenn Kagiwada, Member Ms. Ashley L. Kierkiewicz, Member Ms. Heather L. Kimball, Member Ms. Susan L. K. Lee Loy, Member(came in later) Ms. Rebecca Villegas (via videoconference from Kona) 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: (There were none.) CHR. KANEALI`I-KLEINFELDER: Mr. Clerk, how about we start with our communications? COMMUNI- The Chair directed the Committee to proceed to the next order of business, CATIONS: Communications. Comm. 12.5: REPORT OF FUND TRANSFERS AUTHORIZED: JANUARY 16—31, 2023 From Controller Kay Oshiro, dated February 3, 2023. Motion to Close File: Mr. Inaba moved to close file on Comm. 12.5. Seconded by Ms. Galimba. CHR. KANEALI`I-KLEINFELDER: Council Members, any discussion on Communication 12.5? MS. KIERKIEWICZ: Chair? FC-5 March 7,2023 CHR. KANEALII-KLEINFELDER: Council Member Kierkiewicz, go ahead. MS. KIERKIEWICZ: Thank you, Chair. Director Sako, I have a couple of questions related to some of the transfers contained in this communication. Good morning, Director, good to see you. (Note: At this time, Finance Director Deanna Sako came forward to address the members of the Committee.) MS. SAKO: Good morning. MS. KIERKIEWICZ: Could you just share with us the purpose of Lava Flow Alternate Project—County? Is that just like a placeholder because I think the title also includes the year 2018? MS. SAKO: I believe that for Parks, they had some of the FEMA (Federal Emergency Management Agency) funds in the Operating Budget and some of it was in the Capital Budget. MS. KIERKIEWICZ: Got it. Okay. MS. SAKO: So this is the part related to equipment that was in the Operating Budget. MS. KIERKIEWICZ: Okay, that's helpful. Thank you. The other question I had was related to Big Island Film Office—R&D (Research and Development) contractual services. My understanding is we've hired someone. Are they contracted or is that a permanent position within the County? MS. SAKO: I believe it's a permanent position within the County, yes. MS. KIERKIEWICZ: It's a permanent position. And then this transfer, would it help to facilitate getting them computer equipment? MS. SAKO: Yes. MS. KIERKIEWICZ: Okay, great. Thank you, Director. Chair, I yield. CHR. KANEALI`I-KLEINFELDER: Thank you, Council Member. Any other question? Seeing none, please let the record reflect that Council Member Lee Loy has joined us. We do have the motion to close file on Communication 12.5 on the floor, all in favor? Any opposed? Mr. Clerk, let the record reflect that Council Member Evans joined us as well, appropriately at the right moment. So that gives us nine members in favor for Communication 12.5. Page 2 FC-5 March 7,2023 Vote on Comm. 12.5: The motion to close file on Comm. 12.5 was carried (Filed) following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kierkiewicz, Kimball, Lee Loy, Villegas, and Chair Kaneali`i-Kleinfelder—9. Noes: None. Absent: None. Excused: None. Comm. 13.5: REPORT OF CHANGE ORDERS AUTHORIZED: JANUARY 16 — 31, 2023 From Finance Director Deanna Sako, dated February 2, 2023, transmitting the above report pursuant to Hawai`i County Code Section 2-12.3. Vote on Comm. 13.5: Mr. Inaba moved to close file on Comm. 13.5. Seconded (Filed) Ms. Galimba and carried by the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kierkiewicz, Kimball, Lee Loy, Villegas, and Chair Kaneali`i-Kleinfelder—9. Noes: None. Absent: None. Excused: None. Comm. 14.3: MONTHLY BUDGET STATUS REPORT FOR THE MONTH ENDED SEPTEMBER 30, 2022 From Finance Director Deanna Sako, dated February 8, 2023, transmitting the above report pursuant to Hawai`i County Charter Section 6-6.3 (h). Motion to Close File: Mr. Inaba moved to close file on Comm. 14.3. Seconded by Ms. Lee Loy. CHR. KANEALI`I-KLEINFELDER: Any discussion? Okay, seeing none. Just to make a note, this is for September, and we are in March, thank you. Okay, motion is on the floor. All in favor, Council Members, of closing file on Communication 14.3? Page 3 FC-5 March 7,2023 Vote on Comm. 14.3: The motion to close file on Comm. 14.3 was carried (Filed) by the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kierkiewicz, Kimball, Lee Loy, Villegas, and Chair Kaneali`i-Kleinfelder—9. Noes: None. Absent: None. Excused: None. CHR. KANEALI`I-KLEINFELDER: Resolution 70-23, please? ORDER OF The Chair directed the Committee to proceed to the next order of business, RESOLUTIONS: Order of Resolutions. Res. 70-23: AUTHORIZES THE MAYOR TO ENTER INTO A MULTI-YEAR HOUSING ASSISTANCE PAYMENT CONTRACT WITH KALOKO HEIGHTS AFFORDABLE HOUSING LLLP, OWNER OF KALOKO HEIGHTS AFFORDABLE HOUSING FOR THE SECTION 8 PROJECT- BASED VOUCHER PROGRAM AS OFFERED THROUGH A PUBLIC NOTICE DATED DECEMBER 5, 12, AND 19, 2016 AND FEBRUARY 18 AND 19, 2019 Reference: Comm. 132 Intr. by: Mr. Kaneali`i-Kleinfelder (B/R) Motion to Approve: Mr. Inaba moved to recommend adoption of Res. 70-23. Seconded by Ms. Galimba. MR. INABA: Chair? CHR. KANEALI`I-KLEINFELDER: Mr. Inaba, go ahead. MR. INABA: Yeah, do we have anyone from Housing online right now? CHR. KANEALI`I-KLEINFELDER: Oh, they're here in the chambers. MR. INABA: Oh sorry, Mr. Yee. Mr. Yee, could you please come up and just give the committee an overview as to the function of the resolution and anticipated costs or obligations on the County side for this? (Note: At this time, Housing Specialist Michael Yee came forward to address the members of the Committee.) Page 4 FC-5 March 7,2023 MR. YEE: Good morning, I think it's still morning. Michael Yee, Housing Community Development Specialist VI for the Office of Housing and Community Development. I managed the Housing Voucher program, or Section 8 program. We issue 2,200-plus vouchers per year, over that, some of it, being what we call "Project-Based Vouchers," versus Housing Choice vouchers, which you can take and you're mobile with those. Project-Based, there is a process, in which people must reply to an RFP (Request for Proposal), and then we award based on that. Once they receive an award, if they move further along and do their work and get approvals from HUD (Housing Urban Development), we can then enter into an AHAP (Affordable Housing Assistance Program) payments. So, this is the mechanism which—because we have to do it for multi-year, they can range anywhere from, you know, typically five years to 20 years, right; so hence, doing the permission to do so. The AHAP is the initial contract you give during the construction phase. Once they complete, then you go to a full-half contract with them. There is—all the funding for it comes through HUD, so there is no County expense for doing this contract. Did that answer all of your questions, Council Member? MR. INABA: Yeah. So for this specific project, all 75 vouchers are tied to this Kaloko Heights Project, is that right? MR. YEE: Correct. MR. INABA: Okay, and the term of this agreement? MR. YEE: It's not determined at this moment in time, but typically it could be 15 to 20 years is generally where most of them fall at. MR. INABA: When do you folks usually determine how long the term is? MR. YEE: Well, given that they're looking to close, we'll probably confirm that within weeks here. Usually, when we're coming forth with a multi-year agreement, it's usually much earlier in the process; this one is a little later. MR. INABA: Alrighty, thank you very much, Mr. Yee. CHR. KANEALI`I-KLEINFELDER: Thank you, Council Member. Council Member Galimba, go ahead MS. GALIMBA: Thank you. Thank you, Mr. Yee. Sony, I'm very new here, so I have to ask some dumb questions. You said—you talked about closing, so is it closing with this program, or is it that the company is buying a property or constructing a property? I'm trying to understand this program. Page 5 FC-5 March 7,2023 MR. YEE: So Kaloko has been planned for many years, and so they're waiting to close on their financing, and they're ready, as soon as they close, to break ground. So this is almost like "shovel-ready," ready to go. So this is, like I said, a little late; and usually when we come in, much earlier in the development process. This one is coming at the very end of it. MS. GALIMBA: And so they get these vouchers, and so that helps them to know that they will have a funding stream for building very affordable housing? MR. YEE: Exactly. So, HUD has a 25 percent cap on a project. Except there are some exemptions to that, such as if you're doing senior housing, so you can go over 25 percent. And yes, that provides a steady stream that they count on for the financing of the project. Back in the olden days, when I first started in the business 30 years ago, you found a lot of projects that were 100 percent Project-Based. HUD moved away from that to the Housing Voucher because it gave more mobility, but they also understood that Project-Based Vouchers was a great financing tool. So, it's still a very much desired piece of affordable housing. MS. GALIMBA: One more question. So the vouchers that you sort of give to this project, then is it administration of the vouchers, and sort of who has the housing? Is that with you folks or with the project? MR. YEE: Great question. So when it comes to Project-Based Vouchers, our projects, we usually have a property manager that's managing it. We'll still maintain a waitlist. They still have to pass all the rules of HUD and eligibility. But there's a little more of the operational side that a property management company will oversee, in terms of screening the tenants and getting them in, but the basic eligibility in getting the "okay" for an assistant payment still comes from us. So, it's a very close relationship. The billing and the money still flow through us, so we just have to work with them to make sure they're filling the units, putting the right tenants, and so there's annual monitoring of making sure those activities are proper. MS. GALIMBA: Thank you very much, and I yield. CHR. KANEALI`I-KLEINFELDER: Council Member Evans, go ahead. MS. EVANS: Thank you, Chair. I have a question—I was looking at the resolution, and there is no indication of where this property is located. I guess I'm missing this, somewhere. Where is this parcel? Page 6 FC-5 March 7,2023 MR. YEE: Kaloko, yeah, there's not an address on it, but the project is down in Kona, kind of by, I don't want to say Costco, but close to our Uluwini Project, right? So, off of Hina Lani. MS. EVANS: Off of Hina Lani, okay. So is the project more than—it says, "75 Project-Based Vouchers," but is the actual construction more like 200 units? And this is 25 percent, I mean, I'm a little confused about that 25 percent voucher. MR. YEE: Right. So I can't recall offhand how many total units they're building, but it is much larger than 75 units. I can't remember offhand. MS. EVANS: Okay. Just a request, is it possible when we see these resolutions in the future to have a little more information about where it's located and the size of the project, in relationship to what the voucher program is? It's really neat to know that the community of Kona is going to get some more housing. It would be nice to see the total. MR. YEE: Yep, absolutely. MS. EVANS: Okay, appreciate it. Thank you. Thank you, Chair. I yield. CHR. KANEALI`I-KLEINFELDER: Thank you, Council Member. Any further discussion? Seeing none. Mr. Yee, I do find it interesting that we have a resolution to form an agreement, but we don't know the actual terms of the agreement; that's a good question for Mr. Inaba. Is this normal practice that we commit to the agreement without knowing what the terms of the agreement are? MR. YEE: Absolutely. Because like I said, usually we come in soon after the RFP is done, and so we award x-number of units, and then we come in for this reso. to be able to enter into a multi-year agreement; and usually, that's so early on, they haven't even lined up other financing that we don't know, they don't know, exactly what the term is going to be, that they really want to have. Again, most of the projects will fall under that 15- to 20-year range, though. CHR. KANEALI`I-KLEINFELDER: Okay. And this is normal practice? MR. YEE: Yes, and I think the determination of how long the term will be, will be different for every project and part of it is we want to recycle these PVBs (Project-Based Vouchers), so you don't want them sitting out too long on a project because you want to be able to grab those PBV units back and then be able to award it to another new project, right? So, it's not necessarily—we're not going to want to look for a 25 or 30-year term, but you also need it to be long enough to aid the project, right, to get it started. Page 7 FC-5 March 7,2023 CHR. KANEALI`I-KLEINFELDER: Okay. Okay, thank you, Mr. Yee, thanks for being here today. Appreciate it. Oh, Council Member Evans, go ahead. MS. EVANS: Thank you. Just a follow-up question. The resolution said that OHCD (Office of Housing and Community Development) published notices in local newspapers, accepting proposals. Were you specific that you wanted it in Kona or were you looking anywhere because I know I need some help in the north end of the island? MR. YEE: So when we do the RFP, it's a call-out for anybody that wants a Project-Based Voucher, so your project could be anywhere on-island. The next resolution you'll see would be for several different projects that are throughout the island, right, so anybody can apply. MS. EVANS: All right, good to know. Thank you. I yield. CHR. KANEALI`I-KLEINFELDER: Thank you, Council Member. Seeing no further lights on, and not anything from Ms. Villegas in Kona. Motion is on the floor to forward Resolution 70-23 to Council with a favorable recommendation, all in favor, Council Members? Vote on Res. 70-23: The motion to recommend adoption of Res. 70-23 was (Approved) carried by the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kierkiewicz, Kimball, Lee Loy, Villegas, and Chair Kaneali`i-Kleinfelder—9. Noes: None. Absent: None. Excused: None. CHR. KANEALI`I-KLEINFELDER: Next resolution, please. Res. 71-23: AUTHORIZES THE MAYOR TO ENTER INTO A MULTI-YEAR HOUSING ASSISTANCE PAYMENT CONTRACT WITH THE PROPERTY OWNERS OF THE PROJECTS SELECTED FOR THE SECTION 8 PROJECT-BASED VOUCHER PROGRAM AS OFFERED THROUGH A PUBLIC NOTICE DATED JULY 12, 19, AND 26, 2021 Authorizes the Mayor to enter into a multi-year agreement for the following proposed voucher projects: E Komo Mai Apartments, Hale Ola 0 Mohouli, Hualalai Court, Kamakoa Nui Workforce Housing, and Kuakini Heights. Reference: Comm. 133 Intr. by: Mr. Kaneali`i-Kleinfelder (B/R) Page 8 FC-5 March 7,2023 Motion to Approve: Mr. Inaba moved to recommend adoption of Res. 71-23. Seconded by Ms. Lee Loy. CHR. KANEALI`I-KLEINFELDER: Council Members, discussion? Council Member Inaba, go ahead. MR. INABA: Thank you. The purpose for having two separate ones was it just because we advertised it, or put it out to public notice, separately? MR. YEE: Correct. MR. INABA: Got it. Thank you, Mr. Yee. Chair, I yield. Council Member Galimba. MS. GALIMBA: Just quickly, could you let us know where these five projects are located? MR. YEE: E Komo Mai is in Hilo; Mohouli is in Hilo; Hualalai is, I don't know the exact specific, but West Hawai`i; Kamakoa Nui is in Waikoloa, and then Kuakini is also in Kona. CHR. KANEALI`I-KLEINFELDER: Mahalo, Ms. Galimba. Council Member Kagiwada. MS. KAGIWADA: Thank you, Chair. So once again, new person trying to understand, but many of these or all of these are already built, or some are being built, or none of them are built? MR. YEE: No, E Komo Mai is an existing one. MS. KAGIWADA: Right. MR. YEE: It's the only one. MS. KAGIWADA: Right, okay. So, how is that kind of—when you put out the Request for Proposal, it can be existing places as well as—? MR. YEE: Correct. Well, at least in the RFP that was done in 2021, which was before my time, they allowed for existing to apply. I'm not sure we would always do that in the future, depending on where our priorities are for where we want to use Project-Based Vouchers. But clearly, they awarded nine, and just for a note that they had 11 prior to this award. MS. KAGIWADA: So, are they losing the 11 or are they going to have 20 now? Page 9 FC-5 March 7,2023 MR. YEE: Technically, they have already given up the 11 and so they would get these nine, so there will be less two in the future. MS. KAGIWADA: Okay. Okay, all right. Thank you, that's all for now. Thanks, Chair. I yield. CHR. KANEALI`I-KLEINFELDER: Mahalo. Council Member Inaba. MR. INABA: Yeah, I just wanted to make a clarification. The Hualalai Court is a Hilo project. MR. YEE: Oh, I'm sorry. MR. INABA: Hualalai Street. Funny how we name Hualalai names on this island. Okay, thank you. CHR. KANEALI`I-KLEINFELDER: Council Member Evans, go ahead. MS. EVANS: Thank you. I have a question about your publishing notices in newspapers. I recently did a survey of constituents and how many read local newspapers, and it looked to be about 35 to 40 percent now read newspapers. They just don't read newspapers anymore. Has there been any discussion? Like, how do you actually publish this? Is it the first of the month, you put it up on your website? Maybe we'd tell people, "You better look the first of every month because that's where you're going to find this stuff" Because again, people aren't reading newspapers. MR. YEE: Right So our Administrative Rules right now dictate that we put them out to West Hawai`i and the Hawai`i Tribune Herald, so that's in our rules. Until we change that, that's what we have to follow now. As we want to amend in the future, knowing how notices and where people are looking for them has certainly changed over time. We can certainly consider, you know, improvements to it. I don't disagree with you that trying to expect the public to catch every official notice out of newspapers is not the best way to reach the public anymore. MS. EVANS: Not anymore. MR. YEE: I will mention that we do have a robust, kind of like new OHCD (Office of Housing and Community Development) website. We do push out a lot of information through our Instagram and Facebook pages, and so that's how, on top of official notices, we post a lot of stuff, so it's getting out to a lot of our stakeholders who are on our email list, and et cetera. Page 10 FC-5 March 7,2023 MS. EVANS: So if you were to update the Admin. Rules, do you wait and do like a major overhaul because it usually takes a lot of effort to do that? MR. YEE: So, the five-year plan—hey, we could always change Admin. Rules, but yes, like you said, "It's a lift," and there has to be a public hearing process and stuff. We're currently not looking at doing it this year, but I think we are nearing a period where we need to update some stuff. So could it happen certainly over the next year and start the process? Absolutely. There are a lot of things we are looking at changing. I think it's important to note that most of the leadership of the voucher program has turned over quite a bit within the division over the last year and a half; and so I think with all the new leadership within the division, we're all looking at the changes we need to make, and knowing how that has to change the Admin. rules for us. MS. EVANS: That's good to know. Thank you, Chair. I yield. CHR. KANEALPI-KLEINFELDER: Thank you, Council Member. Any further questions? Okay, hearing none. Mr. Yee, thank you very much for being here today. I appreciate it. We have the motion on the floor to forward Resolution 71-23 to Council with a favorable recommendation, all in favor? Vote on Res. 71-23: The motion to recommend adoption of Res. 71-23 was (Approved) carried by the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kierkiewicz, Kimball, Lee Loy, Villegas, and Chair Kdneali`i-Kleinfelder– 9. Noes: None. Absent: None. Excused: None. CHR. KANEALPI-KLEINFELDER: Bill 28, please. BILLS FOR The Chair directed the Committee to proceed to the next order of business, ORDINANCES: Bills for Ordinances. MR. BROWN: Bills for Ordinances, I believe we have one testifier for Bill 28. STATEMENTS The Chair called Jonathan Hilton, representing the Grassroot Institute, who FROM THE registered to speak in support of Bill 28, and came forward when called. PUBLIC ON BILL 28: Page 11 FC-5 March 7,2023 Bill 28: AMENDS CHAPTER 19, ARTICLE 7, SECTION 19-53 AND ARTICLE 10, SECTION 19-71, OF THE HAWAI`I COUNTY CODE 1983 (2016 EDITION, AS AMENDED), RELATING TO REAL PROPERTY TAXES Safeguards certain agriculturally productive properties which are also used as an owner's primary residence or as an affordable rental from rising assessment values. Reference: Comm. 113 Intr. by: Mr. Inaba Motion to Approve: Mr. Inaba moved to recommend passage of Bill 28 on first reading. Seconded by Ms. Galimba. CHR. KANEALPI-KLEINFELDER: Council Member Inaba, go ahead. MR. INABA: Thank you, Chair, kind of like what our testifier just shared. Essentially right now, the homeowner class, which has the lowest property tax rate alongside with the affordable rental class, they're afforded a three percent assessment cap from year to year, and for some folks who either are not aware that their primary residence can qualify, and they can get into this class. But there are folks who live on ag land, who are paying the ag rate with, you know, whether it's dedicated or non-dedicated ag exemptions that reduces the assessed value. When they have to make a choice of whether they are going to get an assessment cap to preserve and be able to afford where they live or pay a higher rate with reduced assessments and no cap, I don't see how we're really supporting our ag folks right now. I think there is some concern, maybe even that there is abuse of our ag programs, but like everything, there is not one correct way to do it. I think we do have the opportunity to tighten up ship, to make sure that those who are doing dedicated or non-dedicated ag are in fact doing it, so any reductions are warranted in their assessments, or in their exemptions I should say. So essentially this, if you live on a five-acre parcel and you have dedicated or non-dedicated ag use there, right now you might be paying $2,500 a year. I'd like you, however, to be able to pay the homeowner class because that is your primary residence and you should be able to keep getting the benefit of the exemption since you're doing more than the other person, people who just live at their house. You know, we want to encourage you to continue, and we shouldn't force you to choose; keep doing ag and stick with the ag rate or get the benefits of your primary residence, that's exactly what that is. So, I really want to thank our Real Property Tax duo, that we love so much for their assistance, because in addition to Corporation Counsel—because although it seemed easy to just try and make this change, one part referred to another part of our Code that referred to the HRS (Hawaii Revised Statutes), and it really took us down the rabbit hole. So to Corporation Counsel Strance and our RPT (Real Page 12 FC-5 March 7,2023 Property Tax) folks, I just want to put the mahalo out to them for a lot of the groundwork here. I'm happy to answer any questions Committee Members might have. CHR. KANEALPI-KLEINFELDER: Thank you, Council Member. Council Member Evans, go ahead. MS. VILLEGAS: Chair,just to let you know we have the members of Real Property Tax here in the Kona Chambers should you want to call them, or anyone want to call them up to speak. CHR. KANEALN-KLEINFELDER: Mahalo, Council Member Villegas. Council Member Evans, go ahead. MS. EVANS: Yes. I see Deanna Sako with Real Property Tax Division. So this, the non-dedicated and dedicated has been around for many, many, many years, so how big of a change is this? Because this is a program that's existed for so long, just tell us what, you know, are we like at a fork in the road? Are we going to the left and this is on the right, I mean, how big of a change is this? (Note: At this time, Assistant Real Property Tax Administrator Keita Jo came forward to address the members of the Committee.) MR. JO: Keita Jo, Assistant Real Property Tax Administrator. This is actually tied to the Homeowners Program, so back in 2004, 2005, there is discussion on how to best support agricultural use on island, so this kind of goes back to when the Homeowners Program changed. They added the three percent cap, an additional 20 percent exemption at that point and time, and so there is a discussion at that point on how to handle individuals who are participating in the Homeowners Program and also getting an agricultural use benefit. At that time, you didn't see the significant increases maybe that's what we're seeing right now in the market, and so some at that time felt that had they given the three percent cap back in 2005, maybe you would consider it a double-dip; you're getting an ag benefit, you're getting a homeowner's benefit, now you're getting both. But I think the way that the idea has kind of shifted is a lot of people feel that they're almost not getting the full benefit. Even though they are producing agricultural use on their property, they're actually—with the market increasing as much as it has been, they're actually—it's a negative for them. So, how do you encourage agricultural use and keep that cap there? I think that's what Council Member Inaba articulated quite well. That's kind of the fork in the road that we're at. It impacts about 2,200, 2,300 parcels that are in this decision- making process. I mean, ultimately an owner has to decide, do I do ag and be a homeowner or do I just be homeowner, and that's the decision that people make Page 13 FC-5 March 7,2023 every year, but because you don't have this three percent cap, that decision could change. What we found in this past year, is with increases in the market and not having that three percent cap. It made no sense for individuals to be getting a homeowner's and an ag benefit because they were not getting that benefit, right? So, it kind of changed that balance. MS. EVANS: Sorry, I was just thinking of unintended consequence. So let's say the actual land value goes up faster than the house value—so what I've seen in my own district is people choose, is it the land or the house that's going up in value? And then, they pick accordingly, right? So you might have a house that's 40, 45, 50 years old that just goes down in value, it doesn't cost a whole lot, and yet your parcel of land may go just crazy in cost. So, you know, you do have a choice. I guess the unintended consequences, if we give this, now we completely get rid of the dedicated/non-dedicated? Now there's no choice? So, now you'll get assessed on the land, and you'll get assessed on the land and the house, the unintended consequence is that the taxes might be up. But, the benefit I'm hearing is the three percent cap. So, is that the real discussion, the three percent cap, or is it the total? Because again, I'm just being—I want to be careful we're not having an unintended consequence here. MR. JO: Yeah, so what we're talking about here is the three percent cap and the homeowner's tax rate. MS. EVANS: Right. MR. JO: I know there was some testimony earlier that indicated that similar situations occur on O`ahu, but O`ahu actually doesn't have a specific tax class, a preferential tax rate for homeowners, and that's a little bit of a difference. So as far as the market value increasing and someone choosing between land or building, that's a benefit that a homeowner gets right now, right? They're capped. The same thing would apply if this legislation came to fruition. They're going to be capped at an agricultural use value, and they can't go up any more than three percent to the market. So, it's kind of—I don't know if I'm articulating it correctly or clearly, but it's kind of same-same the way— MS. EVANS: I really wish we had a PowerPoint with numbers. MR. JO: Yeah, yeah. MS. EVANS: It would make it easier for me to understand if you showed numbers and the effect on people's property tax. You know, I'd love to compare before and after, because then it would make a little more sense to me. Because again, I'm just a little concerned because I know where I live, you're always making a choice, should I dedicate it or not dedicate it? Because one throws me Page 14 FC-5 March 7,2023 in one direction, and the other direction, which one gives me the best tax relief? So, I'm kind of making that choice. MR. JO: And I think the way that this legislation is written is regardless of what that choice is, the choice is always going to be better; because when you allow the cap for individuals that are participating in the ag program, they're going to pay less in taxes based on this legislation because it ties in the three percent cap as well as the tax rate. MS. EVANS: Will the cap be on the land as well as the house? MR. JO: Yeah. Uh-hmm, yeah. MS. EVANS: So it's for the total? MR. JO: Yeah. MS. EVANS: Okay, all right. Thank you. I yield. CHR. KANEALII-KLEINFELDER: Thank you, Council Member. MR. INABA: Chair, real quick, if I could just point something out? CHR. KANEALPI-KLEINFELDER: Go ahead. MR. INABA: I do have just one amendment. It doesn't amend the contents of the bill, rather just the purpose section. So we'll take it up, but I just maybe forgot to mention it's also to protect those who are in the affordable rental class. If you are committed and you submit to our Real Property Tax Division that you are renting out a property to someone at an affordable rate and you're in that program, and there's ag going on, on that property, the same should apply that you get taxed the homeowner or the affordable rental rate, which is the same, and you get a three percent for as long as you are in that program for affordable rental. So it's two parts: your primary residence; and if you are giving somebody a place to live, that's verified to be affordable, for as long as it is affordable. So, thank you. Just wanted to point that out, and we can take the amendment up after since it doesn't change the intention or substance of the bill itself. CHR. KANEALN-KLEINFELDER: Thank you, Mr. Inaba. Okay, Council Member Kimball. MS. KIMBALL: Thank you, Chair; and thank you, Council Member Inaba, for putting this forward. I had some just sort of more detailed questions about language, and just want to make sure I'm clear on some things. Under Page 15 FC-5 March 7,2023 Section 2(e)(2), we're removing the word "exclusively," what is the purpose of that removal? MR. INABA: Section 2(e)(2), by removing the word "exclusively," we're allowing it—we're opening up that window for dedicated or non-dedicated ag. If we leave that word in there, it basically is saying that whole property has to be used as the primary residence for the homeowner class to be or to be eligible for the homeowner class. MS. KIMBALL: Understood, okay. And then in Section 3, under 2(e), there's just a bunch of strikeouts and additions. The way I'm reading it, and correct me if I'm wrong, that this is largely just housekeeping and sort of rephrasing the existing language for clarity, I presume? MR. INABA: Yeah, so for the most part, you know, before it's mentioning the person, now we're talking about the property itself, including the structures on it. So in Section(e), as for the most part, kind of just rewording, for housekeeping purposes. MS. KIMBALL: Got it. Okay, and then similarly, in Section 4 of the bill, that amendment to Section (b), same kind of thing, I'm presuming? I just want to make sure that I'm not missing any significant changes there. MR. INABA: Yes, same applies. MS. KIMBALL: Great. Assistant Administrator Jo, what is the—do you have an estimate of the impact on revenue for this program? MR. JO: So when we did the analysis, it's been about a year now, the cost-savings to individuals that are in this program would equate to about $2.8 million. We haven't run the numbers to estimate what that would be from Fiscal Year 2023-2024 yet. MS. KIMBALL: Could we request that for the next hearing, wherever this ends up? MR. JO: Absolutely. MS. KIMBALL: Okay, great. So just for the in response to some of the statements from Council Member Evans, this amendment would not replace the dedicated and non-dedicated ag programs, so folks that are electing to be in either of those programs would have the land valued at the rate set by the types of agriculture and those land values set for that. They would then—where now, they don't have the three percent cap, and they don't have—they have a different rate, Page 16 FC-5 March 7,2023 a higher rate than the homeowner's rate. This would just mean that they would have that three percent cap, and then they'd be taxed at this lower rate. I think the three percent cap, particularly in its primary residence, is something I support 110 percent. My main concern—and I realize that this is—I want to, I think we do need to incentivize agriculture and agriculture uses, is that it does feel a little bit like a double-dip because you get to use the dedicated or non-dedicated ag program, which allows you to bring those values on the land way, way, down, but then you have this like higher tax rate. As I remember, having to go to the section myself previously, it's nearly impossible in the Code to decouple that though, the three percent and the homeowner's tax rate. So for me, I'm weighing the three percent cap, which I fully support, but I do have concerns about this appearance of we're giving two different benefits to this particular land class. Yeah, that's my only concern at this point. Thank you, I yield. CHR. KANEALN-KLEINFELDER: Thank you. If you don't mind, Mr. Inaba, I'm going to those who haven't spoken, if they want to. Oh, Ms. Kagiwada, go ahead. MS. KAGIWADA: Thank you, Chair. Sorry, I'm trying to wrap my head around this. I am supportive overall. The concern I have is something that I think Council Member Inaba mentioned, and maybe Council Member Evans also touched on, which is kind of this—well, I know Council Member Inaba mentioned is, are people actually doing ag on ag land to get these benefits. Because that's what we're doing, we're trying to, one, be fair, but also encourage ag production right, and not penalize people for doing ag. So, I just want to say that. That's the issue that I have concerns about. You know, we have the gentlemen farmers that are actually not doing ag, and they're claiming these benefits, and now they're going to get more benefits. So I really hope that we look at addressing that in the near future, and that will make me feel a lot better about going this route. So, thank you. I yield. CHR. KANEALN-KLEINFELDER: Thank you, Council Member. Council Member Galimba. MS. GALIMBA: Thank you, Chair. So similarly, I guess, sort of unintended consequences, and wanting to make sure that people actually do agriculture and do it in such a way that they're actively contributing to the larger economy rather than just for their own personal use. I mean, it's great but doesn't necessarily, you know, be tax breaks are not necessarily appropriate for that very small sort of personal use kind of agriculture. Page 17 FC-5 March 7,2023 The other thing that I kind of worry about is incentivizing the kind of rural sprawl, which gentlemen farms can be. I mean, they are sort of a double-edged sword. In one sense, I really support small family farms and small farming, you know, on a tax map looks the same, really. But perhaps we could put in some kind of language to ensure that there is more of that active—and contribution towards the economy, by the folks that would be getting this. But in general very supportive of this because it's, you know, to have to choose to be shut out of a homeowner's exemption because you do agriculture, I think, is not right. So, those are my comments. I yield. CHR. KANEALI`I-KLEINFELDER: Thank you, Council Member. Council Member Lee Loy. MS. LEE LOY: Thank you, Chair. Thanks, Mr. Inaba, we've been pushing on a whole bunch of levers related to tax maps,just real property tax. Keita, or maybe Deanna, in Section 3 (E), right, there's this mechanics of"portions of the real property and/or structures, including the principal home," but commercial properties. I just wanted to understand the mechanics because it talks about legal structures. I remember my first swing at the Council, Deanna mentioned, "Look, if it's permitted or unpermitted, we no care, we going tax them." So I just wanted to understand the mechanics of that particular section and how that works related to legal, maybe it's permitted and unpermitted structure. MR. JO: Okay, let me take a stab at this. When it comes to the structures and the way that this reads, essentially, we're going to add the—tax. So if it adds value, we tax it. The way that this reads is if we see an unpermitted structure on the property, we'll tax it; if it's not being utilized as its principal residence, it will be taxed accordingly. So, we separate out a percentage of that portion of the structure that's used for commercial. In most cases, I shouldn't say most cases, most clearest thing would be TAR(Transient Accommodation Rental), we would portion that out. It would be excluded. MS. LEE LOY: Perfect. Okay, so the department has the software or ability to capture the primary residence, what that value is, put the cap over it, and then, anything else would be taxed at a different rate? Okay, okay, keep going, keep going. MR. JO: So if there is a portion of the property that's used for transient accommodation rental, they would actually not be eligible for the cap or the homeowner's tax class. It would render them ineligible. Even if they're doing ag use under this proposed legislation, it would exclude them from receiving that benefit. MS. LEE LOY: And then if that particular structure is unpermitted but not in this commercial category, do they still receive the benefit of the rate and the cap? Page 18 FC-5 March 7,2023 MR. JO: Yes. MS. LEE LOY: Okay, thank you. Thank you for helping me walk through that applicability. Mr. Inaba, thank you so much. I'm still having to digest a lot of it. Completely support it, but what I hear from my colleagues too is we're still trying to work out the mechanics. And, Deanna, tell me again, it's 2,300 parcels to the value of about $2.8 million based on the current values now? MR. JO: Correct, that's based off of the 2022 certified value. MS. LEE LOY: And so, we'll see $2.8 million. This would occur in the next tax cycle or the current tax cycle? (Note: At this time, Finance Director Deanna Sako came forward to address the members of the Committee.) MS. SAKO: I believe the effective date is January 1st, 2024, so not the notices we just sent out, but a year from now. MS. LEE LOY: Thank you. Thank you for that because Mr. Inaba's working on stuff and you guys know I am, too. MS. SAKO: Yeah, keeping us on our toes. Got it, yep. MS. LEE LOY: Ms. Kierkiewicz captured it very nicely, there's a lot of levers to pull and tug, and it's a complete balancing act, and so I'm trying to think through some of the other levers. But, I remain committed to the three percent cap. I just continue to want there to be a longer buy-in. You can't just move in, get the cap, use it as a tax shelter and then take all the benefits, and not really commit or contribute to the larger ecosystem of our real property tax base. So,just trying to think through all of that. So I really, really, appreciate the clarity. And thank you, Mr. Inaba. I yield. CHR. KANEALI`I-KLEINFELDER: Thank you, Council Member. I'm going to go back to Council Member Inaba, then I'll come back to you. Mr. Inaba. MR. INABA: I hear loud and clear that the concern is the dedicated and the non- dedicated. Our Tax Review Board in previous cycles has pointed—made recommendations as to amendments that we can make to our Code. Right now, it's just the decision of, "Yes, that's the next step I'd like to proceed with, but at the same time, are we going to allow some folks to perhaps suffer even higher assessments in the meantime, or can we provide that and then redo our dedicated/non-dedicated ag to ensure that there's no abuse, and if there is abuse, then they're out. And if that's their primary home, all they get then is the Page 19 FC-5 March 7,2023 homeowner class rate and the three percent assessment, no exemptions for the ag use. I just want to remind everyone, it's for—you cannot do it in all your properties. You only can do it on the property that you lived at or the property that you have certified with the County you're renting at an affordable rate. The moment you stop renting at an affordable rate, you're out of that affordable tax rate. You don't have the three percent. So, it's very clear as to what this is proposing. There is more work to do outside of this bill as it relates to the dedicated/non-dedicated ag. I am interested in continuing that work with the Real Property Tax Division because perhaps we could make back this $2.8 million on those who are abusing the program, and ensure that we do have both small farms on family lots or even small orchards to larger scale operations, as well. I just wanted to respond, and I hear the concern being brought up across a bunch of us here on the Council. Thank you. CHR. KANEALI`I-KLEINFELDER: Thank you. Council Member Evans. MS. EVANS: Okay, so this is Section 4. I was just seeing that you were defining ag activities as defined in our County Code, and you were taking it away from how it was defined in Hawai`i Revised Statutes. So I was looking up the statutes as we were talking, and it wasn't there. So there may be some cleanup on the reference to the section because I couldn't find it. So just you know, there may be just some typo, or referenced wrong. When I was looking up the definitions in the County Code though, which really has really good clarity on what ag activities are, it's very clear who we're trying to help, if you look at that definition. The question I have is—there are some parcels out in my district that are 20 or 40 acres, and people that have homes on them and they'd probably have applied for dedicated or non-dedicated, but they're actually not doing any ag activities as defined here; so now they're concerned the word is out on the street that enforcement officers are going to be out, running around looking, and so now they're scrambling to put couple cows, or couple sheep, or throw a donkey, or put maybe eight or ten fruit trees, fruit crops on it. But the reality is that's not—the bigger question is—the definition here is an"ag activity." But, it has nothing to do with making money. It doesn't say, you know, it's an ag activity because—so is it—yeah, if you're feeding your family, let's say it's sustenance, right, that you're putting bananas out there and fruit out there, I mean, what really are we trying to do? Because, you know, in ag activity, yeah, if you've got 20 or 40 acres, you're going to have some fruit trees or maybe one cow that, you know, for your— Page 20 FC-5 March 7,2023 So the bigger question for us I guess is, are we supporting sustenance, I guess that's what I'm calling it, and that's a legit ag activity. So all these 20, 40-acre will always be able to—this will apply to, right? Unless we get a little more clarity that, no, we want to give it to ag activities, where they're actually producing; have an ag plan, they filed their ag plan, they have a GET (General Excise Tax), they're paying—you know, they're reporting their income as a legit ag producing activity. So what is it we're really supporting here? Because ag activity could be just anybody that—anyway, so— MS. SAKO: I was just going to say that this particular Section 4 is just addressing the homeowner's exemption. The whole bill is just about the homeowner's exemption being allowed on ag use, and that those other buildings wouldn't be considered commercial or impact that. So it's not necessarily about the entire ag product or production, or whatever that's occurring. But, I mean which is different than our ag programs, you know, which is separate. But this is just addressing the homeowner's exemption on the ag land. MR. JO: And then just to address the agricultural use, and from a compliance perspective, over the course of the last few years, Real Property Tax has been going out and doing compliance checks on our agricultural use program, and we've caught a lot of individuals that may have not met the criteria. So we have a list of criteria to establish what's commercially viable. So someone who has 25 trees on a 40-acre parcel will not get an orchard benefit from us. With that said, there's a lot of work to be done. We have nearly 9,000 parcels that are receiving an agricultural benefit. We have 14 staff members that do inspections, amongst picking up houses and other things. So we do recognize that if this bill does pass, there is a lot of work that will need to be done, in terms of compliance and making sure we don't have gentlemen farmers that are receiving this benefit. Additionally, there is a recognition that our other agricultural programs, non-dedicated agricultural use, dedicated agricultural use, and native forest, might need some re-evaluation in terms of strengthening some of the criteria in order to get into those programs, such as management plans, filing GET (General Excise Tax), whatnot. I believe that's already being looked at. MS. EVANS: So what I'm hearing is keep it simple and don't add much more to this? MS. SAKO: Council Member Inaba did work with Corporation Counsel because as you mentioned, one part of the Code is impacted by other parts of the Code, so I believe we've caught all the areas that we need to implement this, the homeowners or affordable rental exemptions being on the ag dedicated or non-dedicated ag land. Page 21 FC-5 March 7,2023 MS. EVANS: I yield. CHR. KANEALPI-KLEINFELDER: Thank you, Council Member. Council Member Kimball. MS. KIMBALL: Thank you. I did want to mention that, you know, with respect to the concerns that everybody has, Council Member Galimba and I are moments away from having some Code language around non-dedicated and the dedicated ag program. I think if we're really ambitious, and we can get LRB (Legislative Research Branch) to finalize our last changes, we could probably get it on the April 4th agenda, so that there would be some overlap with the progress of this, and just an introduction at least to those concepts that we're looking at. So,just wanted to put that out there. Can we do it? We can do it. Yeah, okay. CHR. KANEALPI-KLEINFELDER: Mahalo, Ms. Kimball. Council Member Inaba. MR. INABA: I guess I keep forgetting different parts of this bill. But one last thing, is Native Forest. So in some cases, people dedicate portions of their land to Native Forest. In Kona, for example, up in Kaloko we saw some projects recently where 67 percent of their project is to be protected and to remain a Native Forest. If I understand correctly, they have not had the three percent protection even though that's their that could be the only property they own and that's their primary residence; but because there have been portions dedicated to Native Forest, they don't get that three percent cap, basically. So this is another provision of the bill, that is providing relief for what we kind of want to a certain extent, right, some preservation of our forest; making sure that we have ag, both at small scales and large scales, and taking care of people where they live, only and where they live. So, thank you. CHR. KANEALPI-KLEINFELDER: Thank you, Council Member. Okay, seeing no more lights. Good discussion. Mahalo to Mr. Inaba for bringing this forward. I have a few questions of Mr. Jo. Keita Jo, yeah? Yeah. We had this discussion before. Okay, I agree. What's our current ag rate? MR. JO: $9.35. CHR. KANEALPI-KLEINFELDER: Nine thirty-five. Affordable rate? MR. JO: $6.15. CHR. KANEALPI-KLEINFELDER: And that's the same as homeowners, correct? Page 22 FC-5 March 7,2023 MR. JO: Correct. CHR. KANEALI`I-KLEINFELDER: Okay. So currently you can combine ag and affordable ag, and homeowners, correct? MR. JO: You can combine ag and homeowners, but you're not going to get the rate. If you're affordable rental, I believe you cannot combine affordable rental with ag. CHR. KANEALI`I-KLEINFELDER: With ag? MR. JO: Yeah. CHR. KANEALI`I-KLEINFELDER: Okay. Regarding ag purpose occupation; if someone has ag land, they're doing an ag occupation, where they have a building that's being used for purposes of agriculture, producing income of some sort, is that going to remove them from getting the homeowner's exemption? The way I read it, I don't think so, but I just want to check. MR. JO: I'm thinking you're talking about like a greenhouse or something on someone's primary residence. CHR. KANEALI`I-KLEINFELDER: Greenhouse, processing facility, you know, someone who is—like Puna Chicks Farm, it's ag land, but they are processing and cleaning eggs. They have cows. I mean, they're doing a lot of work. But with the income-producing ability for those buildings, remove them from homeowner's exemption? MR. JO: No. CHR. KANEALI`I-KLEINFELDER: They're good still, yeah? MR. JO: Yeah, but if they're applying for an agricultural use benefit from us to reduce the land value as it stands and the discussion that's had, it would prohibit them from getting that three percent cap and the homeowner's tax rate. CHR. KANEALI`I-KLEINFELDER: Okay. Well, if it's a primary residence, it's homeowner's exemption, and they can or cannot combine with ag if they need to? MR. JO: They can make the decision not to, and that's the dichotomy that kind of exists, right? Do I do ag and homeowners, or do I just do homeowners alone, even though I might may very well be doing active agriculture use? CHR. KANEALI`I-KLEINFELDER: I've looked at this as well, and try to wrap my head around the rates, what's best, what equals out to—I mean, we all want to Page 23 FC-5 March 7,2023 pay less property taxes, yeah, what equals out to the lowest possible payment for us when you have multiple activities going on, on one property, and you live there too. So that's an interesting dilemma. So, I want to make sure we're affecting the people who are truly doing ag, or have one home, live on it, and we're not negatively affecting them. I'm just touching on some of the testimony that we had today, and saying that you can't do that. But in my understanding, you can combine currently. MR. JO: You can combine to get both benefits; but again, you can't get the tax rate or the three percent cap. MS. SAKO: So, the homeowner benefit on the ag land is only the exemption right now. It's not the reduced rate, and it's not the cap. CHR. KANEALI`I-KLEINFELDER: Okay. The language in here for home occupation, because I looked into this, can you currently do that on anything outside of residential properties? Because I looked at doing a home occupation for our business, we cannot because we're on agricultural land, or might have been the size of our property. But home occupation was more for residential-based businesses or businesses based on a residential zoned area. So I'm looking at that home occupation here in Section 3(E), and just wondering with you folks, and I'm looking at this bill. MR. JO: If I understand correctly what you're asking, the homeowner's exemption program, if someone has a home occupation that's defined by the Planning Department, it doesn't preclude them from receiving the homeowner's exemption, cap, and the homeowner's tax rate. These are things where there's no apparent signage, parking spaces, things that would make it a business per se, regardless of what the underlying tax classification would be. CHR. KANEALI`I-KLEINFELDER: Okay, so—sorry, I'm trying to wrap my head around this too, I apologize. So if you have a home occupation, this would allow you to have the home exemption and that home occupation? And there's some discussion about buildings used for home occupation not being included in the— MR. JO: You can receive that benefit now. So, this legislation doesn't change that. CHR. KANEALI`I-KLEINFELDER: Okay. MR. JO: That fact, yeah. Page 24 FC-5 March 7,2023 CHR. KANEALI`I-KLEINFELDER: Okay. Okay, that's good. Okay, thank you. I'm going to have more questions next time. Mr. Inaba, thank you for bringing this forward. Do you want to—? MR. INABA: Thank you, I'll take up the amendment. CHR. KANEALI`I-KLEINFELDER: Thank you. Motion to Amend: Mr. Inaba moved to amend Bill 28 with the contents of Comm. 113.1. Seconded by Ms. Lee Loy. MR. INABA: Thank you again. This was just pointed out, with the affordable rental component of this bill, the purpose was incomplete. So what we're doing is saying, "Primary residence or as affordable rental housing," so that when you read the purpose, it covers everything that the bill is trying to do. So, that's basically it. Yep,just ask for your support just to clean up Section 1. Purpose. CHR. KANEALI`I-KLEINFELDER: Okay. Council Members, discussion on the amendment? Seeing none. Motion is on the floor, all in favor? Vote on Motion The motion to amend Bill 28 with the contents of to Amend: Comm. 113.1 was carried by the following voice vote: (Approved) Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kierkiewicz, Kimball, Lee Loy, Villegas, and Chair Kaneali`i-Kleinfelder–9. Noes: None. Absent: None. Excused: None. CHR. KANEALI`I-KLEINFELDER: We are back to the main motion, folks. Any further discussion? Council Member Lee Loy. MS. LEE LOY: No, I'll let the maker of this legislation go first, and then offer comment. MR. INABA: Yeah, I just wanted to add one last thing, Chair, is that on the concept of that homeowner—oh, sorry, the home occupation, that's as permitted by the Code, so it's not anything—it's home occupations that we have defined as allowable; and like Real Property Tax said, it's not—it's kind of like us working from our home. You know, we're inside. It doesn't draw people to your house or to your property, and it just kind of restructures what is already being said in that section. Page 25 FC-5 March 7,2023 So with that, I think everybody generally understands the point of what this is, and I'm happy to hear—that maybe I don't have to do so much work since Council Chair Kimball and Council Member Galimba might have gotten started on that already, and we can work together, then to make sure, with our RPT (Real Property Tax) folks, that we tighten that ship up if we're going to be offering any more benefits to community. So, thank you. CHR. KANEALI`I-KLEINFELDER: Thank you, Council Member Lee Loy. MS. LEE LOY: Sure. On the main motion, as amended, absolutely, and I think Mr. Inaba just touched upon it. I think all of us are pulling and pushing on all the various levers of real property tax and completely support this bill here at Committee, and look forward to the work that Ms. Galimba and Council Chair Kimball are doing. I would love to see it because I don't want to be advancing legislation that kind of band-aids in things. And I'm having a little bit of heartburn about some commitments, about hearing a future piece of legislation and how those pieces kind of will work with what we're doing here. So, look forward to advancing this to the Council and having an even broader discussion about how we work on this particular section of real property tax that we know to be very complex. Just to be clear, real property tax and real property tax rates and exemptions are very separate and apart from zoning, so trying to strike that balance just within, you know, members of the dais, right? There's the ag zoning, but then there are ag exemptions, and commercial and homeowners. So thank you, Chair. Mr. Inaba, thank you. I yield. CHR. KANEALI`I-KLEINFELDER: Thank you, Council Member. Council Member Kimball. MS. KIMBALL: Yeah, thank you, Chair. I just want to ask the author of this bill, Council Member Inaba, if you'd be amenable to considering a postponement to the August 4th Committee meeting, and that way we can CHR. KANEALI`I-KLEINFELDER: Did you mean to say August 4th? MS. KIMBALL: I'm sorry, April (4th), and then that would give Council Galimba and I time to at least introduce this other one prior to further discussion on this. Given that your enactment date is the first of 2024, I think we have some time if you're willing to consider it. MR. INABA: Yeah, I would just like to hear from Real Property Tax,just to make sure that it's enough time. We purposely chose January, and I want to make sure if we were to postpone this, it wouldn't put them in a pickle later this year. Page 26 FC-5 March 7,2023 MR. JO: That would give us enough time to do it. A majority of the work would be a system modification, so we'd have to work with our vendor to get that through, but the timing still works for us. MR. INABA: And the latest date,just so we know as a Council, that you would want this, you know, to make it work for your systems would be what? MR. JO: If I were to throw out a date, it actually would be August. MR. INABA: Okay. MR. JO: Yeah, because their assessment notices are as of January 1st of every year, so we kind of need to get things all wrapped out. MR. INABA: So your folks' intention is to bring your bill to the April 4th meeting? I'll say, "sure." I do want to repeat, though, that they are separate things. Actually, I'm a little scared to say "yes" because this concept is already hard, and to try and put it on the same day as another—something similar but different, I feel might get a little sticky for us. So I don't know if we want to just have it be one step ahead, we can discuss this in the same week, but just not at the same committee meeting. So if we push it forward today, and then I'm willing to hold at first reading, until the April one, okay. Motion stands as it is then. CHR. KANEALPI-KLEINFELDER: Thank you, Council Member. Okay, any further discussion? Thank you. Okay, motion on the floor is to forward Bill No. 28, as amended, with the contents of Communication 113.1, to Council with a favorable recommendation. All in favor? Vote on Bill 28: The motion to recommend passage of Bill 28, as amended (Draft 2) to Draft 2, on first reading was carried by the following (Approved) voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kierkiewicz, Kimball, Lee Loy, Villegas, and Chair Kdneali`i-Kleinfelder–9. Noes: None. Absent: None. Excused: None. CHR. KANEALPI-KLEINFELDER: Thank you for your time today. Page 27 FC-5 March 7,2023 Bill 29: AMENDS ORDINANCE NO. 22-64, AS AMENDED, RELATING TO PUBLIC IMPROVEMENTS AND FINANCING THEREOF FOR THE FISCAL YEAR JULY 1, 2022 TO JUNE 30, 2023 Adds the Mass Transit Agency —Hub and Spokes Construction— State project ($400,000) to the Capital Budget. Funds for this project shall be provided from State Grants Receivable account, and would be used for a site analysis and environmental assessment for a new transit hub in Kailua-Kona. Reference: Comm. 134 Intr. by: Mr. Kaneali'i-Kleinfelder (B/R) Motion to Approve: Mr. Inaba moved to recommend passage of Bill 29 on first reading. Seconded by Ms. Kagiwada. CHR. KANEALII-KLEINFELDER: Mr. Andoh, thank you for joining us today. (Note: At this time, Mass Transit Administrator John Andoh came forward to address the members of the Committee.) MR. ANDOH: No problem. CHR. KANEALN-KLEINFELDER: Can you give us a little background on this, please? MR. ANDOH: Yes. The agency was successful in getting a grant from the Office of Planning and Sustainable Development to fund the co-location of a State Civic Center with a future Kailua-Kona transit hub, and as part of that, they're proposing to give us $450,000 to support our planning efforts, which are underway presently with our consultant. So, we're asking for Council's approval to accept this grant. CHR. KANEALPI-KLEINFELDER: Thank you very much, Director Andoh. Just to double check though, that was $450,000 or $400,000 because the B-52 states $400,000? MR. ANDOH: My apologies, $400,000. CHR. KANEALN-KLEINFELDER: Okay, thank you, Mr. Andoh. Council Members, discussion? Seeing none, there are no questions. Mr. Andoh, thank you very much for joining us. Appreciate your time. Motion is on the floor to forward Bill 29 to Council with a favorable recommendation, all in favor? Page 28 FC-5 March 7,2023 Vote on Bill 29: The motion to recommend passage of Bill 29 on (Approved) first reading was carried by the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kierkiewicz, Kimball, Lee Loy, Villegas, and Chair Icaneali`i-Kleinfelder— 9. Noes: None. Absent: None. Excused: None. ADJOURN- There being no further business, at 11:50 a.m., Ms. Lee Loy moved to adjourn MENT: the meeting. Seconded by Mr. Inaba and carried by the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kierkiewicz, Kimball, Lee Loy, Villegas, and Chair Kaneali'i-Kleinfelder—9. Noes: None. Absent: None. Excused: None. CHR. KANEALPI-KLEINFELDER: We are adjourned. It is 11:50 (a.m.). )1k Mr. Matt Kd eali`i-Kleinfel&r, Chair (Date) Finance Co ittee MK/na Page 29