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HomeMy WebLinkAboutMIN FC 2023/04/18 (2022-2024) Committee on Finance 9th Session West Hawaii Civic Center 74-5044 Ane Keohokalole Highway, Building A Kailua-Kona, Hawaii April 18, 2023 CALL TO The regular meeting of the Committee on Finance was called to order at 10:15 a.m., ORDER: in the Council Chambers, Kailua-Kona, by Mr. Matt Kaneali`i- Kleinfelder, Chair. ROLL CALL: Present: Mr. Matt Kaneali`i- Kleinfelder, Chair Ms. Cindy Evans, Vice Chair Ms. Michelle M. Galimba, Member Mr. Holeka Goro Inaba, Member Ms. Jenn Kagiwada, Member Ms. Heather L. Kimball, Member(came in later) Ms. Susan L. K. Lee Loy, Member (came in later) Ms. Rebecca Villegas, Member Absent& Excused: Ms. Ashley L. Kierkiewicz, 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 individual registered to speak and came forward when called by the Chair: Toby Hazel: Comm. 184, Res. 116-23 (Comm. 211), Res. 117-23 (Comm. 212); Bill 42 (Comm. 213), and Bill 43 (Comm. 217); comment and in opposition. CHR KANEALI`I-KLEINFELDER: Okay, let's get started folks. Just for the record, let the record reflect that Council Member Kimball has joined the meeting. Clerk, we do have some folks from the County in our chambers. How about we start with Res. 117-23, please? Change Order As directed by the Chair and with no object from the Council Members, the of Business: following item was taken out of order. ORDER OF The Chair directed the Committee to proceed to the next order of business, RESOLUTIONS: Order of Resolutions. FC-9 April 18,2023 Res. 117-23: AUTHORIZES THE PAYMENT OF FUNDS OF A LATER FISCAL YEAR AND OF MORE THAN ONE FISCAL YEAR FOR A MULTI-YEAR AGREEMENT TO ADD A COMMAND CENTRAL COMMUNITY MODULE TO THE POLICE DEPARTMENT'S CURRENT RECORDS MANAGEMENT SYSTEM Authorizes the Mayor to enter into a five-year lease agreement with Motorola, with an approximate cost of$13,950 for the first year and $13,200 thereafter for a total cost of$66,750. Reference: Comm. 212 Intr. by: Mr. Kaneali`i-Kleinfelder(B/R) Motion to Approve: Mr. Inaba moved to recommend adoption of Res. 117-23. Seconded by Ms. Galimba. CHR KANEALI`I-KLEINFELDER: Council Members we do have joining us today, Major Shopay in our Hilo Chambers. Could you please give us some background on this and kind of describe what this is for us? (Note: At this time, Hawaii Police Department(HPD) Major Thomas Shopay came forward to address the members of the Committee.) MR. SHOPAY: Sure, thank you for having me here today. What this is, is Motorola has purchased Spillman which is the records management system our department has used for the last few years. Part of the Motorola Solutions is they offer basically a community-based access to our records management system. What we're trying to do is use the application within this program to allow for community reporting of types of crimes, or violations, or lesser serious crimes. So, an example would be a time-consuming report that an officer would have to take for an individual that comes to the station and reports their cellphone being lost. If an officer is not available, they would have to wait at the station till an officer becomes available to come back; complete that report, validate it, and then submit it. Part of this software suite would be able to do is implement an online reporting for community members. So, if you have a violation or a type of lost property, lesser type of crimes, you're able to report that online saving the wait time for that person to meet with an officer along with keeping an officer on the road to investigate or deal with the more serious crimes. CHR KANEALI`I-KLEINFELDER: Okay, thank you very much, Major. Going to the Council for questions, if any. Council Member Inaba, go ahead. MR. INABA: Thank you, Chair. Good morning. Just wondering what you think the turnaround time will be for review of these cases that are submitted via this platform? Page 2 FC-9 April 18,2023 MR. SHOPAY: I'm sorry, turnaround time, are you referring to how long it would take to report? MR. INABA: So, if someone from the public submits a report via this platform, how long would it be before an officer does get around to review it and get back to the member of the public if further action is required? MR. SHOPAY: So, the current intent right now is to have it by shifts. So, there would be a shift, an on-duty desk rank or desk officer would review those incoming cases. So, it would be—we're trying to shoot for during that day, and if there is additional follow-up that officer or someone during a more appropriate time. If it was during a midnight shift into daytime, to follow-up to complete that report, if anything is needed to be completed. MR. INABA: Got it. Thank you very much, Major. Chair, I yield. CHR KANEALI`I-KLEINFELDER: Thank you, Council Member. Looking around the room, Council Member Galimba. MS. GALIMBA: Thank you, Chair. I think this is a great idea. I just had one quick question,just wanted to know what the annual cost of your overall record management system? Is it now Motorola system or is it still Spillman? MR. SHOPAY: So, Motorola is the parent company now for records management. This is an add on to allow the there's actually several parts to this suite. What we're looking at initially enacting is this online reporting portion of it, which is what is in front of the Council today. MS. GALIMBA: Right. So, you have some other functions you might be adding later. Is that what I heard? MR. SHOPAY: Yes, that's included with this suite. So, the other parts that, unfortunately, we're not able to implement everything at the same time, would be for online reporting ofI don't know if you may seen like people posting videos online or on social media. They would be able to post those directly to this site, allowing it to be tied to a police report rather than an officer having to go down and track those things out. We would also have the ability to do messaging to our communities and potentially for crime mapping. So, those are additional components for what we would be purchasing here, but the initial part is trying to get the online reporting done and have that integrated as quickly as possible. MS. GALIMBA: Thanks, and probably this is in the budget somewhere. I don't know if you have this information on your fingertips, but I was just wondering about like the cost of the overall system of the documents records management? Page 3 FC-9 April 18,2023 MR. SHOPAY: I apologize, I do not have that figure. MS. GALIMBA: Thanks for the information. I yield. CHR KANEALI`I-KLEINFELDER: Thank you, Council Member. Okay, seeing no further discussion. Major, what is the cost of this to the taxpayers over the next five years? MR. SHOPAY: So, it averages about$14,000 per year, which looking at the time that it would save and hiring additional personnel or avoiding to have to do that, would come to about$66,000, or prior to taxes, so about$70,000 for five years' total. CHR KANEALI`I-KLEINFELDER: Okay, but you kind of prefaced that point by saying there's going to be a fairly large savings to the taxpayers because of the time involved in responding to cases and the time freed up for our people on the field. MR. SHOPAY: That's correct. CHR KANEALI`I-KLEINFELDER: Okay, I like that parallel. How does the department interact with these reports as they come in? Because I know there was some discussion at budget hearings regarding Spillman, and I know it wasn't our favorite, is what I've come to understand. MR. SHOPAY: So, what would happen is it would be very similar to what an officer would complete in their report, there are tabs and fields. We would generate the form that we would need with Motorola to put it into the public. Once the member of the public completes the form and submits it, it would go into the workflow of the different districts where it would be reviewed. So, I don't know if that answers your question of how the process would go, but it would appear in the ranks file as any case, as an officer would have pulled. CHR KANEALI`I-KLEINFELDER: Okay. Then, I'm thinking on the backend of this, if someone from the community does file a report, someone in HPD (Hawai`i Police Department) will follow-up and review the report. That really is the basis for insurance claims or whatever needs to be done on behalf of the victim potentially, correct? MR. SHOPAY: Correct, and what we would want to make sure is that the type of report that the individual thinks they're filing is actually correct, and if there are any other crimes that may be associated with it. We want to make sure we can fully investigate those and give people an accurate representation of what is actually happening. CHR KANEALI`I-KLEINFELDER: Okay, and when is this going to be implemented? Page 4 FC-9 April 18,2023 MR. SHOPAY: That will depend on if we get the funding for this, then we'll work with Motorola to build the forms. We don't want to make it as complex as what an officer would have to really complete for a report,but we want to make sure we capture the minimum amount of data and what's required for, as you had mentioned, either insurance claims or just to a property log. So, once the forms have been completed and built into the system then it can go live, but I don't have a timeframe on how long that may take. CHR KANEALI`I-KLEINFELDER: Okay, as that becomes a potential to change, please make sure the department hasI mean you have good principal information officer, so make sure that we're bringing it out to the public, so they understand it's an option at our fingertips and how to access where the forms are, blah, blah, blah, blah, blah, all that kinds of stuff. MR. SHOPAY: Yes, that would be very much in our interest to do that. The officers would much appreciate lessening the workload of sorts. So, surely will. CHR KANEALI`I-KLEINFELDER: I think the Council would probably help you out on that too. So, mahalo. Thank you for being here today, Major. MR. SHOPAY: Thank you. CHR KANEALI`I-KLEINFELDER: Okay, with that Council Members, seeing no further discussion we do have a motion on the floor to forward Resolution 117-23 to Council with a favorable recommendation, all in favor? Vote on Res. 117-23: The motion to recommend adoption of Res. 117-23 (Approved) was carried by the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kimball, Villegas, and Chair Kaneali`i-Kleinfelder—7. Noes: None. Absent: Committee Members Kierkiewicz and Lee Loy —2. Excused: None. CHR KANEALI`I-KLEINFELDER: Can we go to Resolution 116-23, please? Page 5 FC-9 April 18,2023 Res. 116-23: AUTHORIZES THE PAYMENT OF FUNDS OF A LATER FISCAL YEAR AND OF MORE THAN ONE FISCAL YEAR FOR A MULTI-YEAR LEASE OF REAL PROPERTY FOR THE COUNTY OF HAWAII FIRE DEPARTMENT Authorizes the Mayor to enter into a five-year lease agreement with the option to extend for two additional five-year terms with Gerald M. Yamada Trust and Wendy M. Yamada Trust, for approximately 7,000 square feet of office and warehouse space at an estimated cost of approximately $17,600 per month. Reference: Comm. 211 Intr. by: Mr. Kaneali`i-Kleinfelder(B/R) Motion to Approve: Mr. Inaba moved to recommend adoption of Res. 116-23. Seconded by Ms. Kagiwada. CHR KANEALII-KLEINFELDER: Council Members, any discussion? Council Member Evans. MS. EVANS: Yes, would this be to the Finance Director or the Fire Department, who's there? The question is, if you calculate the $17,600 a month by the agreement, which could be 15 years, that's quite a bit. I wonder if we ever have a program looking at, you know, purchasing property or purchasing existing space that might work for us? Do we have an active program? (Note: At this time, Finance Director Deanna Sako came forward to address the members of the Committee.) MS. SAKO: We do. Especially in this case. We have already acquired land from the State, but it will take time to build a new Central Fire Station, and it will take time to design that building. So, not only this station, but other stations need repair and maintenance work. So, the thought process is that we can cycle different, either fire stations through this location or other County workers until this space is completed. MS. EVANS: Okay, so there is a priority to try to identify and have our own? MS. SAKO: Our own spaces, correct, yes. MS. EVANS: Yeah, well good. Thank you. Thank you, Chair, I yield. CHR KANEALII-KLEINFELDER: Thank you, Council Member. Council Member Inaba. MR. INABA: Thank you. Director Sako,just confirming what this resolution says. So basically, this space would be used as Central Fire Station for now. Is that right? Page 6 FC-9 April 18,2023 MS. SAKO: Correct. While they do the initial repairs and maintenance on that station. And if it's worse than what we think, they will be here at this location longer term until the new station is completed. If they can move back in then there are other stations that need repair work and we'll rotate them through the facility. MR. INABA: Okay, thank you. And then, having them commence on July I", is that when or soon around there, we intend to have them there already? MS. SAKO: I believe so. I think we're waiting. The landlord has some repairs or, you know, modifications to make to the building on our behalf, and so when those are completed is actually when they would be able to move in. MR. INABA: Okay, then maybe I would just recommend that the Fire Department be sure to, you know, share this probably in our paper and get the public to know ahead of time. Sometimes people do go into the stations for help, making sure they don't have to go there after July 1st or whenever it is they make their move. Thank you, Director. MS. SAKO: Okay, we'll work with them. CHR KANEALI`I-KLEINFELDER: Thank you, Council Member. Council Member Kagiwada. MS. KAGIWADA: Thank you, Chair. Director,just double a check, we do have money in our budget for doing the work on the current Central Fire Station? MS. SAKO: There is some bond money in DPW's (Department of Public Works) budget—not budget, but in the recent bond authorizations that we did. We did give them some RNM (Reserve Not Met) money as we worked on the May budget, but if they need additional funds, we'll work with them and come before Council, if needed. MS. KAGIWADA: Okay, so it'll be ready to go once they move over to get that work started? MS. SAKO: Well, they are limited on staff, so I can't promise exactly when it will start, but yes, it's on their radar. MS. KAGIWADA: Okay, thank you so much. I'll be supporting. CHR KANEALI`I-KLEINFELDER: Thank you, Council Member. Okay, seeing no further lights on. Mr. (Hamana) Ventura, you're here for this one? MR. VENTURA: Yes. Page 7 FC-9 April 18,2023 CHR KANEALI`I-KLEINFELDER: Okay, I appreciate you being here, and I know we do have the Chief too, as well. Chief Todd, are you in the Chambers in Hilo? MS. SAKO: We have several Fire Department personnel here, yes. CHR KANEALI`I-KLEINFELDER: Alright. Where's the Chief? Okay, so I know this is kind of stemming from what I understand was a large piece of cement, well, one of our members narrowing averting a life-threatening situation. So, can you give us a background on why we're making this move? This is fairly expensive. (Note: At this time, Fire Chief Kazuo Todd came forward to address the members of the Committee.) MR. TODD: Yeah, it is kind of an expensive monthly cost, but we think, you know, when we come down to the safety of our personnel, that we got to put the money where we need to for safety reasons. So, our current building, Central Fire Station was built in 1933, and one of the issues we're running into is the concrete right now is running into spalling and collapse issues within the living quarters. So, earlier last year, we had a situation where approximately a 4x4-foot section of the ceiling collapsed in the bathroom, and we had a personnel using it,just shortly before that. Luckily, they walked out of the room before it collapsed. But, when we weighed it all out, it was a good 60-70 pounds of concrete that fell down from the ceiling. So, all in all, what we're looking to do is get our personnel out while we effect some repairs and make sure that our building is safe for our personnel to be there. In the meantime, we also have, you know, some roof repairs that need to happen to some other town stations. So, having this facility and getting it upline so we can move some guys out, do some work on the existing buildings as we move towards eventually building a new Central Fire Station up the road, is what we're looking to do right now. MS. SAKO: Chair, I might just add that, you know, the cost is also related. We've been looking for space for this, to relocate the station for some time. But it's been difficult to find, like a foundation strong enough to hold the weight of the fire trucks and the ambulances. So, to find a specific location to support the Fire Department needs has been challenging. So,we're thankful that this project is finally coming through. CHR KANEALI`I-KLEINFELDER: Thank you, Deanna, appreciate that. Safety of our personnel is paramount, more so the safety of our community. I'm hearing that we're looking for land or possibly have land for a new fire station. Is that what I'm hearing? Page 8 FC-9 April 18,2023 MR. TODD: Yes. So, we've reached out to the State, and the Governor signed over approximately four acres up on Mohouli, not too far from our new call center. So, we're in the process of going through the various steps that the State wants us to do in terms of cutting that section of land off from its existing parcel, and then we're going to move forward with getting designs done. Eventually, hopefully Deanna can assist us, and we're looking for, you know, alternative sources of funds to build a new station. CHR KANEALI`I-KLEINFELDER: Okay, the lease is a set five-year term? I mean, if we're able to complete the repairs before five years, can we walk away from a pretty, you know, penalty? MS. SAKO: We always have cancellation clauses in our lease, but we do believe that for at least the first five years, they'll be sufficient need for the building as we repair other facilities as well. CHR KANEALI`I-KLEINFELDER: So, we're planning on repairing the structure for five years or planning on rebuilding it? MS. SAKO: No, like so, it may take them two years to repair Central. They would move back in. There's another station that needs significant repairs and sewer improvements. We would move them into this facility, and then when their repairs are done, we'll move them back. Once we get all the fire stations completed, if you know, we're still within the first five years, there's definite need countywide for space as we work on our other facilities. So, I mean we can get out of it in less than five years. I'm just saying that's probably unrealistic that we would do so. CHR KANEALI`I-KLEINFELDER: Okay, interesting. Okay, thank you for that and appreciate all the information. I can kind of see where you guys are headed, and you're balancing a lot of different projects on this one space while we're planning new projects, which is good. It's for topple, thank you. Ms. Kagiwada, go ahead. MS. KAGIWADA: Thank you. So, looking at the cost benefit analysis of the current fire station, is that being looked at to see if you're going to repair it, because it's in such poor condition or are you definitely going to repair it? MR. TODD: So, at this time, the plan is to repair. I can't say for sure if they start actually affecting repair and realize that, you know, I don't know $8-$10 million, it turns into a$50 million job, whether we'll make a different decision at that point. But at this point, you know, the facility is historic, and while we are looking to relocate our fire station up the road to get it out of the tsunami inundation area, the building still holds a lot of promises. A County facility for use of other sections of the Fire Department, or even potentially Page 9 FC-9 April 18,2023 shared space for other reasons. So, we do want to at least step it along and get it safe, and then figure out how we can best use it at that point. MS. KAGIWADA: Okay, so looking to keep it in our inventory even when you move to a new facility? MR. TODD: That is correct. MS. KAGIWADA: Okay, thank you so much. CHR KANEALI`I-KLEINFELDER: Thank you. Okay, seeing no further discussion, appreciate all the information today. Mr. Ventura, thank you for being here as well. And Ms. Sako, Chief Todd, thank you very much. We have a motion on the floor to forward Resolution 116-23 to Council with a favorable recommendation, all in favor? Vote on Res. 116-23: The motion to recommend adoption of Res. 116-23 (Approved) was carried by the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kimball, Villegas, and Chair Kaneali`i-Kleinfelder—7. Noes: None. Absent: Committee Members Kierkiewicz and Lee Loy —2. Excused: None. CHR KANEALI`I-KLEINFELDER: Let's go to Resolution 119, please? Res. 119-23: AUTHORIZES THE PAYMENT OF FUNDS OF A LATER FISCAL YEAR AND OF MORE THAN ONE FISCAL YEAR FOR A MULTI-YEAR LEASE OF ONE SUPER DUTY 4X4 TRUCK WITH UTILITY CABINETS INCLUDING AUTO CRANE FOR THE DEPARTMENT OF ENVIRONMENTAL MANAGEMENT Authorizes the Mayor to enter into a five-year lease agreement with an approximate monthly cost of$7,000 to be used by the Construction Equipment Mechanic to perform repairs and maintenance on heavy equipment for the Solid Waste Division. Reference: Comm. 215 Intr. by: Mr. Kaneali`i-Kleinfelder(B/R) Motion to Approve: Mr. Inaba moved to recommend adoption of Res. 119-23. Seconded by Ms. Galimba. CHR KANEALI`I-KLEINFELDER: Council Members, we do have Director and Director for Solid Waste, Mike Kaha in Hilo Chambers, so if there's any questions. Council Member Inaba, go ahead. Page 10 FC-9 April 18,2023 MR. INABA: Thank you. Just confirming, maybe it's with Finance, when we do this monthly pricing for a lease, it comes out to about$45,000 more than the actual estimated purchase price. Is that because we're doing it via a lease? (Note: At this time, Finance Director Deanna Sako came forward to address the members of the Committee.) MS. SAKO: I'm sorry, did you say that the total cost looks to be more than if we bought it outright? MR. INABA: Yeah,just as a purchase price, it's estimated at$375,000, but if we do the $7,000 per month lease payment over 60 months, it comes out to $420,000. So, is it just because it's a lease that it's $45,000 more? MS. SAKO: Yeah, it's probably the interest component. The interest itself, I mean they probably used an estimated rate. The interest is not determined until the day we sign the lease based on the market value. So, depending what, you know, the market interest rate is, that's what we would actually pay. MR. INABA: Okay, thank you, it's at whatever point we—even though it's budgeted for this current fiscal year, it'll start whenever we get the MS. SAKO: When we receive the equipment, correct. MR. INABA: Got it. Okay, thank you, Director. Chair, I yield. CHR KANEALI`I-KLEINFELDER: Thank you. Council Member Evans. MS. EVANS: Thank you. So, Director Ramzi (Mansour), hello. MR. MANSOUR: Hello, I'm here. MS. EVANS: There you are. Hi, I have a question. I know that I'm fairly new to this position, and you were before asking for money to purchase and start replacing some of your older vehicles. Is this lease a replacement? (Note: At this time, Environmental Management Director Ramzi Mansour came forward to address the members of the Committee.) MR. MANSOUR: This is actually—we've been looking to hire a mechanic over the last three years. So, we finally secured a mechanic just recently. So, that equipment will be new. We didn't have this type of equipment within our inventory to be able to provide services to the heavy construction equipment. In the past, we were utilizing a smaller truck just to help us through the process. But that smaller truck does not transport heavy parts within these construction equipment. So, it's one the first for the department to allow the mechanic to be Page 11 FC-9 April 18,2023 able to drive around to the landfill, then to the reload facility to perform his mechanic duties at the location. MS. EVANS: So, what criteria do you have to determine if you're going to purchase vehicles for your fleet as maintained by our County mechanics versus this leased vehicle will be, I assume, maintained by the person you're leasing from? MR. MANSOUR: This will be maintained by County mechanics as well. I think this question came before you in the past where we leased to own. So eventually after the five years we own the vehicle. But in the meantime, our County Department of Public Works will continue maintaining our current vehicles in addition to the leased equipment. MS. EVANS: Okay. Thank you, Chair, I yield. CHR KANEALI`I-KLEINFELDER: Thank you, Council Member. Looking around the room, seeing no lights. Now, a quick question for you guys, you've got two resolutions for the same kind of truck, at least in the brief description that's given. One is for $250,000 and one is for $375,000. What's the difference? MR. MANSOUR: One is for the Solid Waste Division, which they deal definitely with different types of equipment, construction equipment at the reload facilities and at the landfills. So, these types of equipment are kind of heavy equipment that require a bigger truck, which is the one that's before you now for the solid waste. And it has a bigger crane attached to it to be able to take parts off and on. The other one is for the wastewater, which is a bit smaller utility truck that goes around and makes sure our facilities' pumps and motors are being maintained. They pull out this equipment at wet wells and what have you. So, two different purposes, two different usages and sizes. Also, that to allow us the preventative maintenance for the wastewater and the preventative maintenance on our landfill equipment. CHR KANEALI`I-KLEINFELDER: Okay, thank you for that, and appreciate the explanation. I'm seeing you have one is an F-750 and one is an F-550, but same kind of setup, utility cabinets and crane for both. On that same note, these went out to a bid from different vehicle manufacturers, correct? MR. MANSOUR: No, we're before you today to get the authorization so we can start bidding out this equipment. CHR KANEALI`I-KLEINFELDER: So, we do these bids. I've always wondered why we specify an F-750, because there are comparable models in other types of trucks, correct? Page 12 FC-9 April 18,2023 MR. MANSOUR: Correct. I think the way we write the bids this is for the sake of budgeting. So as we write the bid, it's 750 or equivalent. CHR KANEALI`I-KLEINFELDER: So, the resolution of says F-750 from Ford. Does that mean we have to buy a Ford F-750 when we pass the resolution? MR. MANSOUR: I think we have to follow the procurement process. So, we cannot bid it out. So, if somebody else, Director Sako, maybe you could add to that. MS. SAKO: Yeah, I was just going to say, I think they're trying to give you just like a comparison or kind of, you know, why we're in that price range. However, when the specs go out, they'll be more generic than that. Unless the department comes before the Standardization Committee to actually standardize on a certain type of equipment, then it goes out with more generic specs. It's just more for reference, and this is the B-52, not the actual specs that will be used in the bid documents. CHR KANEALI`I-KLEINFELDER: Thank you, Deanna. So, when it does go to procurement, contracting, there is just a broader RFP (Request for Proposal) for a vehicle meeting the general requirements of an F-570 or a-550? MS. SAKO: Right. It's worded more so that all the things Ramzi talked about, right? The solid waste truck versus the wastewater. The solid waste needs a bigger one that can lift heavier items. Those types of things, you know, like up to a weight of X-amount and can accomplish X-amount. Those types of things will be in there, and our team has all the right wording. CHR KANEALI`I-KLEINFELDER: Okay, good, and that means we can potentially get good pricing from one of the manufacturers out there. I appreciate that. It is taxpayer money that we're using. You know, back to Mr. Inaba's point, great point. If we're paying $40,000 more to have a five-year lease, I mean, that's almost one position for a year within that five-year term of this lease in savings. MS. SAKO: It is, and so it kind of depends where we're at when these particular items were bid. I don't think they have sufficient funding in their budget. But you know, if we have the funding available at the time or perhaps, we can put it into next year's budget, then they could buy it outright. But again, they did probably estimate high, because the interest rates have been going up, but the interest rate will be whatever it is in affect when we purchase or actually the equipment is delivered. So, most times the interest rates are very small. So, I think it's a little bit higher right now just given our current economy. But by the time it gets here, those rates we hope will be down again. Page 13 FC-9 April 18,2023 CHR KANEALI`I-KLEINFELDER: Okay, and I've seen, I mean you can buy a Kubota Excavator for zero down, zero interest, but the payments are huge. But you'd think they'd give us a good deal on the interest given that we're buying a $375,00 vehicle. MS. SAKO: We hope so. CHR KANEALI`I-KLEINFELDER: That's kind of out of our wheelhouse, that's in your ballfield, so. I like the point, though, good point to bring up, you know, we have some potential savings if we put our funding in the right place as we start to approach equipment like this. Thank you very much, appreciate your time, thank you. Okay, seeing no further discussion we do have the motion on the floor to forward Resolution 119-23 to Council with a favorable recommendation, all in favor? Vote on Res. 119-23: The motion to recommend adoption of Res. 119-23 (Approved) was carried by the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kimball, Villegas, and Chair Kaneali`i-Kleinfelder—7. Noes: None. Absent: Committee Members Kierkiewicz and Lee Loy —2. Excused: None. CHR KANEALI`I-KLEINFELDER: Let's do Resolution 120-23, please? Res. 120-23: AUTHORIZES THE PAYMENT OF FUNDS OF A LATER FISCAL YEAR AND OF MORE THAN ONE FISCAL YEAR FOR A MULTI-YEAR LEASE OF ONE SUPER DUTY 4X4 PICKUP TRUCK WITH UTILITY CABINETS INCLUDING AUTO CRANE FOR THE DEPARTMENT OF ENVIRONMENTAL MANAGEMENT Authorizes the Mayor to enter into a five-year lease agreement with an approximate monthly cost of$4,700 to perform pump removal/installations, scheduled maintenance, and repair work at various pump stations and treatment plants for the Wastewater Division. Reference: Comm. 216 Intr. by: Mr. Kaneali`i-Kleinfelder(B/R) Motion to Approve: Mr. Inaba moved to recommend adoption of Res. 120-23. Seconded by Ms. Galimba. Page 14 FC-9 April 18,2023 CHR KANEALII-KLEINFELDER: Any discussion, Council Member? Okay, seeing none, thank you for your time, everyone, appreciate it. Motion is on the floor to forward Resolution 120-23 to Council with a favorable recommendation, all in favor? Any opposed? Vote on Res. 120-23: The motion to recommend adoption of Res. 120-23 (Approved) was carried by the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kimball, Villegas, and Chair Kaneali`i-Kleinfelder—7. Noes: None. Absent: Committee Members Kierkiewicz and Lee Loy —2. Excused: None. CHR KANEALII-KLEINFELDER: Going back to Resolution 118-23, please? Res. 118-23: CREATES ONE NEW WATER SAFETY OFFICER V AND ONE NEW CLERK III POSITION FOR THE HAWAII COUNTY FIRE DEPARTMENT Establishes positions to support the Fire Department's Ocean Safety Operations Branch. Reference: Comm. 214 Intr. by: Mr. Kaneali`i-Kleinfelder(B/R) Motion to Approve: Mr. Inaba moved to recommend adoption of Res. 118-23. Seconded by Ms. Galimba. CHR KANEALII-KLEINFELDER: Council Members, we do have some of the members of the Fire Department in the Chambers in Hilo. Are there any questions? Council Member Inaba. MR. INABA: Thank you. Just one question, for the Clerk III position. In these types of State-funded positions are fully State-funded, we create these positions in anticipation of perpetual or continued funding of this position? (Note: At this time, Fire Chief Kazuo Todd came forward to address the members of the Committee.) MR. TODD: So, these particular positions are being created as we're moving some funding around within our State funding that we're using for the Beach Lifeguard Systems. I would say, is not guaranteed, as in the past we've actually had years where the State decided to just not fund our lifeguards, and so the County took on that burden. Page 15 FC-9 April 18,2023 However, in this particular case, it isn't so much that we've gotten additional funding or anything else, we just realized that for the current amount that we're receiving within our, I guess, contracted performance throughout the State to provide lifeguards for the State beaches. We have enough funding to shift some stuff around and create some positions that can create oversight and allow for some clerical work to get done. Does that answer your question? MR. INABA: Yes, it does. Then for the Water Safety Officer V, how many branch chiefs do we have currently? MR. TODD: So, within the Ocean Safety area, we have zero. MR. INABA: Okay,perfect. I'll be in support. Thank you, Chair. CHR KANEALI`I-KLEINFELDER: Thank you. Okay, thank you, Chief Todd, for being here today, appreciate it. I see no further lights. Given that, motion is on the floor to forward Resolution 118-23 to Council with a favorable recommendation, all in favor? Vote on Res. 118-23: The motion to recommend adoption of Res. 118-23 (Approved) was carried by the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kimball, Villegas, and Chair Kaneali`i-Kleinfelder—7. Noes: None. Absent: Committee Members Kierkiewicz and Lee Loy —2. Excused: None. CHR KANEALI`I-KLEINFELDER: Can we go back to the top of the order, please, Communication 12.8. Return to Order The Chair directed the Committee to return to the order of business. of Business: COMMUNI- The Chair directed the Committee to proceed to the next order of business, CATIONS: Communications. Comm. 12.8: REPORT OF FUND TRANSFERS AUTHORIZED: MARCH 1 — 15, 2023 From Controller Kay Oshiro, dated March 20, 2023. Page 16 FC-9 April 18,2023 Vote on Comm. 12.8: Mr. Inaba moved to close file on Comm. 12.8. Seconded Filed by Ms. Galimba and carried by the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kimball, Villegas, and Chair Kaneali`i-Kleinfelder—7. Noes: None. Absent: Committee Members Kierkiewicz and Lee Loy —2. Excused: None. CHR KANEALI`I-KLEINFELDER: Communication 13.8, please? Comm. 13.8: REPORT OF CHANGE ORDERS AUTHORIZED: MARCH 1 — 15, 2023 From Finance Director Deanna Sako, dated March 20, 2023, transmitting the above report pursuant to Section 2-12.3 of the Hawaii County Code. Vote on Comm. 13.8: Mr. Inaba moved to close file on Comm. 13.8. Seconded Filed by Ms. Galimba and carried by the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kimball, Villegas, and Chair Kaneali`i-Kleinfelder—7. Noes: None. Absent: Committee Members Kierkiewicz and Lee Loy —2. Excused: None. CHR KANEALI`I-KLEINFELDER: Moving on to Communication 184, please? Comm. 184: SUPPLEMENTAL SUMMARY OF BONDED INDEBTEDNESS AS OF MARCH 2, 2023 From Finance Director Deanna Sako, dated March 21, 2023, transmitting the above report pursuant to Hawai`i Revised Statutes Chapter 47C-3, per the issuance of$13,055,000 Special Tax Revenue Bonds for Community Facilities District No. 1-2021 (Kaloko Heights Project.) Motion to Close File: Mr. Inaba moved to close file on Comm. 184. Seconded by Ms. Galimba. CHR KANEALI`I-KLEINFELDER: Ms. Sako, I know you're in our Chambers. Could you just give us a little background on this report we're seeing,just for the public's kind of information. What we're looking at, what the totals are, what our max capacity for these types of things are, and then I will go from there to questions. Page 17 FC-9 April 18,2023 (Note: At this time, Finance Director Deanna Sako came forward to address the members of the Committee.) MS. SAKO: Sure. So, you know, we normally do this report every June 30'h at the end of the fiscal year, but whenever we issue debt, then within 30 days we need to update the report and send that to Council as well. So, this particular report was generated because we issued the bonds for the Kaloko Heights CFD (Community Facilities District), which is the first CFD for the County of Hawaii and only the second in the State of Hawaii. So, when we issued those bonds, we updated all of our figures. So, you will see on Page 1 of the actual report that, you know, we have our total bonds outstanding and there's various groupings. So we have General Obligation Bonds, State Revolving Fund Loans, we have revenue bonds, which is the new CFD, and then some other indebtedness for one of our housing projects. Then the form of the statement is actually prescribed by State Law. So, there are certain exclusions. Usually, the debt that's due in the current fiscal year, as well as debt that's going to be repaid to us, whether it's by the CFD Improvement Districts or the Department of Water Supply. So, our net funded debt for the County is $414,536,662.00, and all of those numbers are supported by various schedules on these following pages. But happy to answer any questions. CHR KANEALI`I-KLEINFELDER: Thank you very much. Okay, Council Members. Council Member Galimba, go ahead. MS. GALIMBA: Hi, Director Sako. Could you just explain this CFD, briefly? MS. SAKO: Sure. So, usually a CFD is more when someone is developing property and they would need to put in infrastructure. Typically, infrastructure that's going to end up being donated to the County, it could be roads or any type of infrastructure. This particular one was for the sewer pipe going down, I believe it's Hinalani Street and headed to the sewer system. It's going to benefit both the Kaloko Heights Subdivision as well as the new affordable housing project that's being put in the same area. Then we will build this particular one on the real property tax bills. So, we have a consultant that's going to helps us determine the amount to bill each year. Then they'll receive the bill on their real property tax statement, and our real property tax team will collect the funds and remit it to the trustee. So, it's not actually our debt, its actually debt issued on behalf of the developer. MS. GALIMBA: Got it. Thank you for that explanation. Do you have a name for the affordable housing, that would be also be benefiting from this, or is it too early? Page 18 FC-9 April 18,2023 MS. SAKO: No, it's the project Keith Kato is doing, and I'm not sure what the name is at the moment, I'm drawing a blank, but it's in the same area. You know, and they've been working on it for time. MS. GALIMBA: Okay, thank you. I yield. CHR KANEALI`I-KLEINFELDER: Thank you. Council Member Kimball, go ahead. MS. KIMBALL: Thank you, Chair. Thank you for being here Director Sako. I'm thinking just with the three new members present here today, it might be useful for you to just briefly talk about our debt rating, and what sort of thresholds you try to maintain our debt at in order to maintain that rating. Thank you. MS. SAKO: Sure. So, whenever we issue bonds, we do have to go before the Bond rating agencies. There are primarily three that we typically use. Standard& Poor's, Moody's, and Fitch. We really only need two, but depending on the situation. The bond market sometimes will do all three. So, they give us a rating. With triple A being the best and they go down from there. B is probably the absolute lowest rating you want to get, or you will pay significantly higher interest rates. Because we are a double A plus, we pay fairly low interest rates when we do go out to the bond market. It's kind of like a report card, sort of speak, on our financial ability to monitor and pay for those bonds. That's one of the reasons why we try to keep our debt service in the budget to less than 15 percent. We actually look at two numbers, and both those numbers were reported in the capital project budget transmittal letter. One is what the actual debt is. So, if we go out and issue bonds and actually sell the bonds,then the $392 million in bonds on this report is actually—all of our debt is under 10 percent in the current year budget of total expenditures. However, we have also gotten approval from the Council to issue additional bonds, some of which are, you know, works in progress. If we issued every single dollar of authorization that we have today, we would be closer to 13 percent on our debt service ratio. But every year we pay down about$40 million worth of bonds. So, as time progresses, you know, we can issue additional debt. MS. KIMBALL: Thank you for that explanation, Director, and I just also want to thank you for keeping tabs on this. You know, having that good credit rating of double A plus is really important for us to get cheap money for all these projects that we want to support for the community. So, appreciate your oversight on our indebtedness. Thank you, I yield, Chair. CHR KANEALI`I-KLEINFELDER: Thank you. Council Member Galimba. Page 19 FC-9 April 18,2023 MS. GALIMBA: Thanks. I just wanted to ask a follow-up question to that indebt rating. Has it changed over the last five years, or has it been pretty much double A plus? MS. SAKO: There was a time when we were maybe single A, maybe single A plus when I started with the County. Over the years, we've slowly improved that rating up to the double A plus that we are now. However, some of that is not all by our doing. Sometimes the bond rating agencies change their criteria. One of which changed it recently. And so, it kind of depends on what they highlight. So, sometimes it might be fiscal management, it might be policies. Sometimes it might be your long-term debt. Not actually only bonds, but actually the long-term debt for our Employees' Retirement System, which is managed statewide. We don't even have a say in that, you know, management plan. But it's those types of things that the long-term debt for retirement and OPEB (Other Post-Employment Benefits) are also included in some of the things they look at. MS. GALIMBA: So, it's been a gradual improvement, you'd say, over the past 10 years? MS. SAKO: Over the last 20, yes. MS. GALIMBA: 20, okay, alright, and we haven't had any sort of bobbles in there or anything? MS. SAKO: There probably has been a time. We dropped a step, maybe from double A to a double A minus. Some of that is also dependent on what's going on on our island. So, when lava is flowing the bond rating agencies were calling weekly pretty much to find out what is happening on our island; if our real property tax base is going to be going down because lava is covering the island. And you might recall during the 2018 eruption, especially, the mainland news had it looking like it was Mauna Kea that was erupting, and lava was covering the entire island. So, you know, it also depends on what the mainland news stations pick up as well. But they're very good about keeping in touch with us so that we can keep them better informed and send them maps and pictures and things like that. MS. GALIMBA: Thanks so much for that detail. I yield. CHR KANEALI`I-KLEINFELDER: Thank you. Okay, I don't see any lights on here. Ms. Sako, when we pull a bond, if we don't utilize a portion of the total, what happens to the overall bond pool? MS. SAKO: So, we have to actually go out to the market and sell bonds, and there are very strict IRS (Internal Revenue Service) guidelines. In order to issue tax exempt debt, there's Page 20 FC-9 April 18,2023 spend-down ratios, and we have to spend 85 percent of it within the first three years. We have had issues before, because as you know, Hawaii has many archeological sites. So, as projects started, historically, we might end up with issues once we do the Environmental Assessment, and the project would get delayed, and that would cause some spending delays. So, we now do a newer program where we have the Council authorize the debt, and we work on the projects. Then, as we need cash, we actually issue something called a bond anticipation note. We get short-term debt, basically, to pay all those construction costs. When we accumulate enough of them, then we actually issue the bond and pay off those notes and start our 20-year term. This way, the bond funding is basically spent when we issue the bonds. When we have large projects, such as the upcoming Hilo Wastewater Treatment Plant, we know we'll be needing additional cash. So, we'll also issue some new money, but we'll work with the departments to ensure that's going to get spent down within six to twelve months, so that we don't have those IRS issues to worry about. CHR KANEALI`I-KLEINFELDER: Okay. What is the longest amount of time that we can hold funding under a bond ordinance for a specific project before we have to just clear it off the books, or is there a time? MS. SAKO: No, the bond authorizations themselves, we use it for the purpose intended, for the ordinance, you know, was intended. Eventually, we do come in usually and ask the Council to amend so that we can clear up and fully utilize the ordinance. Let's say, there's half-a-million dollars left or something like that. You know, we don't want that ordinance standing out there for a long period of time. But most of the time, it gets spent for the purposes designated in the ordinance and is completed and we move on to the next one. CHR KANEALI`I-KLEINFELDER: Okay, so a Council Member or the Administration could ask to amend a previous bond ordinance to utilize funding better or circumstances have changed, and we want to do a different project? MS. SAKO: Usually, it's just to amend the projects, yes. Because what happens is we have to ensure that we haven't already designated that funding for a specific project. If it's already encumbered, then we can't change the purpose. You know, if that project is ongoing already, then we wouldn't be able to change the purpose, if that makes sense? CHR KANEALI`I-KLEINFELDER: That does make sense. Okay, well that answers all of my questions. Thank you very much. I think that was very clarifying as well. It's an interesting process. Thank you. Okay, seeing no further lights here in Kona. Thank you for your time, Ms. Sako. We do have the motion on the floor to close file on Communication 184, all in favor? Page 21 FC-9 April 18,2023 Vote on Comm. 184: The motion to close file on Comm. 184 was carried by the Filed following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kimball, Villegas, and Chair Kaneali`i-Kleinfelder—7. Noes: None. Absent: Committee Members Kierkiewicz and Lee Loy —2. Excused: None. CHR KANEALII-KLEINFELDER: Moving on to Bill 42, please? BILLS FOR The Chair directed the Committee to proceed to the next order of business, ORDINANCES: Bills for Ordinances. Bill 42: AMENDS ORDINANCE NO. 22-63, AS AMENDED, THE OPERATING BUDGET FOR THE COUNTY OF HAWAII FOR THE FISCAL YEAR ENDING JUNE 30, 2023 Increases revenues in the Fund Balance From Previous Year account($47,000); and appropriates the same to the Golf Course Other Current Expenses account to cover higher than anticipated utility expenses. Reference: Comm. 213 Intr. by: Mr. Kaneali`i-Kleinfelder(B/R) Motion to Approve: Mr. Inaba moved to recommend passage of Bill 42 on first reading. Seconded by Ms. Galimba. CHR KANEALII-KLEINFELDER: Any discussion, Council Members? Mr. Inaba, go ahead. MR. INABA: Noting this shortfall this year, have we budgeted properly for next year? CHR KANEALII-KLEINFELDER: Is there anyone from Parks? Mr. Inaba, go ahead. MR. INABA: Good morning, still. Just wanting to confirm that we have budgeted appropriately for the upcoming fiscal year to cover these increases in cost and use, whether it be via green fees or any other funding mechanism. (Note: At this time, Parks & Recreation Business Manager Reid Sewake came forward to address the members of the Committee.) Page 22 FC-9 April 18,2023 MR. SEWAKE: Good morning, Council Member Inaba. Reid Sewake, Business manager. To my left is Troy Tamiya, Golf Course Administrator. So, we did include these increases for the proposed budget for the next fiscal year to water accounts, electricity, and fuel accounts. MR. INABA: Okay, and how are we paying for it? MR. SEWAKE: It's with the revenues from the Golf Course Funds. This is one of our Special Revenue Funds that the department administers. We did submit a balanced budget with green fees, revenues, our concessions; both restaurant and the pro shop, as well as the subsidy from the General Fund. So, all that is factored in the way the increases are being accounted for. MR. INABA: Thank you, Reid. So, were there increases in the green fees? MR. SEWAKE: Our last increase to the green fees was in 2022. So, going forward, we're sticking with that fee schedule. You know, we've been pretty fortunate, the last couple years we've been bringing in good numbers for rounds. We are impacted somewhat by the weather. So, I think December and January hurt us a little bit, but overall, we're looking pretty good. MR. INABA: Okay, got it. Thank you very much, Reid. Chair, I yield. CHR KANEALI`I-KLEINFELDER: Thank you. Any further discussion. Council Member Galimba. MS. GALIMBA: Just following up on Council Member Inaba's point. I mean, it does seem like there is quite a large subsidy. So, the golf course—for real property and perhaps, I mean, I think probably a lot of people around the island do use this golf course, but probably it's a little bit, I think an ordinance. I would like to think about perhaps making it a little bit more self-sufficient. I don't know, perhaps we could just talk story about that at some point. Just my two cents adding on to Council Member Inaba. I yield. CHR KANEALI`I-KLEINFELDER: Thank you. Any comments from the department? Okay seeing none, we do have a motion on the floor to forward Bill 42 to Council with a favorable recommendation. Council Members, all in favor? Page 23 FC-9 April 18,2023 Vote on Bill 42: The motion to recommend passage of Bill 42 on (Approved) first reading was carried by the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kimball, Villegas, and Chair Kaneali`i-Kleinfelder—7. Noes: None. Absent: Committee Members Kierkiewicz and Lee Loy —2. Excused: None. CHR KANEALII-KLEINFELDER: Moving on to Bill 43, please? Bill 43: AMENDS CHAPTER 19,ARTICLES 1 AND 8, OF THE HAWAII COUNTY CODE 1983 (2016 EDITION,AS AMENDED),RELATING TO COMMERCIAL AGRICULTURAL USE DEDICATION FOR REAL PROPERTY TAXES Seeks to implement recommendations of the Real Property Tax Review Working Group and Agricultural Committee's September 2019 Final Report by: amending the definitions for"commercial agricultural activities" and "Commercial agricultural use dedication"; adding four new definitions relating to commercial agricultural uses; amending Section 19-60 of the Hawaii County Code to create a "Long-term commercial agricultural use dedication"; and establishing a new section titled "Short-term commercial agricultural use dedication". Reference: Comm. 217 Intr. by: Ms. Kimball and Ms. Galimba and Comm. 217.1: From Council Members Heather Kimball and Michelle Galimba, dated April 11, 2023, transmitting supporting documentation relating to Bill 43. ; and Comm. 217.2: From Council Members Heather Kimball and Michelle Galimba, dated April 11, 2023, transmitting supporting documentation relating to Bill 43. Motion to Approve: Ms. Kimball moved to recommend passage of Bill 43 on first reading. Seconded by Ms. Galimba. CHR KANEALII-KLEINFELDER: I will let the Council Members, the authors, go ahead, then I will go to questions. MS. KIMBALL: Thank you, Chair. So, Council Member Galimba and I worked on this together, and what I'm going to do is give a brief overview of what the intention is of this project and go into a little bit of the history with the report that came from the Real Property Tax working group and agriculture working group that is included here in your binders as part of the communications. Page 24 FC-9 April 18,2023 Then Council Member Galimba is going to go through some of the specifics in the bill as well as a couple areas where we think there's opportunity for feedback from all of you about how we might improve the language to address the issues we're trying to solve. Before I begin, though, I want to thank Administrator Lisa Miura and Deputy Administrator Keita Jo, who's over there in the Hilo Chambers. This was a project that we worked on quite quickly together. So, appreciate all of your feedback on this, as well as former Council Member Richards, before he left office he actually helped on this as well. I will say that we farmed this out, no pun intended to the Hamakua Institute to share with our agricultural community for vetting prior to introduction, as well as the Hawaii Farmers Union. So, both of those groups have taken a look at this bill. I will say that I'd like a little leeway from our Chair to discuss both this bill and Bill 44 together to some extent,just because they are tied together. The reason they're not included in a single bill is that I think Bill 43 can pass without Bill 44 happening, but the inverse is not true, where we may not—we probably don't want to pass Bill 44 without putting Bill 43 in place. So, generally what we're trying to do here is address some of the concerns that our farmers and our agricultural community have about speculation and the land market. One of the reports that came out of the Hamakua Institute for the countywide agricultural assessment is that property values is one of the greatest barriers to agricultural development in our County. Part of that is due to the speculation in the land market. And that speculation is occurring because folks are—what we're seeing is some gentrification in our agricultural lands, so people are claiming these agricultural exemptions and not necessarily with any intention in the long-term to do farming. I will also say that, you know, one of the things that really motivated us to get this moving was Council Member Inaba's proposal for the three percent cap, which has been received very positively by the farmers in my community. But there's also this concern that if we don't have some sort of better handle on who's doing Ag (agriculture) and who's not that it would be inappropriately applied. At the same time, we want to make sure we're supporting and promoting agriculture. So when we put those guidelines in, we wanted to also build in enough flexibility for the people who are legitimately farming that this is not going to be hugely burdensome to them. So, Michelle will go a little bit more into some of that flexibility that we've tried to build in. Page 25 FC-9 April 18,2023 Additionally, we are looking at a different program, and this is the part of Bill 44 that is a Community Food Sustainability Program. This is something that would in part replace the nondedicated Ag program. But the general concept of it is that we know there are people that are out there that are not doing commercial Ag in the traditional sense, but they are providing either for sale or by donation, food to the community as a whole. You know, since food sustainability is a priority for all of us, I think, and the amount of food that we import has implications in terms of our resilience as well as our costs and climate change; supporting our food producers is critical. I see my light is already blinking. I'm going to ask for a little bit of leeway, Chair,just since we're setting the stage. So,just wanted to go over the report that was provided from the Agricultural and Real Property Tax working group. The information about the Agricultural Program starts on Page 6 with sort of an introduction, but I wanted to go through the points that they recommended. The first one is to revise the ten-year dedicated agricultural program. Our bill does propose to do the recommendations here, including creating a diversified agricultural category. It also identifies a fallow period, so that is included in the options for the usage of the land. One of the additional modifications that we made is that we prohibited people that were growing anything for commercial agriculture that was on the noxious weed list or otherwise an invasive species will not be able to be part of the dedicated Ag program. For number 2, it proposes to create a short-term dedicated Ag program. That's what this bill does. So in addition to some modifications to the long-term dedicated Ag program, we are creating a three-year short-term dedicated Ag program. We'll go into the—Council Member Galimba will talk a little bit about the differences there. Three, as far as revising the non-dedicated Ag programs, some key things there are the requirement of a farm land. This is something that we've added to both the short-term. The long-term, short-term dedicated Ag programs, as well as in Bill 44 for the community food sustainability program is the requirement of a farm land. The other recommendation, with respect to the non-dedicated agricultural program, was in a value assessed at 30 percent. So, the community food sustainability program does assess the value at 30 percent of the market value. I should go back to the short-term dedicated Ag, as recommended in the report; that will be set at three times the ten-year dedicated Ag program. Then I'll skip Number 4, which is the native forest program. Thank you to Council Member Poindexter for her work in getting that implemented. Page 26 FC-9 April 18,2023 Going on to Item 5, the minimum size requirements. The minimum size requirements are not actually legislated, but they come from a schedule, so we've included that language in there with the exception—we understand that with new agricultural technologies, including things like hydroponics, smaller lots are able to be productive. So, if their farm land indicates that they are able to be productive on a smaller lot size than the minimum required, that is an exception to that part of it. Number 6, which was to reduce the signatures needed. We're not able to do that on the advice of Corporation Counsel primarily because, if we initially tried to set it at 51 percent of the folks that had to sign, what that ultimately means is that for those other folks who are potentially doing the taking, and the property that they have rights to has now been dedicated to a certain usage and they hadn't approved that usage. So, we have not made the amendment to 51 percent of the owners signing on advice of Corporation Counsel. As far as required documentation, this is something that Council Member Galimba will get into, but we have added the requirement for the Schedule F, for the long-term dedicated program. It is not required for the short-term dedicated program and that's because the short-term dedicated program is intended for people that are speculative, so they don't necessarily know that they're going to be able to do a ten-year dedicated program, and so they get into the smaller program as a first step to prove viability then they can get into the longer program. As mentioned in 8, we are creating the diversified land use; creating the fallow periods. And then, Number 9 is that this pasture rating, again pasture ratings are actually not included in the Code or in the legislation. This is something that is set by Finance, and we have not actually addressed that. For your benefit, there is additional communication in the packet that includes all of the values that are currently set for the ten-year dedicated program and the non-dedicated program. The final item there, Number 10, the application process does not adequately identify legitimate farming activities. We've hopefully addressed, in terms of the requirement of the paperwork coming in, that we will have a better handle and ability to identify people that are conducting legitimate agricultural activities. So,just in summary of this first bill here, Bill 43, makes some modifications to the ten-year dedicated Ag programs, which is there for people that know that they can commit long-term to commercial agriculture. The short-term program is there for the folks that are speculative. This is kind of a replacement for a part of the non-dedicated Ag program. The idea here is that anybody that is currently legitimately doing farming or contributing to food systems, has some pathway or another, even with the phase out of the non-dedicated Ag program to secure some tax benefits. With that I'll Page 27 FC-9 April 18,2023 yield and pass it over to Council Member Galimba to go through some more of the specifics on the bill. Thank you, Chair. CHR KANEALI`I-KLEINFELDER: Thank you. Council Member Galimba. MS. GALIMBA: Okay, so yes, I just came in here at the very end had to look at things and added, you know, my two cents worth. So,just want to, you know, say thank you to Chair Kimball and the folks that worked on this. So, this does strengthen the Ag dedication programs and I can make them more meaningful, changes the single commercial Ag dedication to two of them; long-term and short-term, and Bill 44 would repeal an non-dedicated Ag program, which is you know, pretty loose. This adds more specific thresholds and definitions of"commercial agriculture" and adds in "diversified agriculture." And, I guess, we'll just kind of go through it. So, the amendment to Section 2, there's just some adding and some wording, but we do have there, and it is existing, a minimum $2,000 of annual gross income per farm operation, which is something that I think we would be interested in knowing what the body thinks about that as a minimum and is a fairly low minimum for a commercial agricultural operation. Then moving on to Section 3, changing the wording and then adding the time element of a minimum of ten years into that definition of long-term commercial agricultural use dedication. I think it was already there, but not particularly in the definition, and adding on "diversified agriculture." Section 4, so these are some of the other definitions. So, a definition for "commercially viable agricultural operation," and I think we do have some. We've had some discussion on that. It is sort of a definition that was taken from the USDA (United States Department of Agriculture) would be open definitely to talking about that, whether all of its parts are necessarily relevant to Hawaii agriculture. But I think it is a good general definition for commercially viable agricultural operation. Then a definition for a"diversified agriculture"blending intensive agriculture and orchards while transitioning. Farm plan definition. This "farm plan" is an important part of making sure that we have proper documentation of the operations seriousness about being a viable agricultural operation. There is in this definition, the phrase "commercially viable agriculture,"which depending on whether we take up, and there's enthusiasm for Bill 44, we may need to take that phrasing out because it doesn't relate to the community food use program. Then we have the definition of"short-term commercial use dedication." Moving on to sort of the meat of the dedication program, in Section 5, (Section 19-60). We do have that fallow period in Number 2. I think that's important, especially Page 28 FC-9 April 18,2023 for some of the crops like sweet potatoes and ginger. They do need to fallow to sort of deal with some of the pests that get into those crops. So, it's important to have a fallow period allowed. Whether that's, you know, an appropriate amount, three out of ten. It's definitely something we can talk about; the noxious weed part. Then Part(d) on the next page is the documentation requirements. Internal Revenue Service schedule F (form 1040) or State taxation G-49 from the previous tax year. Then requiring one of these: A farm plan, documentation of organic certification, NRCS (Natural Resources Conservation Service)plan, documentation of food safety certification from USDA. If someone doesn't want to do any of those kinds of very sort of, I guess, writing heavy documentations, receipts demonstrating an investment of a minimum of$2,000 in farm equipment for use on the subject property. Potentially, we may need to put in a definition of farm equipment, but that shouldn't be too difficult. If anyone else has any other recommendations on a meaningful sort of documentation there, we would welcome that. There are some just relatively minor amendments done by LRB (Legislative Research Branch). Then we come to Section 6, which is the "Short-term commercial agricultural use dedication,"which is all new language, but it is very much based on the existing agricultural use dedication. One big difference is that the short-term does not require that the dedication be recorded with the Bureau of Conveyances, and of course there is the difference in the value for the short-term being much less generous than the long-term. Let's see, I think that is about it that I have for that, and of course, if Council Member Kimball wants to add in there, please go ahead. I yield. CHR KANEALI`I-KLEINFELDER: Thank you. Going to the Council Members for discussion. Council Member Kagiwada. MS. KAGIWADA: Thank you, Chair, and thank you both for bringing this forward. I know it was an awful lot of work. You've been working on it for a very long time, and a lot of people contributed. So, one thing I'm wondering, the Farm Plan. Who's going to be reviewing the Farm Plan? Is the Director of Finance the person to do that or somebody in the Finance Department, or is there outside reviewers? How will that be dealt with? CHR KANEALI`I-KLEINFELDER: Ms. Kimball? MS. KIMBALL: Yeah, thank you. Actually, we kind of went around in circles on that. Right now, the exact language is that it will be part of the application that goes to the Director of Finance. So, the Director would actually have flexibility in terms of assessing that Farm Plan. Page 29 FC-9 April 18,2023 You know, we'd looked at things like designating the Agricultural Commission, but that's a political body, and it's not really in their purview, and so that didn't seem like a good idea. Plus, it's not staffed. We have no volunteers on that board at this time. The other was to identify, you know, qualified experts, but then again that was, you know, in some cases, one might argue that the owner of the land is the most qualified expert on that land. So, in order to just provide the greatest flexibility,we've left the wording in that it's up to the directors' determination, and Director Sako would have the ability to delegate that, as she felt appropriate. I don't know if we have Director Sako and Deputy Administrator Keita Jo available if they want to chime in this one at all. (Note: At this time, Finance Director Deanna Sako and Real Property Tax Assistant Administrator Keita Jo came forward to address the members of the Committee.) MR. JO: Keita Jo, Assistant Administrator for Real Property Tax Division. Yeah, the Director would have the authority to assign that task, similar to what we do now. Division staff would likely review the form plans for approval. MS. KAGIWADA: Okay, great. Then, Director, you feel you have the expertise in-house to review those farm plans. MS. SAKO: We do. They're currently doing it now as part of our current system. So, they're used to kind of reviewing the plans or in talking to the taxpayers and the landowners to make sure we understand the plans as what they think it says. You know, so they have to go through that quite a bit now, so they're pretty used to that. MS. KAGIWADA: I see, okay, good. I really love the farm plan idea. Is that a super-involved document? MR. JO: So, currently right now we do not have a universal document, and I think, should this bill pass, the division will need some time to stand up some of the rules and regulations in order to support kind of what a farm plan will look like, standardizing it to a specific form. That again, would be universal, easily reviewed by our staff. There could be a plethora of different styles of writing and technique when it comes to farm plans, but we definitely want to keep that tied down, so to speak. MS. KAGIWADA: That's great. I would love to see that. Fairly accessible to people so that we could put more emphasis on that and maybe get away from the, I don't know, the $2,000 farm equipment investment concerns me a little bit, as far as a little bit of wiggle room, but I mean, how do you define farm equipment? Page 30 FC-9 April 18,2023 So, I don't know. I would love to see people with a little bit more of a plan. If it's not too cumbersome, I would love to see us go that direction a little more. Anyway, those are my main comments around that. Thank you so much for doing this. CHR KANEALI`I-KLEINFELDER: Thank you, Council Member. Council Member Evans, go ahead. MS. EVANS: Thank you. Well, amazing piece of legislation and a heck of a lot of work. So, hats off to all the effort and all the comments. I'm going to nitpick some of this stuff that I'm seeing. Okay, so, on Page Two under Section 4, under "Commercial viable agricultural operations." What do you mean when you use the term Agricultural Service versus Agricultural Business, because there's no definition for service? I'm wondering if that needs to further defined or to the Director, will you be doing this through Administrative Rules? MS. KIMBALL: Council Member Evans, can you restate where we're looking? MS. EVANS: Okay, so Page Two at the top, Section 4, you have a definition, "Commercially viable agricultural operations mean an agricultural business or service." And my question is, what is the definition of service? Will you put it in this legislation, or will that be determined by maybe Administrative Rules that you may be having to pursue? CHR KANEALI`I-KLEINFELDER: Council Member Kimball. MS. KIMBALL: So, I think this particular definition, "Commercially viable agricultural operation." As Council Member Galimba said, it was pulled from the USDA in part, and that is some of the language that they pull in there. What I would suggest is an agricultural service is something like, you know, housing retired horses from a ranch, or something like that where it's not necessarily a business, but it is tied in a way of providing service to the agricultural community at large. I'm certainly willing to explore a definition there if you think that's something necessary for clarity. MS. EVANS: Normally, I don't know, I guess Corporation Counsel could answer this, but service as defined by USDA, blah, blah, blah. You know, I mean, in my opinion, if you don't tie it to something, then maybe you'll have to do an Administrative Rule or something for clarity, but you could say, as defined by blah, blah. Then you got it, you know. I don't know, any comment from Director? MS. SAKO: I was just going to say that there are several areas in the bill that probably would require Finance Director rule changes, and we're happy to do those. We are concerned,just since I'm bringing that up, about some of the effective dates in the bill and giving us enough time to do that as well. But we Page 31 FC-9 April 18,2023 can discuss that further later, but I just wanted to get that discussion point on the table. Thanks. MS. EVANS: Okay, thank you. So, now I'm on Page four and I'm looking at (d) (2), and it's talking about the Director shall prescribe the form of the petition that shall include: Documentation of organic certification. Well, what is someone doesn't want to be organic. Is this legislation specific to organic, because you're requiring it? MS. KIMBALL: Chair if I may? CHR KANEALI`I-KLEINFELDER: Council Member? MS. KIMBALL: This clause ends in an "or" so, basically, the intent here is that they can do a farm plan or any of these other things. The idea was that if somebody already has an organic certification or they have an NRCS (Natural Resource Condition Assessment)plan; or they have food safety certification, we can rely on all of those exterior documents, as they're legitimately farming. We don't need them to also produce a farm plan. MS. EVANS: I don't think the language is clear enough to say that. I think you need to wordsmith it a little bit. Like, the Director shall prescribe the form of the petition, and if they meet any one of these conditions. I mean there's something about the "or"that's not there. I don't see it. MS. KIMBALL: We can look at wordsmithing that. Clause (D) has the "or" in it. Yeah, (2) (D) it says, "Documentation of food safety certification from the U.S. Department of Agriculture; or." So, I can work with LRB to maybe rephrase that. So, it's clear, that at least, one of the following. MS. EVANS: Right. Is the intent of the authors that all they have to do is achieve one of the five? MS. KIMBALL: That's correct. MS. EVANS: Okay, I think that would be nice to have that for clarity. That's my take on it. Okay, so on Page four, Number (6) Action by the director on a petition. "The findings shall include and be based upon the productivity ratings of the land in those uses for which it is best suited." So, the Director now, will have to now evaluate the productivity rating of the land in addition to the stuff up above, which is okay, but is the productivity ratings of the land determined by the U.S. Department of Agriculture or something? Again, I think it would be nice to have that. The reference says where you're getting that, and the reason for it is the person who's reading this that is filing for the petition should be able to look it up and find it. So, they know exactly what, you know, kind of the decision matrix. They'll be able to find it. Again, this is wordsmithing stuff. This is really a well-written piece of legislation. Page 32 FC-9 April 18,2023 MS. KIMBALL: So if I may again, Chair, on that note? Just, I think it's easier if I respond immediately to questions, rather than wait, but you can stop me if that's problematic. CHR KANEALI`I-KLEINFELDER: No, go ahead. MS. KIMBALL: So, that particular part has already been the case, and this is already done with these agricultural dedications where there's an assessment of productivity per the rules. I don't know if Director Sako or Deputy Administrator Jo wants to speak to their current procedures for that sort of assessment? MR. JO: So, currently that portion of the code is utilized in our assessment as it exists now, and the intent of that language is to help bridge the gap between someone's use of a particular portion of the property for, let's say, intensive agriculture. They choose for whatever reason not to use the rest of the portion of the property for that agricultural purpose, but they want to receive the benefit across the whole property. So, that language there is to prevent the situation where someone says, "you know, I choose not to use that portion of the property,"for whatever reason. It kind of ties into the fact that if it's suitable for agricultural use and you choose not to then you default to a market value type situation. MS. EVANS: Yes, and I think that's great. I'm just talking about clarity for the person reading this. But, where's the productivity ratings? Is that an annual report by the USDA? I mean, is it done by the Land Use Commission? I'm just trying to make it easier for the person who wants to do the petition to understand your reference points. That's all. It's just for clarity. Just a recommendation. Okay, so, the next on Page four(6) (B), it's saying, "the director shall also make a finding of fact as to whether the intended use is in conflict with the overall development plan of the County." Are we talking about the General Plan? What development plan are we talking about? MR. JO: In this context, it'll be the General Plan, whether that agricultural use fits in with that. MS. EVANS: So, should we say the General Plan of the County instead of development plan? MS. SAKO: That's language that's been there for quite some time. So, I'm not sure what the initial intent was, because it could just be, you know, depending on what's going on in that particular neighborhood also. MS. EVANS: Just a suggestion that you look at that. Again, this is all about clarity for people, that someone who's filing a petition needs to know it's the General Plan instead of this. I think it's vague,personally, but just a suggestion. Page 33 FC-9 April 18,2023 I only have a couple more. They're on clarity. I used to do this what I was Chair of Committees. Okay, Page seven, Section 6, Section 19 (a), it may be a definition somewhere else, but it's the first time when I read this through that you reference a special land reserve is established, and there's no other place in this legislation that talks about land reserves. So, wondered where—does this connect to another section and code? If so, would you put a reference in there? A special land reserve per Code blah, blah, blah. Section blah, blah, blah. Again, for the person that's trying to figure this out has that cross-reference or some clarity. MS. KIMBALL: If I may? So that language you'll notice is also the introductory language for the long-term dedicated program. This is just terminology that applies for tax purposes. So, you know, it's coming from that syntax ofa land reserve is a way of describing a dedication. I don't know if you want to chime in Administrator Jo or Director Sako, but that's sort of common terminology. MS. EVANS: I'm just pointing out, it never appears anywhere else, and all of a sudden it pops up as a new term, a special land reserve. Just curious how we, again, educate people and make it friendly. MS. SAKO: I'm looking to see if we already have that defined in Chapter 19, just a second. MS. KIMBALL: It is. It's the first clause of 19-60. It's on Page two. Council Member Evans, where you have the language, that we're bringing the current code with respect to Section 19-60, Item (a) A special land reserve is established to enable, blah, blah, blah. So, it's already the language related to what is now going to be called the Long-term commercial dedicated program. MS. EVANS: So, this is the only place in our code that we have special land reserves? I mean, I'm just reading it, a special land reserve is established. That's okay if that's the only place in our code we have special land reserves. But I was just curious, if you have that terminology and stuff floating around,just make sure it's consistent, that's all I'm again suggesting for clarity. CHR KANEALI`I-KLEINFELDER: Ms. Evans, your five-minutes was up. Your timer went off, so I'm going to go to the Council Members to see if they have questions. I'll come back to you. MS. EVANS: Okay, thanks. CHR KANEALI`I-KLEINFELDER: Council Member Galimba. MS. GALIMBA: Thank you. I just wanted to respond to Council Member Kagiwada's comments about the monetary part. Just knowing farmers, I think Page 34 FC-9 April 18,2023 it's important to have something that is just very basic, because some of them would not want to do any of the above, and I think we could raise it to make it a little higher bar, if you like, but I think it is sort of important to have something. It doesn't require a plan. So, farmers just don't want to deal with that, and I don't want to exclude them, because they potentially might be some of the best. Thanks. CHR KANEALI`I-KLEINFELDER: Thank you. Council Member Kagiwada. MS. KAGIWADA: So,just to clarify. Do you have any concerns that there are people who maybe aren't doing farming could use that clause in a way that isn't what is intended? MS. GALIMBA: I think, you know, it's definitely a risk, but I think if we can define farm equipment pretty stringently, like having, four-wheelers. It has to be something directly related to, actually raising a crop, or raising livestock. I think we can make it, you know, pretty good. It's never going to be perfect. I nice incentive, actually. MS. KAGIWADA: Yeah, I like that defining the farm equipment. I mean, I see one benefit of all this work you guys are doing is to try and close some of the loopholes that people have been kind of taking advantage of in some cases. So, just don't want to leave obvious ones in there. So,yeah, thank you. CHR KANEALI`I-KLEINFELDER: Thank you. Okay, Council Member Evans, go ahead. MS. EVANS: I had one last question, actually. It has to do with, it says on Page ten at the bottom. I'm looking at Subsection (4), real close to the bottom. It says, "The additional taxes and penalties due and owing shall be a paramount lien upon the property as provided for by this chapter." Could you please explain what paramount means? I'm sorry, I haven't heard that term before. MR. JO: So, by virtue of the Code, the Real Property Tax Division has a paramount lien for property taxes that are owing. So, in the case of a property that's conveyed out, there's a transaction that, you know, exchanges money. The County typically would get paid off as a primary lien holder, and then all other lien holders would get paid off. So, that basically maintains the County's position with the paramount lien status in the event there is a rollback. So, in the case that this dedication is breached, we would go back in time and assess the difference in taxes between what was actually paid and what should have been paid had the property not participated in the dedicated program. So that particular language, again, maintains that lien status. Page 35 FC-9 April 18,2023 MS. EVANS: Do we ever have like an ongoing estimate of what are liens are? I guess, real property tax, do we kind of know where we're at on that? Because that's potential. MS. SAKO: You know, all real property taxes are subject to lien, basically. So, it's more the delinquencies that we'll actually record the lien on, but all real property taxes are subject to lien and have a first priority lien. MS. EVANS: Okay, good. Thank you, I yield. CHR KANEALI`I-KLEINFELDER: Thank you, Council Member. Let the record reflect that Council Member Lee Loy has joined us. Council Member Inaba. MR. INABA: Thank you, Chair. I want to circle back to what Council Member Evans brought up regarding the form for the petition. I agreed that the "or"part is not clear, but I do like the idea of a farm land. I don't know how or if we currently have that as part of—we do not, okay. Because regardless of what other documentation you provide, I think a farm plan kind of shows you have an idea. Any of these other documents, you know, certify, but I don't know that you necessarily you know, if you get documentation of foods, saying it's certification. Does that exactly correlate with the plan for farming? So, to boil it down, I guess I would say, I do like maybe having a farm plan in whatever form we would accept it be a requirement in addition to any of the others you folks have listed here. Understanding at the same time,we don't want to make the farm plan go too lofty where we discourage people from you know, true farmers from applying and getting into this program. Going to the first page for the definition, "Commercial agricultural activities shall mean farm operations." Do we define "farm operations" elsewhere in the chapter right now? Okay, so maybe we can—we went from the use of property to farm operations. So, I'm wondering if we can just define that or at least provide a little bit more clarity there. Then, understanding the tax benefits. So, if either of the introducers could share what this, "Long-term commercial agricultural use dedication." What is the tax benefit, by percentage or weight, how does it work? CHR KANEALI`I-KLEINFELDER: Ms. Kimball. MS. KIMBALL: Council Member Inaba, if you'd refer to Communication 217.2? You have the assessed values for the ten-year dedicated programs. So, the tax benefit is that the assessed value for the land is at this lower rate. It's not based on a percentage. It's a set value. So, every acre of, you know, intensive agriculture, you have it assessed at$2,000 per acre, rather than at market rate, and that's where the tax benefit comes from. Page 36 FC-9 April 18,2023 Our proposal here is that the short-term dedicated Ag would be at three times this rate. So, if you take that in terms of agriculture it would be now at$6,000 per acre. MR. INABA: Got it. Thank you. Then, while everyone else was looking at Communication 217.2, the second section on dedicated Ag would be repealed? MS. KIMBALL: That's correct. Not within Bill 43, but what Bill 44 proposes is the sunset of the non-dedicated Ag program. We need a little time to transition, and instead proposes another alternative. So again, when we get to Bill 44, I'll speak to that a little bit more. But yes, the intention is between these two bills to ultimately sunset the non-dedicated program as it currently stands. MR. INABA: Okay. Then,just on the tax side, Keita Jo, as we look at these assessment rates because these are at a rate per acre and we do tax rates just based on value, how does that work? MR. JO: So, those specific rates—so for example, if you took a 10-acre parcel located in Puna, let's say, that was utilized currently for a 10-year dedication on, let's say, pasture. That actual assessed value would be valued at$2,100, and so we would tax the property taking $2,100 multiplying it by the agricultural tax rate which currently is $9.35 per $1,000 of value. That particular property would result in a minimum tax, so $200 annually. If you take that same parcel and you assessed without the agricultural use, so let's say, the market value of 10 acres in Puna was $300,000, you would take that same $300,00 multiply it by $9.35 per $1,000, and you'll get a substantially higher tax bill. So, that's the benefit of these programs. If I were to throw out a number in terms of the number of properties that are participating in these Ag programs, they're about 9,000. So, that speaks to Chairwoman Kimball in the next that's going to be discussed. Building and some timing to address these changes. As Director Sako had mentioned, there's a lot of rule-making that needs to take place. So, it's a fairly complicated time-consuming process as we transition, should this bill pass. MR. INABA: Okay, and then have we looked at the numbers in terms of comparing someone's, you know, normal no-Ag use rate to the 10-year versus the short-term rates being proposed? I guess ultimately for someone who doesn't have any Ag use right now, if they go into the short-term use, do we know if there's significant benefit, like is it—are we going to be incentivizing people enough to consider going into the program for short-term, basically? Page 37 FC-9 April 18,2023 MS. SAKO: Three times the current Ag rates are still substantially below market value. So, it would still definitely be incentivizing people to go into the program. MR. INABA: Okay. I would just point out as well on Page eight. Same thing for the "Short-term agricultural use dedication petition, the farm plan." As is the case with the long-term. But other than that, that's all the questions I have for now. I want to thank the introducers of these bills for bringing them forward. CHR KANEALI`I-KLEINFELDER: Thank you. Council Member Kimball. MS. KIMBALL: Thank you, Chair. Just to make a couple additional comments. Particularly with respect to the documentation. You know, an initial draft, the one that I circulated with the members of the Hamakua Institute Collaborative Ag working group, as well as the ones that I circulated with the Farmers' Union. There was concern about this need for additional documentation with the legitimate farmers. These men and women are already working 24/7 on their farms. The idea of this additional paperwork was something that was concerning, and what I will highlight is that, for example, the documentation of organic certification, you have to pay for that. There's no way that somebody who has an organic certification is not doing legitimate agriculture. Similarly, the Natural Resource Conservation Service. That whole process is quite time-consuming and burdensome. Food safety certification, time- consuming and burdensome. There's no way anybody that has any of these is not legitimately engaged in agriculture, because it costs money, or they take a lot of time. The thing that I want to be cautious of is that by allowing these other pieces of documentation, we can actually make the farm plan a little bit more robust, because the folks that don't have these things, we can make a more thorough farm plan to match up with these other programs while most of the folks will actually be able to participate because they have these other documentation. So, I certainly don't want to give the impression that having these other documents is any less rigorous than a rigorous farm plan. Understood about the comments with regard to the investment in farm equipment, and Council Member Galimba and I will work on a definition. The other thing that I really wanted to highlight is under Section 2 on the first page. "Commercial agricultural activities." There's this requirement of a $2,000 annual gross income per farm operation. In one of the original proposals for this bill actually took that out. But I put it back in just because I wanted to get everybody else's feedback on this. Page 38 FC-9 April 18,2023 My thought is that if we have these other methods of ensuring that people are legitimately farming, why do we need to be their income police, and maybe we don't need this clause at all. So, if you have these other documents that prove legitimacy, maybe we don't need to include this requirement for a $2,000 annual gross income. That value comes from a long time ago anyway, but I think if we have these other security measures in place, we may not necessarily need it. But thank you all for your feedback on this, and you know, there is stuff that we want to address, including the expective date, Director Sako. We know that we need to give you guys a little more comfort in that but appreciate everybody's feedback. Thank you, Chair. CHR KANEALI`I-KLEINFELDER: Thank you. Looking around the room, I don't see any further lights on. I appreciate the discussion. Good discussion today. Look toward Administration members in Hilo, the difference between Ag use and this Ag dedication, is what? MR. JO: If I understand your question, you know, the difference is getting the agricultural use benefit, which is the preferred assessed value of the land. So, you're bringing it well below what the market value would normally be taxed on. So, that's a huge benefit for commercial agricultural operations. That's why we have about 1,000 properties in our dedicated program, and they're usually made up of large acreage because it provides a significant benefit from a tax perspective. CHR KANEALI`I-KLEINFELDER: Okay. So,you know, someone who has an Ag property, they may not be in the program, correct? MR. JO: Yeah, it's whether or not you're actively utilizing the property for agricultural use. That's the difference. You can still be agriculturally taxed; have an agricultural tax classification, but if you want a preferential assessment to bring down the actual value that we're taxing you on, that's when you need to participate in one of these programs. CHR KANEALI`I-KLEINFELDER: Okay, then minimum lot size? MR. JO: So, originally, the minimum lot sizes were established when this code came to be, and that was work that was done back in, I believe, 2005 to establish what was commercially viable size for a particular property at that time. It was really restricted to the agricultural use at that time, which was monocrops. You grew one type of things. So, I think one of the items that's included within this legislation is the opportunity to have a diversified agricultural operation, and maybe in some cases, have a property that's below that minimum size requirement. But you'd have to provide additional documentation to help support that benefit being received. Page 39 FC-9 April 18,2023 CHR KANEALI`I-KLEINFELDER: What are the minimum lot size requirements? MR. JO: So, currently for intensive agriculture, I believe it's a quarter-acre; for orchard, you have to have a minimum of one-acre; for pasture, it's 10 acres. CHR KANEALI`I-KLEINFELDER: Where are those definitions or requirements at? MR. JO: So, those are within the Finance Director's Rules and Regulations, currently. CHR KANEALI`I-KLEINFELDER: So, those are adjustable via Administrative Rules and not Council Rules? MR. JO: Correct. CHR KANEALI`I-KLEINFELDER: And they're not housed anywhere in our Code, then? MR. JO: Correct. CHR KANEALI`I-KLEINFELDER: Are those publicly posted anywhere? MR. JO: The Finance Director's Rules and Regulations are publicly posted. MS. SAKO: They're on our Finance website. CHR KANEALI`I-KLEINFELDER: On the website. Okay, thank you both. Going, you know, to some of the questions that came up and I've looked at this program before, the farm plan and what is required just to be considered Ag use. It was interesting going through that process and listening to the departments and how they gauge what farm use would be and how to identify yourself as a farm. I think this term, "commercially viable,"may be problematic, and I understand it was based on a USDA definition, and I can see the reasoning for that. But I also know that in part of my discussion I was learning that a farm can be both in the start-up fees and can be existing. If you're existing, you can probably show you're commercially viable, you can show income. If you're beginning or trying to get the rolling, then the plan basically says, I plan to do this, and it will look like this, but these are all just future estimates. So now, what I'm leaning back to is who's going to be enforcing all this? Who enforces the farm plan, and I understand it's the Finance Director and Finance Department. I would say and I understand you're doing that already, but are we saying that the Finance Department is going to go through a farm plan to see if Page 40 FC-9 April 18,2023 they're commercially viable. That's kind of a lot of information to digest and go through to make that decision. MR. JO: We currently go through that process, as it stands. We have established agricultural use criteria that our staff go through to ascertain whether a property is commercially viable, and that's typically tied to stocking rates, density of orchards; trees, things like that. The idea is, you know, if you have a banana patch here, you have an avocado tree there, you're more along the lines of a gentleman farmer not necessarily providing that food sustainability out to the community. Rather maybe helping to support a hobby of yours or sustain yourself. So, we currently have that built I right now. CHR KANEALI`I-KLEINFELDER: I agree with that statement. Some of the language throughout the code, we're saying that, like let's go to Number(2) on Page three, under determining agricultural use value. I'm wondering about the language here. We're saying, you know, "Intensive agriculture,"which includes—do we need to have the language but not limited to. You know, include but may include or does this allow the production of other kinds of agricultural goods? On the same point, Ms. Evan's point, the use of"or." I really think that the language here needs to be looked at very clearly to make sure it does do exactly what you want it to do. If that"or" is in the right place? Otherwise, when I look at this, you have to deal with the following or under the prescription of the petition, then you shall include (A), (B), (C), and(D) or(E). MS. SAKO: So, that's language currently in the code. They're just adding the "Diversified agriculture" category, and you know,there are some catchall phrases in "Intensive Ag" like vegetables. In "Orchards,"more you know, tropical specialty fruit type of things. So, we have tried to include things that actually grow on our island. But it may have been a little while since we reviewed this section of the code, and we can you know, look at it again. CHR KANEALI`I-KLEINFELDER: Okay, because it's in front of us, it would be good—if it's not required, that's fine, but usually you'll find, "which may include, or which includes, but is not limited to," such crops as, you know, that kinds of leaves it open to other types of agricultural commodities that may or may not be here now or maybe developed in the future. Then again, to Ms. Evan's point, I mean I'm looking at Number(2) on Page four. That"or"to me is in the wrong place. You can correct me if I'm wrong, but the way it looks right now, you need to provide (A), (B), (C), and(D), and then (E) is optional. That's how I read that. Mr. Jo, can you respond to that? Page 41 FC-9 April 18,2023 MR. JO: Yeah, I read the "or" as one of the different five components that you'd have to provide. CHR KANEALI`I-KLEINFELDER: So, in that case, I think that the beginning sentence, "The director shall prescribe the form of the petition that shall include," one of the following or(A) and one of the other following. The language ain't right, yeah, okay. Who enforces this? Because I'm looking at the different sections under Section 19. "Short-term commercial agricultural use dedication." Who enforces if someone's changing dedication? If, you know, someone says, "hey, I raise cattle, I'm doing pasture." Who's your enforcing body? Who goes out to visit? MS. SAKO: Our appraisers go out and do that. So, they are the ones that determine if they first qualify; if they're in any violation. They work with the taxpayers; will go out and do inspections. They'll give the taxpayer an opportunity to respond, and say, "Oh, you might not have seen this." So, our appraisers are the ones that do that regularly, as well as their neighbors who are very good, if they believe there are any violations happening, of informing us right away. CHR KANEALI`I-KLEINFELDER: How's the staffing in the Appraisal Department? MR. JO: We currently have 14 staff members or positions, three of which are currently vacant. CHR KANEALI`I-KLEINFELDER: Okay, and last question for me. Is there a definition of farm dwelling, as it relates to this section here under the Short-term dedication? MS. KIMBALL: If I may, farm dwelling is defined in Chapter 25 of the Planning Code and requires a farm plan, I might note. CHR KANEALI`I-KLEINFELDER: And a farm dwelling would be different from the residents that may be on the property? Sorry, Ms. Kimball, I'd like to hear from the department. MR. JO: We would treat it as the first dwelling on the property. So, if there's single-family home on the property, we would carve up to a quarter-acre at the highest assessed value, as it relates to the agricultural rates. CHR KANEALI`I-KLEINFELDER: Okay, so if you have a property and a home on it, and you do farming on the property, that would be a considered a farm dwelling not a residence? MR. JO: Correct. Page 42 FC-9 April 18,2023 CHR KANEALI`I-KLEINFELDER: Then that will be taxed at a preferential rate? MR. JO: Yes, that preferential rate right now for the land up to a quarter-acre underneath that home sight would be assessed at$500, because of the property's participation in the agricultural use program. If there was a yard that was carved out, maybe three-quarters of an acre was fenced off, then a quarter would be assessed at$500; three-quarters would be assessed at whatever the market value for three-quarters of an acre is. CHR KANEALI`I-KLEINFELDER: Can this program be combined with the homeowner's exemption program? MR. JO: I think that's on the docket for tomorrow as far as discussion. Ideally in an ideal situation, because the home exemption program and the agricultural use program, we're looking at some modifications to that to allow for the three percent cap for properties that are participating in both programs. There's a preference that we firm up some of the existing rules prior to enacting that legislation. So that, we're not providing a benefit to a homeowner who's also participating in Ag, and then with this program or these changes, we're going to take away that benefit. We want to kind of streamline that process and eliminate any confusion. MS. SAKO: But as of today, you choose either the Ag or you choose homeowner. CHR KANEALI`I-KLEINFELDER: You cannot combine Ag and homeowner? MS. SAKO: No, that's what Bill 28 does tomorrow. CHR KANEALI`I-KLEINFELDER: Okay. Thank you for your time. One last question, Page four, under "Action by director on petition." Again, this is to Ms. Evan's point. On (B)whether the "intended use is in conflict with the overall development plan of the County." And it's talking about the director shall approve the petition. This is in the Property Tax Department, or since we're talking about overall development plan of the County, this would fall back to the Planning Department? MS. SAKO: The development plan could be the Planning Department General Plan; it could be CFD's (Community Facilities District). You know, there is multiple. Depends on the activity in the area. CHR KANEALI`I-KLEINFELDER: So, is this section clear? Does it need to be adjusted to specify which director, because right now, this says, "the director." Page 43 FC-9 April 18,2023 MS. SAKO: Well, I mean right now, everything in Chapter 19 is pretty much the Finance Director. CHR KANEALI`I-KLEINFELDER: Okay, interesting parallels between development plan of the County and"the Director shall decide, or a petition to become a long-term commercial agricultural use." So, if it needs clarity, now is the time to say if this should be the Planning Department. But it would get a little convoluted then if we're looking at Planning Department approval for development and use of land versus petition to become long-term dedication for Ag. MS. SAKO: You know, our appraisers are very familiar with their areas. So, they work on the same area and will rotate eventually, but you know, they're very familiar with their districts. They know what's going on in the area. They're familiar with the development. They're very capable of making these types of decisions, and if there's any question, then you know, that question would rise up the ranks and we would discuss it. CHR KANEALI`I-KLEINFELDER: Okay, thank you. That covers my questions. Interesting, though. I like the direction. You know,just to ask to put this on the record, who's on the Real Property Working Tax Group that came up with these recommendations? Can you read me the names? MS. KIMBALL: It's there on the report. CHR KANEALI`I-KLEINFELDER: I know it's there. Can you read it for me, please? MS. KIMBALL: Sure. First from the general public: Mary Begier, Chris English, William Moore, Marissa Harman from Kamehameha Schools; Nahua Guilloz, Riley Smith, Peggy Farias, Jaime Ortiz-Nava. Then from the County: Director Sako; Glenn Sako from Research from Research and Development, Administrator Miura, Deputy Administrator Jo, and then Evaluation Analysis, Brandon King. CHR KANEALI`I-KLEINFELDER: Beautiful. Thank you very much. I yield. Also, I'm the Chair. So, any other questions? I apologize. Going back to Ms. Kimball, go ahead. MS. KIMBALL: Just on a couple complaints. So, FYI, Director is defined in Chapter 19 as the Director of Finance. So, anything within this chapter would directly go to the Director of Finance. Also, farm dwelling is, I just noticed this as well, also defined in this chapter as well as Chapter 25. But I do think your point about which development plan we're talking about is something we can refine. So, we'll clarify that. Page 44 FC-9 April 18,2023 Just to your point about, you know, the whole purpose of the nondedicated Ag program was for folks that were speculative in nature, like they didn't know that they could commit for sure to ten years. You know, one example, that long-time farmer, time period is coming up; doesn't know if the kids are going to take over the farm. So, may not want to commit to that ten years because you have that deed restriction. It's recorded on the deed. You have the rollback taxes if you get out of the dedicated program. So, we wanted to provide the flexibility of the non-dedicated program for the speculative folks, and additionally, it doesn't require the tax documentation. So, you don't need to have had a year of previous commercial liability to prove that you're getting into the speculative program. But that flexibility comes with the cost of the higher valuation, but it's still a very attractive program. But the idea there is to have a place for people that are more speculative to go. And that's all. Thanks for everybody's consideration. Appreciate it. CHR KANEALI`I-KLEINFELDER: Thank you. Any further discussion, Council Members? MS. SAKO: You know, I really feel we should talk about the date before this goes too far down the chain to Council, and you know, there's no way this can be effective for July 1st, 2023. We've already set the values and people have had to apply last year for this coming tax year, 2023. So, we are already, if people wanted to—we're already taking applications for Tax Year 2024,s which is January 1st, 2024. So, we really feel the effective date should be December 31st 2024 or January 1st, 2025. Our commitment is to get the rules in place by December 31", 2023, so that anyone who wants to apply in calendar year 2024,those rules would be available, and they would know exactly what they are applying for. CHR KANEALI`I-KLEINFELDER: Thank you, Ms. Sako. I appreciate that. I was thinking about the timelines as well. Ms. Kimball, any response. MS. KIMBALL: Director and Deputy Administrator, I'll connect with you after this, and we'll get that worked out. But, yeah, certainly understand you guys need time to get your rules in place for this program. Thanks. CHR KANEALI`I-KLEINFELDER: Okay, seeing no further lights and no further discussion, thank you very much for your time on this. Mr. Clerk, we do have the motion to forward Bill 43 to Council with a favorable recommendation. All in favor? Page 45 FC-9 April 18,2023 Vote on Bill 43: The motion to recommend passage of Bill 43 on (Approved) first reading was carried by the following voice vote: Ayes: Committee Members Evans, Galimba, Inaba, Kagiwada, Kimball, Lee Loy, Villegas, and Chair Kaneali`i-Kleinfelder—8. Noes: None. Absent: Committee Member Kierkiewicz— 1. Excused: None. CHR KANEALII-KLEINFELDER: Bill 44,please? Bill 44: AMENDING CHAPTER 19, ARTICLES 1 AND 7, OF THE HAWAII COUNTY CODE 1983 (2016 EDITION, AS AMENDED), RELATING TO COMMUNITY FOOD SUSTAINABILITY USE ASSESSMENTS AND NONDEDICATED AGRICULTURE USE ASSESSMENTS Seeks to implement recommendations of the Real Property Tax Review Working Group and Agricultural Committee's September 2019 Final Report and the 2021 Annual Report of the Real Property Tax Board of Review by: establishing a sunset date for the definition of"Nondedicated agricultural use assessment"; adding a new definition for "Community food sustainability use"; establishing a sunset date for Section 19-57 of the Hawaii County Code; and establishing a new section titled "Community food sustainability use assessment". Reference: Comm. 217 Intr. by: Ms. Kimball and Ms. Galimba Motion to Approve: Ms. Kimball moved to recommend passage of Bill 44 on first reading. Seconded by Ms. Galimba. CHR KANEALII-KLEINFELDER: Council Member Kimball. MS. KIMBALL: Thank you, Chair. Again, thank you to everybody that helped. This is a companion bill to the previous one, Bill 43. And really our overall philosophy with developing these two bills, was we wanted to give a pathway for everybody that was legitimately engaged in commercial agriculture or providing food to our food systems; have a pathway for a tax benefit. We want to incentivize local agriculture. We want to incentivize the preservation of land in agricultural usage, and we want to incentivize the contribution of good products to our ecosystem. So, looking at the potential for phasing out the nondedicated Ag program as it exists now, we recognize now that hopefully most people will be pushed into now this long-term or short-term dedicated Ag program that most folks that are now in the non-dedicated program will go that way. Page 46 FC-9 April 18,2023 But, there's still going to be a subset of people that are contributing to our food systems in a meaningful way that maybe aren't doing traditional Ag or commercial Ag at this scale that these folks getting into this other program. So, we wanted to create a little bucket for that. Again, the reason I separated these two concepts out was, I think that Bill 43 can pass without the existence of Bill 44. However, I think the converse is not true unless you create that short-term dedicated program, and you create those guardrails on both programs; then Bill 44 doesn't make a ton of sense which is why it's separated out. The primary thing here is that you're limited to crops that are food related. So, you can't get into this program if you're growing trees for, you know, slow rotation forestry. It's only for food products, and there's a commitment that you are providing receipts of the sale or donation of that food. So, that's why we're looking at this program. It's instead of going at those rates that were indicated in the communication, you're looking at a 30 percent valuation of the property that's used for the production of the food. So, slightly different model. It's based on the percentage rather than these flat rates. But it's a percentage of market value. Council Member Galimba, I'll pass it to you if you if you want to go into any of the specifics. MS. GALIMBA: Okay, so again, it's repealing the Nondedicated Ag Program and adding the Community Food Sustainability Use Dedication Program. Basically, allowing for food production that doesn't have to meet that definition like commercial liability or commercial agriculture that in the previous two programs. So, Section 2 is repealing the "Nondedicated agricultural use program." Then, Section 3 provides a definition of, "Community food sustainability use," and as Chair Kimball pointed out, the forestry and pasture uses are not part of this program. However, I believe the intensive agriculture, you know, would include livestock, such as piggery and poultry. So, there is, I think enough leeway for different kinds of agriculture as long as it's going to be for community food use. The next section is about timing or the sunset of the nondedicated agricultural use program. Section 5 is again, the process of sunsetting, and nondedicated use assessment. And then, Section 6 is establishing the "Community food sustainability use assessment." I guess one of the highlights there is again, 30 percent of the fair market value. So, it's not as substantial of a benefit. Then you can also notice in this we don't have the equipment part. It would be just the farm plan or the organic certification, or the NRCS (Natural Resources Conservation Service)plan or food safety. Page 47 FC-9 April 18,2023 Then on the next page is the "Documentation of annual sales." To quality for this programso, it's a minimum of$1,000. So, documentation of annual sale at the time of renewal, "Sales or donations must be generated from the assessed property. Annual sales shall be documented through excise tax receipts. Donations of food must be to a non-profit 501(c)(3) organization." The next section is about the "Deferred or rollback tax,"which is under standard conditions. So, that's the details and I yield. CHR KANEALI`I-KLEINFELDER: Thank you. Council Member Inaba. MR. INABA: Thank you. I would just recommend, on Page three, Section (c)(3). I think that language covers kind of what we were talking about in the previous bill. "Shall include any of the following." Because I think the other one just said, "shall include the following." So that would just help to clarify. Then, I understand the intent. You know, this is providing benefit to community food sustainability. I just think of some of the folks who are doing this work here already, and I'm not sure that there's going you know, for some of them, they do community events of their own, but it's not a direct donation to a non-profit. But I do see where this whole thing fits into what they're already doing. So, I have to think about how this donation of food is really the qualifier, if you will, for them to be a part of this proposed section in the code. But understanding, you need some kind of way to quantify, right? So, I'll just think about it. But generally, in support of this in creating this new avenue. So, thank you for bringing this forward. Chair, I yield. CHR KANEALI`I-KLEINFELDER: Thank you. Council Member Evans. MS. EVANS: Thank you, Chair. Page two, I have a question. Just for consistency, Bill 43 suggested language on someone who might be leasing the land. So, if you look at(c)(3), it says, "The application must be signed by all owners of the land being assessed." Well, in the other one, you actually had underneath that, if someone is leasing the land and has `X' amount of years on it, you would allow them to do that. So, I don't know if you want for consistency purposes, to have—someone might be leasing the land versus owning the land? So, Chair, may I ask the question? CHR KANEALI`I-KLEINFELDER: Council Member Kimball, any response? MS. KIMBALL: Yeah, thank you. Actually, for this one, we wanted to restrict it to the folks that own the land. So, again, we're hoping that are in a situation where they're at the stage where they're leasing land to do agriculture and produce food. But they are actually more appropriately fitting into the short-term dedicated program rather than this community food sustainability. So, this is really just dedicated to people that are property owners. Page 48 FC-9 April 18,2023 MS. EVANS: I was just thinking if some young is on the land and they're got a 10, 15-year lease, maybe they would want to participate in this, but of course, anyway. That's just a question. I don't know—it was not the same, so it had a question mark there. The other thing is on Page three, at the bottom, under (4), you threw in "at the discretion of the Finance Director. Question, why would it be discretionary? MS. SAKO: I'm sorry, we may have missed the question. We were discussing something else. MS. EVANS: Page three at the very bottom, which is Subsection (4) of(c). It says the application is approved, renewed, etcetera, at the discretion of the Finance Director. So, my question is, why would we want to give discretion and not just require it? MS. KIMBALL: So if I may, the reason for that is, it's really going to be on this five-year cycle that we're checking for this legitimacy. This, have a done $1,000 in donations or sales from this property? Now, if there is concern from the assessors that they're not actually doing this community program, and they want to re-evaluate the application, the director would have the discretion to do that if there was some indication that maybe they were not following the guidelines of the program. MS. EVANS: Well, okay, Director, do you prefer having the discretion? MS. SAKO: I think it's similar to the way we do it now. Basically, Keita might be able to explain it better. But, you know, we do constantly re-evaluate and so, it's not an automatic thing that you're just going to automatically get renewed. MS. EVANS: Okay—it doesn't force you into that. Since I've never drafted legislation like this before, can there be sunset dates put on those like this, so that it forces out in the future, maybe three-four years to the Council to determine if it really was effective and it did what we had hoped it would do. Do we have sunset dates? I don't know. MS. KIMBALL: It's always possible to have sunset provisions. I think, yeah, it adds a layer of complication, but it's certainly mechanically possible to do. MS. EVANS: This is one I would like to see a sunset on. I'd like to see if this really achieves people who, you know, have their yard—in the back they have maybe ten fruit trees. And hopefully, this incentivizes them to contribute to a food source for the local community. I'd like to see, if in fact, people embrace and actually use it, or if they're not using it, why are they not using it? So, we could modify it because I think the idea has merit. I'm just wondering how it's going to roll out and really play out. Page 49 FC-9 April 18,2023 MS. KIMBALL: If I may, Chair? So, I think one of the arguments against this the idea of putting a sunset in at this point in time is that because this is tax policy and has to do with the annual assessment, it gets pretty complicated. Like we're proposing a three-year timeframe for us to sunset the nondedicated Ag program as it exists now, and then bring in this commercial Ag program. So, even if you had a sunset date, you would also have to build in another three years to transition from one program to another. What I would suggest, is that at the State, sunsets are more reasonable because it's more difficult to get legislation through to correct things later on. Whereas an amendment—if this isn't working out, and you know, we'll come and revisit this in a couple of years, if it's not working out, it's a simple code amendment to remove this provision. So, I think it's less desirable to have a sunset, perhaps, than you know, we have a little bit more flexibility and ability to change code at any time if we notice a program is not working out. MS. EVANS: Well if we remember, the point you do sunsets is it forces people to stop and take a look at it. But you know, I was under the impression, and I may be wrong, that we can pass out Bill 43 and it'll just run on its own, and we don't need Bill 44. Do we have to have Bill 44? Can you do one without the other, or are they really linked? MS. KIMBALL: If I may? Yeah, they were actually intentionally separated because I do think we can do the amendments to the long-term program. Create the short-term program, and then not create this community food sustainability program. In the event that there's not a desire by this body to create the community food sustainability program, I would suggest that I would withdraw Bill 44 and just propose legislation to sunset the nondedicated Ag program without creating this other program. MS. EVANS: Right. Well I do believe, at least in my district, people that, you know, have food in their yard have a tendency to go to the local grocery store and work with the produce person and get it sold. I mean, I just want to make sure that the intent, I think, of Bill 44 is to get a whole lot more people out there wanting to take the food that they have in the backyard that is falling off, rotting on the ground and seeing if we can incentivize them to get those oranges, and lemons, and limes, or whatever into the food system. I love the idea of incentivizing. I'm just concerned really if it'll be effective and work. Again, I like sunset dates, but you know, let's hear from my long-term colleague who's been here a long time if she has any thoughts on that. Thank you, I yield. CHR KANEALI`I-KLEINFELDER: Thank you. Council Member Lee Loy. Page 50 FC-9 April 18,2023 MS. LEE LOY: Thank you for inviting me into the conversation. I think like the previous bill, I think dialing in the gates in this chu chu train track of our Real Property Taxes is actually what will be critical. You know elevating the conversation from Ms. Evans, absolutely, those sunset dates kind of do this push and pull. Listening to the maker of the bill, I think there's enough teeth in the previous bill. The only thing I like that's in here is that incentive piece to give back to community, and if there was a way to dovetail that into the other one, that would be great. Those are my thoughts. I do have a question for the Director, though. Deanna, in light of the conversation that we had regarding Bill 43 and then now, Bill 44, and some of the dates contained within Bill 44. If we were to dial it in just right, it sounds like some of these programs will kind of happen in fiscal year 2025-2026. Is that a good estimate? MS. SAKO: Yeah, I think it will be Tax Year, 2025, which would be Fiscal Year 2026. That's correct. So, we just want everything to line up on the dates so that, you know, no one's left without anything for, you know, a period of time. MS. LEE LOY: Okay, yeah, those are my thoughts. Thank you, Chair, I yield. CHR KANEALI`I-KLEINFELDER: Thank you. Looking over the room, seeing no lights. You know, back to the same questions from Bill 43, this community food sustainability piece. Being that this can be zones, Ag, Residential, Family-Ag, Intensive-Ag. Can they participate in the homeowner's exemption program as well? MR. JO: They can participate in the homeowner's exemption program to get the exemption only. But if they're participating in this program as well as the homeowner's program, as it stands now, they would not be entitled to receive the three percent cap or the homeowner's tax rate. CHR KANEALI`I-KLEINFELDER: Okay. Mr. Jo, if you could mock up just a couple just kind of representations that you think fit the community the best as far as what savings would be? I'm thinking about in two lenses, property tax, revenue decrease or increase from these two bills; then the effect, positive and negative on the homeowners. You know, I'm thinking about the small residential lots in Hilo who would want to use this program. I'm thinking about your larger agricultural lots who would want to use this program, but if we don't have something visual to look at as far as what savings are; what people can do with their property, it's hard to make that assumption that it's going to work well for everyone. Or if this, you know, only a handful of people who can do it; or you've got to use, you know, what programs in unison together? Page 51 FC-9 April 18,2023 So,just something you think represents our community here in Hawaii County, the best and provides some good data for the Council when we look at this at Council. MR. JO: We can provide that to you folks. CHR KANEALI`I-KLEINFELDER: Beautiful. Thank you, Mr. Jo. Okay, seeing no further discussion, we do have the motion on the floor unless there's anything else, Council Member Kimball? MS. KIMBALL: Just want to make a couple of other quick comments. In the definition of the different Ag categories. It's in the code now and it's written there in the previous bill. But I wanted to just highlight that intensive agriculture does include piggeries, dairy, poultry, that sort of thing. So, intensive agriculture does include animal-related food products. Just wanted to highlight that. Then, with respect to Council Member Inaba's comment. You know, this idea of the $1,000 threshold donating to 501(c)(3) or sale, you know, that was our way to identify legitimacy. Like we do have to do something to identify legitimacy. These tax benefits that we provide are meant for people that are doing like backyard gardening. You have the homeowner's exemption for that. It is more for if you're contributing to the food systems. So, I think that there's room for different wording with respect to that, but that was our best attempt at coming up with a way to identify legitimacy. So, certainly welcome feedback on that that might include some other ways to establish legitimacy or just looking at that value of$1,000 is at the right value. So, and I'll take a look at drafting a sunset provision, and agree, Council Member Lee Loy, we do need to revisit these dates. We'll take care of that as well. Thank you. CHR KANEALI`I-KLEINFELDER: Thank you. Council Member Evans. MS. EVANS: Thanks Chair. I really liked your suggestion that we kind of get a mock up and understand the impacts of a choice. If someone chooses one or the other, do they lose a homeowner exemption? And having said that, I would like to see Bill 44 come back again and postpone it to the next time and get more information. I know that these two aren't tied together anyway. That's why I ask that question. I think the one has been so bedded,but this one needs a little more work. So, that's my suggestion. I yield. Motion to Postpone: Ms. Kimball moved to postpone Bill 44 to May 2, 2023. Seconded by Ms. Galimba. Page 52 FC-9 April 18,2023 CHR. KANEALI`I-KLEINFELDER: Okay, so we have a motion on the floor to postpone Bill 44 to the May 2, 2023, Committee Meeting. Council Members, discussion? Vote on to Postpone: Ms. Kimball moved to postpone Bill 44 to May 2, 2023. p p p (Approved) Seconded by Ms. Kagiwada and carried by the following voice vote: Ayes: Committee Members Evans, Galimba, Kagiwada, Kimball, Villegas, and Chair Kaneali`i-Kleinfelder—7. Noes: None. Absent: Committee Members Inaba and Kierkiewicz—2. Excused: None. ADJOURN- There being no further business, at 12:55 p.m., Ms. Lee Loy moved to adjourn MENT: the meeting. Seconded by Ms. Galimba and carried by the following voice vote: Ayes: Committee Members Evans, Galimba, Kagiwada, Kimball, Lee Loy, Villegas, and Chair Kaneali`i-Kleinfelder—7. Noes: None. Absent: Committee Members Inaba and Kierkiewicz—2. Excused: None. Approved: 41. Mr. Matt Kaneali`i- leinfelde�� Chair (Date) Finance Committee MK/dt Page 53