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HomeMy WebLinkAboutCOM 0024.000 2010-2012 U J �. v ..„.. TAX BOARD OF REVIEW County of Hawai'i 101 Pauahi Street, Suite 4 Hilo, Hawaii 96720 -4679 r,, December 15, 2010 --, o c--: _Jj The Honorable William P. Kenoi, Mayor . - County of Hawaii _, 25 Aupuni Street _,) Hilo, Hawaii 96720 - '' The Honorable Dominic Yagong and Members of the County Council County of Hawaii 25 Aupuni Street Hilo, HI 96720 Dear Mayor Kenoi, Chairman Yagong and Members of the County Council: Pursuant to Chapter 19 of the Hawaii County Code, enclosed please find the 2010 Annual Report of the Real Property Tax Board of Review. Thank you for your time. Respectfully submitted, (‘ , % -Cht,i.-. ...t Harold Murata, Chairman /enclosure cc: Nancy Crawford, Director of Finance Comm. No. Ref. To: r G- Ref. Date DEC 1 fi all11 William P. Kenoi c°` v , „��, Nancy E. Crawford Mayor r{• • Finance Director •��� i• Deanna S. Sako • "' Deputy Director � County of Hawaii DEPARTMENT OF FINANCE - REAL PROPERTY TAX Aupuni Center • 101 Pauahi Street • Suite 4 • Hilo, Hawai`i 96720 -4679 • Fax (808) 961 -8415 Appraisers (808) 961 -8354 • Clerical (808) 961 -8201 • Collections (808) 961 -8282 75 -5706 Kuakini Highway • Suite 112 • Kailua -Kona, Hawaii 96740 • Fax (808) 327 -3538 Appraisers (808) 327 -3542 • Clerical (808) 327 -3540 Website: www.hawaiipropertytax.com REAL PROPERTY TAX BOARD OF REVIEW 2010 ANNUAL REPORT December 15 2010 Introduction Pursuant to the provisions of Chapter 19, Article 12, Section 19- 97(e), Hawaii County Code as amended, the members of the Real Property Tax Board of Review submit the following report of activities and recommendations for the 2010 -2011 tax year. The recommendations relate to both legislative and administrative matters. The following is a list of the officers and members of the Board: Harold Murata, Chairman Wesley Takai, Vice - Chairman Reiko Ford Albert Kualii Potential appointees should be apprised of the demands of their time that service on this Board entails before their names are submitted to the County Council for confirmation hearings. All members are expected to attend all meetings. Meetings in Hilo or Kona may be a biweekly occurrence from July through November with two nights away from home or the office. Hawai `i County is an Equal Opportunity Provider and Employer 2010 Tax Board of Review Annual Report 2 Board Membership The following is a list of the Board members and when their term ends: Board Member Term Ends — December 31, Harold Murata 2010 Reiko Ford 2011 Wesley Takai 2012 (vacant) 2013 Albert Kualii 2014 With active searching by the Board Members, no candidate could be found to fill the vacant position. Activities Organizational Meeting The annual organizational meeting of the Board was held on March 2, 2010, at the Real Property Tax Conference Room in Hilo for the purpose of electing officers and establishing a tentative appeal hearing schedule for hearings to be held in both Hilo and Kona. A tentative workshop date and place were also set and there was a general legal discussion of Chapter 19, as well as a discussion of any bills relating to assessments. Deputy Corporation Counsel Craig Masuda provided a power point training session for the Members on rules and duties of the Board. The Real Property Assistant Tax Administrator, Mr. Michael McCall, discussed the changes made to streamline appraisers' presentations at appeal hearings. Minutes from meetings held on August 18, 19, 25 and 26, September 1, 2, 8, 9, 22 and 23, October 6, 7, 13, 14, 27 and 28, and November 3, 2009, were approved. 2010 Board of Review Statewide Conference The Board of Review Statewide Conference was held on May 7, 2010, at the Ala Moana Hotel on Oahu. There were approximately 100 guests in attendance including Board Members, Deputies Corporation Counsel and Real Property Tax Office Administrators and staff from four island counties: Oahu, Maui, Big Island and Kauai. Speakers included Robert Vernon, MAI, CRE, ASA, who did a presentation on the Testimony of Unlicensed Appraisers and Decision Making. An all County matrix was presented providing information on Board Members, schedules, appeal counts, Tax Appeal Court cases, decisions, forms and related costs. Information that was provided at the conference caused changes in rules and forms used by this Board. Interactive sessions were also held between the Attorneys, Board Members and County Appraisers. It was apparent to the attendees that primarily the Oahu Boards have a rift and lack of communication with the Oahu Real Property Tax Division. Our Board Members have a very amicable relationship with their Real Property Tax staff. 2010 Tax Board of Review Annual Report 3 The amount of outreach we have with our Real Property Tax Division compared to other Counties is very heneficial to thi Board Workshop A workshop was held on May 26, 2010, at Coconut Grill with Board Members, including newly appointed Member Albert Kualii, and Real Property Tax Office administration, Appraiser V, and support staff in attendance. Also present were Nancy Crawford, Finance Director, Deanna Sako, Deputy Director, and Deputy Corporation Counsel Craig Masuda. New Board Member, Albert Kualii, was sworn in at the workshop by Mrs. Crawford and formally introduced to those in attendance. Attendance at this year's workshop was based on last year's recommendation by the Board and was found to be beneficial to the Board Members. The workshop proved to be a very informative session as well as educational for Board Members and staff. Opening remarks was provided by Mrs. Crawford and Mr. Masuda, who also did a power point presentation on Board rules, procedures and the appeal process. Assistant Tax Administrator Michael McCaII presented information on the Sales Ratio Analysis, Mass Appraisal and Cost Approach, Valuation of Commercial Properties and Appraiser Training. Clerical Supervisor June Ban presented information on the different types of exemptions available. Appeal Hearings One thousand forty (1,040) appeals, which included 265 from East Hawaii and 775 from West Hawaii, plus appeals from amended assessment notices (P38s), were scheduled for hearing this tax year. This is a decrease from 1,449 cases in the previous tax year. There were six (6) sessions held in East Hawaii (July 6, 7; August 3, 4; and September 14, 15) and ten (10) sessions held in West Hawaii (July 13, 14; August 10, 11, 17, 18; September 20, 21; and October 19, 20). Complaint Hearing As required by Chapter 19- 97(e), a notice was published on September 22, 2010, specifying a period (September 22 — 30, 2010) within which complaints may be filed by a taxpayer. One (1) complaint was filed. The reason for the complaint was the lack of providing sales comparables. The Board heard the complaint on November 16, 2010, and is attaching a copy of the complaint hereto as Exhibit A. Also attached is a copy of Real Property Tax Office's communications with the complainant. 2010 Tax Board of Review Annual Report 4 Comments and Recommendations Board's Comments 1. The procedure of rendering an immediate decision in open session upon the completion of the presentation of each appeal case continues to be accepted by all parties and is still an efficient process. 2. The half -day workshop which included the Real Property Tax staff and Board members prior to the start of hearings was very informative and productive. Future workshops is encouraged to continue with attendees limited to the current Board Members as well as those Members who are in the process of being approved, Finance Director, Tax Administrator, Assistant Tax Administrator, Appraisal Supervisor, Clerical Supervisor, Board Secretary and Corporation Counsel. Again, all information discussed and suggestions presented at the workshop should be provided to the appraisers at a separate meeting or workshop. The suggestion of providing a workshop for the appraisers made at the 2010 workshop by the Board Members was not acted upon. 3. The presence of Corporation Counsel at each meeting /hearing is very helpful and is encouraged to continue. The Board has relied upon Corporation Counsel in many instances for clarification and interpretation of rules and /or laws. 4. The Board of Review Statewide Conference with participants from other Counties provided Board Members with the opportunity to review issues and laws from each County that affects Real Property Tax Board of Review policies and functions. Providing the Members with a chance to gain more knowledge in different issues as well as being able to interact with other Members from the various Boards, Real Property Tax staff, and Corporation Counsel benefits all those involved. Board Members would like to recommend to the organizers for the 2011 conference to continue having the interactive sessions between Attorneys, Board Members and staff. Break -out sessions which would separate all Board Members, Attorneys, Board Secretaries as well as clerical support personnel, and appraisal staff into smaller groups would be of benefit to the attendees as discussions could be held on practices, issues, experiences and outcomes. Attendance at this conference is encouraged to continue. 5. Although the Board Members have been provided with Appeal Data Worksheets prepared by the County appraisers, County should be working towards having the appraisers standardize their forms so all information is presented in the same order and manner. Presentations may vary for appraisers and at times have caused unnecessary delays in appeal case hearings. 6. While the Board appreciates the attempt of the Division to standardize its presentation thru the use of the Appeal Data Worksheet, greater consistency and efficiency could be gained by the appraisers also following a standardized practice on exhibits and oral presentations as well. The Board also appreciated the presence of the Assistant Tax 2010 Tax Board of Review Annual Report 5 Administrator who was able to anticipate questions of the Board and had the information at hand nr was able to ro remntPly arracc pperty tax information via la ! P " " " vi i � �uuv� i via laptop. 7. While the Board found that the Division has made significant efforts to improve some appraisers still could not respond fully to the Board inquiries. 8. There was definitely a great stride this year with Corporation Counsel and the County conducting training sessions for the Board although the sessions were more impromptu rather than the suggested half -day sessions as recommended in the Board's 2009 report. Corporation Counsel did a great job in selecting issues that benefited the Board as well as instructing tax office staff in the preparation of material that was presented during the long breaks that became available between scheduled morning and afternoon hearings. These training sessions were meaningful to the Members as they could relate the issues to particular cases that were recently presented. 9. Newly hired appraisers were provided with the opportunity to sit in and observe several case hearings. Allowing the appraisers to observe will help the department review and re- evaluate items 6 and 7 above on a continuous basis. 10. The Board suggested and the division expressed concern about providing a "pricing ladder" worksheet as a standard form in the Appeal Data Worksheet packet prepared by appraisers. Their position on this matter was that the multitude of data on the County's printout would make this a confusing and complex issue and it would not be feasible for the County to pay the modification cost to redesign this page mainly because the Board made this recommendation. A simple spreadsheet format containing the requested information should decrease the presentation time of each case. There would be little need to describe each component in detail and the Board will spend less time interpolating values. 11.There are currently two (2) main programs provided by the County which protects homeowners from large increases in assessments during times of large increases in property values — non - speculative residential dedication program and the three percent (3 %) growth cap program. There are less than 1,000 properties in the non - speculative dedication program (originated in 1992) versus the 33,000+ properties under the growth cap program (originated in 2004). The majority of the dedication properties will need to renew their petition by September 1, 2011 should they wish to remain in this program. There is a rollback provision in this program with back taxes that could be retroactive up to ten (10) years if the owner breaches the conditions of the dedication. The growth cap program does not have a rollback provision. Board's Recommendations 1. The practice of actively seeking and training new Board members is encouraged. d v 2010 Tax Board of Review Annual Report 6 2. The vacancies to be left by Harold Murata and the current vacant position should be filled prior to the organizational meeting to he Crhedoeri in Ma 9011. Tr sessions should occur shortly thereafter. 3. The Board continues to recommend that the feasibility of a more aggressive outreach program to inform and educate citizens of this County on real property issues be considered. The Board has heard many cases where a better informed and educated citizenry could have prevented the filing of appeals. The number of appeals filed this year was in part due to the building values of properties not eligible to be in the homeowner's 3% growth cap. 4. Again, the Council might want to be proactive to enhance the viability of small businesses by considering discounts and /or exemptions. Value added local agricultural commodity processing plants (e.g. dairy products, meat processing, macadamia nut processing, coffee processing) should be given a discount on the commercial property values to preserve and encourage local food production. Education should be given to assist small businesses (e.g. the provisions for enterprise zones and urban revitalization). 5. The Board continues to recommend that the Real Property Tax Division update their website to be educational and informative to the taxpayers. 6. The Board continues to recommend that Section 19- 53(e)(2)(A) should be amended to include in the homeowner's class an owner /occupied property used for care giving and /or care home. Under the current code, an owner /occupied property that is partially used for a home - occupation and /or a rental qualifies to be in the homeowner's class but a property partially used as a care home does not qualify for this class, per the County's Planning Department. 7. Sales data should be shared and used amongst the real property appraisal staff for their annual re- evaluations to avoid large differences in values between relatively comparable neighborhoods within close proximity to each other. The uniformity and equality provision of the County Code requires a quality control program. 8. The Board recommends that a "pricing ladder" worksheet be provided as a part of the County's Appeal Data Worksheet packet prepared by appraisers. This worksheet should be included as a standard document in each appeal information packet. 9. The Board has recommended over the past few years that prior years' market and assessed values be posted on the County's Real Property Tax website. Appellants have stated on many occasions that they have attempted to compare prior years' assessments with their neighbors but the information was not available on the website. It seems that this could readily be addressed since the prior years' assessments are part of the division's database. 10. The Board again recommends that market modeling be implemented. Market modeling is the term commonly used by the real property tax division for the mass appraisal of 2010 Tax Board of Review Annual Report 7 improved properties (primarily single family residential type properties) by the sales rmmpari annrnanh (vPrci is the cost annrna 11. It is highly recommended that training sessions continue to be provided for the Board as time permits. It is also recommended that training material provided for the Board by the County be compiled into an informational manual to use as a reference guide for future Board Members. 12. The Board recommends that the County continue to provide new appraisers with the opportunity to observe appeal case hearings. It is further recommended that the experienced appraisers also be provided with the opportunity to observe the presentations of their colleagues if time permits. 13. The Board recommends that the non - speculative residential dedication program be repealed. Close Chairman's Comments - None — Submitted by Members of the Tax Board of Review: 7\ ....-- l Harold Murata Wesley T Chairman Vice - Chairman `7 —4 , Reiko Ford Albert Kualii Member Member EXHIBIT A RP Form 19 -97(e) (Rev 03/2009) Dept. of Finance COUNTY OF HAWAII REAL PROPERTY TAX BOARD OF REVIEW 101 Pauahi St., Ste. 4, Hilo, HI 96720 75 -5706 Kuakini Hwy., Ste. 112, Kailua -Kona, HI 96740 TAXPAYER'S NOTICE OF COMPLAINT USE OF THIS FORM WILL NOT RESULT IN ASSESSED VALUE CHANGES USE RP FORM 19 -91 (APPEAL APPLICATION) FOR ASSESSMENT APPEALS NOTICE is hereby given that oyrktir-tvfru: } I + t �S`':7 (Name of Taxpayer) hereby files this complaint to the County of Hawaii Real Property Tax Board of Review. The real property identified as Tax Map Key No. lI () 2 © 1 )_ , for tax year 2010 - 20 l: l , has been improperly valued for real property tax assessment purposes. County's Valuation: Land: \3 )04 Building: „749 I (We) believe that the proper assessment value of the property is as follows: Taxpayer's Valuation: Land: '',27 q2C Building: !'C ,.fir The c: grounds of objection to the County's valuation are: T h�1e.. ytIf Ztt , ,^ 1 ' 1i :d -- t l/ CO ' �' k , C Y' . E' ' NM_ a i i, v i) / Q, t im + '4 a e li i & t!, jhv °4- rill, .- " c' l L [ r gupLoit :) 40.- , - ttuf j)--h, p y;\ 6\A,i, , ,v_tat, `-- Eke/Li, wi.11 vAt+ -170 ti � f t. Signed : Igi AI /ki (1' 44`') Dated: "1 k it C) Ta •. } Day Phone el ' ' C ' i Mailing Address: (/ 4 -- ( 3- 1- t: i iC PI 77), t I li I a.(1-- ( 1( 59 FOR TAX OFFICE USE ONLY _:--- sue_. . `3/4"--- Receipt Acknowledged: Dated: 20 1(LL Hawai `i County is an Equal Opportunity Provider and Employer REQUEST TO ACCESS A GOVERNMENT RECORD DATE: 0- / 1 47 0 Department of Finance Division: ` 0 / Y P TO: County Y D �' FROM: C` '4401 ' ' t�Z1 i�� t.e� (41/4 1 Name or Alias Contact Information JJ q Ot �ttc r = ' , - �fI ._ ■ /�1 l I (/ Izo A . /J,- `6, Although you are not required to provi,'e any personal information, you should provide enough information tc allow the Department to contact you about this request. The processing of this request may be stopped if the Department is unable to contact you. Therefore, please provide any information that will allow the Departme, to contact you (name or alias, telephone or fax number, nailing address, e -mail address, etc.). I WOULD LIKE THE FOLLOWING GOVERNMENT RECORD: Describe the government record as specifically as possible so that it can be located. Try to provide a record name, subject matter, date, location, purpose, or names of persons to whom the record refers, or other information that could help the agency identify the record. A complete and accurate description of the government record you request will prevent delays in locating the record. Attach a second age if need • d. . Ctli ak aiidur 4 .00 c_ l',. i__ ori a_./ 3 1 i a_ 't e' iii ' 1 - 1 / . ' - 1 - A T h i w- toed 1, : 7iniiinte giiiiirid (t c at t v--e_s Air - ZD i 0 , I WOULD LIKE: (Please check one or more of the options below.) I ITo inspect the government record. i ' A copy of the government record. (Please check one of the opt ,! • ' , i) k_ ' ; `, information about fees that you may be required to pay for agenc , Copying and transmission charges may also apply to certain opts ti ,.( I II will pick up the record on (date and tune): lease mail the record to me at the above address. 1 - lill / I 7please fax me the information (toll free only): Fax t 1 'Other, if available (please specify): ' . j - I The government record in the following format (if it is mainta ' I (Electronic I 'Audio Other (please specify): • I IA fee waiver because this request is in the public interest (see waiver information on back). For Finance Department Use only. Date received: ' 'Required 1 (initiated by Requester I 'Disagreement over denial I I Fees over $15 I 'Other OVER Pnrr,. I nr Z - - s , William P. Kenoi �s7 °F H� Nancy E. Crawford Mayor �R'�C' �1 Finance Director Deanna S. Sako '• == =` Deputy Director -.Tt, 01 Nl County of Hawaii DEPARTMENT OF FINANCE - REAL PROPERTY TAX Aupuni Center • 101 Pauahi Street • Suite 4 • Hilo, Hawaii 96720 -4679 • Fax (808) 961 -8415 Appraisers (808) 961 -8354 • Clerical (808) 961 -8201 • Collections (808) 961 -8282 75 -5706 Kuakini Highway • Suite 112 • Kailua -Kona, Hawai`i 96740 • Fax (808) 327 -3538 Appraisers (808) 327 -3542 • Clerical (808) 327 -3540 Website: www.hawaiipropertytax.com May 24, 2010 Charlene K. Rodrigues 94 -032 Hokupalemo PI. Mililani, HI 96789 Re: TMK (3) 8 -2- 005 - 025 -0000 Ms. Rodrigues: I am enclosing a copy of the email response from the zone appraiser, her analysis for her proposal to reduce your land assessment, and information extracted from the recorded sales data of vacant land sales in 2009 in South Kona. These were not used to value your parcel because of there location and the fact that they justified the assessed values on the lots. If they were used your assessment would be around $22.00 per square foot, or $315,300. The appraiser's settlement offer is lower and is based on an analysis of a 2010 sale, which occurred after the 1/1/10 assessment date. Regarding the building value, we do not have comparables per se. We are not using a market modeling system to set our values, so we do not have actual comparables. Instead we are using cost tables which are based on actual construction costs and market based adjustments for physical condition and age, functional utility, and economic conditions. These cost table values are compared to actual market sales, and we have consistently been within 10% of the full market, normally on the low side. The current sales ratio studies have not been completed for this year, but I am sure they will be similar to the previous years, showing we are under assessing the majority of property. After the appraiser inputted the changes mentioned in her email, your assessed building value is a little over $70,000 less than its replacement cost. We can print out the actual tables used in this calculation, but the last time we did it upon a request it took 8 reams of paper and cost in excess of $400.00. If you want a copy of these tables, I can get an exact dollar amount it would cost. I hope what I am providing you with meets your request. If not, please let me know what other specific things you want. I am returning your $2.00 check, as what we are sending you is what we would normally send anyone upon a request. If you have any questions, feel free to call me at (808) 961 -8260, or the appraiser, Angie Metriyakool at (808) 327 -3528. Sincerely. yours, Michael B. McCall Enclosures CC: A. Metriyakool Hawai `i County is an Equal Opportunity Provider and Employer Page 1 of 1 McCall, Mike From: M An Sent: Monday, May 24, 2010 11:07 AM To: McCall, Mike Subject: RE: Request for Records Attachments: Napoopoo and values.xls Hi Mike, I'll send over what I have. There was a recent ocean front lot sale in April 2010 for $1.2 Mil across the street from the subject. I analyzed older sales in the area and extracted a ratio of non oceanfront to oceanfront values and applied it to that recent $1.2mil sale. I came out with a value of $346,000 (see attached spreadsheet) for a non oceanfront lot and chose to settle at more conservative values closer to $300,000 for land on the non oceanfront Tots in the area (due to the appraisal methods used). After inspecting Charlene Rodrigues's property I also noted that the carport was miscoded as a garage and made the change for 2011. In addition to this the improvements showed deferred maintenance, specifically chipped and peeling stucco and a significant amount of missing roof shingles. The adjustments made for the CDU and carport indicated a new building value of $209,000. So basically, the settlement offers a land value of $300,000 and a new building value of $209,000 for a total of $509,000. I'll input the sketch in CA22 today as well. Let me know if you need any other info. Thanks, Angie From: McCall, Mike Sent: Thursday, May 20, 2010 12:27 PM To: Metriyakool, Angie Subject: Request for Records Angie, I just received an official request for copies of any records /files you have that were used to set the and values for TMK 8 -2- 005 - 025 -0000. Please send them to me ASAP as I need to respond to the request. Looking at the parcel it appears that the last time the value was changed was for 2007, so I assume that there has been nothing since to lower values. Just give me whatever you have, even if it justifies no change. Thanks, Michael B. McCall Assistant Administrator (808) 961 -8260 mmccall@co.hawaii.hi.us 5/24/2010 , TMK 3- 8- 2 -6 -16 Vacant NonOceanfrnt land Sold 5/6/2005 $560,000 TMK 3- 8- 2 -5 -13 Sold 10/4/2005 $2,100,000 'improvement Extraction: 864sf x $150 /sf $129,600 324sf x $40 /sf $12,960 315sf x $25 /sf $7,875 864sf x $10 /sf $8,640 Total $159,075 Depreciation:9Years Marshall & Swift Nrml Depr. /LE 25Yrs 25% ($39,769) Depreciated Value of Improvements $119,306 Site Costs: Septic, Grading, Utilities $20,000 Total Contribution of Improvements $139,306 Oceanfront Land Value $1,960,694 Ratio of NonOceanfront to Oceanfront 0.28561319 Current Values: TMK 3- 8- 2 -5 -31 Vacant OF land Sold 4/30/2010 $1,239,000 Vacant NonOF land @ 28% $346,920 All parcels analyzed were approximately 10,000sf lots No size adjustments were deemed necessary. Cost figures for Improvement Extraction were taken from appraisers files of 2005 building costs. Normal Depreciation applied per Marshall and Swift with a life expectancy of 25 years for improvements. Analysis of Land Value Sale Date Size Price Assm't Per SF Appeal Parcel: 8 -2- 005 - 025 -0000 14331 391200 27.30 2009 Recorded Sales (South Kona): 7 -8- 011 -041 -0000 4/6/09 16422 350000 336300 21.31 7 -8 -011- 046 -0000 5/1/09 15194 359000 330900 23.63 No change made in assessments as sales prices were comparable to current assessments.