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HomeMy WebLinkAboutCOM 0024.001 2010-2012COI !!TY RK ? 1' DEC 29 PM 2: 3 TAX BOARD OF REVIEW County of Hawai'i 101 Pauahi Street, Suite 4 Hilo, Hawaii 96720 -4679 December 29, 2011 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 2011 Annual Report of the Real Property Tax Board of Review. Thank you for your time. /enclosure cc: Nancy Crawford, Director of Finance Respectfully submitted, Albert Kualii, Chairman Comm. No. Ref. To F� c- Ref. Dote JAN 4 2012, William P. Kenoi Mayor CCU VTY CLERK OU"T" r�t 2 H DEC 2 9 Pil 2: 31 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 West Hawai`i Civic Center • 74 -5044 Ane Keohokalole Hwy. • Bldg. D, 2nd Flr. • Kailua Kona, Hawaii 96740 Fax (808) 327 -3538 • Appraisers (808) 323 -4881 • Clerical (808) 323 -4880 Website: www.hawaiipropertytax.com REAL PROPERTY TAX BOARD OF REVIEW 2011 ANNUAL REPORT December 29, 2011 Introduction Nancy E. Crawford Finance Director Deanna S. Sako Deputy Director 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 2011 -2012 tax year. The recommendations relate to both legislative and administrative matters. The following is a list of the officers and members of the Board: Albert Kualii, Chairman Wesley Takai, Vice - Chairman Reiko Ford Michael D'Amico Scott Church 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 2011 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, Reiko Ford 2011 Wesley Takai 2012 Albert Kualii 2013 Scott Church 2014 Michael D'Amico 2015 Activities Organizational Meeting The annual organizational meeting of the Board was held on March 8, 2011, 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. Real Property Appraisal Supervisor Jon Pike was present on behalf of Administrator Stanley Sitko and Assistant Administrator Michael McCall. Mr. Pike requested information from the Board as to items they wished to discuss or have information presented on at the State Board of Review Conference. Minutes from meetings held on September 14, 15, 20 and 21, October 19 and 20, and November 16, 2010, were approved. 2011 Board of Review Statewide Conference The Board of Review Statewide Conference was held on May 27, 2011, at the Pacific Beach Hotel on Oahu. There were approximately 120 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. An all County matrix was presented providing information on Board Members, schedules, appeal counts, Tax Appeal Court cases, decisions, forms and related costs. Legal panels comprised of Deputies Corporation Counsel for the Boards of Review from each County as well as for the Real Property Tax Offices provided attendees the opportunities to present questions as well as receive information on various topics and questions that was answered by each of the individual Counties. A few of the topics discussed were assessments, property comparables, appeal forms, evidence presented and Board procedures and decisions. The organizers of the conference did a good job in keeping everyone in order and prevented the communications from including only Oahu County, which was a problem with conferences years prior. 2011 Tax Board of Review Annual Report 3 Workshop A workshop was held on June 7, 2011, at the Hilo Hawaiian Hotel's Mala lkena Room with Board Members, Real Property Tax Office administration, Appraisal Supervisor and support staff in attendance. Also present were Finance Director Nancy Crawford, Deputy Director Deanna Sako, and Deputy Corporation Counsel Craig Masuda. New Board Member, Michael D'Amico, 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 the Board's recommendation 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 presentation on the Code of Ethics, Powers and Duties of the Board, parliamentary procedures and topics from the 2011 Board of Review Conference. Administrator Stanley Sitko presented information on the Sales Ratio Analysis as well as information on foreclosure sales and arms - length transactions. Attendees were also provided with the opportunity to review and discuss the Tax Board of Review 2010 Annual Report and the Board's recommendations. Appeal Hearings One thousand forty -six (1,046) appeals, which included 331 from East Hawaii and 715 from West Hawaii, plus appeals from amended assessment notices (P38s), were scheduled for hearing this tax year. This is an increase from 1,040 cases in the previous tax year. There were seven (7) sessions held in East Hawaii (July 12, 13; August 16, 17; September 20, 21; and November 15) and eight (8) sessions held in West Hawaii (July 19, 20; August 23, 24; September 27, 28; and October 11, 12). Complaint Hearing As required by Chapter 19- 97(e), a notice was published on September 4, 2011, specifying a period (September 14 — 28, 2011) within which complaints may be filed by a taxpayer. No complaints were filed. 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. 2011 Tax Board of Review Annual Report 4 2. The workshop, which included the Real Property Tax staff and Board Members held prior to the start of this year's appeal 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, the Finance Director, Deputy Director, Tax Administrator, Assistant Tax Administrator, Appraisal Supervisor, Clerical Supervisor, Board Clerk 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 Board recommends that the separate workshop be continued and that Administration organize a mandatory island -wide workshop to include all Appraisers prior to the start of the appeal hearings. 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. It was great to know that the organizers of this year's conference followed the Board Members' recommendations to continue having the interactive sessions between Attorneys, Board Members and staff, more importantly, agendized break -out sessions which separated all Board Members, Attorneys, Board Secretaries as well as clerical support personnel, and appraisal staff into smaller groups. The purpose of the break -out sessions was the benefit all attendees would receive as discussions could be held on practices, issues, experiences and outcomes for each specific group. The Board recommends that the statewide conference be continued and that the Board's attendance be funded. 5. The Board Members appreciated the Appraisers' efforts to follow their recommendation to standardize the formatting of their data packet and keeping the attachments to a minimum. Maps showing the location of the appealed parcel and the comparables used by some appraisers were very helpful. Such maps should be one of the standard attachments to the appeal data packet. The satellite pictures were also helpful and impressive. 6. The Board again appreciated the presence of the Assistant Tax Administrator who was able to anticipate questions of the Board and had the information at hand or was able to remotely access property tax information via laptop. 7. While the Division has made significant efforts to improve, a few Appraisers could not respond fully to the Boards inquiries. The Board suggests that greater training emphasis be done on establishing additional training on mass appraisal standards. The Board also recommends that in initiating their presentations that the Appraisers identify the data and methodology used for their assessment. 2011 Tax Board of Review Annual Report 5 8. The Board again appreciated the impromptu training sessions conducted by Corporation Counsel and the Assistant Tax Administrator. These sessions were probably more meaningful to the Members than the suggested half -day sessions recommended in the Board of Review's 2009 Annual Report. The 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 5 and 7 above on a continuous basis. 10. The Board previously suggested that the Division provide a "pricing ladder" worksheet as a standard form in the Appeal Data Worksheet packet prepared by Appraisers. The Board recommends that the Appraisers provide, as part of their packet, the per square foot cost based on their system of the square foot living area and delineation between multiple floors. 11. The Board noted the need to revise or eliminate the non -spec residential program. 12. The annual schedule set by the Board of Review should be made a priority in the Real Property Tax Division's annual activity calendar to avoid conflicts as experienced in the past few years. 13. The Appraisers should strive for greater uniformity in assessments and appeal settlement agreements within neighborhoods. 14. The Board Members are aware that the public has a huge misperception of the motivations, goals and responsibilities of the Real Property Tax Division with regard to assessments and tax rates. The individuals interacting with the Board were seasoned professionals, working within well structured guidelines, making fair and reasoned valuations, etc. The Division should use all forms that are available to better inform the public of its roles and responsibilities. 15. The Board Members would like to thank the Assistant Tax Administrator, Michael McCall, for the great job he had done these past few years in scheduling and facilitating the appeal hearings. 2011 Tax Board of Review Annual Report 6 Board's Recommendations 1. The practice of actively seeking and training new Board members is encouraged. 2. The vacancy to be left by Reiko Ford should be filled prior to the organizational meeting to be scheduled in March 2012. Training 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. The Board recommends that all Appraisers attend a mandatory all- island workshop prior to the start of the appeal hearings to receive the information and material discussed at the Board's annual workshop. 5. The Board again 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 the Appraisers provide information on the per square foot cost based on their system of the square foot living area and delineation between multiple floors. This worksheet should be included as a standard document in the Appeal Data Worksheet packet prepared by the Appraisers. 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. 2011 Tax Board of Review Annual Report 7 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 improved properties (primarily single family residential type properties) by the sales comparison approach (versus the cost approach). 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. With the pending retirement of the Assistant Tax Administrator prior to the appeal hearings in 2012 and with the majority of the appraisal staff, including the Appraisal Supervisor, being new or relatively new employees, it is important that intensive training be scheduled early next year. One of the most important training items is the presentation of Chapter 19 and how its provisions relate to real property appraisals. Close Chairman's Comments - None — 2011 Tax Board of Review Annual Report 8 Submitted by Members of the Tax Board of Review: Albert Kualii Chairman Reiko Ford Member Michael D'Amico Member Wesley Takai Vice - Chairman ott Chu Member