HomeMy WebLinkAboutCOM 0893.000 2012-2014 JMtVlOF
William P. Kenoi Nancy E. Crawford
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Mayor Director
Deanna S. Sako
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County of Hawaii
Finance Department
25 Aupuni Street, Suite 2103 • Hilo,Hawaii 96720
(808)961-8234 • Fax(808)961-8569
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May 15, 2014
J Yoshimoto, Council Chair and
Members of the Hawaii County Council
Hawaii County Council
25 Aupuni Street
Hilo, Hawaii 96720
Re: Amendment to the Hawaii County Code
Enclosed is a bill for an ordinance amending section 19-53 of Chapter 19, Article 7 of the
Hawaii County Code, related to Valuations; considerations in fixing. The purpose of this bill is
to modify the code to include the income approach as a consideration in the valuation of taxable
real property.
Currently, the County of Hawaii utilizes the cost and market(also known as the sales
comparison approach) approaches in the valuation of real property. The income approach is
considered to be the most applicable approach for most commercial properties by all
professional appraisal groups, and was recommended in an audit by the IAAO (International
Association of Assessing Officers). The addition of this approach, and the collection of income
data, will allow for a more accurate valuation of the properties in question, in conjunction with
the other approaches. It will also assist us in defending these values in Tax Appeal Court,
where it is already allowed, and extensively used by the appellants.
If you have any questions, please feel free to contact Stan Sitko at 323-4891, or Lisa Nahoopii
at 961-8260.
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Nanc Crawford
Director of Finance
Enclosure
<Bi as Comm. No. 3 _
Hawai'i County is an Equal Opportunity Provider and Employer Ref.TO: G
Ref. Date 15 2014
Form #: B-52
7/18/91
DEPARTMENT OF FINANCE
REQUEST FOR COUNCIL ACTION
DEPARTMENT: Finance, Real Property Tax Office DATE: 5/14/2014
STAFF CONTACT: Stan Sitko or Lisa Nahoopii PHONE: 323-4891 or 961-8260
A. REQUEST:
Approval to add the "income approach" to an acceptable valuation method to the Hawaii County Code
Section 19-53.
B. BACKGROUND AND JUSTIFICATION (USE ADDITIONAL SHEETS AS NEEDED):
Currently the County of Hawaii utilizes the cost and market (also known as the sales comparison approach)
approaches. The income approach is considered to be the most applicable approach for most commerical
properties by all professional appraisal groups and was recommended in an audit by the IAAO (International
Association of Assessing Officers).
In 2012, the County Council funded the IAAO audit which reflected forty recommendations.
Recommendation #26 states "The Council should consider Code changes to permit the use of the income
approach, especially for multi-family and commerical properties, in addition to the other recognized
approaches to value, when appropriate on the basis of data availability and type of property under
consideration. The Division should review data gathering methods to try maximize available income and
expense information."
The addition of this approach and the collection of income data will allow for a more accurate valuation of the
properties in question in conjunction with the other approaches. It will also assist us in defending these
values in Tax Appeal Court where it is already allowed and used by the appellants extensively.
SIGNED: DATE:
epartment Head