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HomeMy WebLinkAboutMIN FC 2018/07/24 2016-2018Committee on Finance 39t` Session West Hawaii Civic Center 74-5044 Ane Keohokalole Highway, Building A Kailua-Kona, Hawaii July 24, 2018 CALL TO The regular meeting of the Committee on Finance was called to order at ORDER: 1:32 p.m., in the Council Chambers, Kailua-Kona, by Ms. Karen Eoff, Vice Chair. ROLL CALL - Present: Ms. Karen Eoff, Acting Chair Mr. Aaron S. Y. Chung, Member Mr. Dru Mamo Kanuha, Member Ms. Susan L. K. Lee Loy, Member Ms. Eileen O'Hara, Member (via videoconference from Hilo) Ms. Valerie T. Poindexter, Member Mr. Herbert M. "Tim" Richards, III, Member (via videoconference from Hilo) Ms. Jennifer Ruggles, Member (came in later) Absent: Ms. Maile Medeiros David, Chair ACTING CHR. EOFF: Council member David is absent today. She has a minor medical procedure, so as Vice Chair I'm going to be chairing the Finance Committee. STATEMENTS The Chair directed the Committee to proceed to the next order of business, FROM THE Statements from the Public on Agenda Items. PUBLIC ON AGENDA ITEMS (There were none.) COMMUNI- The Chair directed the Committee to proceed to the next order of business, CATIONS: Communications. ACTING CHR. EOFF: Mr. Clerk, let's move on to Communication 7.24. Comm. 7.24: MONTHLY BUDGET STATUS REPORT FOR THE MONTH ENDED MAY 31, 2018, FROM THE DEPARTMENT OF FINANCE From Finance Director Deanna Sako, dated June 27, 2018, transmitting the above report pursuant to Hawaii County Charter Section 6-6.3(h). FC -39 July 24, 2018 Vote on Comm. 7.24: Ms. Poindexter moved to close file on Comm. 7.24. Filed Seconded by Mr. Kanuha and carried by the following voice vote: Ayes: Committee Members Chung, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, and Acting Chair Eoff – 7. Noes: None. Absent: Committee Members David and Ruggles – 2. Excused: None. ACTING CHR. EOFF: Let's move on to Communication 377.4. Comm. 377.4: FOURTH QUARTER REPORT OF PERSONS EMPLOYED UNDER A CONTRACT FOR LESS THAN 90 DAYS: APRIL 1 – JUNE 30, 2018 From Human Resources Director William V. Brilhante, Jr., dated June 29, 2018, transmitting the above report pursuant to Section 2-12.5 of the Hawaii County Code. Motion to Close File: Ms. Poindexter moved to close file on comm. 377.4. Seconded by Mr. Kanuha. (Note: At this time, Deputy Finance Director Nancy Crawford came forward to address the members of the Committee.) ACTING CHR. EOFF: Any questions or comments, Council Members? MS. O'HARA: I have one, Chair. ACTING CHR. EOFF: Ms. O'Hara. MS. O'HARA: With the contract for the last individual named here, it appears this is something recent that has occurred since the eruption. ACTING CHR. EOFF: I'm sorry, Ms. O'Hara, which one were you pointing out? MS. O'HARA: I'm sorry, are we are on Communication 7—maybe I'm on the wrong communication. Is it 377.4? ACTING CHR. EOFF: Yes. I just didn't hear what you said. MS. O'HARA: Okay. Oh, no. What I was saying is—and Ms. Crawford's trying to get a copy of it. You can have mine, if you'd like. Well, I'm not sure if that's appropriate. I don't know. But it's an individual that was hired for Civil Defense GIS (Geographical Information System) specialist, and the date of hire is the date Page 2 FC -39 July 24, 2018 of the eruption, so I'm assuming that it was eruption related. Is this going to be something that we're going to be compensated for? MS CRAWFORD: Nancy Crawford, Deputy Director of Finance. Yes, that is an allowable cost. This is because they don't currently have a GIS specialist in there. They were able to bring someone in on contract, who's been serving us very early on in the event and will be eligible for not full reimbursement but should be eligible for the 75 percent that FEMA (Federal Emergency Management Agency) reimburses, and has been absolutely essential in the ongoing reporting. Not only related to coverage and parcels lost and so forth, but also the coverage and planning for everyone to report and coordinate and see where we're at at any given point and time. MS. O'HARA: That's what I was hoping to hear. I actually believe that Civil Defense should have a position like this on a regular basis. I'm really glad we could find somebody to come in to serve that need. MS CRAWFORD: Right, they have a vacant position right now. She's filling in on a contractual basis. MS. O'HARA: Alright, thank you. Thank you for answering. ACTING CHR. EOFF: Okay, thank you, Ms. O'Hara. Anybody else? Seeing none, all in favor please say "aye." Vote on Comm. 377.4: The motion to close file on Comm. 377.4 was carried by Filed the following voice vote: Ayes: Committee Members Chung, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, and Acting Chair Eoff — 7. Noes: None. Absent: Committee Members David and Ruggles — 2. Excused: None. ACTING CHR. EOFF: Communication 976. Comm. 976: FOLLOW-UP AUDIT REPORT: COUNTY OF HAWAII PURCHASING From Legislative Auditor Bonnie S. Nims, dated June 26, 2018, transmitting the above report pursuant to Hawaii County Charter Section 3-18(4)(3). Motion to Close File: Ms. Poindexter moved to close file on Comm. 976. Seconded by Mr. Kanuha. Page 3 FC -39 July 24, 2018 ACTING CHR. EOFF: Is Ms. Nims in the Hilo Chambers? MS. O'HARA: Yes, she is. ACTING CHR. EOFF: Okay, thank you. Then, Council Members, do you have any questions or does Ms. Nims want to make a brief presentation? (Note: At this time, Legislative Auditor Bonnie S. Nims came forward to address the members of the Committee.) MS. O'HARA: Perhaps you could just give us a real short summary. It's not a very long report. ACTING CHR. EOFF: Ms. Nims? MS. NIMS: Hi. Bonnie Nims, Legislative Auditor. We just recently reissued a follow-up report on our County of Hawai`i's Purchasing Card Program audit that was originally issued in July of 2015. We did do some limited research and found that the County had implemented all six of our audit recommendations. In addition, just to verify that recommendations had been implemented, we did look at all pCard transactions from August 2015 through December 2017. We did pull 67 transactions for review, totaling about $24,000, and we found that they were following the County policy. So we will consider ongoing monitoring as stated in our audit plan throughout the next fiscal year, basically just spot-checking vendors, seeing if there's anything that would have any questionable County purposes. That's about all I have. ACTING CHR. EOFF: Okay, thank you, Ms. Nims. Council Members, do you have any questions? Ms. Lee Loy. MS. LEE LOY: Thank you. Thank you, Ms. Nims. I just had a question. At the conclusion of your audit, you mentioned considering "ongoing monitoring of purchase card transactions as part of our fiscal year 2018-2019 audit plan." When is that audit plan coming out? Is that in October? MS. NIMS: Actually, I think that's a typo issue. It should be fiscal year 2017-2018. That will probably also consider the 2018-2019 plan also. MS. LEE LOY: And then, one follow-up question. You mentioned 67 receipts over a time period. What percent would that encompass of all purchase cards? Page 4 FC -39 July 24, 2018 MS. NIMS: I'm sorry, I don't have that number off the top of my head. I can get it for you, if you'd like. Typically, there's quite a few in a given month. I'd say it's a fairly low percentage that we felt the need to follow-up with. MS. LEE LOY: Okay, thank you. I yield. ACTING CHR. EOFF: Thank you. Any other comments or questions? Seeing none, then all in favor please say "aye." Vote on Comm. 976: The motion to close file on Comm. 976 was carried by the Filed following voice vote: Ayes: Committee Members Chung, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, Ruggles, and Acting Chair Eoff — 8. Noes: None. Absent: Committee Member David —1. Excused: None. ACTING CHR. EOFF: Moving on to Communication 977. Comm. 977: FOLLOW-UP AUDIT REPORT: VARIABLE FREQUENCY DRIVES FOR PARKS AND RECREATION SWIMMING POOLS From Legislative Auditor Bonnie S. Nims, dated June 29, 2018, transmitting the above report pursuant to Hawaii County Charter Section 3-18(4)(3). Motion to Close File: Ms. Poindexter moved to close file on Comm. 977. Seconded by Mr. Kanuha. (Note: At this time, Legislative Auditor Bonnie S. Nims came forward to address the members of the Committee.) ACTING CHR. EOFF: Any questions or comments? Bonnie, would you like to give us a brief overview of this one? MS. NIMS: Sure, I'd be happy to. Bonnie Nims, Legislative Auditor. Again, this is a follow-up report from an audit that we did in June 2015oh, I'm sorry, December 2015. Basically, we had two recommendations for the Department of Parks and Recreation to implement variable frequency drives at some of their pools. The specific recommendations, including developing program measures and I'm sorry, plan and budget for installing addition VFDs (Variable Frequency Drives). Based on our audit, we found that there was a significant cost saving as these VFDs are implemented at pools. We found that both of our recommendations have been partially implemented. Page 5 FC -39 July 24, 2018 In September 2017, Parks and Recreation applied for and received a rebate of $11,000. If they keep installing these VFDs, not only will we get the energy cost savings back but we also get the rebates, so they typically pay for themselves in just a few years. When we looked at the cost savings or the energy cost for the Kona Community and Aquatic Center and the Laupahoehoe pool, we found both a 21 percent savings at the Kona Community Aquatic Center as well as a 15 percent saving at Laupahoehoe, so pretty significant cost savings by implementing these VFDs. We want them to continue trying to develop some program measures and try to put that into a formalized plan to realize that cost savings. ACTING CHR. EOFF: Thank you. Questions, Council Members? Ms. Lee Loy. MS. O'HARA: Chair, I just wanted to let you know that the Deputy Director and Director of Parks and Recreation just arrived, if there's any questions for them. ACTING CHR. EOFF: Ms. Lee Loy, did you want to ask your question? Go ahead. MS. LEE LOY: Thank you, Chair. And again, Bonnie, you know I always enjoy reading your reports. Your conclusion section on this one is "Despite the department's efforts, auditors determined that the cost savings associated with the audit team's initial findings has not been fully realized." If they were to stay on track, would you have a best guess on when we could fully realize the potential of these cost savings through the cost of energy reductions? MS. NIMS: Sure. In our initial audit, we did take a look at the six swimming pools and did a projected cost savings based on actual cost savings from previously installed VFDs. We did find in five years that if—Parks and Recreation could save the County approximately $600,000. MS. LEE LOY: Thank you. I'm going to yield. Maybe at some point Ms. Waltjen or Mr. Messina might be able to provide their thoughts on continuing this cost saving program. I yield. ACTING CHR. EOFF: Thank you. Mr. Richards. MR. RICHARDS: Thank you, Chair. So, Bonnie, just looking really quick, it's a 2006 recommendation for three swimming pools. And then the report actually says two, so one of them has not been done. Is that what I'm reading here? MS. NIMS: Sorry, my auditor is not in attendance and he has the details. MR. RICHARDS: Okay, no worries. We have Director Waltjen and Deputy Messina here. Page 6 FC -39 July 24, 2018 (Note: At this time, Parks and Recreation Director Roxcie Waltjen and Deputy Director Maurice Messina came forward to address the members of the Committee.) MR. MESSINA: Maurice Messina, Deputy Director of Parks and Recreation. MR. RICHARDS: Yeah, thanks, Moe, for being here. I realize this is 2000 looks like 2006, when it first started. It predates all of us. But then reading the report, it looks like two of them have been done, two out of three have been done, and so the third one is still on deck. Is that correct? MR. MESSINA: That's correct. What we're trying to figure out right now isso we've got a couple of issues at some of our pools and we're trying to go out for bids to fix these pump rooms in these pools. What we would like to do is install the third one at one of these pools when we fix it. Basically all at the same time. That's our goal in this one. MR. RICHARDS: Okay. And then obviously from the report, it looks like we're getting about 20 percent savings on our power, so obviously the sooner we start implementing it, the better long-term. I appreciate the fact there's a capital investment upfront that we have to fund that going forward, so it's balancing that. Okay, that makes sense to me. I yield. ACTING CHR. EOFF: Okay, thank you, Mr. Richards. Ms. Lee Loy has a follow-up question. MS. LEE LOY: Thank you, Chair. Mr. Messina, Ms. Waltjen, thank you. You know, I wanted to give you folks an opportunity. But I'm beginning to hear is that there are other problems with the facilities that require attention to, regarding the age of the infrastructure and some of the infrastructure, like the pumps. So it's kind of the hip bone is connected to the leg bone. It's hard to realize the cost savings, if some of the other pool equipment isn't working properly. Is that a safe assumption? MR. MESSINA: Yes, it is, and that's exactly the way we're looking at it too. As we're working with the different companies that are looking to put bids in on our pools and the pump equipment itself, that's what we have to do. You know, do we install brand new into an old pump room that could, like really degrade what it should be doing, where we don't realize the 20 percent cost differential; or when we go into this new pump room to make the new repairs and make everything up to par, then we go in and put this to where—it is going to cost the money to upgrade these facilities the way they need to be. For instance, the Kohala swimming pool, the pump room in there is really bad. But if you would go and look at the Pahoa swimming pool, at the pump room in there, and you look at the way it looks now after the all the upgrades and just how beautiful it is, that's the Page 7 FC -39 July 24, 2018 kind of pump room that you need to put these VFDs in to realize our cost savings, yes. I hope I answered your question. MS. LEE LOY: Thank you, yes. Maybe this might be an opportunity for the department to provide me a thumbnail sketch on a strategic plan on these different repairs and how we begin to realize a return on investment. So with the capital improvement of repairing the pumps, you know, what's the return on investment? Is it an energy saving cost, you know, better quality? Maybe that's an opportunity for the department to put something together as we move forward, especially into our next budget cycle, which we know will be extremely challenging. So, I yield. Thank you. MR. MESSINA: And to answer your question, that is exactly what we're doing. But not just at our pools, to every one of our facilities, including the zoo, the golf course, Mauna Kea recreational area, every single facility that we have. That's exactly what we're doing. Once the budget got passed, we're doing a complete countywide assessment of every facility we have. What are the shortcomings? What can we live with? What can work for another couple of years, while we look to put our funds onto the facilities that are really degraded and maybe even have a little bit of a bigger impact on the community that surrounds those facilities? MS. LEE LOY: Thank you for that, Mr. Messina. I really do appreciate that. You know, we all have to be working harder and smarter and really making sure we are using our tax dollars in the most effective and efficient way possible. Chair, I yield at this time. ACTING CHR. EOFF: Thank you, Ms. Lee Loy, and thank you, Mr. Messina. Ms. Nims, is there anything more to add? MS. O'HARA: Chair, I have a few questions. ACTING CHR. EOFF: Sure, Ms. O'Hara. MS. O'HARA: Thank you, Chair. You mentioned, Bonnie, that you had looked at six pools. MS. NIMS: In the original audit, yes. MS. O'HARA: And what were those six pools? MS. NIMS: Honoka`a, Kohala, Kona Aquatic Center, Konawaena, Laupahoehoe, and NAS (Naval Air Station). MS. O'HARA: Okay, so you didn't look at the Pahoa pool? Page 8 FC -39 July 24, 2018 MS. NIMS: Not at the time, no. MS. O'HARA: Okay. And how many pools do we have in total, Parks and Recreation? MR. MESSINA: Approximately ten. I would have to get you those exact numbers. MS. NIMS: I hope we don't have one that we MR. MESSINA: Yeah, we also have—right. MS. O'HARA: So we have agreements for use of other pools? I got you, okay. How long do these VFDs warranted for? How long are they expected to last? MS. NIMS: I'd have to get you that information, I'm sorry. MS. O'HARA: Okay. Because pumps are generally, what, seven years average, or are we talking longer than that? MR. MESSINA: Well, it all depends on what our MS. O'HARA: Not that they always last that long, but yeah. MR. MESSINA: So when wePahoa pool, for instance. MS. O'HARA: Okay. MR. MESSINA: We have a very stringent preventative maintenance schedule that we're doing on all of our facilities. So we don't just put the pump rooms in there and just let them run. We have a very stringent preventative maintenance schedule. So when you see that, for instance, a diaphragm starting to wear, through our preventative maintenance inspections, we can notice that. We can make them last a lot, lot longer. For instance, my vehicle has 275,000 miles on it because I do a lot of preventative maintenance on it; so just like that, that's the way we're trying to run everything. Everything that we do now, the way we're inspecting all of our equipment—even our roofs now, because we want to make everything last longer and just try to fix it as we go. That way, we don't have one big problem at the end. MS. O'HARA: Thank you for that, I appreciate. Preventative maintenance is the way to go, and sometimes we're not able to do that and we pay the price. But yeah, I was just kind of curious how those warranties—how they travel alongside each other and whatnot, your need to upgrade some of the other pool pumpage so that it's relevant and worth putting the VFD. Page 9 FC -39 July 24, 2018 MR. MESSINA: For instance, when our electricians go into a pump room, even though they're just looking at one piece of equipment, they inspect every single thing around so they can let us know. Because one of the things that our director tells these guys, "Don't let us know of a problem after something explodes or blows up, or it's bad or starts leaking." We want to know about problem way beforehand so that we can fix it. You know, instead of spending $500,000 to fix an entire pump, well, maybe we can spend $2,000 to fix one piece of equipment, That if it goes out, it has a cascading effect on other equipment. MS. O'HARA: Thank you. I'm a little aware of having run a large size community pool for five years. Things happen. Anyway, great. Appreciate it. Thank you. MR. RICHARDS: Chair? ACTING CHR. EOFF: Mr. Richards. MR. RICHARDS: Thank you. Deputy, what I think I heard you say, you're coming up with a list of all the maintenance that you believe that we really need to get done, and you'll be putting that together and then bringing it to Council relatively soon. Is that what I'm hearing? I was going to ask how much is it going to cost to do the pool pump room repairs? But if that's part of the whole process going forward—and I fully appreciate you don't want to put a piece of brand new equipment into something that's going to fail and then lose that piece of equipment, that doesn't make a lot of sense. Is that what I'm hearing, you're trying to put together the wish list for fixing? MR. MESSINA: So, not just that. We're actually going out and inspecting every one of our facilities. In every one of facilities, we want to know, okay, create a punch list for every one of our facilities. For instance, your pool, we're going up to do the bids to fix the Kohala pool right now. MR. RICHARDS: Okay. MR. MESSINA: But yeah, we want a punch list for every single one of our facilities because there are some that are out there that have been there for years and years and years, and there's something that's been wrong that we don't even know about. But if we know about it, we can fix it. MR. RICHARDS: Okay, alright. Yeah, so I won't push you on that one. But we'll be getting that list in a recently near future or at least the first crack at the list? The reason I'm asking is, as was stated, when we start looking towards the budget, the sooner we start knowing what scale of needs, that will help us start planning for the future. We're going to start talking about next year's budget very soon. Page 10 FC -39 July 24, 2018 MR. MESSINA: That's exactly, actually almost word-for-word for what Roxcie—the reason she said wanted this. MR. RICHARDS: That's why we get along, Roxcie. Alright, I yield. ACTING CHR. EOFF: Okay, thank you, Mr. Richards. Any other follow-up comments or questions? Seeing none, then all in favor of filing Communication 977 please say "aye." Vote on Comm. 977: The motion to close file on Comm. 977 was carried by the Filed following voice vote: Ayes: Committee Members Kanuha, Lee Loy, O'Hara, Poindexter, Richards, Ruggles, and Acting Chair Eoff – 7. Noes: None. Absent: Committee Members David and Chung – 2. Excused: None. ACTING CHR. EOFF: Can you please read Communication 978? Comm. 978: ANNUAL AUDIT PLAN FROM THE OFFICE OF THE LEGISLATIVE AUDITOR From Legislative Auditor Bonnie S. Nims, dated June 26, 2018, transmitting the Fiscal Year 2018-19 Audit Plan, pursuant to Hawaii County Charter Section 3-18(4)(2). Motion to Close File: Ms. Poindexter moved to close file on Comm. 978. Seconded by Mr. Kanuha. (Note: At this time, Legislative Auditor Bonnie S. Nims came forward to address the members of the Committee.) MS. NIMS: Hi. Bonnie Nims, Legislative Auditor. In our 2018-2019 plan, based on some risk assessment, which includes general themes that we've identified through national organizations, constituent complaints, concerns that we hear during Council meetings, any number of risk -identifiers, based off of that information we develop our audit plan of the audits that we are planning to initiate during the next fiscal year. This is just a plan. It's not set in stone. They do tend to fluctuate based on increased concerns, emergencies that we may need to look at, et cetera. We manage the contract for the Financial and Single Audit of the County, so that is every year on our audit plan. Page 11 FC -39 July 24, 2018 This year we have five self -initiated performance audits planned, including building permits, facilities maintenance, real property tax, road maintenance, and overtime. We also have three follow-ups planned: Information Technology, Asset Management, from 2015; cash handling at Parks and Recreation, from 2016; inventory management at Public Works - Highways Division, from 2017. We're also continuing our audit from Council's Resolution 287-17, on Department of Water Supply contingency plans. This year we're also hoping to do some ongoing monitoring of surprise cash accounts. Kind of checking on a surprise basis any department that's receiving cash over the counter. Making sure that cash is accounted for and that internal controls are working. We will also consider spot checking purchasing card expenditures and travel expenditures. So that is our grand plan for this next year. I'm happy to answer any questions. ACTING CHR. EOFF: Okay, thank you. Questions, Council Members? Ms. Lee Loy. MS. LEE LOY: Thank you, Chair. Ms. Nims, on the self -initiated performance audit, you know, the five listed there, are they prioritized based on that matrix? MS. NIMS: Not typically. We try to work with the departments and their schedules. You know, if we know that they're having staff change or a system change, like an IT (Information Technology) system change, we may put it off for a few months. We may go back and forth between a couple. We realize that we work on top of an already overworked schedule typically, so we try not to over burden our departments but still try to get our work done. So it's not prioritized, necessarily, but we try to get what we can. MS. LEE LOY: So that message, just alphabetical. MS. NIMS: Hyperbetical? MS. LEE LOY: Well, alphabetical. MS. NIMS: Oh, alphabetical. Coincidentally, yes, it is. MS. LEE LOY: Okay. Well, if I could suggest? At building permit process, I think would go a long way for the entire County. You know, that's an opportunity for us to expedite construction, bring more real property tax revenue into the County, and if there was anything I would like to prioritize, it would be that one for sure. Just my suggestion. I yield. Page 12 FC -39 Vote on Comm. 978 Filed ORDER OF RESOLUTIONS: July 24, 2018 MS. NIMS: Thank you. ACTING CHR. EOFF: Okay, thank you. Any other comments or questions of Ms. Nims? Anyone in Hilo? No. Okay. Well then, thank you very much for presenting this ambitious plan. We look forward to the reports. MS. NIMS: Thank you. ACTING CHR. EOFF: All in favor of filing Communication 978 please say Ic aye. The motion to close file on Comm. 978 was carried by the following voice vote: Ayes: Committee Members Chung, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, Ruggles, and Acting Chair Eoff — 8. Noes: None. Absent: Committee Member David —1. Excused: None. ACTING CHR. EOFF: Okay, moving to Resolutions. The Chair directed the Committee to proceed to the next order of business, Order of Resolutions. ACTING CHR. EOFF: Resolution 616. Res. 616-18: AUTHORIZES A DECREASE IN THE COUNTY OF HAWAII FUEL TAX FOR FISCAL YEARS 2018-2019 AND 2019-2020 Decreases the fuel tax by 5 cents per gallon for Fiscal Year 2018-2019, bringing it to 14 cents per gallon, and by 9 cents per gallon for Fiscal Year 2019-2020, bringing it to 14 cents per gallon. Fuel taxes may be used to support the safe and efficient operation of County roads, mass transit, and highway infrastructure. Reference: Comm. 940 Intr. by: Mr. Richards Postponed: May 21 and June 5, 2018 (Note: There is a motion by Mr. Richards, seconded by Ms. Lee Loy, to recommend adoption of Res. 616-18.) ACTING CHR. EOFF: Okay, thank you. Mr. Richards, there's a motion on the floor already. Page 13 FC -39 July 24, 2018 MR. RICHARDS: Thank you, Chair. Chair, this was all part of kind of a tax restructuring that we were looking at before our island blew up. I had postponed it; I asked to defer it until a later date. I'd like to do it one more time to probably the first week of October. Our County is still not settled, and I don't think it's prudent to do anything about our income streams at this point, until we have a better understanding. We're starting to get a better feeling of where we're going, but I'm not comfortable of doing anything at this point. So I'd like to postpone it until the first Council meeting, excuse me, Committee meeting of October. Clerk, if you could give us a date on that one? MR. HENRICKS: As of now, it's schedule for Tuesday, October 2. ACTING CHR. EOFF: Okay, so is that the motion, postpone until October 2na. MR. RICHARDS: Yes. Vote on Motion Mr. Richards moved to postpone Res. 616-18 to to Postpone: October 2, 2018. Seconded by Ms. Poindexter and (Approved) carried by the following voice vote: Ayes: Committee Members Chung, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, Ruggles, and Acting Chair Eoff — 8. Noes: None. Absent: Committee Member David —1. Excused: None. ACTING CHR. EOFF: Mr. Clerk, Resolution 636-18. Res. 636-18: AUTHORIZES A GRANT OF EASEMENT 5-41 ON, THROUGH, AND/OR OVER A PORTION OF KAOMOLOA ROAD, LOT R-1 OF FILE PLAN 1683, TAX MAP KEY NO.: 6-7-003, FOR SEWER PURPOSES TO WAIMEA WASTEWATER COMPANY, INC., SITUATED AT LALAMILO AND WAIKOLOA, WAIMEA, DISTRICT OF SOUTH KOHALA, ISLAND, COUNTY AND STATE OF HAWAII The roadway contains an area of approximately 860 square feet, and would be used for a sewer easement to serve the Lualai Subdivision, with an anticipated sales price of less than $1,000. Reference: Comm. 980 Intr. by: Ms. David (B/R) Motion to Approve: Mr. Richards moved to recommend adoption of Res. 636-18. Seconded by Mr. Kanuha. Page 14 FC -39 July 24, 2018 (Note: At this time, Nahua Guilloz of Parker Ranch came forward to address the members of the Committee.) ACTING CHR. EOFF: I have a note that Nahua Guilloz from Parker Ranch is in Hilo, is that correct? MR. RICHARDS: She's in the Waimea office. ACTING CHR. EOFF: She's in the Waimea office. MR. RICHARDS: Ask Nahua to come up? ACTING CHR. EOFF: Yes, if she's available. Mr. Richards, shall we see what she has to offer first or would you like to ask some questions? MR. RICHARDS: No, I think, let's just go ahead and start with Nahua. I can see her at the Waimea office. Go ahead, Nahua. Introduce yourself, and could you give us a quick overview, please? ACTING CHR. EOFF: Oh, there she is. MS. GUIL,LOZ: Hi. My name is Nahua Guilloz. I am a Vice President, Business Administration, at Parker Ranch, and I also am the Corporate Secretary for Waimea Wastewater Company. So this was basically a grant of easement that was overlooked. In the process of cleaning up our easements, jut making sure everything was correct, we noticed that this one was missing. Part of the road has already been dedicated to the County. (Note: At this time, Corporation Counsel Joseph Kamelamela came forward to address the members of the Committee.) ACTING CHR. EOFF: Council Members, Mr. Kamelamela is here and he's prepared. I'm not sure if you had something you wanted to tell us or are you just here ready for questions? MR. KAMELMELA: Good afternoon, Chair and members of the County Council. So what she had said is correct. ACTING CHR. EOFF: Okay. Okay, are there any further questions regarding Resolution 636? Hearing none, all in favor please say "aye." Page 15 FC -39 July 24, 2018 Vote on Res. 636-18: The motion to recommend adoption of Res. 636-18 was (Approved): carried by the following voice vote: Ayes: Committee Members Chung, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, Ruggles, and Acting Chair Eoff — 8. Noes: None. Absent: Committee Member David —1. Excused: None. BILLS FOR The Chair directed the Committee to proceed to the next order of business, ORDINANCES: Bills for Ordinances. ACTING CHR. EOFF: Mr. Clerk, Bill 163. Bill 163: AMENDS ORDINANCE NO. 18-68, AS AMENDED, THE OPERATING BUDGET FOR THE COUNTY OF HAWAII FOR THE FISCAL YEAR ENDING JUNE 30, 2019 Appropriates revenues in the State Grants — Hawai`i Tourism Authority account ($145,000); and appropriates the same to the Hawaii Tourism Authority account. Funds would be used by the Department of Research and Development to develop and implement its Ho`okaulike Signage project. Reference: Comm. 983 Intr. by: Ms. David (B/R) Vote on Bill 163: Ms. Poindexter moved to recommend passage of Bill 163 on (Approved): first reading. Seconded by Mr. Kanuha and carried by the following voice vote: Ayes: Committee Members Chung, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, Ruggles, and Acting Chair Eoff — 8. Noes: None. Absent: Committee Member David —1. Excused: None. ACTING CHR. EOFF: Bill 165. Page 16 FC -39 July 24, 2018 Bill 165: AMENDS CHAPTER 19, ARTICLE 10, OF THE HAWAII COUNTY CODE 1983 (2016 EDITION, AS AMENDED), RELATING TO REAL PROPERTY TAX EXEMPTIONS FOR DISABLED OR UNEMPLOYABLE VETERANS Removes the phrase "totally disabled" from Section 19-73, and replaces with "100 percent disabled or 100 percent unemployable, or both." Further amends Section 19-73 to exempt disabled or unemployable veterans from all real property tax, where "totally disabled" veterans are currently subject to the minimum tax provided for in Section 19-90(e). Reference: Comm. 989 Intr. by: Mr. Kanuha Comm. 989.1: From Council Member Dru Mamo Kanuha, dated July 20, 2018, transmitting proposed amendments to Bill 165. Motion to Approve: Mr. Kanuha moved to recommend passage of Bill 165 on first reading. Seconded by Ms. Lee Loy. ACTING CHR. EOFF: Mr. Kanuha. MR. KANUHA: Thank you, Madam Chair. This bill came about byI had constituents coming into my office, trying to explain to me that when we increased the minimum tax, was it last year or the year before, from $100 to $200, that minimum tax for those that were 100 percent disabled also increased. I mean, across the board everybody had to pay that minimum tax, and they said it doubled the amount that they were going to have to pay. They came to me saying it really put a burden on some of the members in the community having to pay this double amount, and I agreed with that. So I went to Finance and Real Property Tax, just to find out who's in this category, you know, all the different details involved. Really, at the same time that this was happening, the Real Property Tax Task Force came out with recommendations, and one of the recommendations was that the veteran disability annual real property tax be zero. I was like "wow," you know, this is all kind of coming out at the same time. So let's try to move this forward. The Real Property Tax Working Group gave the recommendation to do this. Not really this year but the next fiscal year, 2019, which I'm going to have an amendment to change the date that this goes into effect. But basically to receive this benefit, the current program requires that the veteran be 100 percent disabled or 100 percent unemployable due to a service related injury, and that the property needs to be the veteran's primary residence. This program currently has—we have Lisa Miura and Nancy Crawford in Hilo, but I'm pretty sure these numbers are all correct. Maybe they can correct me if I'm wrong. But currently has 600 parcels, and at the current $200 minimum tax the County receives about $121,000 in revenue annually. The Tax Board or Working Group discussed this pretty extensively, but the consensus with the group was that Page 17 FC -39 July 24, 2018 these were 100 percent disabled veterans due to a service related injury and that they've already paid the ultimate sacrifice. So that was why they recommended this to us, which is why I believe that it should be introduced, and it was really a good thing for our County to do. So we cleaned up some of this language. Instead of you seeing "totally disabled," the VA (Veterans Administration) now goes with 100 percent disabled or 100 percent unemployable. So we just added that language into coincide with the VA and how they process these applications. It's not an easy thing to be 100or to get that status. But the VA does a lot of outreach with the veterans. We really go off of what the VA—how they do the applications. Lisa can tell us more about how they go through with it. I thought this was a good thing to do for our veterans and it just made a lot of sense to me. Really, that's how this process works, having our community members come in to us, advocating for a certain position that we put forth these bills. But if there's any questions, I'd be happy to answer it. I do have an amendment coming forth, and I can do that after discussion. But I ask for your support. Questions, you have Finance Department in there for questions as well. I'll yield at this time, and I just ask for your support. ACTING CHR. EOFF: Council Members, do you have any questions or would you like to hear from Lisa Miura? Lisa, are you available? (Note: At this time, Real Property Tax Administrator Lisa Miura and Assistant Administrator Keita Jo came forward to address the members of the Committee.) ACTING CHR. EOFF: Thank you. MS. MIURA: Good afternoon. Lisa Miura, Real Property Tax Administrator. And I also have Keita Jo here, who is the TA (Temporary Assignment) to the Assistant Administrator position, if you have any questions. ACTING CHR. EOFF: Do you want to add any statistics or information for us? MR. JO: Keita Jo, Acting Assistant Administrator for Real Property Tax. I just wanted to provide some updated numbers. The numbers provided earlier were based off of 2017 certification, so we have since certified 2018. Our current count for individuals who are receiving the veteran's disability is 656, and the taxes that are represented of that would $131,200. ACTING CHR. EOFF: Okay, thank you. Council Members, do you have questions? Page 18 FC -39 July 24, 2018 MS. O'HARA: Chair, I do. ACTING CHR. EOFF: Ms. O'Hara. MS. O'HARA: Yes, of the 656, do they currently have to demonstrate that they're disabled as a result of a service injury? MR. JO: Yes. The certification goes through the Veterans Administration. So the Veterans Administration actually has to sign off on the disability application. MS. O'HARA: So this would not change anything that they currently have to do. They already are doing that in order to get a reduction in property tax. MR. JO: Correct. MS. O'HARA: Previously, my understanding was that they were charged $50. Is that correct? And then it was raised to $100, do I have that correct? Or was it $75 raised? No? MR. JO: From my understanding, they had always paid the minimum tax. So the minimum tax was $100 and been since increased to the $200 class. MS. O'HARA: Oh, okay. I thought there were couple other categories with minimum tax. No? MS. MIURA: Well, if their—because they all have—in some case, the dwelling was worth a lower amount and they had the primary homeowners, it did mean that they could have paid a little bit less, so it just depends. But that was also tied to the homeowner. MS. O'HARA: Okay. And so the reduction to total revenues would be $131,200 if this were enacted in this year; but this would be not enacted in this year, the following year. MS. MIURA: It would be in the following year with the draft. MS. O'HARA: Okay, I think that answers my questions. Thank you. ACTING CHR. EOFF: Okay, thank you. Any other questions? MR. RICHARDS: Chair? ACTING CHR. EOFF: Oh, I'm sorry. We'll go to Mr. Richards. MR. RICHARDS: Okay, just really quick. Lisa, thanks for the statistics. I will be supporting this. Councilman Kanuha, I appreciate you bringing this forward to us. Page 19 FC -39 July 24, 2018 This is in the right direction. This is what we had talked about. And as we were trying to go through all of our dealing with real property tax, I think this is one of the things that we had an oversight, so this is correcting that. Thank you very much. I'll be supporting. ACTING CHR. EOFF: Okay, thank you. Mr. Chung. MR. CHUNG: Yeah, it's of course very difficult going against something that is really an appreciation for our veterans who gave the ultimate sacrifice. However, I'm troubled by the elimination of the minimum tax, and I'm going to voting against this for that reason. You know, what happensI don't know how much—what was that figure, about one hundred somewhat thousand dollars? It may seem like a small amount in the grand scheme of things, but it is after all $100,000 less in in our coffers. What happens there is, that means someone else has to pick up the tab, and that's been the criticism of the minimum tax throughout the years, I mean, in whatever form it's taking. But we support it, you know, particularly for the elderly, those who have lived here many, many years. They've contributed to the communities. We want to at least pay back. Same thing with the veterans, we want to recognize what they've given to all of us, but I still think they've got to pay the minimum tax. When they're 100 percent unemployable, 100 percent disabled, it conjures images of people who—because you're unemployable, you can't earn a living. But they're receiving benefits from the United States government. It's not like they cannot pay. I don't want to seem like a cold-hearted bastard or anything like that, but I just think that we have a minimum tax and that is the minimum tax. It's designed to help people. Now we're going to take it away, that means something else has to—we have to raise taxes again somewhere else to balance our budget. I'd like to give. I always want toyou know, it's easy to give away things, but at some point, it becomes a dangerous, slippery slope. So I have to be voting against this, sorry. Thank you. ACTING CHR. EOFF: Comments, Council Members? Ms. O'Hara. MS. O'HARA: Chair, I have a couple. I do have concerns about eliminating the tax all together down to zero because it is the case that when we don't pay for something, we tend not to value it as much. Now, if I understand correctly, this class was previously paying $100 as minimum tax. Is that correct? MS. MIURA: Correct. MS. O'HARA: Okay, and at that rate did we have requests for appeals on that or were you hearing from this population? Page 20 FC -39 July 24, 2018 MS. MIURA: In every group, we always have some that feel they shouldn't pay any tax. So I would say that through the years this part of our Code is no different. We have had individuals feel that they shouldn't have to pay tax. MS. O'HARA: Okay. But generaly that was an acceptable amount for the majority? At least they were paying it. I mean, you didn't have a lot of nonpayment on this class. MS. MIURA: Correct. MS. O'HARA: Okay. Would it be worth considering, and I'm just throwing this out to Mr. Kanuha who has this bill going, to consider creating a minimum tax for disabled veterans. Is that something that we could potentially consider? I don't know; I guess I should also ask the Real Property Tax Director. MS. MIURA: You're asking if they can pay a different amount, the $200 to $100? You could propose that. MS. O'HARA: Yeah, that might be a consideration. I don't know what Mr. Kanuha thinks about that, but it kind of plays it in the middle a bit. I yield. ACTING CHR. EOFF: Okay, thank you for that comment. Any other comments? Ms. Ruggles. MS. RUGGLES: Thank you. First, I want to appreciate Mr. Kanuha for bringing this forward. I honestly didn't know that this was an option for us to do. When we first had heard increasing the minimum tax, I was adamantly against it because of its effect on disabled veterans, and I believe I brought that up. A lot of my district, namely the upper areas, Fern Forest and Eden Rock, the most isolated, the most impoverished areas, with no access, public transportation or services, would be subject to this doubling in their taxes while they live on fixed income. These are people who—they're one hundredI mean, they're disabled. They cannot work anymore, a lot of the them, because of the sacrifices that they made. When they believed that they were standing up for our freedom and put their life on the line physically, mentally, emotionally, and spiritually. Certainly, they are getting benefits but they paid a cost to get those benefits. So unless we're actually going to increase their benefits, then any increase to their cost of living, like their property tax, they have no opportunity to accommodate for. I whole-heartedly support this. I think it was—out of all the tax increases that we looked at, to put the highest increase, we doubled their tax. We gave small percentage increases in all the other types of taxes that we have, but we haven't doubled a tax like this. So we doubled it on the most disadvantaged, struggling Page 21 FC -39 July 24, 2018 population of our constituents. So to reverse that, I think, is appropriate. I hope that it passes. Thank you. ACTING CHR. EOFF: Thank you, Ms. Ruggles. Any other comments or questions? Mr. Kanuha. MR. KANUHA: Thank you for all the discussion, and I appreciate everybody's discussion on this. Just the point to Ms. O'Hara, this thing is still in play. We can amend this bill however we choose to. If somebody wants to put forth an amendment to the $100 minimum, you know, it's going to be discussed. I just did this because I thought it was the right thing to do and it also coincided with the recommendation from the Tax Review Working Group. I thought this was the good thing to do. It's open for amendments now and into the future. I'm still going to ask for your support at this time. I yield. ACTING CHR. EOFF: Any other questions or comments? I just wanted to ask Mr. Kanuha a question. So the recommendation from the Task Force was to drop it from even the $100 minimum down to zero? That was one of the? Thank you. Okay, any other questions? Then we'll go ahead and MS. LEE LOY: Chair? ACTING CHR. EOFF: Ms. Lee Loy. MS. LEE LOY: Thank you. Maybe this is a question for Ms. Miura. You know, I'm listening carefully to all of the discussion. My general concern is, are we creating like a special category that's not for anybody else? My concern is this may create somewhat of a slippery slope. So my question is, Ms. Miura, is this unique? MS. MIURA: It would be for us as the County in the State of Hawaii. There are other counties that do have other programs that pay zero tax, but we would be the only ones doing a full or zero tax for disabled veterans. MS. LEE LOY: So what I'm hearing you say, it's not your Maui County, or City and County of Honolulu, they do zero tax? MS. MIURA: Not that we're aware of, unless they recently changed. MS. LEE LOY: During the Working Force Group conversation, do you have any rationale as to why they felt this was—you know, I'm with Mr. Kanuha. We're trying to hep, but in the same breath everything costs something. Do you have any rationale, Ms. Miura, as to why this particular group— MS. MIURA: They spent a lot of time talking about this one part of the program. They did go back and forth between just lowering it to $100 minimum tax or zero. Page 22 FC -39 July 24, 2018 Like Mr. Kanuha said, and I think they put it in their report to Council, is that they felt that 100 percent disabled, service related injury, that they already paid their ultimate price. That was ultimately what they decided at the end; that they had already paid for it. They did recognize. They did discuss the income they get . We did discuss it with Colonel Han, with the U.S. Veterans Administrations, about what it does take to get qualified. It's not an easy process. I know a lot of people are very leery of how government approves things. But I think for anybody who's really dealt with VA, it's not the easiest thing to get the 100 percent disabled veteran due to a service related injury. We see a lot of them come through our office at 80 percent, or 50 percent, or 20 percent. And people all the time tell us, "I should be 100 percent." One hundred percent unemployable could also mean PTSD (Post Traumatic Stress Disorder) and other areas. But the VA, it's about a two-year average process for them to get the 100 percent. For the total number of veterans in the State of Hawaii, it's a very low percentage that actually get the 100 percent. So they weighed a lot of different options. There were some in the group that felt that everybody should pay some sort of tax. Last year, the County Council did also approve—when you asked if anything else, if we are on a slippery slope, I mean, everything valued at $500 or less also pays zero tax, whereas before their minimum was $25. So I think it does depend what the County Council's goal is. As for our office, we'll implement whatever you decide because that will become law. MS. LEE LOY: Ms. Miura, follow-up question. During the Task Force Working Group, you know, the suggestions coming forward, did they make any recommendations as to where we would make up for the gap? MS. MIURA: There are other areas that they have coming forward. I mean, one of them that was also submitted in the same report, was to completely repeal the non -spec residential program, and they do have other areas. But their whole role goal was to make the program fair and equitable. I think they felt that this was step forward to improving the living for people in this category. Although their goal isn't necessarily to be budget or income neutral, they also don't want to give away the house. So I can tell you that it wasn't a quick and easy decision to come to zero. It took about three -and -half meetings, and it sounds like a little bit. But when it's over a year's time, they really, really did struggle with looking at it and coming at it from all angles. They looked at who was—not "who" in particular the names of people, but the values of the parcels. You know, what they would pay if they weren't in it, and making sure they were all primary homeowners. That's the other thing we have to remember, people in this class, this isn't their second home. They are all primary homeowners. So they have to qualify for the homeowner's exemption, as well. MS. LEE LOY: Thank you, Chair. Mr. Kanuha, I'm going to be supporting this at this time but maybe there might be an opportunity to look at some amendments, Page 23 FC -39 July 24, 2018 and maybe even if there's a follow-up status report from the Task Force on where to make up that gap. You know, it's like a rising tide. We kind of give up this opportunity for a revenue source. It's going to have to come out of somebody else's pocket. I'd actually like to see how those two would be connected to one another. Thank you, Ms. Miura. I yield. ACTING CHR. EOFF: Okay, thank you. Mr. Chung. MR. CHUNG: Yeah, thank you. I hate talking about this thing because whenever you talk about doing things against disabled veterans, you know, it only brings down that popularity meter, right? But I just wanted to make sure that the other side, the other opinion was given in this discussion. Really, my vote kind of—it's consistent with my just overall philosophy of how things are going in the United States, really. We are a democratic society. You know, democracy, we have elected officials, and the lifeblood of each of those elected officials are the voters. What happens is it's easy to give things away. That's how people get votes. But we have to think about things on a broader level. We owe it to the overall community to provide services. Now, you take away $100,000 here, a $100,000 there, $100,000 somewhere else, it has to be made up in other areas and that's what really, really concerns me. Once you give something away at the County Council level, in terms of exemptions and things like that, you can never get it back. I'm sorry, I've never seen it happen. So I just wanted to offer that caution. Obviously, an unpopular position that I'm taking but I'm just very concerned if we keep on going on this path. Thank you. ACTING CHR. EOFF: Thank you. Any other comments? Ms. O'Hara. MS. O'HARA: Yes, Chair. Questions, basically. Ms. Miura, do you know approximately where, in which districts, these 656 properties are located? Is there a predominance in one district to another? MS. MIURA: We have it broken down to East Hawaii districts versus the West Hawaii districts, and most of the veterans disability are in the East Hawaii districts. MS. O'HARA: And what is the average value of property? MS. MIURA: The average value, the area that have the most veterans' disabilities were under $400,000. MS. O'HARA: Okay. And the real property tax reform group, have they come up with recommendations to reduce any other classes to zero? Page 24 FC -39 Motion to Amend July 24, 2018 MS. MIURA: No. MS. O'HARA: This is the only one? MS. MIURA: Correct. MS. O'HARA: And what are other counties currently charging disabled vets who own property? Is there a standard model across the state? What are they doing? Do you know? MS. MIURA: We did have to come up with that information for the group, but that was several months ago, so I'd feel pretty uncomfortable trying to wing it off my memory on what that number is at this time. MS. O'HARA: So there's no set model? MS. MIURA: No. MS. O'HARA: No. Each county is different? MS. MIURA: Correct. MS. O'HARA: Okay, that would be interesting to know. Alright, thank you. I just had some questions. ACTING CHR. EOFF: Thank you. Any other comments or questions? MR. KANUHA: Madam Chair? ACTING CHR. EOFF: Mr. Kanuha. At this point, I'd like to amend Bill 165 with the contents of Communication 989.1. Mr. Kanuha moved to amend Bill 165 with the contents of Comm. 989.1. Seconded by Ms. Poindexter. ACTING CHR. EOFF: Does everybody have Communication 989.1? Oh, Mr. Kanuha, you can explain this amendment. MR. KANUHA: Sure. It's basically removing the "ordinance shall take effect upon approval" toand adding—taking out "upon approval" and adding "on July 1, 2019." I mean, the recommendation was to change this for the year 2018, but obviously we've got to be more realistic in the budget deadlines and everything that's going on. I think it's obviously more appropriate to have it take effect July 1, 2019. Page 25 FC -39 July 24, 2018 ACTING CHR. EOFF: Okay, thank you. Any questions or comments, Council Members? Seeing none, all in favor of amending with Communication 989.1 please say "aye." Vote on Motion to The motion to amend Bill 165 with the contents of Amend: Comm. 989.1 was carried by the following voice vote: (Approved) Ayes: Committee Members Chung, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, Ruggles, and Acting Chair Eoff — 8. Noes: None. Absent: Committee Member David —1. Excused: None. ACTING CHR. EOFF: I guess back to the main motion. Are we ready to vote on Bill 165 as amended? Any further discussion? MR. RICHARDS: Chair? ACTING CHR. EOFF: Mr. Richards. MR. RICHARDS: Yeah, just a quick procedural question. My understanding is we can't touch real property tax rates unless we're in the year previous to the tax rate that it will be affecting. So when we're talking about that, coming forth, we have to have the budget before us, and in the year previous of the tax year we're affecting. Is that a true statement? That's what I ran into when I was trying to work with the budget previous. And this is not about supporting the intent of this, this is about a procedural question. Clerk? ACTING CHR. EOFF: Is that a question for the Deputy County Clerk? MR. RICHARDS: Yes. ACTING CHR. EOFF: Mr. Henricks, would you know how to answer that? MR. HENRICKS: I guess I don't quite understand your specific concern, particularly since the bill was just amended, so it wouldn't affect until the next fiscal year. I think that was the purpose of the amendment; so that should this be approved, the administration can plan for not having this source of revenue in the future, yeah? Is that the concern that you have, Mr. Richards? MR. RICHARDS: Yeah. Well, again, procedural. Because as I understood, we can't affect real property tax rates this far in advance, because we're talking about next fiscal year. And then also, the question came up, do we need a public hearing as far as that goes? Page 26 FC -39 July 24, 2018 MR. HENRICKS: I think I understand your point now. As far as I'm aware, the Council, through ordinances, could affect certain aspects of real property, such as this, where other exemptions or other things. Naturally the administration would prefer that those policies take effect at the beginning of the next fiscal year again so they could plan accordingly. But that is wholly separate from actually setting the real property tax rates; which do have only a certain window of time, between, I believe, April and June 20' to be increased or decreased. But the Council could, as they are doing, well, at least potentially doing with this bill, affecting general policy when it comes to how real property taxes—for example, exemptions such as this. MR. RICHARDS: Okay. MR. HENRICKS: I suppose the Council could have adopted this bill and had take effect now, and then the administration would just have to absorb that and perhaps amend the budget accordingly. But I think Mr. Kanuha is just following the suggestion or request of the administration to make this a little bit simpler and have it take effect on July 1 of next fiscal year. MR. RICHARDS: Okay. Yeah, I'm getting the—like I said, strictly a procedural thing. But I'm getting what you're saying here. Okay, I yield. MR. HENRICKS: Right, and no public hearing is required for this particular type of ordinance. ACTING CHR. EOFF: Okay, thank you. Comment? MR. CHUNG: Me again. ACTING CHR. EOFF: Mr. Chung. MR. CHUNG: You know, I was just checking online, and this might be subject to fact checking, but I just briefly looked. A person who is totally disabled from a military injury gets $3,000 plus a month, okay. And again, just based on my quick review, that's nontaxable. So in other words, you're looking at basically a $50,000 income. What about those guys who are 70 percent disabled? Now, they've got to work and they've got to pay the minimum tax. I mean, something is not right with this equation. I know you guys were talking about the ultimate sacrifice, 100 percent unemployable. But there are other considerations here too. Thank you. ACTING CHR. EOFF: Okay, thank you for that, Mr. Chung. Ms. Lee Loy. MS. LEE LOY: Thank you. Mr. Clerk, with this ordinance taking effect at the beginning of the next fiscal year—but as we go through our budget cycle for that Page 27 FC -39 July 24, 2018 fiscal year, will this be reflected if we go up or down on those real property tax categories? MR. HENRICKS: If this change is made and the 656 people that we understand to be qualified for this don't pay any property tax, are you asking if that would affect potentially tax rates? It could, but then again there's other manners and methods. It would depend upon how the administration crafts the budget for the next fiscal year. And then also, of course, when they see, you know, in that mid-April time when they have the valuations for property, that is really the telling thing. As I understand it, for them it's—you know, were they increases, decreases, or status quo, when it comes to the building and land properties that we have to charge those rates against. MS. LEE LOY: Yeah, I think my question was more focused on the category itself. We have residential category, or hotel category, affordable housing. Would this be a line item category in those real property tax rates which we set at that particular point and time in which we take out to public hearing or does this not show up? MR. HENRICKS: You know, I'm presuming that Lisa Miura or Keita Jo are still available. But I feel safe in saying the answer to that question is "no." MS. MIURA: Correct. They're currently in the homeowner's exemption already, or in the homeowner's classification, so we don't have a separate classification and tax rate for veterans. MS. LEE LOY: Thank you, Ms. Miura. And thank you, Clerk. I yield. ACTING CHR. EOFF: Further comments or questions? We'll just take a vote. All in favor of approving and sending Bill 165, as amended, to first reading please say "aye." Vote on Bill 165: The motion to recommend passage of Bill 165, as amended, Draft 2): on first reading was carried by the following voice vote: (Approved) Ayes: Committee Members Kanuha, Lee Loy, O'Hara, Poindexter, Richards, Ruggles, and Acting Chair Eoff – 7. Noes: Committee Member Chung –1. Absent: Committee Member David –1. Excused: None. MS. EOFF: And that is the end of Finance Committee agenda. May I have motion adjourn? Page 28 FC -39 July 24, 2018 ADJOURN- There being no further business, at 2:45 p.m., Ms. Lee Loy moved to adjourn MENT: the meeting. Seconded by Ms. Poindexter and carried by the following voice vote: Ayes: Committee Members Chung, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, Ruggles, and Acting Chair Eoff — 8. Noes: None. Absent: Committee Member David — 1. Excused: None. ACTING CHR. EOFF: We're adjourned. Approved: Ms. Maile Medeiros avid, ,hair Finance Committee MD/na YI-7111v (Date) Page 29