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HomeMy WebLinkAboutCOM 0073.000 2018-2020 JrtY OSM,"'•• • Ort* N►i TAX BOARD OF REVIEW County of Hawai'i 101 Pauahi Street, Suite 4 Hilo,Hawaii 96720-4224 C=I -- Q Y. Z January 15, 2019 - -,In The Honorable Harry Kim, Mayor z,=.,, , County of Hawaii 25 Aupuni Street Hilo, Hawaii 96720 The Honorable Aaron Chung and Members of the County Council County of Hawaii 25 Aupuni Street Hilo, HI 96720 Dear Mayor Kim, Chairman Chung and Members of the County Council: Pursuant to Chapter 19 of the Hawaii County Code, enclosed please find the 2018 Annual Report of the Real Property Tax Board of Review. Thank you for your time. ectfully us itted, Melvin Ventura Chairman /enclosure cc: Deanna Sako, Director of Finance Comm. No. 19 Ref. To: FG Ref. Dote JAN 1 5 2019 Harry Kim ~ ' Deanna S. Sako : !ft:*- Finance Director Mayor 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 West Hawaii 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 2018 ANNUAL REPORT December 31 , 2018 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 2018-2019 tax year. The recommendations relate to both legislative and administrative matters. The following is a list of the officers and members of the Board: Melvin Ventura, Chairman Wesley Takai, Vice-Chairman Emygrace Reinhard Michael Hughes Nelson Harano Board Membership The following is a list of the Board members and when their term ends: Board Member Term Ends — December 31, Melvin Ventura 2018 Wesley Takai 2019 Emygrace Reinhard 2020 Michael Hughes 2021 Nelson Harano 2022 Hawai`i County is an Equal Opportunity Provider and Employer 2018 Tax Board of Review Annual Report 2 Activities Organizational Meeting The annual organizational meeting of the Board was held on March 7, 2018 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. Nelson Harano was not in attendance as he was yet to be confirmed to the Board. Melvin Ventura was elected as Chairperson and Wesley Takai as Vice-Chairperson. The annual workshop date and place was set and there was a general legal discussion of Chapter 19. Real Property Tax Administrator Lisa Miura was also in attendance and provided comments as well as updates on state bills relating to assessments that was pending before the House and Senate. 2018 Board of Review Statewide Conference The 2018 Board of Review Statewide Conference was held on June 7, 2018 at the Honolulu International Airport Interisland Terminal Conference Rooms on Oahu. There were approximately 80 guests in attendance including Board Members, Deputies Corporation Counsel and Real Property Tax Office Administrators and support staff from four island counties: Oahu, Maui, Big Island and Kauai. Topics presented and discussed were a statewide statistical comparison to the appeal process, the making of a good property tax professional, and an overview of Senate Bill 2922 (ConAm to allow for a State surcharge on investment property). City and County of Honolulu's Chief of Staff to the Mayor, Gary Kurokawa was also in attendance and provided remarks. Attendees were also afforded the opportunity of a breakout session to discuss matters within related groups — Directors/Administration, Corporation Counsel, Board Members, Board Clerks, Appraisers, Support Services and Treasury/Tax Relief/Collections. A question and answer open discussion forum was also held. The location of the conference worked well and very convenient for those traveling from outer islands. The coordinators provided a great conference for the attendees. Workshop A workshop was held on July 9, 2018, at the Aupuni Center Conference Room in Hilo with Board Members, Real Property Tax Office Administration, Appraisal Supervisor, Appraiser V (Commercial Appraisers), Valuation Analysts and support staff in attendance. Also present were Finance Director Deanna Sako and Deputies Corporation Counsel Craig Masuda, J Yoshimoto, and Keyra Wong. Opening remarks were provided by Mrs. Sako and Lisa Miura, Tax Administrator. Mr. Yoshimoto did a presentation on the Role of the Board of Review. Various Real Property Tax staff presented information on the sales ratio analysis, legislative changes, the Real Property Tax Review Working Group and Agricultural Committee, and current activities related to the Kilauea volcano eruption event. The Board was provided the opportunity to 2018 Tax Board of Review Annual Report 3 present questions to the tax office personnel and administration. The workshop continues to be a very beneficial and worthwhile session to the Board. Appeal Hearings Two hundred twenty-one (221) appeals, which included 95 from East Hawaii and 126 from West Hawaii, including appeals from amended assessment notices, were scheduled for hearing this tax year for a combined total of $399,777,700 disputed. This is an increase from 195 cases in the previous tax year. There were three (3) sessions held in East Hawaii (August 15, 16; October 17) and two (2) sessions held in West Hawaii (September 4, 5). In 2008, an all-time high of 1,516 cases were adjudicated by the Board across 22 sessions. Complaint Hearing As required by Chapter 19-97(e), a notice was published on September 2, 2018, specifying a period (September 4 — 17, 2018) within which complaints may be filed by a taxpayer. No complaints were filed. The complaint hearing was held on October 17, 2018. Comments and Recommendations Administrative Matters 1. 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 December with two nights away from home or the office. 2. The procedure of rendering an immediate decision in open session upon the completion of the presentation of each appeal case continues to differentiate this Board from other Counties within the State of Hawaii and is found to be an acceptable practice to all parties. 3. 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 for the Members. An annual workshop is highly recommended and should continue to include administrative staff presenting a broad array of relevant tax matters and information for the Members. 4. The presence of Corporation Counsel at each meeting/hearing has proven itself to be essential and is recommended to continue. The Board has relied upon Corporation Counsel in many instances for clarification and interpretation of rules and/or laws. 2018 Tax Board of Review Annual Report 4 5. The presence of the Real Property Administrator and/or Assistant Administrator at each meeting/hearing has proven itself to be essential and is recommended to continue. The Board has relied upon the administration in many instances for information on office policies and procedures before rendering decisions. 6. The Board recommends continued funding to allow the Board and support staff to attend the statewide conference as it provides multiple benefits to all participants. 7. The Board recommends that they be accompanied by both Corporation Counsel and the Board Clerk to all conferences, workshops, meetings and other related matters. 8. The Board appreciates the impromptu training sessions conducted by Corporation Counsel and the Real Property Tax division. These sessions provided the Board with information and insight on various issues, topics, programs, etc. The Board recommends that these training sessions continue to be offered. 9. The Board recommends that additional one-on-one training be provided by the division and Corporation Counsel for the newest appointed member. This training session should include basic information on programs, appeal procedures and the specifications of their role as a member. 10.The public has a misconception that the Real Property Tax division sets the tax rates and the Board recommends that the County continue to provide outreach interaction to dispel this. 11. The Board commends the division for their effort to review the enforcement of the exemption program by expanding their options to verify the claimant's eligibility and to understand the owner's possible financial consequences of the disallowance of an exemption, especially one in the homeowner's classification with the three percent (3%) growth cap. 12. The Board appreciates the effort by the appraisal staff in settling a number of appeals which reduced the hearing time of each scheduled day. It is recommended that each of the settlements be reviewed for next year's assessment to determine what effect, if any, the settlement has to similar properties within the appealed parcel's neighborhood. 13. The Board recommends that the land classification also be included along with the values and exemptions on the proposed settlement agreement letters between the division and the taxpayers. 2018 Tax Board of Review Annual Report 5 Legislative Matters 1. The Board again recommends that the non-speculative residential program be terminated due to the fact that the homeowners class, exemptions and other programs have taken its place and this program is now antiquated. Any change in County Code should include a provision whereby the frozen base value of each affected parcel for the first year be the lowest of: a. the frozen value; b. the market value; c. the 2004 market value times three percent (3%) a year until present if the property had the same owner since 2004; or d. the market value of the property at the time of purchase after 2004 times three percent (3%) per year until the present. 2. 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. The Board continues to recommend that Section 19-53(e)(2)(A) be amended to include in the homeowner's class an owner/occupied property used for care giving and/or care home. 3. The Board highly recommends that the Hawaii County Code be amended for refunding or non-refunding of the $50.00 appeal filing fee as follows: a. Option 1: The current code be amended to change the $50.00 appeal filing fee to be non- refundable. b. Option 2: • Non-refundable appeal filing fee for cases that are withdrawn by the taxpayer.a er. This will help in eliminating appeals that are filed with no merit. • Non-refundable appeal filing fee for cases that have their values sustained by Board decision. • Refundable appeal filing fee for cases that ruled by the Board in favor of the taxpayer with the difference in valuation being twenty percent (20%) or more. 2018 Tax Board of Review Annual Report 6 c. Option 3: The current code be amended to revert back to the language used prior to the change made in 2010 and would read as follows: In the event of an appeal by a taxpayer to the Board of Review, if the appeal is compromised, or amended as to fifty percent or more of the valuation in dispute, the costs deposited shall be returned to the appellant. Otherwise the entire amount of costs deposited shall be retained by the County. The current language provides "or the Board finds that an adjustment is required due to duplicate assessments or departmental errors such as but not limited to transposition in figures, typographical errors, and errors in calculations, the cost deposited shall be returned to the appellant." Section 19-22 of the current code covers these issues and the County is allowed to process adjustments and refunds for the current and two (2) prior years. Morally, the County should refund the appeal fee if the case is found to be a departmental error and not a judgmental issue. Currently, if an appeal's value is decreased by as little as $100, the appellant receives a refund of the entire appeal filing fee. If a case is withdrawn, the appellant receives a refund of the entire appeal filing fee as well although, in essence, the division proved the accuracy in their valuation which caused the appellant to withdraw their appeal. Close Chairman's Comments The staff and administration of the Real Property Division deserve much appreciation and respect for a job well-done. They have demonstrated diligence, compassion, professionalism, and Aloha in carrying out their duties. Much mahalo also to Board Clerk Elizabeth `Nina' Swain, and to my fellow board members who have served with me over the years. 2018 Tax Board of Review Annual Report 7 Sub ted by Members of the Tax Board of Review: gles [Melvin Ventura Wesley T. ai Chairman Vice-Chairman Emygrace Reinhard Michael Hughes Member Member !son Harano Member