City and County of Honolulu 530 South King Street, Room 208 • Honolulu, Hawaii 96813 Phone

DEPARTMENT OF BUDGET AND FISCAL SERVICES CITY AND COUNTY OF HONOLULU 530 SOUTH KING STREET, ROOM 208 • HONOLULU, HAWAII 96813 PHONE. (808) 768-3900 • FAX: (808) 768-3179 • INTERNET: www.honolulu.gov

RICK BLANGIARDI ANDREWT. KAWANO MAYOR DIRECTOR DESIGNATE

KELLI J. NISHIMURA ACTING DEPUTY DIRECTOR January 27, 2021

The Honorable Tommy Waters Chair and Presiding Officer and Members Honolulu City Council 530 South King Street, Room 202 Honolulu, Hawaii 96813

Dear Chair Waters and Councilmembers:

SUBJECT: Real Property Tax Board of Review Report

Pursuant to Section 3-15, Revised Ordinances of Honolulu 1990, as amended, please see the attached reports required for periodic review by the City Council from the Real Property Tax Boards of Review I, II, and Ill.

If you have any questions, please call me at 768-3901.

Sincerely, Digitally signed by ,~f~-y ~i;~’L, Kawano, Andy Date: 2021 .01 .28 08:56:42 -1 0’OO’ Andrew T. Kawano, Director Designate Budget and Fiscal Services

Attachments

APPROVED:

Michael D. Formby Managing Director Designate

DEPT. COM. 58 DEPARTMENT OF BUDGET AND FISCAL SERVICES CITY AND COUNTY OF HONOLULU REAL PROPERTY ASSESSMENT DIVISION 842 BETHEL STREET, BASEMENT * HONOLULU, HAWAII 96813 PHONE: (808) 768-3799 * FAx (808) 768-5540 WWN.HONOLULU.GOV

RICK BLANGIARDI ANDREW T. KAWANO MAYOR DIRECTOR DESIGNATE

KELLI J. NISHIMURA ACTING DEPUTY OIRECTOR

STEVEN H. TAKARA ADMINISTRATOR

January 27, 2021

MEMORANDUM

TO: Andrew T. Kawano, Director Designate Department of Budget and Fiscal Services

FROM: Rachel M. Glanstein, Supvg Real Property Tax Clerk II Real Property Assessment Division

SUBJECT: Revised Ordinances of Honolulu Section 3-15.4 — Reports from Boards or

Commissions for the Periodic Review by the City Council — Boards of Review

Revised Ordinances of Honolulu (“ROH”) Section 3-15.4 requires the Boards of Review to submit to the Council a report with the below information (the information requested is set forth, followed by the information itself):

(1) A statement of the purpose for which the board or commission was created;

The Boards of Review (“Boards”) were created to hear disputes between the director and any taxpayer in all cases in which appeals have been duly taken pursuant to ROH Section 8 Article 12.

(2) A summary of the accomplishments of the board or commission during the preceding five-year period;

The Boards submit annual reports to the Mayor, the City Council, et al., noting their accomplishments and recommendations. See the last five reports attached. Subsequent to the submission of the last report, the Boards have been able to hold their hearings electronically due to COVID-19 restrictions and health and safety concerns, as allowed by the Governor’s emergency proclamation.

Boards of Review Report 01/27/2021 Page 1 of 3 (3) Factors that aided or inhibited the achievement of the accomplishments, including, but not limited to, the composition and purpose of the board or commission and staff support;

COVID-1 9 made the last year difficult to keep up with the scheduling of appeals; the allowance of electronic meetings has assisted with the appeal case backlog. Most of the Boards’ vacancies have been filled; there is only one vacant seat and one seat pending the confirmation process.

(4) A statement of the measures implemented by the board or commission to enhance transparency in its operations;

The board receives and processes appeal applications in a timely manner and posts its meeting agendas as required. The administrative hearings permit taxpayers to present their evidence to the board and the board issues its written decision. No additional measures were required, requested, nor implemented.

(5) A statement of the measures implemented by the board or commission to ensure responsiveness to inquiries and comments from the mayor, the council, and the public;

The board has a dedicated support staff that is responsible for ensuring timely responses to inquiries made by stakeholders.

(6) The annual costs of operation of the board or commission for each year of the preceding five-year period;

The annual costs of operation for the Boards include member stipends, mileage and parking reimbursement, approximate certified mail costs for the hearing notices, and the salary cost of a Board clerk. The 2020 approximation also includes the price of the Webex accounts to allow for electronic hearings. For 2016, the annual costs were approximately $45,500; for 2017, $44,500; for 2018 and 2019, $42,500; and for 2020, $40,500.

(7) A statement of whether the charter or ordinance provisions establishing the board or commission should be retained without change, amended, or repealed; and

Both the Revised Charter of Honolulu (“RCH”), Section 13-103(h) and the Revised Ordinances of Honolulu (“ROH”), Section 8-12.7(d) should be amended to allow for electronic meetings.

(8) If applicable, suggested modifications and revisions to membership number and qualifications; organization; purpose: or powers, duties, and functions to better enable the board or commission to serve its purpose, including justification and suggested amendatory language.

The Boards should be authorized to meet electronically in the RCH and ROH, and not just as allowed by the current emergency proclamation from the Governor, so

Boards of Review Report 01/27/2021 Page 2 of 3 that they can choose to continue to meet electronically even if the restrictions are lifted.

Additional administrative rules could be crafted to support electronic meetings and to set forth procedures and requirements. The current administrative rules need to be updated to match the RQH appeal deposit ($50 versus the $3 in the old rules), along with any other conforming changes necessary. Lastly, it would be beneficial to allow an appellant to waive the requirement to mail the notice of hearing via certified or registered mail (so that the notice could be mailed via regular mail or emailed).

Boards of Review Report 01/27/2021 Page 3 of 3 BOARDS OF REVIEW ANNUAL REPORT FOR TAX YEAR 2015

This annual report for tax year 2015 is a joint collaborative effort of Boards of Review I, II, and Ill. Because it is a requirement for each Board Chair to submit an Annual Report and to avoid duplication of time, effort, and resources, a combined joint report is hereby submitted. The report is divided into five categories.

I. ORDINANCES AUTHORIZING BOARDS OF REVIEW II. MEETING SCHEDULE OF EACH BOARD III. TYPES OF APPEALS AND ASSIGNMENT OF CASES IV. CHAIRS’ LEADERSHIP ROLE AND RESPONSIBILITY V. RECOMMENDATIONS

SECTION I. ORDINANCES AUTHORIZING BOARDS OF REVIEW

As per Department of Finance of the City and County of Honolulu, State of Hawaii, Title 4

Subtitle 5 Real Property Taxation — Chapter 17 — Assignment of the Director of Finance relating to the Assignment of Real Property Tax Appeal cases to the Board of Review pursuant to Subsection 8-12.7 (b), Revised Ordinances of Honolulu (“ROH”) Part XXIV.

SECTION II. MEETING SCHEDULE OF EACH BOARD

The Boards, in total, meet approximately three times per week, fifty weeks per year, hearing appeals covering; (a) Residential, (b) Hotel and Resort, (c) Commercial, (d) Industrial, (e) Agriculture, (f) Preservation, (g) Public Service, (h) Vacant Agriculture Classes, and (I) Residential A. (ROH Section 8-7.1 (C) (1).)

Board I; Meets at 2:00 pm on more than half of the Tuesdays and Thursdays in a month

Board II; Meets at 2:00 pm on almost half of the Wednesdays and Fridays in a month

Board Ill; Meets at 1:00 pm one Tuesday per month, in some months

Boards I and II meet at 842 Bethel Street, Basement, Honolulu, Hawaii, 96813

Board Ill meets at 1000 Uluohia Street, Room 106, Kapolei, Hawaii, 96707

SECTION III. TYPES OF APPEALS AND ASSIGNMENT OF CASES

All three Boards of Review resolve real property assessments and/or disallowance of exemption disputes between taxpayers and the City Real Property Assessor. The Boards consist of five members who are appointed by the Mayor and confirmed by the City Council for staggered terms up to five years.

Boards of Review Annual Report for Tax Year 2015 Page 1 of 4 Appeals are mainly concerned with valuations based on and interpreted by the City Real Property Assessor.

For real property tax appeals, the ROH Section 8-12.3 specifies four grounds for appeal of the property:

1. Assessments of the property in question exceeds by more than 10% of the market value of the property, or 2. Lack of uniformity or inequality, brought about by the illegality of the methods used or error in the application of the methods to the property involved, or 3. Denial of an exemption to which the taxpayer is entitled to and for which person has qualified, or 4. Illegality, based on any grounds arising under the Constitution or laws of the United States or the laws of the State of Hawaii or the ordinances of the City and County of Honolulu in addition to grounds of illegality of the methods used, mentioned in clause (2).

IV. CHAIRS’ LEADERSHIP ROLE AND RESPONSIBILITY

Chairs should have at least two years of experience running Board hearings or its equivalent. They should be able to attend the majority of the hearings and be available to represent the Board at official functions as necessary.

They should have the ability to manage a full agenda of appeals. They should be effective in writing and in oral communication. They should be able to demonstrate seasoned judgment, common sense, understanding and professionalism in dealing with people. Chairs should have the dedication and time to come in at least fifteen minutes early and not leave until all business is completed, and all documents are signed and checked. They should be able to serve as the point of contact between divisions and departments as required. They should have a working knowledge of property valuations as calculated by the City Real Property Assessor.

V. RECOMMENDATIONS

The three Boards handle thousands of appeals each year and try to keep an excellent rapport between the taxpayer and the City. The Board members listen to appellants, young and old presenting their evidence and concerns. Because of manpower shortages in the Assessor’s Office in the past there was often a backlog of two, three, and sometimes even four appeals from the same appellant on his/her property valuations for consecutive years. It may not be in the best interests of the City to lump all the appeals of consecutive years together. The Assessor’s Office has made progress in its efforts to get through the backlog of prior year

Boards of Review Annual Report for Tax Year 2015 Page 2 of 4 appeals. The goal for 2015 was to catch up on prior year appeals and hear as many 2015 appeals as possible.

Board Ill had a positive impact on reducing the case loads and making the residents feel the City is responding to the people’s needs in West Oahu (Ewa, Kapolei, Nanakuli, Makaha, Ocean Point, etc.). Board Ill in the past struggled to meet the quorum requirements due to the loss of members, but the Mayor’s Office has taken action, and now Board Ill has its full complement of five members. However, Board Ill still occasionally has trouble fulfilling quorum requirements, and action may be taken by the Mayor’s Office.

It’s recommended that all Board hearings have a member from the office of the Corporation Counsel present to review any and all legal questions that may arise, especially during the executive session.

Appellants should be informed about what evidence is/isn’t acceptable, i.e., formal appraisal dates, comparable sale dates, etc.

An ordinance could be passed to have Realtors and/or Title/Escrow companies advise new homeowners of home exemptions that are currently available to them and how to file online. Filing online is strongly recommended due to the near instant confirmation of filing received and to avoid any postal delivery delays or errors.

Additional public service announcements (“PSAs”) could be considered semiannually or quarterly for publication in the local daily newspaper to ensure that all homeowner-occupants are aware of: (a) the home exemption program; (b) the requirements for filing; and (c) the need to notify the Real Property Assessment Division of any changes that could affect an exemption (transfer, deaths, moving, etc.). Likewise, PSAs could be contemplated to ensure that appellants understand that the appellants themselves bear the burden of proof for an appeal (e.g., they must prove that a lower value or an exemption is warranted).

The City Council could look at changing the assessment date to January from October as to bring Honolulu County in line with the other three neighbor island counties.

The new computerized equipment has been made operational and familiarity with it has increased. The overhead projector has been used to display the list of appellants present waiting to be heard and can be used for any other relative information necessary for a fair solution (taxmaps, comps, etc.). Appraisers now all present their cases via PowerPoint presentations.

Presently there are three Boards handling all the cases on Oahu. The attached table shows how many appeals were filed in the tax years from 2001 through 2016, the cases heard and closed in

Boards of Review Annual Report for Tax Year 2015 Page 3 of 4 the 2015 tax year (July 1, 2015 to June 30, 2016) up until June 1, 2016, and the numbers and percentages of cases where the taxpayers prevailed.

The Boards appreciate the priority that the Mayor’s Office has given to staffing each Board with its full complement of five members. The City Council should consider raising the appeal fees to at least $50 from the present $25 to attempt to more cover the administrative costs of taking in, scheduling, hearing, and processing the appeals. Appeals should be heard in the tax year of the filing and not lumped together later with other back-logged appeals. However, the backlog of appeals has been greatly reduced, and there are now less prior year appeals than ever before.

Board I has handled the majority of the appeals filed, working two days a week for more than half of a month, and Board II working two days a week for almost half of a month, and Board Ill on one Tuesday per month in some months. All members should have their stipends increased to $50 from the present $25. Chairs should have their stipends increased to $75 because of the added time spent as the chairperson and being responsible for setting the agenda and certification of all appeals. By increasing the stipends the City will be able to attract and retain highly qualified people to staff all of its Boards and Commissions.

______L~ Board I Chair Board II Vice-Chair Board Ill Chair Mike Ellis Donald Lau Lee Gordon

June 13, 2016

Copy to: Mayor of Honolulu City Council Director Budget & Fiscal Services BOR Deputy Corporation Counsel Real Property Assessment Administrator

Boards of Review Annual Report for Tax Year 2015 Page 4 of 4 BOARD OF REVIEW COUNTS_FOR HEARINGS IN THE 2015 TAX YEAR TO DATE (7/1/2015 - 6/1/2016) TOTALS Tax Year 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005

Cases fielded 2888 1884 1998 1298 1009 2403 1577 3048 2929 7492 5915 4360

Cases Closed Board I 246 341 93 17 13 11 5 3 3 1 1 3 737 Board II 250 88 11 1 0 0 1 0 0 0 0 0 351 Board III 57 1 0 0 0 0 0 0 0 0 0 0 58 Totals 553 430 104 18 13 11 6 3 3 1 1 3 1146

Settlements Taxpayer Prevails — Board I 71 131 45 9 3 4 3 1 0 0 0 0 267 Board II 170 22 3 0 0 0 0 0 0 0 0 0 195 Board III 22 0 0 0 0 0 0 0 0 0 0 0 22 Totals 263 153 48 9 3 4 3 1 0 0 0 0 484

Board I Taxpayer Prevails % 36.23%

Board II Taxpayer Prevails % 55.56% —

Board III Taxpayer Prevails % 37.93% —

TOTALTaxpayerPrevails% 42.23% BOARDS OF REVIEW ANNUAL REPORT FOR TAX YEAR 2016

This annual report for tax year 2016 is a joint collaborative effort of Boards of Review I, II, and Ill. Because it is a requirement for each Board Chair to submit an Annual Report and to avoid duplication of time, effort, and resources, a combined joint report is hereby submitted. The report is divided into five categories.

I. ORDINANCES AUTHORIZING BOARDS OF REVIEW II. MEETING SCHEDULE OF EACH BOARD III. TYPES OF APPEALS AND ASSIGNMENT OF CASES IV. CHAIRS’ LEADERSHIP ROLE AND RESPONSIBILITY V. RECOMMENDATIONS

SECTION I. ORDINANCES AUTHORIZING BOARDS OF REVIEW

As per Department of Finance of the City and County of Honolulu, State of Hawaii, Title 4

SECTION II. MEETING SCHEDULE OF EACH BOARD

Board I; Meets at 2:00 pm on more than half of the Tuesdays and Thursdays in a month

Board II; Meets at 2:00 pm on almost half of the Wednesdays and Fridays in a month

Board III; Meets at 1:00 pm one Tuesday per month, in some months

Boards I and II meet at 842 Bethel Street, Basement, Honolulu, Hawaii, 96813

Board Ill meets at 1000 Uluohia Street, Room 106, Kapolei, Hawaii, 96707

SECTION III. TYPES OF APPEALS AND ASSIGNMENT OF CASES

Boards of Review Annual Report for Tax Year 2016 Page 1 of 4 Appeals are mainly concerned with valuations based on and interpreted by the City Real Property Assessor.

For real property tax appeals, the ROH Section 8-12.3 specifies four grounds for appeal of the property:

IV. CHAIRS’ LEADERSHIP ROLE AND RESPONSIBILITY

Chairs should have at least two years of experience running Board hearings or similar meetings. They should be able to attend the majority of the hearings and be available to represent the Board at official functions as necessary.

V. RECOMMENDATIONS

The three Boards handle thousands of appeals each year and try to keep an excellent rapport between the taxpayer and the City. The Board members listen to appellants presenting their evidence and concerns. Previous years had backlogs of two, three, and sometimes even four appeals from the same appellant on his/her property valuations for consecutive years. It may not be in the best interests of the City to lump all the appeals of consecutive years together. The Assessor’s Office has made progress in its efforts to get through the backlog of prior year appeals. The goal for 2016 was to catch up on any prior year appeals and hear as many 2016 appeals as possible, to eliminate future backlogs.

Boards of Review Annual Report for Tax Year 2016 Page 2 of 4 Board II needs its full complement of five members again, although they have been functioning well with only four members. The Boards appreciate the priority that the Mayor’s Office has given to staffing each Board with its full complement of five members. Only one (1) Board hearing had to be cancelled due to the lack of a quorum during this tax year.

Appellants should be better informed about what evidence is/isn’t acceptable, i.e., formal appraisal dates, comparable sale dates, etc.

An ordinance could be passed to have Realtors and/or Title/Escrow companies advise new homeowners of home exemptions that are currently available to them and how to file for exemptions online. Filing online is strongly recommended due to the near instant confirmation of filing received and to avoid any postal delivery delays or errors. The City also allows online filing of assessment appeals.

Additional public service announcements (~PSAs”) could be considered semiannually or quarterly for publication in the local daily newspaper to ensure that all homeowner-occupants are aware of: (a) the home exemption program; (b) the requirements for filing; and (c) the need to notify the Real Property Assessment Division of any changes that could affect an exemption (transfer, deaths, moving, etc.). Likewise, PSAs could be contemplated to ensure that appellants understand that the appellants themselves bear the burden of proof for an appeal (e.g., they must prove that a lower value or an exemption is warranted).

The City Council could look at changing the assessment date to January from October as to bring Honolulu County in line with the other three neighbor island counties.

The new computerized equipment has been made operational and familiarity with it has increased. The overhead projector has been used to display the list of appellants present waiting to be heard and all appraisers now present their cases via PowerPoint presentations.

Presently there are three Boards handling all the cases on Oahu. The attached table shows how many appeals were filed in the tax years from 2006 through 2017, the cases heard and closed in the 2016 tax year (July 1, 2016 to June 30, 2017) up until June 9, 2017, and the numbers and percentages of cases where the taxpayers prevailed.

Boards of Review Annual Report for Tax Year 2016 Page 3 of 4 The City Council raised the appeal deposit to $50 (from $25) starting in March 2017, and applying to 2017 tax years and later. This increase will come closer to covering the administrative costs of taking in, scheduling, hearing, and processing the appeals.

Appeals should be heard in the tax year of the filing and not lumped together later with other back-logged appeals. However, the backlog of appeals has been greatly reduced, and there are now less prior year appeals than before (the Boards didn’t hear any 2010 or prior year appeals during the current tax year).

All members could have their stipends increased to $35 from the present $25. Chairs especially should have their stipends increased to $50 because of the added time spent as the chairperson and being responsible for setting the agenda and certification of all appeals. By increasing the stipends the City will be able to attract and retain highly qualified people to staff all of its Boards and Commissions.

______Lt~ Board I Chair Board II Chair Board Ill Chair Mike Ellis Donald Lau Lee Gordon

June 19, 2017

Copy to: Mayor of Honolulu City Council Director Budget & Fiscal Services BOR Deputy Corporation Counsel Real Property Assessment Administrator

Boards of Review Annual Report for Tax Year 2016 Page 4 of 4 BOARD OF REVIEW COUNTS_FOR HEARINGS IN THE 2016 TAX YEAR TO DATE (7/1/2016 - 6/9/2017) TOTALS

Tax Year 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 —

Cases fielded 0 2888 1884 1998 1298 1009 2403 1577 3048 2929 7492 5915

Cases Closed Board I 130 1631 84 55 2 3 0 0 0 0 0 0 1905 Board II 188 204 45 14 1 1 1 0 0 0 0 0 454 Board Ill 85 1 0 0 0 0 0 0 0 0 0 0 86 Totals 403 1836 129 69 3 4 1 0 0 0 0 0 2445

Settlements Taxpayer Prevails Board I 42 702 50 39 1 3 0 0 0 0 0 0 837 Board II 74 103 25 11 1 1 1 0 0 0 0 0 216 Board Ill 34 1 0 0 0 0 0 0 0 0 0 0 35 Totals 150 806 75 50 2 4 1 0 0 0 0 0 1088

Board I Taxpayer Prevails % 43.94%

Board II Taxpayer Prevails % 47.58% —

Board Ill Taxpayer Prevails % 40.70% —

TOTAL Taxpayer Prevails % 44.50% — BOARDS OF REVIEW ANNUAL REPORT FOR TAX YEAR 2017

This annual report for tax year 2017 is a joint collaborative effort of Boards of Review I, II, and III. Because it is a requirement for each Board Chair to submit an Annual Report and to avoid duplication of time, effort, and resources, a combined joint report is hereby submitted. The report is divided into five categories.

I. ORDINANCES AUTHORIZING BOARDS OF REVIEW II. MEETING SCHEDULE OF EACH BOARD Ill. TYPES OF APPEALS AND ASSIGNMENT OF CASES IV. CHAIRS’ LEADERSHIP ROLE AND RESPONSIBILITY V. RECOMMENDATIONS

SECTION I. ORDINANCES AUTHORIZING BOARDS OF REVIEW

As per Department of Finance of the City and County of Honolulu, State of Hawaii, Title 4

SECTION II. MEETING SCHEDULE OF EACH BOARD

Board I; Meets at 2:00 pm on more than half of the Tuesdays and Thursdays in a month

Board II; Meets at 2:00 pm on at least half of the Wednesdays and Fridays in a month

Board Ill; Meets at 1:00 pm one Tuesday per month, in some months

Boards I and II meet at 842 Bethel Street, Basement, Honolulu, Hawaii, 96813

Board III meets at 1000 Uluohia Street, Room 106, Kapolei, Hawaii, 96707

SECTION III. TYPES OF APPEALS AND ASSIGNMENT OF CASES

Boards of Review Annual Report for Tax Year 2017 Page 1 of 4 Appeals are mainly concerned with valuations based on and interpreted by the City Real Property Assessor.

For real property tax appeals, the ROH Section 8-12.3 specifies four grounds for appeal of the property:

IV. CHAIRS’ LEADERSHIP ROLE AND RESPONSIBILITY

Vice-Chairs should also possess the same qualities, since they are often called upon to run the hearings in the absence of the Chair.

V. RECOMMENDATIONS

The three Boards handle thousands of appeals each year and try to keep an excellent rapport between the taxpayer and the City. The Board members listen to appellants presenting their evidence and concerns. The Assessor’s Office has made progress in its efforts to get through the backlog of prior year appeals. The goal for 2017 was to catch up on any prior year appeals and hear as many 2018 appeals as possible prior to July 2018, to eliminate future backlogs, It may not be in the best interests of the City to lump all the appeals of consecutive years

Boards of Review Annual Report for Tax Year 2017 Page 2 of 4 together, and some appellants have complained about this procedure; however, it may be more cost effective for the City to handle the appeals together, and some appellants appreciate not having to attend multiple hearings.

Board Ill needs to replace two members who no longer wish to serve, and substitute members from Boards I and II have had to attend a number of hearings to ensure a quorum since there is one member that doesn’t attend any hearings. The Boards appreciate the priority that the Mayor’s Office has given to staffing each Board with its full complement of five members. Only one (1) Board Ill hearing had to be cancelled due to the lack of a quorum during this tax year.

Board Ill has continued its positive impact on reducing the case loads and making the residents feel the City is responding to the people’s needs in West Oahu (Ewa, Kapolei, Waianae, etc.).

Additional public service announcements (“PSAs”) could be considered semiannually or quarterly for publication in the local daily newspaper to ensure that all homeowner-occupants are aware of: (a) the home exemption program; (b) the requirements for filing; and (c) the need to notify the Real Property Assessment Division of any changes that could affect an exemption (transfer, deaths, moving, demolition and rebuilding, etc.). Likewise, PSAs could be contemplated to ensure that appellants understand that the appellants themselves bear the burden of proof for an appeal (e.g., they must prove that a lower value or an exemption is warranted). Appellants could be better informed about what evidence is/isn’t acceptable, i.e., formal appraisal dates, comparable sale dates, etc.

One Board member requested more programs to educate the elderly with the exemptions and credits available to them, and the City does provide staff to serve at the Senior Fair each year in September to provide exemption and credit assistance to seniors.

The City Council could look at changing the assessment date to January from October as to bring Honolulu County in line with the other three neighbor island counties. One Board member suggested that the City mail to any homeowner whose exemption will be removed for

Boards of Review Annual Report for Tax Year 2017 Page 3 of 4 the future tax year before September 30, so that they could refile prior to the deadline; the notice of exemption removal is handled by the assessment notice mailed on or before December 15, which is after the September 30 deadline to file for exemption.

The computerized equipment and overhead projector has been used to display the list of appellants present waiting to be heard and all appraisers now present their cases via PowerPoint presentations.

Presently there are three Boards handling all the cases on Oahu. The attached table shows how many appeals were filed in the tax years from 2007 through 2018, the cases heard and closed in the 2017 tax year (July 1, 2017 to June 30, 2018) up through May 30, 2018, and the numbers and percentages of cases where the taxpayers prevailed.

Board I has handled the majority of the appeals filed, working two days a week for more than half of a month, and Board II working two days a week for at least half of a month, and Board Ill on one Tuesday per month in some months.

All members could have stipends increased to $35 from the present $25. Chairs especially deserver higher stipends (such as $50) because of the added time spent as the chairperson and being responsible for any correspondence. By increasing the stipends the City will be able to attract and retain highly qualified people to staff all of its Boards and Commissions.

______L~ Board I Chair Board II Chair Board Ill Chair Mike Ellis Donald Lau Lee Gordon

June 1, 2018

Copy to: Mayor of Honolulu City Council Director Budget & Fiscal Services BOR Deputy Corporation Counsel Real Property Assessment Administrator

Boards of Review Annual Report for Tax Year 2017 Page 4 of 4 BOARD OF REVIEW COUNTS FOR HEARINGS IN THE 2017 TAX YEAR TO DATE (7/1/2017 - 5/30/2018) TOTALS

Tax Year 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 —

Cases fielded 1221 2303 2982 1932 2060 1347 1056 2446 1626 3169 3013 7550

Cases Closed Board I 79 736 26 86 23 0 1 0 0 0 0 0 951 Board II 348 151 16 25 16 3 3 2 2 2 1 1 570 Board Ill 35 1 0 0 0 0 0 0 0 0 0 0 36 Totals 462 888 42 111 39 3 4 2 2 2 1 1 1557

Settlements Taxpayer Prevails Board I 38 72 9 56 12 0 0 0 0 0 0 0 187 Board II 190 51 9 12 10 1 0 0 0 0 0 0 273 Board Ill 5 0 0 0 0 0 0 0 0 0 0 0 5 Totals 233 123 18 68 22 1 0 0 0 0 0 0 465

Board I Taxpayer Prevails % 19.66%

Board II Taxpayer Prevails % 47.89% —

Board Ill Taxpayer Prevails % 13.89% —

TOTAL Taxpayer Prevails % 29.87% — BOARDS OF REVIEW ANNUAL REPORT FOR TAX YEAR 2018

This annual report for tax year 2018 is a joint collaborative effort of Boards of Review I, II, and Ill. Because it is a requirement for each Board of Review (“Board”) Chair to submit an Annual Report and to avoid duplication of time, effort, and resources, a combined joint report is hereby submitted. The report is divided into five categories.

I. ORDINANCES AUTHORIZING BOARDS OF REVIEW II. MEETING SCHEDULE OF EACH BOARD III. TYPES OF APPEALS AND ASSIGNMENT OF CASES IV. CHAIRS’ LEADERSHIP ROLE AND RESPONSIBILITY V. RECOMMENDATIONS

SECTION I. ORDINANCES AUTHORIZING BOARDS OF REVIEW

As per Department of Finance of the City and County of Honolulu, State of Hawaii, Title 4

Subtitle 5 Real Property Taxation — Chapter 17—Assignment of the Director of Finance relating to the Assignment of Real Property Tax Appeal cases to the Board of Review pursuant to Subsection 8-12.7 (b), Revised Ordinances of Honolulu (“ROH”) Part XXIV.

SECTION II. MEETING SCHEDULE OF EACH BOARD

The Boards, in total, meet approximately three times per week, forty-four weeks per year, hearing appeals covering; (a) Residential, (b) Hotel and Resort, (c) Commercial, (d) Industrial, (e) Agriculture, (f) Preservation, (g) Public Service, (h) Vacant Agriculture Classes, and (i) Residential A. (ROH Section 8-7.1 (C) (1).)

Board I meets at 2:00 pm on about a quarter of the Tuesdays and Thursdays in a month. Board II meets at 2:00 pm on about a quarter of the Wednesdays and Fridays in a month. Board Ill meets at 1:00 pm one Tuesday per month, in some months. Boards I and II meet at 842 Bethel Street, Basement, Honolulu, Hawaii, 96813. Board Ill meets at 1000 Uluohia Street, Room 106, Kapolei, Hawaii, 96707.

SECTION III. TYPES OF APPEALS AND ASSIGNMENT OF CASES

All three Boards resolve real property assessment disputes (values, exemptions, and property classifications) between taxpayers and the City. The Boards consist of five members who are appointed by the Mayor and confirmed by the City Council for staggered terms up to five years.

Appeals are mainly concerned with valuations based on and interpreted by the City Real Property Assessment Division (“RPAD”).

Boards of Review Annual Report for Tax Year 2018 Page 1 of 4 For real property tax appeals, ROH Section 8-12.3 specifies four grounds of appeal:

IV. CHAIRS’ LEADERSHIP ROLE AND RESPONSIBILITY

It’s helpful for Board Chairs to have at least two years of experience running Board hearings or similar meetings. They should be able to attend the majority of the hearings and be available to represent the Board at official functions as necessary.

Vice-Chairs should also possess the same qualities, since they are often called upon to run the hearings in the absence of the Chair.

V. RECOMMENDATIONS

The three Boards handle thousands of appeals each year and try to keep a rapport between the taxpayer and the City. The Board members listen to appellants presenting their evidence and concerns. RPAD has made further progress in its efforts to get through the backlog of prior year appeals (some were awaiting the outcome of pending Tax Appeal Court appeals, which have now concluded). The continuing goal is to hear as many 2019 appeals as possible prior to July 2019, to eliminate future backlogs.

Board III needs to replace two members who no longer wish to serve, and substitute members from Boards I and II have had to attend a few hearings to ensure a quorum since there is one member that doesn’t attend any hearings. Additionally, Board II has a vacancy that needs to be

Boards of Review Annual Report for Tax Year 2018 Page 2 of 4 filled, and Board I has a member that may have now been serving for at least 10 years and may need replacement.

The Boards request that the Mayor’s Office give higher priority to staffing each Board with its full complement of five members. A few Board hearings had to be cancelled due to lack of quorum during this tax year.

Board Ill has continued its positive impact on reducing the case loads and making the residents feel the City is responding to the people’s needs in West Oahu (Ewa, Kapolei, Waianae, etc.).

It’s recommended that all Board hearings have the Corporation Counsel liaison present to review any and all legal questions that may arise, especially during the executive session.

Additional public service announcements (“PSAs”) could be considered semiannually or quarterly for radio, newspaper, television, and/or online media to ensure that all homeowner- occupants are aware of: (a) the home exemption program; (b) the requirements for filing; and (c) the need to notify the Real Property Assessment Division of any changes that could affect an exemption (transfer, deaths, moving, demolition and rebuilding, etc.). The Boards requested more information go to homeowners regarding the home exemption prior to the filing deadline of September 30. Some home exemption recipients never provided their dates of birth to RPAD, and it was suggested that RPAD contemplate contacting them to give them another opportunity to provide their dates of birth to take advantage of higher age-based exemptions.

Furthermore, PSAs could be contemplated to ensure that appellants understand that the appellants themselves bear the burden of proof for an appeal (e.g., they must prove that a lower value or an exemption is warranted). Appellants could be better informed about what evidence is/isn’t acceptable, i.e., formal appraisal dates, comparable sale dates, etc.

One Board member suggested that the City mail to any homeowner whose exemption will be removed for the future tax year before September 30, so that they could refile prior to the deadline; the notice of exemption removal is handled by the assessment notice mailed on or before December 15, which is after the September 30 deadline to file for exemption.

Presently there are three Boards handling all the cases on Oahu. The attached table shows how many appeals were filed in the tax years from 2008 through 2019, the cases heard and closed in

Boards of Review Annual Report for Tax Year 2018 Page 3 of 4 the 2018 tax year (July 1, 2018 to June 30, 2019) up through May 30, 2019, and the numbers and percentages of cases where the taxpayers prevailed.

The City Council raised the appeal deposit to $50 (from $25) starting in March 2017, and applying to 2017 tax years and later. This increase has allowed the City to come closer to covering the administrative costs of taking in, scheduling, hearing, and processing the appeals (that cost was conservatively estimated of at least $65 per appeal). The City Council could consider an amendment to the ordinance to consider the appeal deposit a non-refundable administrative cost when a taxpayer files an appeal.

Board I has handled the majority of the appeals filed, followed by Board II, then by Board Ill, although Board II has held the most hearings in the 2018 tax year.

Board Ill requested to review evidence provided with appeals prior to the hearing, but have been told by Corporation Counsel that due to the Sunshine Law, they must wait until the hearing to review, which results in appellants waiting for members to review what they submit either while they are presenting their case, or rushing to review it before or after the appellant presentation. Is there a way members could review the evidence prior to the hearing?

Board I hair fr~Board II Ci~~r Board Ill Chair Ruth Lin Randall Wh~&ff Lee Gordon

May 31, 2019

Copy to: Mayor of Honolulu City Council Director Budget & Fiscal Services BOR Deputy Corporation Counsel Real Property Assessment Administrator

Boards of Review Annual Report for Tax Year 2018 Page 4 of 4 BOARD OF REVIEW COUNTS FOR HEARINGS IN THE 2018 TAX YEAR TO DATE (7/1/2018 - 5/31/2019) TOTALS Tax Year 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008

Cases fielded 1483 1221 2303 2982 1932 2060 1347 1056 2446 1626 3169 3013

Cases Closed Board I 162 107 656 12 0 0 0 0 242 0 0 0 1179 Board II 327 246 13 19 13 5 1 0 0 0 0 1 625 Board III 91 1 1 0 0 0 0 0 0 0 0 0 93 Totals 580 354 670 31 13 5 1 0 242 0 0 1 1897

Settlements Taxpayer_Prevails Boardl 21 18 4 6 0 0 0 0 191 0 0 0 240 Boardll 69 94 4 8 6 2 0 0 0 0 0 0 183 BoardIll 20 0 0 0 0 0 0 0 0 0 0 0 20 Totals 110 112 8 14 6 2 0 0 191 0 0 0 443

Board I Taxpayer Prevails % 20.36%

Board II Taxpayer Prevails % 29.28% —

Board III Taxpayer Prevails % 21.51% —

TOTAL Taxpayer Prevails % 23.35% BOARDS OF REVIEW ANNUAL REPORT FOR TAX YEAR 2019

This annual report for tax year 2019 is a joint collaborative effort of Boards of Review I, II, and Ill. Because it is a requirement for each Board of Review (“Board”) Chair to submit an Annual Report and to avoid duplication of time, effort, and resources, a combined joint report is hereby submitted. The report is divided into five categories.

I. ORDINANCES AUTHORIZING BOARDS OF REVIEW II. MEETING SCHEDULE OF EACH BOARD III. TYPES OF APPEALS AND ASSIGNMENT OF CASES IV. CHAIRS LEADERSHIP ROLE AND RESPONSIBILITY V. RECOMMENDATIONS

SECTION I. ORDINANCES AUTHORIZING BOARDS OF REVIEW

As per Department of Finance of the City and County of Honolulu, State of Hawaii, Title 4

SECTION II. MEETING SCHEDULE OF EACH BOARD

Boards I meets at 2:00 pm on about a quarter of the Tuesdays and Thursdays in a month. Board II meets at 2:00 pm on about a quarter of the Wednesdays and Fridays in a month. Board Ill meets at 1:00 pm one Tuesday per month, in some months. Boards I and II meet at 842 Bethel Street, Basement, Honolulu, Hawaii, 96813. Board Ill meets at 1000 Uluohia Street, Room 106, Kapolei, Hawaii, 96707.

During the 2019 tax year, the Boards held fewer hearings than usual due to the COVID-19 pandemic that required the cancellation of most hearings from mid-March 2020 through the end of May 2020. Two hearings were held via teleconference to approve stipulated settlements offers, withdrawn appeals, and postponement requests.

SECTION III. TYPES OF APPEALS AND ASSIGNMENT OF CASES

Boards of Review Annual Report for Tax Year 2019 Page 1 of 4 All three Boards resolve real property assessment disputes (values, exemptions, and property classifications) between taxpayers and the City. The Boards consist of five members who are appointed by the Mayor and confirmed by the City Council for staggered terms up to five years.

Appeals are mainly concerned with valuations based on and interpreted by the City Real Property Assessment Division (“RPAD”).

For real property tax appeals, ROH Section 8-12.3 specifies four grounds of appeal:

IV. CHAIRS’ LEADERSHIP ROLE AND RESPONSIBILITY

Board Chairs should have the ability to manage a full agenda of appeals. They should be effective in writing and in oral communication. They should be able to demonstrate seasoned judgment, common sense, understanding and professionalism in dealing with people. Chairs should have the dedication and time to come in at least fifteen minutes early and not leave until all business is completed, and all documents are signed and checked. They should be able to serve as the point of contact between divisions and departments as required. They should have a working knowledge of property valuations as calculated by RPAD appraisers.

Vice-Chairs should also possess the same qualities, since they are often called upon to run the hearings in the absence of the Chair.

V. RECOMMENDATIONS

The three Boards handle thousands of appeals each year and try to keep a rapport between the taxpayer and the City. The Board members listen to appellants presenting their evidence and

Boards of Review Annual Report for Tax Year 2019 Page 2 of 4 concerns. RPAD has worked to eliminate most of the backlog of prior year appeals, and many of those remaining are tied to the outcome of pending Tax Appeal Court appeals.

Boards I and II both have a vacancy that needs to be filled, and Board I has a member that has now been serving for more than 10 years and needs to be replaced. Board Ill needs to replace one member who no longer wishes to serve, and substitute members from Boards I and II have had to attend a few hearings to ensure a quorum since there is another member that doesn’t attend any hearings. The Boards request that the Mayor’s Office give higher priority to staffing each Board with its full complement of five members.

Board Ill has continued its positive impact on reducing the case loads and making the residents feel the City is responding to the people’s needs in West Oahu (Ewa, Kapolei, Waianae, etc.).

Boards have consistently requested to have the Corporation Counsel liaison present regularly to review any and all legal questions that may arise, especially during the executive session; they understand budgetary constraints. The liaison is usually able to attend upon request.

City Council could consider an ordinance to require Realtors and/or Title/Escrow companies advise their clients of home exemptions that are currently available to them and how to file for exemptions online. Filing online is strongly recommended due to the near instant confirmation of filing received and to avoid any postal delivery delays or errors. The City also allows online filing of assessment appeals. RPAD has sent staff to present information to realtors’ groups.

Additional public service announcements (“PSAs”) could be considered mid-year for radio, newspaper, television, and/or online media to ensure that all homeowner-occupants are aware of: (a) the home exemption program; (b) the requirements for filing; and (c) the need to notify the Real Property Assessment Division of any changes that could affect an exemption (transfer, deaths, moving, demolition and rebuilding, etc.). The Boards requested more information go to homeowners regarding the home exemption prior to the filing deadline of September 30. RPAD followed the suggestion of the Boards to contact home exemption recipients who had not provided their dates of birth to do so to take advantage of higher age-based exemptions.

Presently there are three Boards handling all the cases on Oahu. The attached table shows how many appeals were filed in the tax years from 2009 through 2020, the cases heard and closed in the 2019 tax year (July 1, 2019 to June 30, 2020) up through May 31, 2020, and the numbers

Boards of Review Annual Report for Tax Year 2019 Page 3 of 4 and percentages of cases where the taxpayers prevailed. The statistics were slightly skewed in favor of the taxpayer due to the pandemic causing hearings from mid-March through May to only contain appeals that were stipulated for settlement, withdrawn, or postponed.

The City Council raised the appeal deposit to $50 (from $25) starting in March 2017, and applying to 2017 tax years and later, which has allowed the City to come closer to covering the administrative costs of taking in, scheduling, hearing, and processing the appeals (that cost was conservatively estimated of at least $65 per appeal). However, the City Council could also consider an amendment to the ordinance to make the appeal deposit a non-refundable administrative cost when a taxpayer files an appeal.

Board II has handled the majority of the appeals filed and held the most hearings in the 2019 tax year, followed by Board I, then by Board Ill.

The Boards have been told by Corporation Counsel that due to the Sunshine Law, they must wait until the hearing to review appellant evidence, which results in appellants waiting for members to review what they submit either while they are presenting their case, or rushing to review it before or after the appellant presentation. Is there a way members could review the evidence prior to the hearing?

I ~hair Board II C17~r •JBoard Ill Chair Ruth Lin Randall Wh~.tt~bff Jacinto Legal

June 1, 2020

Copy to: Mayor of Honolulu City Council Director Budget & Fiscal Services BOR Deputy Corporation Counsel Real Property Assessment Administrator

Boards of Review Annual Report for Tax Year 2019 Page 4 of 4 BOARD OF REVIEW COUNTS FOR HEARINGS IN THE 2019 TAX YEAR TO DATE (7/1/2019 - 5/31/2020) TOTALS Tax Year 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009

Cases fielded 1274 1483 1221 2303 2982 1932 2060 1347 1056 2446 1626 3169

Cases Closed —

Board I 38 125 22 7 1 0 0 0 1 0 0 0 — 194

Board II 22 263 24 11 0 3 0 0 0 0 0 1 — 324 BoardlIl 20 10 0 0 0 0 0 0 0 0 0 0 30 Totals 80 398 46 18 1 3 0 0 1 0 0 1 548

Settlements_Taxpayer_Prevails Boardl 37 60 15 4 0 0 0 0 0 0 0 0 116 Boardll 2 65 12 5 0 0 0 0 0 0 0 0 84 Boardlll 9 5 0 0 0 0 0 0 0 0 0 0 14 Totals 48 130 27 9 0 0 0 0 0 0 0 0 214

Board I Taxpayer Prevails % 59.79%

Board II Taxpayer Prevails % 25.93% —

Board III Taxpayer Prevails % 46. 67% —

TOTAL Taxpayer Prevails % 39.05%