BF Committee From: Amber Coutsos <[email protected]> Sent: Thursday, April 20, 2017 2:33 PM To: BF Committee Subject: BF-1 Testimony for Friday 042117 Attachments: FY20 18 BF-1 Mayor's Budget Testimony 04201 7.pdf Importance: High Aloha, I have attached Pamela Tumpap's testimony for the Budget & Finance Committee meeting on Friday, April 21st at 1:30pm on the proposed Mayor's Budget FY2018. She will be in attendance at the meeting tomorrow. Mahalo, ;; MAUI CHAMBER OF COMMERCE L KWOMNOIN LT Amber Coutsos Executive Assistant execasstcämauichamber.com Maui Chamber of Commerce 95 Mahalani St RM 22A Wailuku, HI 96793 Phone: 808-244-0081 Fax: 808-244-0083 http://www.mauichamber.com ounty.com 1 OFALA MAUI C HAM BEROF COMMERCE Testimony on BF-1 Re: Proposed Fiscal Year 2018 Budget for the County of Maui Thursday, April 20, 2017 Dear Chair Hokama, Vice Chair White & Members of the Budget and Finance Committee Aloha and Mahalo for the opportunity to provide testimony on the following Rates & Fees proposed in the Mayor's FY2018 budget. Real Property Taxes - While we appreciate a level playing field vs. what has occurred in the past where businesses have had to bear the brunt of the burden, we strongly oppose the 7.5% increase at this time for the following reasons. • Valuations (although not yet verified) are on the rise which will net the County more revenue; • We have not heard about significant cost cutting measures. • The rational for this increase is based on creating more affordable units, with 3% of the pro- posed increase going towards this effort. While all agree that this is critical as the County is said to be short nearly 14,000 units from 2015-2025, but there is no stated plan on how this will occur and there has been a long standing balance in the Affordable Housing Fund - cur- rently reported to have a balance of $5,986,221 as of 6/30/17. We feel that the County should move forward with spending the money already in the Affordable Housing Fund while creating a solid plan to create needed affordable units to present to the community to better justify the case for such an increase. Additionally, what we need for Affordable Housing/Units is a proactive approach to streamline the permitting process, an enabling land use review process, etc. This can be done in-house. • While Maui County's real property taxes rates are said to be the lowest in the nation, that comment does not reflect an apples to apples tax comparison given what our residents and businesses face in Hawaii. Many Counties fund their school systems, they have a sales tax vs. a regressive General Excise Tax, they may not pay state income tax, etc. • The State Legislature has a surcharge bill in Conference Committee now to add a surcharge to County Real Property Tax to fund pay increases for teachers. We have strongly opposed this bill. However, should it go through, that will be another hit for many visitor accommoda- tion businesses and individuals with investment properties. • The Hotel & Lodging Association reports that their properties make up 41.4% of the real property tax revenue. As a Chamber of Commerce, we are concerned about these business- es and all businesses in our County. When you add in all business categories, that number goes to 62.4%. MAUI CHAMBER OF COMMERCE Page 2 Testimony on BF-1 Re: Proposed Fiscal Year 2018 Budget for the County of Maui Friday, April 20, 2017 CORA Rates - We adamantly oppose the proposed rate increase for this industry which regularly seems to be unfairly hit with substantial rate increases as: • This industry's permit fees are based on per park, per activity and the Commercial Ocean Recreational Operators therefore hold multiple permits for different activities offered at each park and multiple park permits to address weather conditions and overcrowding. This is un- like other activity businesses, yet, we don't see other permit increases proposed. • In the 2015 Budget Process, this industry already experienced a significant increase with the first two permits increased from $500 to $1,000. • The Park Department sought a legislative change to allow them to then let available permits, but they have failed to release open permits. Further, after the last hit, some companies gave up permits, making more available, but these haven't been given out yet either. If the County is looking for revenue, the obvious thing to do would be to release open permits as soon as possible. • Further, there is a built up fund - Ocean Recreational Activity Fund - that has a long stand- ing balance over 1/2 a million dollars. It is currently at $521,468 That should be exhausted and enforcement done for those operating without proper permits before we hit this industry up again • Now the proposal is $200 per month, per permit, per park, per activity. That is an astronomi- cal hit on these small businesses who offer many benefits to our visitors and beach parks. That is for all permits, taking the first two from $1,000 to $2,400 each and each additional permit from $500 to $2,400. No other increase of this magnitude is proposed anywhere else in the budget. So, why this industry? They may be small in size, but they care about the en- vironment, educate visitors, have saved lives, help reduce liabilities for the County at beach parks where there are no lifeguards, and provide world class activities for our visitors. It's not right and it's not fair and we ask that the current fee schedule stand as is, without any in- crease until the department issue all available permits, ramps up enforcement, utilizes exist- ing built up funds and can solidly justify the need for rate increases without targeting one par- ticularly industry. To advance and promote a healthy economic environment for business, advocating for a responsive government and quality education, while preserving Maui's unique community characteristics. OrAlhk r 11 MAUI 4 A 0 CHAMBER OF COMMERCE ftLVOICE OFBUSINESSU LII I Page 3 Testimony on BF-1 Re: Proposed Fiscal Year 2018 Budget for the County of Maui Friday, April 20, 2017 Building Permit Fees - While it appears that these rate increases are meant to encourage more complete plan submission by the design community on initial submittal, we feel that the proposal will create unintended negative consequences for Owner/Builders and significant challenges for all. • The new rates being proposed are in addition to Design Review Fees already paid based on a percentage of the project. • Further, many times after a project is submitted for review and the County issues a letter of findings, the submitter resubmits their plans addressing all of the findings detailed in the first review, and then the County later adds additional findings. This occurs quite a bit and this proposal does not address that. • Also, if such fees are to be imposed, we would want to see an appropriate review timeline included. For example, if the review would be done in a week, most would be happy to pay an additional $250. • We cannot support the large staggered increases proposed of $250 to $500 and then to $1,000 for each additional submission, on top of the paid design review fees. It is too high and a review timeline should be included, along with a process to note that the first re- submittal is after all County comments have been shared and the applicant is responding to that. Solid Waste Rate Increase - We do not support a 22.2% rate increase for solid waste. • Increases beyond 5% are real red flags. In business, swift action is taken on these. • While the construction industry had a private source they could use for this, that landfill is now full and the County has no real plan of addressing this problem. Therefore, solid waste is currently going to the Central Maui Landfill which will fill it up sooner and reduce its intend- ed life. • We recommend the County consider land use approvals and permits for other private solid waste operations. To advance and promote a healthy economic environment for business, advocating for a responsive government and quality education, while preserving Maui's unique community characteristics. oil.r 4 140 MAUI A CI-IAMBEROF COMMERCE VOICE OF BUSINESS Page 4 Testimony on BF-1 Re: Proposed Fiscal Year 2018 Budget for the County of Maui Friday, April 20, 2017 Waiehu Golf Course - While we appreciate the Mayor and his team address significant cost over- runs and now clearly understand that the Waiehu Golf Course is a big red flag for this, it is also a be- loved golf course and treasured community asset. • Before closing, we feel the rates should be raised to the level needed to sustain operations. • The County should also explore public/private partnerships to handle the overall operations, which may reduce costs and keep needed rate increases lower. Refuse Collection Fees - We support the refuse increase from $24 to $30 per collection unit per month. • While we support this, we ask that this be a unilateral fee paid by all property owners. This would reduce illegal dumping and increase subscribers. • We hope the increased subscribers will offset the proposed $3 per car charge fee for residen- tial dumping at the Central Maui Landfill as we do not support this fee. • We believe this nominal per car charge will cost more to administer than it is worth and could encourage illegal dumping. Water Rate Increases - We support the proposed rate increases with the following comments.