Council Meeting - public_hearing

Aloha and good morning, everyone. It is Tuesday, July 14, 2026, and the time is 9.07 a.m. Will the Committee on Budget please come to order? Welcome to the committee members who are present in the chamber today. We have Committee Vice Chair Nishimoto, Council Member Kea'aina, Council Member Tauba, and Council Chair Waters. We'd like to also welcome Council Member Tupoula. I'd like to excuse Council Member Cordero at this time. She is on her way. Although remote oral testimony is being permitted, this is a regular in-person meeting and not a remote meeting by Interactive Conference Technology under HRS section 92-3.7. Therefore, the meeting will continue notwithstanding loss of audiovisual communication with remote testifiers or loss of the public broadcast of the meeting. Members of the public are allowed to provide oral testimony on all items on the agenda in two ways, in person in the council chamber and remotely via video conference or phone. Remote and in person oral testimony will be allowed when each agenda item is taken up. Before testifying, each person shall state their name. Each speaker may not have anyone else read their statement and is limited to a one minute presentation on each item. As both English and Hawaiian are official languages of the State of Hawaii, pursuant to Article 15, Section 4 of the Hawaii State Constitution and Section 1-13 of the Hawaii Revised Statutes, members of the public may testify in either language. For oral testimonies offered in Olalo Hawaii, additional time as may be necessary will be allowed for the testifier to provide an English translation of their testimony. All persons who have registered to testify in person will be called upon first. When your name is called, please come up to the testifier podium. Persons who have not registered will be given an opportunity to testify following the registered testifiers. After in-person testimony has concluded, I will proceed to remote testimony via video conference or phone. When I call your name, please monitor your screen and follow the prompt to unmute. For those who are joining us by telephone only, please press star nine if you wish to testify, and I will identify you by the last three digits of your phone number. When your number is called, please listen for the prompt to unmute and press star six. some friendly reminders and tips, video conference from a quiet location if possible. If you are also watching the proceedings on Olelo, please mute your television at the time you are called to testify. When the timer on screen reaches zero, please conclude your remarks promptly. Written testimonies including the testifier's address, email address, and phone number will be available to the public as described on the posted agenda. As a courtesy, please turn off or silence all cell phones for the duration of this meeting. Members, item number seven, Bill 40-2026, CD1 on page five of the agenda has been canceled and will not be considered today. I'd like to also welcome, joining us in the chamber today, Council Member Cordero. Moving on to agenda item number one for action, resolution 26-154. This resolution confirms the appointment of Shannon Smith to the board of review one for real property tax appeals of the city and county of Honolulu for a term to expire on June 30, 2029. Members, please note that we distributed a hand-carried proposed CD1 identified as OCS2026-04467. slash seven slash 13 slash 2026 at 1045 a.m., which makes the following amendments. Item A amends the title of the resolution to read as follows. Confirming the appointment of Shannon Smith to serve on the board of review two for real property tax appeals of the city and county of Honolulu. Amends references to board of review one to board of review two throughout the resolution. And the fourth whereas clause identifies the existing reference letter dated June 23, 2026 as mayor's message 87 2026 and as a reference to the letter dated july 9 2026 identified as mayor's message 94 2026 and d makes miscellaneous technical and non-substantive amendments i'd like to welcome joining us in the chamber today councilmember dos santos tam Before we call up the administration, we will proceed first with in-person oral testimony in the council chamber. Clerks, do we have any in-person testifiers for this item?

Chair, there are none.

Thank you. Proceeding now with remote testimony, clerks, do we have any remote testifiers for this item?

Chair, there are none.

Thank you. We'd like to welcome, let's see if we have with us, joining us in the chamber today, we have the appointee, Shannon Smith. Miss Smith, if you would just like to come and introduce Brief recess.

Thank you.

Thank you, members. At 9.17, we call the committee on budget back to order. Again, I would like to welcome with us to the chamber Ms. Shannon Smith, our appointee.

Thank you. My name is Shannon Smith. I moved to Honolulu in 1993, became a licensed realtor in 1998, and have been exclusively full-time selling residential real estate since 2003. So I'm very excited to try to better understand some of the way the process works. And I also sit on a professional standards committee, so I understand the necessity of looking at Specific documents in front of you and making a judgment based on the facts that's presented to you during that You know during that process. So Anybody has questions?

Thank you. Miss Smith matters any questions for the appointee. We'll start with councilmember Kiaina Thank you.

Good to see you Miss Smith and I do appreciate your professional background, because this board is critically important for a lot of people, both homeowners as well as developers. And I also appreciate that you have a certificate in historic preservation. So good for you. You know, over time, I've had various constituents come to my office requesting assistance with property tax disputes. And this year I've been contacted by numerous recent condo owners at Ulana at Ward Villages. And I'm pretty sure that the council member sitting next to me also has been receiving a lot of inquiries And they've been contacting me about assessments, tax assessments that they feel are based on inappropriate or incomparable comparisons, some which is twice as much as their appraisals from a few months before the city's assessment. The condo they live in is new, but has minimal amenities and is 100% workforce housing building with simpler and lower quality finishing and materials. One of your key roles as a member of the Board of Review will be to assess disputes between the city's real property tax office and property owners for mass valuations. Sorry. What? Are you being told not to answer this question?

Excuse me. Oh, you got to hold that? Yeah.

Wait, I haven't finished my question.

Yeah, I'm not interrupting. I'm talking to her about something.

Okay, we'd like to have Council Member Kiyaina finish her question for the appointee, and then if the administration would like to come up during discussion. But please proceed, Council Member Kiyaina.

For mass evaluations, do you think the class or type of building matters when looking at comparison cells? In other words, should we be looking at similar buildings when looking for comparable cells?

Well, I would hope that it would be somewhat based on value. And I am super familiar with one. I actually worked on that sales team. So I understand that, you know, if you're looking comparing buildings, they're definitely going to sell for a different value because that's how you evaluate any property would be based on value. what they're made of. Okay.

So you concede that it does matter, so that when you're doing comparable comparison and assessments, you can't just compare a workforce housing building with another building in that fair market value.

I'm sorry. ask CORE to chime in on this, but these are active board cases that, in my opinion, should not be discussed at this point. I don't know if CORE or Council Services can chime in on this. You're asking specific information relating to cases.

Just for the record, can you identify yourself, Mr. Takara?

I'm sorry, yes. Steve Takara, we're a property assistant administrator for the city. Thank you.

You're right, I probably shouldn't have brought up the building. If I didn't bring up the building and was just asking the question, you would be able to answer that, correct?

Well, I mean, I also have not been sat down and I've gone through no training as far as what the current, you know, the role that, the way that... Yes, but I'm asking your role as a realtor, not as a... Well, as a realtor, yes, I mean... the way that it finishes and certain things of a building absolutely should matter as far as a market value.

Yeah, that's all I need to hear. Thank you so much. Thank you, Council Member Kinney. Chair Waters.

Thank you so much. I mean, I find it very intimidating that a member from the RPAD budget and fiscal services team is standing over your shoulder. When you're sitting there as a tax appeals member and people like that are trying to intimidate you, are you going to stand up for yourself or are you going to just do whatever he tells you to do?

No, I would, if whatever's presented in front of me, like I said, I set on the standards and we have to just look at, I was just saying that we had a case where I felt that there was probable cause, but there was not proof provided to us. So we had to rule based on what is provided, you know, it's black and white, what's in front of you to look at that. And I would always You know interject my knowledge and what?

Understanding the rules and the laws apply those evenly no matter what now I appreciate that and part of the problem is that that you really don't have much leeway Right when when you're asked to decide these appeals so one of the things I'd like to know from you is once you have

a little bit more experience can you uh work with us to change the laws to make it better that's honestly part of the reason i applied to do this is i want to better understand um the the how that the assessments are even done and because i see some in my building where units that have no view or valued at one that is significantly better position in the building and just trying to understand what the rationale is behind some of the evaluations. I know it's a tough job because there's so much to consider, but I'm curious about how that it works and to try to see that if there's a way that we can You know make it better for everyone and make it evenly and fair for all the for our homeowners Appreciate that very much.

Thank you.

Thank you chair waters any further questions for the appointee Seeing no further questions members. We are thank you so much miss Smith members. We are in discussion Seeing no further discussion The chair recommends that resolution 26-154 be amended to the hand carry proposed CD1 identified as OCS 2026-0446 forward slash seven slash 13 slash 2026 at 1045 a.m. Any further discussion, any objections or reservations? Hearing none, the resolution is amended to a CD1. The chair then recommends that resolution 26-154 CD1 be reported out for adoption. Any discussion, any objections or reservations? Hearing none, so ordered. Thank you very much, Ms. Smith. Moving on to agenda item number two, resolution 26-155. This resolution confirms the appointment of Shannon Olivado to the Grants and Aid Advisory Commission of the City and County of Honolulu for a term to expire on January 14, 2030. Before we call up the administration, we'll proceed first with in-person oral testimony in the council chamber. Clerks, do we have any in-person testifiers for this item? Chair, there are none. Thank you. Proceeding now with remote testimony. Clerks, do we have any remote testifiers for this item?

Chair, there are none.

Thank you. We'd like to now welcome up, I think I saw her here. We have the appointee, Ms. Shannon Alivado. Good morning, Ms. Alivado.

Good morning chair, vice chair, members of the council. Shannon Olivado, thank you so much for this opportunity to the mayor's office and for the council's consideration. I'm Shannon Olivado. I do government relations in the daytime and I'm also a very active community member where I live in Waimanalo. Just honored to be considered for this position. I know how important the GIA Advisory Commission is and I just would love to have the opportunity to hear from the nonprofit organizations that have high interest in being considered for these grants. As we know, the community has been facing a lot of difficult times, not only locally, but on the federal level as well. And if anyone has been looking at how the nonprofits have been reaching for other opportunities, the Honolulu Council has provided them a very prime opportunity just to be considered for extra funding. They're in desperate need right now. I know many of you have been following the Kona Low Storms. We just saw a headline this morning about how the requests are coming in. So the importance of this commission is felt by everyone in the community and I would love an opportunity to just take a harder look at the applications.

Thank you so much, Ms. Alivado. Members, questions for the appointee? Council Member Tupoula.

Aloha and good morning. Thank you for being here. So thank you for your reference to the need for a lot of these GIAs. Specifically in the city and county, we have like a rubric. So it's a little different than the state side. So there's scoring. There's a lot of different things that happen that I feel like are transparent. But every now and then, there are mistakes that are made. I will say that. You know, there was a mistake made where there was a nonprofit in my community that honestly was scored incorrectly and later they tried to rectify it. But how do you think your role on the Grants and Aid Commission, as far as your background and your involvement in the community, can help with issues like that?

Thank you, Councilmember. I think my role is really to just take a hard look at the applications. In talking to past members, the application process is very timely and consuming. It's going to be upon the members of the Commission to look at each and every application, understand their need, and look at what the overall need in the community is and score them. at that time. The resources online, I've been taking a look at the online education. It's pretty in-depth, but if there's opportunity for these organizations to learn more about what the committee members are looking at in scoring, I think that would really help them educate themselves. Maybe look at how other organizations that were awarded, what they put forth in their application to help improve theirs because I think what the goal of this commission is, is really to look at the need of the community at the time. Needs change every year, and I think it's upon this commission to not only bring your own expertise in analyzing each application, but then coming together as a group to understand why one particular committee member saw something in an application and why another didn't, and comparing notes.

Yeah, it's important. I think two or three years in a row I held a town hall. And I worked with Grants and Aid so that we could disseminate information. And I think sometimes, not all the time, sometimes in the city we feel like we're being very, very clear, and we're not. It's not as easy for people to digest or consume the information on how to be prepared what is required, all of the other things. So we did actually have a few nonprofits speak at that town hall to kind of share their experience so that other people could kind of ask questions. But all of that has to happen before a lot of these things are posted because there are timelines where the GIA not committee, but I guess department within the city can't assist. There's like a time period where they can't answer questions when certain things have been disseminated. There's a time period to submit questions and get answers. So long story short, I think everything is going great. I work specifically close with them because of some of those issues. And I encourage you to continue to kind of, from an outsider perspective, suggest to us or even suggest to the administrator things that we could do better, because he's great. He's always open to feedback, but I think as things change or as new groups come on board, it could be starting from square one, to be honest. Every time I have a town hall, there's always people who are just like, never, ever done a GIA, need to be acclimated from the beginning. So thank you for your willingness and thank you for all your service to the community. Thank you, Chair. Thank you, Council Member Tupola. Council Member Kea-Aina.

Thank you. Good to see you, Shannon. And when I talked about the breadth of your experience during full council, I forgot to mention all of your nonprofit work. And so I just think you're a well-rounded nominee. One of the challenges, I feel that you understand the challenges that nonprofits are going. are going through. And as you know, because there's not a lot of funding streams, it's even more important of the role of Grants and Aid, as well as, quite frankly, the Community-Based Development Program, CDBG, out of the Department of Community Services. It's equally important. And I think that we need to ensure that a lot of nonprofits who are at least involved in housing, because I feel that that's the direction, should also look at that as a stream of funding. My question is, one of the concerns I get is capacity of grant writing. Because of the dearth of funding trickling down to nonprofits, a lot of small nonprofits are finding that they can't compete, and they're scoring lower. So my question to you is, what do you believe that the department or the advisory commission can do to build capacity within our communities, perhaps in consultation or collaboration with Hano and the Hawaii Community Foundation. What are your thoughts on that? Because I don't believe workshops are enough. You need to have workshops that strategically targeted the ability for long time, by the way, long time, not just small nonprofits, long time nonprofits who are finding that they're scoring low. They're not making the cut. What can we do to make it better for them?

Thank you for the question, Councilmember. Yes, I think Vice Chair touched upon the outreach efforts and that possibly being one of the outlets. But with respect to your comment with the smaller nonprofits not being able to access the funds, maybe it's having direct conversations with them and helping them understand why they did not get it instead of doing a major outreach effort. It could be more towards those that have applied in the past, have had a record of not even being considered or not even making the cut on the point system and working directly with them. I'm not, privy to the capacity of the committee members and whether or not we have the ability to go out and talk directly with these applicants. But I'd be willing to have a conversation with the other committee members and see if we can have working groups maybe to identify those smaller nonprofits and target them directly.

Okay, well, I guess I'm looking at more systemic changes. So maybe not the committee, but the Department of Community Services themselves to strengthen their ties because the same problems that we have for GIA, we have for CDBG. were about capacity. So I'm just making a comment that I feel that that needs to be attended to just as well as them learning what they did wrong in the last. Sometimes if you are not strong in grant writing, then it's cyclical. So our job is to help build the capacity within them to be able to know how to improve their chances. Anyway, thank you so much and you're a wonderful choice. Thank you so much, Council Member.

Thank you, Council Member Kia-Aina. Members, any further questions for the appointee? Thank you so much, and we appreciate you using your spare time to volunteer for this capacity.

We appreciate all that you do, Shannon.

Seeing no further questions, members, we are in discussion. Seeing no further discussion, the chair recommends that resolution 26-155 be reported out for adoption. Any discussion, any objections or reservations? Hearing none, so ordered. Moving on to agenda item number three, Bill 29-2026. This bill relates to real property taxation. Members, I will now defer to the introducer of this bill, Councilmember Dos Santos-Tam, for further explanation.

Thank you, Chair. Thank you for hearing this bill. It's a fairly short bill, but it deals with the sort of alphabet soup of housing programs that go to help low-income rental projects. There's many different types of financing, and there's many different regulatory agreements that these projects face. They come in different flavors. Sometimes they're with the city. Sometimes they're with HHFDC. Sometimes they're with HCDA. Sometimes they're with the federal government through LIHTC. Sometimes they're through all of these. depending on how a project gets financed. With respect to these projects, they can avail themselves of a property tax exemption on the city side, but the current language is very, very specific with regard to what needs to be submitted on or before September 30th. It must be a document from the agency regulating the housing project, blah, blah, blah, blah, blah. And my proposal here is to simply have the regulatory agreement or mortgage documentation available to real property so that they can properly grant the exemption here. I know that was a lot, but hopefully that made a little bit of sense, and I'm sure the administration will have some comments on it.

Thank you, Council Member Dos Santos-Tam. Members, before we call up the administration, we'll proceed first with in-person oral testimony in the council chamber. Clerks, do we have any in-person testifiers for this item?

Chair, there are none.

Thank you. Proceeding on with remote testimony, clerks, do we have any remote testifiers for this item?

Chair, there are none.

Thank you.

With us today from the administration, we have from the Department of Budget and Fiscal Services, Director Andy Kawano.

BUDGET CHAIR OKIMOTO, VICE CHAIR NISHIMOTO, CHAIR WATERS, HONORABLE COUNCILMEMBERS ANDY KAWANO, DIRECTOR OF BUDGET AND FISCAL SERVICES. I WOULD LIKE TO THANK COUNCILMEMBER DOS SANTOS-TAM FOR EXPLAINING THE ISSUE WITH REGARD TO THE various programs that are available from different agencies for rent relief for lower income renters. You know, this program under ROH Chapter 10-17 I'm sorry, chapter 8-10.17 and 8-10.18 is a very generous program. For this program, you define what the project is, and with regard to project for rental units, and with regard to those rental units, only 20% of the rental units have to be tenanted by renters that are at 80% AMI or lower. It's not 80% AMI with regard to rent, but with regard to income. This bill, which BFS strongly opposes, as the council member mentioned, would allow a mortgage document to demonstrate that the tenant qualifies And there are enough tenants that qualify in the project to be able to benefit from the exemption that would go to the landowner. The exemption is 100%. So 20% of the units are of lower income as defined. The entire project will be exempt from taxes. So it's very generous already. We don't know how a mortgage document will ensure that the project will function as required by the government agency, in this case the city, to provide rentals to lower income tenants. We also are not sure how our mortgage document would ensure that at least 20% of the tenants are earning no more than 80% of the area median income or AMI. So with that, we're really concerned about the potential impact of the program. Our real property assessment team shared some data. They said that if we include mortgage documents, essentially there could be 2,000 more projects on this island that could qualify under the program. And if you look at the top end, that would impact, reduce our tax revenues by about $40 million, which is significant in a time when we have constrained budgets and we're gonna have to fund collective bargaining increases for salaries and fringes that'll roll into the four year period starting, actually started fiscal year 2026. So we don't believe that this is good legislation and strongly oppose it. We'll take questions.

Thank you, Director Carbano. Members, questions for the Director, Council Member Tupoula.

Hi, aloha, Director, good morning. So prior to this suggestion of the mortgage document, it just says a copy of the regulatory agreement. Can you just define for me what that is? What is the regulatory agreement right now and how is that kind of more sound than the mortgage document? Thank you.

I'll give you the high-level review. So it's an agreement between a city agency, it could be DCS, it could be DPP, and the landowner, whereby the landowner agrees to carry out a city function with regard to providing rental units for lower income tenants. And they commit in a document that of the units that make up the project, and the project is also defined in the document as well, of the units defined in the project or included in a project, 20% of the units will be for those tenants at 80% AMI or lower. So there's an agreement and there's also agreement that, you know, the city will validate from time to time that the owner is in compliance. So that's my high level overview. If you want details, we have our administrator here that can give you details, but it's a 15 year document. So there's a commitment for 15 years to do that. And annually, the property manager slash owner will send rent roll information so that our iPad department can cross-check and validate that they're in compliance.

Yeah, and I think HUD does this as well. I mean, on the federal level, they actually do checks. They run checks on the properties that have been utilizing federal funds just to make sure that the AMI is still being properly upheld. So I'm guessing it's similar, right? What we're doing on our side. I guess my question would be, because this sounds very specific, how would a, because it says or mortgage documentation, what would that equal? Like that would be the owner just sending you the mortgage document as opposed to having the signed agreement?

Based on our reading of the proposed ordinance, that's what we believe that the mortgage document would be able to replace the regulatory agreement. If that happens, you open the door to more projects who could qualify. There's inequity because we have nearly 300 projects already that are operating under regulatory agreements, and they're benefiting from this very generous program. So to open it up, so to speak, and let someone send in a financing agreement to vouch that they are in compliance just doesn't do it for us. So we need to understand how that works out.

Yeah, and I'm guessing if it's a mortgage document, it's not going to have all the specificity of all of the AMIs and the unit numbers, et cetera. Am I correct on that? It sounded like the other one was more specific.

Yeah, absolutely. And we've had situations where a project goes out of compliance because the property owner runs it so tight. So they have only exactly 20% of the units that are deemed for low income renters. And from time to time, so sometimes the projects are part of multiple projects. They do things like they move units around or they put the resident manager, they move it from the market building to the low rental building. without readjusting, you know, the number of rental units that they have that would qualify and they go out of compliance. They do stuff like that and I've seen it and, you know, it's hard to fix and, you know, that's why the regulatory agreement is needed, especially when you have such a generous program.

Thank you. Thank you for your specification. Thank you, Chair, for the time. Thank you, Councilmember Tupoula. Councilmember Dos Santos-Tam.

Thank you, Chair. First of all, we've had a number of meetings on this. This is my first time hearing about the potential 2,000 projects that this would have affected. And I'd really like to understand that piece better since it's my first time hearing about that specific number. Is there a way to get that information

Yes, we just worked on it recently because we didn't think the bill would continue to move with the clause, the OR clause for mortgage documents. So we had to do more research and dig into the data, but we can get you more information.

Yeah, I would appreciate that. As I've mentioned, there's a number of different ways that these projects are regulated. Sometimes it's by the Fed, sometimes it's by the state. How does the city currently assess whether a project is quote-unquote compliant if it's a state regulatory agreement or a federal regulatory agreement?

Since our administrator's here, I will allow him to respond to that for the right details.

Yes, good morning, budget chair, vice chair. Steven Takard, we're a property assessment administrator. The annual certification includes a certification from a regulatory agency. So in cases where ACDA or HSFDC or a city agency, they would supply the certification document confirming or assuring that the property management or the project complies with the original agreement which merits or grants the exemption.

So in that case, we're sort of taking the state and feds at their word and to the extent that they do their own checks and compliance.

Correct. Okay. Because that's what the agreement states.

Got it. And then within the city, it was mentioned that these regulatory agreements with the city are either with DCS or DPP. I can't imagine there's another agency involved.

BFS also is included, yes.

So for those projects where there's a city regulatory agreement, how does the city go about verifying compliance right now under all the terms of the regulatory agreement?

I'm not sure the mechanics of each agency, but they supply us a list or certifications along with the actual applications from the claimant that they're in compliance. So we also ask for rent rolls as well that we double check.

And you actually double check those? I'm sorry? And we actually double check those in a robust way?

Yes, yes, yes, yes. So it's maybe a triple check at that point.

So would we be able to continue doing that if we had the initial regulatory agreement, but then on an ongoing basis, the mortgage documentation with the rent rolls?

Yeah, I guess that's part of maybe director's question. If I can ask it in a different way, how would the mortgage documents serve as basically a government agency and to assure that the 20% of the tenants are at 80% AMI?

I think the challenge here is, under the current process, a building goes through, say, the HCDA process. HCDA says, here's our agreement. They file it with the Bureau of Conveyances. And I suppose the developer then turns it into you. And right now, they simply just go and send a letter to HCDA and say, well, are we good? And they send a letter by September 30th, and you guys say, okay, well, we got this letter, and you guys get your property tax exemption. And it seems like there's a lot of paperwork here when there's already some other government agency like HCDA, HHFDC, et cetera, already verifying compliance. And for the real property side, what I'd like to... What I'd like to do is make it as sort of easy as possible here rather than creating, you know, multiple levels of paperwork. And so I think, you know, based on the comments today, maybe we need to continue working on this to really resolve. You know, this has come up for a few of the HCDA regulated buildings, and I really want to drill in on that. I understand that there might be 2,000 projects island-wide where this might be an issue or cause a problem, but You know, HCDA has a very specific regulatory structure, and I don't think we need to be reinventing the wheel there, similarly with HHFDC, and so perhaps we can continue working on this based on the comments today.

If I understand the comment or the, The intent of the bill, it's actually replacing the government agency. So the mortgage document would serve as the government agency. The way I understand your comment is that they would go through the government agency, but this proposal is removing that government oversight that we need that's been historically successful, because now the mortgage documents, the bill says or, so now it replaces it, so you don't have a government oversight. So that's why I was asking, how does the mortgage documents, because my understanding is, The mortgage, I'm asking, am I missing something that the mortgage has assurances that they would comply with the exemption provisions?

I think that the core issue here is when there's another government agency involved that's already doing its checks, HCDA, HHFDC, et cetera, for the purposes of real property tax, I want to make sure that we're not asking for sort of of the documents in order just to get something that they get each and every year in order to you know recertify I think we can streamline this process and make it a little bit easier so I'd like to just explore that and this can be a vehicle to do it but I think maybe based on comments today there's a little bit more work to really drill down on how we can facilitate that yeah I think we're not on the same page because

proposal takes away that oversight. So you're going to have projects that have nothing to do with government oversight, just the mortgage documents. If I'm understanding the comment correctly.

Thank you, Administrator Takara. Thank you, Council Member Dos Santos-Tam. Members, any further questions for the administration? Seeing no further questions, members, we are in discussion. Okay, hearing the discussion and the testimony input from the administration, I first of all want to just thank Council Member Dos Santos-Tam. I understand, I appreciate the intent behind the measure as it relates to what we can do to, like you said, streamline exemptions for the low-income rental housing and tenants who are affected by that. hearing this new information from the administration and I encourage the administration to kind of take what we do seriously. I've heard more than once that you didn't anticipate it going further until it's here. So I heard Council Member DeSantos-Thames say that here in meetings you guys have had new information has come since then. So I just encourage administration to really when you see us doing things not to wait till the 11th hour or at this time we're catching it you know in this first committee hearing but really continue to work with us. We're willing to work with you guys and so Hearing the discussion and knowing that there is some new information that kind of came about, I want to allow the time to discuss between administration, Council Member Dos Santos-Tam, as well as us. So at this time, the Chair recommends that action on Bill 29-2026 be postponed to a date and time to be determined by the Chair. Any further discussion? Any objections or reservations? Hearing none, so ordered. Thank you. Members, moving on to agenda item number four, Bill 33-2026, CD1. This bill relates to funds. Members, we have posted to the agenda a proposed CD2-OCS-2026-0422 0422-7 slash 7 slash 7 slash 2026 at 1 16 PM, submitted by myself. For your information, the amendments are listed on the agenda. Members, I will now defer to the introducer of the bill, Council Member Tupola, for further explanation.

Thank you, Chair. This is in regards to Parks Maintenance and Recreation Services Revolving Fund. We've discussed it in my committee. It's definitely for us to be able to hold over contracts outside of the fiscal cycle, which will help all of our parks. However, today I'm going to ask that we postpone action until August. I have a few more edits, but once it's done in this committee, it is going to go for third reading, so we're hoping that it can be the best version possible. This is something new that we're doing, and we're hoping that this will be set so that we can actually increase the amount of services and funds that are available to maintain our parks. Thank you, Chair.

Thank you, Council Member Tupoula. Before we call up the administration, we'll proceed first with in-person oral testimony in the council chamber. Clerks, do we have any in-person testifiers for this item? Chair, there are none. Thank you. Proceeding now with remote testimony. Clerks, do we have any remote testifiers for this item?

Chair, there are none.

Thank you. Joining us in the chamber today, we have from the Department of Parks and Recreation, Director Laura Thielen. Good morning, Director Thielen.

Good morning, Chair. Good morning, committee members. Laura Thielen on behalf of the Department of Parks and Recreation. I think we began this conversation about two years ago with the Parks Committee Chair, and it's been a long road. We support the CD1 version. We support the amendments proposed in the CD2 version, and we will continue to work with Council Member Tupola on any additional amendments. Unlike a lot of other departments, the Department of Parks and Recreation does not have a special fund. And what that means is when funds are allocated to the park department, they will lapse at the end of a fiscal year. and it cannot receive dedicated funds that would be hold over to a future fiscal year. It also cannot obtain any fees or revenues from any things like entry fees. Those would go to the general fund. And so these special funds created would allow the department for both the parks maintenance and recreation services as well as the botanical gardens and community gardens and community forestry type of projects to be able to have funds dedicated to it that would hold over into a fiscal year. The intent is not to increase a fund balance. The intent is to spend the funds. And so the monies would then be going out on a regular cycle, but as you folks know, oftentimes procurement or other things may delay something. A project may be delayed due to a historic review or other things that may take a little bit longer than anticipated. So I'd be happy to answer any questions if the members like. I didn't want to bore the people that have been on the Parks Committee and have been part of the larger discussion, but I know we have other members that have not been part of that committee.

Thank you, Director Thielen. Members, questions for the director? Thank you. Seeing no further questions, members, we are in discussion. Okay, seeing no further discussion, The Chair recommends that Bill 33-2026 be amended to the posted CD2 identified as OCS 2026-0422-7-7-2026 at 1.16 p.m. Any discussion, any objections or reservations? Seeing none, the bill has been amended to a CD2. Okay. Okay, thank you. I just want to mahalo Council Member Topolo again and thank you for your input. We want to ensure that this measure, before it passes third reading, is properly amended. So the Chair recommends that action on Bill 33-2026-CD2 be postponed to a date and time to be determined by the Chair. Any discussion or objections or reservations? Hearing none, so ordered. Moving on to agenda item number five, Bill 44-2026. This bill relates to revenues and funds. Members, I will now defer to the introducer of the bill, Council Member Kia-Aina, for further explanation.

Thank you, Chair. Before I talk about what Bill 44 does, I would like to talk about the ordinance that it is amending, and that would be Ordinance 2133 that was passed in 2021. And what this ordinance did was it set aside 8.34% of all transient accommodations taxes to be used to mitigate the impacts of visitors and public facilities and natural resources, including the restoration operations and maintenance of beaches and parks, and also supplement and not supplant any funds regularly appropriated for the purposes specified. under this measure. Currently, 100% of these funds, which is about $8.99 million annually, and it's only likely going to increase as the TAT increases, It is administered out of the Department of Budget and Fiscal Services, and it's been around five years. And, you know, currently all departments are eligible. And I've been watching this year as, I think it's one of the first times that 100% of those funds is going to the Department of Parks and Recreation. I have expressed concern. I believe that the process needs to be a little more transparent for the council members. This year's funding will be used mostly to to help with regard to the fixing of a lot of roofs at our parks, which are in dire need. But I don't know if that was the intent when we had crafted this because there's a lot of other needs. Again, it's not to... supplant it's supposed to supplement a base funding for the park so having said that i think it's a high time given the fact that uh councilmember topola is advancing uh both bills 32 as well as 33 i did feel that the tat needed a time for revision and so under bill 44 What I do with 100% is that 75% will go to the Department of Parks and Recreation, 65% to the Maintenance and Recreation Services Revolving Fund, 10% to the Botanical Gardens and Urban Forestry Revolving Fund, and lastly, 25% would go to the Department of Enterprise Services to the Honolulu Zoo Fund. And so I think that this is a measured approach given the time that we've had to see about whether or not the current system is working. I believe that it could be improved and it could be better improved by directly putting these funds in areas where number one, there is need and in alignment with the intention of this ordinance.

Thank you, Council Member Kea-Aina. Before we call up the administration, we'll proceed first with in-person oral testimony in the Council Chamber. Clerks, do we have any in-person testifiers for this item? Chair, there are none. Thank you. We will now proceed with remote testimony. Clerks, do we have any remote testifiers for this item?

Chair, there are none.

Okay. We'd like to welcome back again with us Director Laura Thielen from the Department of Parks and Recreation.

Thank you, members of the committee. Laura Thielen, on behalf of the Department of Parks and Recreation. We also have with us today the Director for the Department of Enterprise Services, who may also want to speak as well. I would like to address remarks on both Bill 44, as well as the next bill on the agenda, which is a similar bill submitted by Councilwoman Tupola, Bill 49, I believe it is.

Director, I think we have to just stay within the... Confines of bill 44 at this time, but we do take up 49 We can't you have you come up again?

Thank you, right? So if I if I may Just in the context of my remarks on bill 44 Initially when the administration we started this discussion I think there was some uncertainty by the Department of Budget and Fiscal Services about allocating a full 100% of of that 8.34% of the TAT. So the initial discussions was about allocating 50% of that. I think in the intervening time that is passed, the administration is in agreement that it's best at this point in time to allocate the full 8.34%. And so there is support for the allocation that is in Bill 44 with 100% of the 8.34%. So I want to thank the council member, Park Committee Chair, for working with us so diligently and moving the discussion forward about having an allocation. It's been a pleasure to work with the Park Committee. And I also want to thank the councilwoman, who initially put in the legislation to have the 8.34% carved out for the impacts of tourism on recreational activities, because we think that is really important. So just in that larger context, we do support the allocation in Bill 44.

Thank you, Director Seelan. Members, questions for the Director? I do believe we have with us from the Department of Enterprise Services as well, Director Data-Hollyfield. If you would like to come up, Director.

Good morning, Dita Holyfield, Director of Enterprise Services. Good morning, Chair Okimoto and Vice Chair Nishimoto, Chair Waters, good to see you this morning. Thank you so much, Councilmember Kiana for this wonderful opportunity. A couple things I just wanted to share briefly this morning, and that is we got some of the latest comp numbers from the tourism side. We are up 4,000, over 4,000 visitors this last year, which is going to be, you know, there's always going to be mitigating circumstances in which we are having to take care of our facilities. I wanted to also thank Esther for thinking of us in this particular piece. I wanted to introduce, if I could, Chair, if I could introduce our brand new zoo director. His name is John Barry, and he comes from the Washington D.C. Zoo. He then went to run the federal government, and then he became the ambassador of Australia, and now he is the new director of the Honolulu Zoo and I just wanted to take a few minutes since we're talking about all the elevation opportunities. Director Berry.

Thank you, Madam Chair, Chair Okamoto. Chairman Waters, it's an honor to be with you today. And Chairman Toba, I look forward to working with you and your committee. I love your shirt. And of course, Council Member Kiyohana, it's just a great honor to be with you. I'm very happy to report one month in, that we have got a phenomenal staff at the zoo whose passion for wildlife is second to none. And with that passion, I think we've got it within our reach with your help and with the mayor's to not only make us the number one tourist destination in Honolulu, but I believe also the best zoo in the world. And so it's a great honor to be with you and happy to answer any questions that the committee would have.

Thank you, Director Barry. Members, do we have any questions for our Department of Enterprise Services or our zoo director, Council Member Kia'aina?

Thank you. Thank you, Director Berry. You know, before I ask my question, I need to let you know, and I know we know each other, but I would like to say this publicly and profoundly. You have had various roles, stellar background at the federal government, but I personally wanted to thank you in your role as the Assistant Secretary for Policy Management and Budget at the US Department of the Interior under the Clinton administration, where you oversaw the federal native wine relationship. And I do want to brag to my colleagues that in concert with the Justice Department, and after the apology resolution, it was Director Barry in his former position where he and the Justice Department issued From Mauka to Makai, The River of Justice Must Flow Freely, a report on the reconciliation process between the federal government and Native Hawaiians. And the reason this report was important, although reconciliation is still continuing, is that for the first time in history, the US government is on record as supporting self-determination for Native Hawaiians within federal law. So I just wanted to thank you. And I know now that you're back in Hawaii, we are going to get the Hawaiian community together to properly thank you. Now, turning back to the Zoom. So you've been there over a month, and you've made a few observations, but I wanted to talk specifically about the upgrades that you envision that we need for the zoo's current exhibits and animal inventory.

Thank you, Councilmember. You know, the zoo is a city within a city, if you will. Every day not only do we have keiki and educators on site, we also have to deal with security and sewage and electricity. And as you also are well aware, it is one of the older zoos in the world. And so that brings both benefits and challenges and the infrastructure definitely faces challenges. Since I've only been there one month, but the power has gone out twice. And thank goodness for the support of my colleagues in the administration. They've been helping us mightily. And the goal first is to catch up on sort of deferred maintenance. But the real vision is to, in my opinion, I would say about a third of the zoo is underutilized or underperforming in terms of what it should be doing to make the next generation of conservationists through awe and inspiration of our exhibits and our ambassadorial animals and I think why I'm so excited by not only this legislation, but also the amazing support that exists throughout the community. I believe that we're going to be able to take all of these exhibits to a whole new level. And starting with Giant Panda, which hopefully will be proceeding forward, the mayor's in very good discussions with the government of China. And I think that could be a very dynamic heart to the zoo to the new new exhibit tree in the zoo But we also face many challenges. So for example orangutans in Sumatra and Malaysia are Crashing in populations just like the Kona lows hit the islands here We lost about 500 orangutans through landslides and storms that were occurring in our neighbors and So I'm looking at refreshing the old chimp exhibit to become a new orangutan exhibit, which I think could be very dramatic for the city and would also help our partners in the Orangutan Foundation because their sanctuaries right now are busting at the seams. There used to be, in the 1980s, an Australia exhibit at the zoo. And I would love to proceed with bringing that back with a lot of wonderful animals that our children in Keiki can truly appreciate and learn from. We are refreshing right now our giraffe exhibit to make it a multi-animal exhibit. We will be allowing our giraffes access to that yard for 24 hours a day with improvements that are being made right now this week. And in the fall, we hope to welcome two zebras. And we look forward in the future if that integration goes well to maybe adding in ostriches as well to the African exhibit as well. I think what you see is I foresee anchor exhibits throughout the zoo that can be very dramatic, very exciting, and then they'll be linked with smaller exhibits with smaller animals. But in closing, I just would make one last point, and that is one of the zoo's core missions is conservation. And they have a very proud history and one I am proud to join and hope to help take to even more accomplishments. The zoo was the first to ever breed Galapagos tortoises in the world. And thank goodness they did because that species might be extinct had they not. And their work, our ancestors' work in previous generations, allowed Galapagos tortoises to be bred up and brought back to Galapagos. And the population there is holding very steady. And our oldest resident in the zoo is Jaws, who came to the zoo, we're uncertain of his age, but was already of mature age when he arrived at the zoo in 1929. and still going strong today. So it's a great example. But we've been involved also in conserving Hawaii snails, the precious snails, and are now involved with many partners, including the DLNR and the director and the US Fish and Wildlife Service And what is happening on Kauai is that there are a number of birds that are facing severe challenges. And the ani-aniao is the smallest of all Hawaii's honeycreepers. It's about the size of your thumb and only weighs 10 grams. But the mosquito populations have finally gotten to the mountaintops in Kauai, and they're having decimating results. And it is rare where a zoo is asked to bring in, if you will, an ark population that in case of an extinction in the wild, over time when we're able to fix those problems that are happening in the wild, we'll be able to reintroduce these animals. And that process is underway now. And it's exciting. Our team has been volunteering. And this is one where it's all hands on deck. And I think it's going to happen.

Thank you so much. I really love your energy. I think we're going to have to have you come back to our Public Safety and Parks Committee. And you can do an info briefing there. Thank you so much, Director. Did that answer your question, Council Member?

Yes, and thank you for talking about Kauai because the social media feed is burning and people are crying in Kauai right now. So I just like the fact of what you're envisioning at the zoo, but more importantly, what you could do for conservation because what is happening is going to be happening all around the archipelago. and we have to look at innovative ways of seeing the various partners to help in the conservation. Thank you so much. Thank you.

Thank you, Council Member Kaina. Members, any further questions? Seeing no further questions, members, we are in discussion. Committee Chair, Committee Vice Chair Nishimoto.

Thank you, Chair. I do think this bill and the next bill provides funds to some worthy causes. I don't have a problem with that. I do have some reservations about earmarking things to specific programs. As someone that was on the Finance Committee in 2006, 2007, 2008 in the legislature, when we had sharp economic downturns, and we cut our state budget by 30%, and we swept every available special fund we could just to balance the budget. I'm always cautious to put things in specific buckets or for specific things. It gives us less flexibility in the future in case we have another downturn like we did in the mid-2000s. For those reasons, I'll be voting with reservations on this one and the next one.

Okay, thank you, Vice Chair Nishimoto. Members, any further discussion?

Okay.

Seeing no further discussion, the Chair recommends that Bill 44-2026 be reported for passage on second reading and scheduling of a public hearing. Any further discussion? Noting the reservations of Committee Vice Chair Nishimoto, any objections or further reservations? Okay, hearing none, so ordered. Moving on to agenda item number six, Bill 49-2026. This bill relates to revenues and funds. Members, I will now defer to the co-introducer of the bill, Councilmember Tupoula, for further explanation.

Thank you, Chair, and thank you for introducing this with me. So in this bill, half of it is for the parks and half of it is actually for the general fund. And so this is something that we discussed with the administration and this was their position. But I do think that perhaps they've come around and now they're okay with maybe the full 8% going to parks, which is fine. And I think obviously dividing it into our maintenance, into the botanical funds, and with Council Member Kerr and his version into the zoo fund is fine as well. I think that Director Thielen ultimately is the decider of what is the best use of the funds that go towards the parks. And again, it's only the 8% of the TAT, so it's not the full amount, but I'm fine with either version. I mean, obviously I want all of our parks to succeed. I think that the funds going towards it indefinitely, like all of it in, in totality is up to you. I do think that the administration is probably going to be fine with either and then whatever happens and if it gets consolidated or if maybe the best versions get put together, it's also fine with me. But thank you chair. Thank you so much. Council member to Paula.

Okay. Okay, before we call up the administration, we'll proceed first with in-person oral testimony in the council chamber. Clerks, do we have any in-person testifiers for this item?

Chair, there are none.

Thank you. Proceeding now with remote testimony. Clerks, do we have any remote testifiers for this item?

Chair, there are none.

Thank you. We'd like to welcome back with us from the Department of Parks and Recreation, Director Laura Thielen.

Thank you, council members. Laura Thielen, Department of Parks and Recreation. I won't repeat the items I said before, but just a comment on the concerns that were expressed. The bulk of the time, the economy is fine. What happens is if you dedicate the funds, which these bills propose to do, it allows the departments to plan for the expenditures in advance. If the departments have to come up annually to ask for a portion of these funds, we do not find out until June whether that is going into the budget starting July. And that really doesn't give the departments an opportunity to plan. So by dedicating the funds, we can plan in advance for doing long-range planning, implementing that long-range planning. So for example, Hoʻomaluhia, which has approaching 800 000 visitors a year just one of the botanical gardens has just completed a long-range master plan that was done with the use of the tat funds which is fantastic because they never had the ability to do that in the past and so now we're going to be working on the implementation of that plan by having the dedicated revenues we can start to progress uh work with budget and fiscal services match that with cip you know start to implement the different things to be able to serve our visitors and our local residents that go to these places. And that's just a really important opportunity that we don't want to miss out on. So thank you very much for your support.

Thank you, Director Thielen. Members, questions for the Director? Council Member DeSantos-Tam.

Thank you, Chair. I have a specific question about in Bill 49, it proposes 50% of the revenues must be deposited into a special account in the general fund to be appropriately named by the BFS director. We currently have a parks and playgrounds fund, which I understand is sort of the contributions from developers. How does this all fit in with what's being proposed here? I don't like the idea of having multiple funds that are doing kind of similar things, and that's more work for you guys to keep track of as well.

Thank you for the question. So the Parks and Playgrounds Fund is related to another ordinance which requires developers to either make a park contribution either by dedicating land for the park or in lieu of land, dedicating revenue. And so that revenue is kept in an account and restricted under the ordinance for use to improve a park near the development. So it's a very restrictive fund. And it's been interpreted to mean that it can only go to capital improvements. So it cannot be used to say put in benches and trees and a drinking fountain because those are not capital improvements. And so that money tends to sit until there is a capital improvement in the location of that development. That is what is delaying a lot of the funds to go out. Normally the contributions are in such a small dollar figure, they don't justify creating a capital improvement for it. So for $50,000, we're not going to go and start a million dollar project for that. The parks and playground funds, if it's above, my rule of thumb is if it's above $500,000, then we could go ahead and initiate a capital improvement project. If you folks wanted to get the money out quicker, and you amended that ordinance to allow us to do non-capital improvements to a park, which would open up the door for smaller amenities, which would improve a park, we could get that out very quickly. These special funds are going to be something different. They are large amounts that can go for a variety of purposes that is listed in the funds. So it can go for recreational programs, education programs, long range planning, minor improvements, major improvements.

Thank you. That's exactly the answer that I wanted to hear, which is one of my frustrations with the Parks and Playgrounds Fund is that you're right, small amounts, relatively small amounts go in and then they just sit and no one ever sees the benefit, even though we say, oh, the developer is supposed to be helping with this park.

We'd be happy to work with your office on some amendments to the ordinance if you wanted to consider it that would allow a more expeditious expenditure and park improvements to go in place faster. Okay.

Thank you.

Thank you, Council Member Dos Santos-Tam. Council Member Cordero.

Thank you, Chair Okamoto. Hi, Dr. Thielen. Thank you very much for explaining a bit as to why a lot of the funds will then go underutilized, waiting for capital improvement projects. and other types of restrictions through funds. Are there other types of restrictions that occur? And I do appreciate the recommendation on the solution so that we can get further funding out, but are there any other types of restrictions that then causes lapse funding? Because we did have a pretty big discussion with how much funding's lapsed over in your department.

So on the parks and playgrounds money does not lapse because that was dedicated for a specific purpose. So that will hold over and that's why you see it year after year in the budget item. The funds that we have, we've really reduced the lapsing in our department when we shifted over towards using master agreements. And that has allowed us to work much more expeditiously on getting funds out. It's mostly the lapsing funds that you will see from the Department of Parks and Recreation may be on salaries. And I'd like to say that we've also significantly reduced our vacancy rate. We went from about a 24% vacancy. We are now at 17% through our hiring expeditiously. So we have filled 200 positions over this last year. But lapsing funds for our department tends to be mainly in the salary. and the salaries were reduced in this year by over 5%, so you will likely not see that type of lapse in fiscal year 27. Wait, what fiscal year?

Fiscal year 27.

Yeah, thank you.

Thank you. It's all good. I don't even know what you're sometimes too. So I also have a question that is kind of sticking with me when you mentioned that it will help for better planning in the next fiscal years. Would you be able to share a little bit more about that? Because I'm sure it's just beyond the playgrounds and fund itself, right? So what other components come into play?

So for the planning, what we've been doing is a couple things. I mentioned the botanical gardens. There's five botanical gardens. They're really very short staffed. I mean, they're not staffed well. They have a huge number of visitors coming into them and also a huge number of residents. We've done the Ho'omaluhia Long Range Master Plan, which now gives us a vision for that botanical garden, and we would be doing a lot of improvements there. Our botanical garden director is retiring, which we're very sad to see her go, but it does give us an opportunity to try and bring in somebody that can help carry that vision forward in the future. We are working on the education program at the Botanical Gardens, which is highly popular. And so we are trying to reorganize that so that we can expand our educational offerings through the Botanical Gardens. On the recreation side, as you folks know, we've been doing a lot of work around youth leadership and our summer fun programs and starting to build that out the junior leader, the intermediate through high school student program. Our kupuna clubs, we are working on revitalizing those because that old model of the kupuna club is not that attractive to the new kupunas that are coming into that age group and so they want more active activities. And then as you know, we've been doing a lot around planned maintenance and asset management. So we did, with the thanks of the TAT funds and the support of this council, we did an assessment of all of our roofs. you have supported this year we will do a similar assessment of electric electrical and light poles because as many of you know the nighttime activities are hugely important to our working population which needs to recreate at night and for our youth leagues which need to be expand you know field use and so we need to have the lighting for that so we will be doing a lot of asset management and planned replacement and repairs and to keep recreational amenities in working order for our residents as well as our visitors.

Okay, thank you. My one last question because actually my state representative is watching and has actually commented about playground. Will this allow for a new master agreement for newer types of play equipment that's more up-to-date versus I guess the plastic kind that she brings her kids to and sees it at Salt Lake District Park. Sorry, that's really pointed and you can tell who my state rep is already.

I am delighted that this year we got permission to use a national master agreement around playgrounds. So we have five vendors in Hawaii that are certified under this agreement. We have one is going in right now in Council District Eastside. We have one going in out on the YNI community and one going in in Sheridan to replace the playground that was burned down. We are, this is a design build contract so we can give parameters for the design and have the companies then bid on that and we will select the design that meets both the durability and the safety as well as the creativity. So far the designs have been utilizing more of the typical type of playground materials, although they're gonna be new recreational amenities that we haven't seen before. But I was thinking the same thing myself with this latest design that came out for Sheridan. And so we may give instruction next time to see what they could come up with that's a variety on the design. But Sheridan will be our first early childhood playground in decades. as well as a playground for older kids. And they will be separated so they'll be safe, but there's gonna also be a little mini bicycle track around it for young kids to be able to bike because we see them out on the play courts all the time and it's not really appropriate for them to be co-mingling with like the basketball players.

Definitely and I agree and I'm also the same representative was the reason why I started putting and I guess you call it early childhood but taught lots into my budget of requests from when I first came on so thank you I'll be able to share that with her I'm sure she's watching but thank you very much for that information and also I guess more what you're looking at into implementing for planning and I know you've mentioned during the budget cycle but also now about how you're looking to lower down the amount of funding that we should be utilizing in each fiscal year. Thank you.

Thank you, Councilmember Cordero. Any further questions for the Director? I had a quick question, Director Thielen. I know that this measure and the measure before us were similar. They had some, the intents I think were similar, but maybe the avenues that we're taking are slightly different. Which vehicle for your department would be the best or would you prefer?

You know, I'd have to go back and take a closer look at the two bills to see the differences in the language. We were looking honestly more at the appropriation amounts and where they were allocated. So I think the administration is supporting allocating the full 8.34% and is supportive of the allocation dispersal in Bill 44. May we reserve comment on the rest of the text of a preference between one or the other because we haven't looked that closely.

I appreciate that. We want to make sure that when we're moving things forward, it'll help you the best way. Okay. Members, any further questions? Any discussion? Thank you so much, Director. Members, we are in discussion. Council Member Tupoula.

Yeah, thank you so much, Chair, and thank you, Council Member Kiana, also, for your discussion and for the different thoughts that were shared. I think that it would be appropriate to hold Bill 49 and move forward Bill 44. I will say that there may be some language that might want to be preserved, but it's nothing that we can't work on. And I honestly feel like we're having a Parks Committee meeting this morning, so thank you for the time, everyone. Thank you.

Thank you so much, Council Member Tupola. Members, any further discussion? Council Member Dos Santos-Tam.

Thank you. Well, I'm not a member of the committee. I want to thank my colleagues for starting this discussion. I think it's an important one. I want to mahalo especially Council Member Kiana for her proposal to dedicate some of the funding to the zoo. I think that that's an important aspect, especially given how many of our visitors go there. Overall, I I also appreciate that these bills work in conjunction with Bill 33, which rolls together and repeals two very small special funds, which has been one of my goals this whole time, is looking at some of these little funds and how to make them work better. And so I look forward to working with Director Thielen on the Parks and Playgrounds Fund, especially if we have tiny amounts of money that are just locked up, not doing anything.

Thank you, Councilmember DeSantos-Tam. Members, any further discussion? Thank you. And thank you again, Council Member Tupoula, for introducing this measure. The Chair recommends that action on Bill 49-2026 be postponed to a date and time to be determined by the Chair. Any discussion, any objections or reservations? Seeing none, so ordered. Thank you, Council Member Tupoula. Members, moving on to agenda item number seven. As I announced earlier, this item has been canceled. I would like to thank Council Member Dos Santos-San. We'll continue working on it and look forward to hearing it in a future agenda. Moving on to agenda item number eight, Bill 45-2026. This bill relates to rural property taxation. Members, I will now defer to the introducer of the bill, Council Chair Waters, for further explanation.

Thank you so much. What this does is increases your homeowner's exemption by $20,000. And everybody talks about the cost of living and how expensive it is to live here in Hawaii. We elapsed $200 million last year. $200 million that could go back into taxpayers' hands if we pass Bill 45 and 46. Bill 46 deals with kupuna, and I'll talk about that in a few minutes. Again, we don't have control over food and the cost of food or medicine or other expenses, G.E.T. tax, your income tax, both on the state and federal level, but we do have control over your property taxes. And that's what this bill does. It increases your homeowner's exemption, and that way you have more money in your pocket to support your family and take care of daily needs. So, thank you.

Thank you, Chair Waters. Before we call up the administration, we'll proceed first with in-person oral testimony in the council chamber. Clerks, do we have any in-person testifiers for this item?

Chair, there are none.

Thank you. Proceeding on with remote testimony, clerks, do we have any remote testifiers for this item?

Chair, there are none.

Thank you. Joining us from the administration, we have from the Department of Budget and Fiscal Services, Director Andy Kawano. Good morning again, Director Kawano.

Good morning again, Budget Chair Okimoto, Honorable Council Members, Andy Kawano, Director of Budget and Fiscal Services. We have no issue with the intent of the bill. We understand what Chair Waters is doing. I appreciate his introduction. Our concern is the fiscal side, and we already have an exemption increase that's going to go into effect July 1st, 2027. this bill would essentially double up for those under 65, $20,000 more exemption, which is, I think, something that taxpayers would really appreciate. At the same time, Our responsibility at BFS is to balance things and to ensure that we're able to fund programs. The lapsing that we've had is real, but keep in mind that information is from June 30, 25. We are gonna have tougher times going forward, and we actually, for the 27 budget, needed to reallocate salaries to other city service areas so that we could continue services, cover mayor's priorities, at the same time balance the budget. So we're gonna, I think if we continue to take revenue by passage of bills from different mechanisms in the real property tax program, we're gonna be hurting. And I think we're gonna be hurting going out a few years because the current CBA agreements, if we just look at that, We'll increase our costs on a compounding basis by more than 50 million dollars a year and it's actually started in FY 26 so every year you're gonna have that compounding effect just from salaries and fringes and then you know we Solid waste cost is going to go up because of just costs of what we pay for people that collect garbage. The supplies we use, materials we use, the equipment we use, everything's getting more expensive. We have transit as well. Everything's getting more expensive there. I think while the council members like to point out lapsing of the general fund in the past, it's not gonna be as much going forward. And keep in mind that coming out of COVID, we got a lot of federal dollars, the last large sum amount through the ARPA program. And a lot of that, a lot of the monies were deemed to be revenue replacements. So essentially like general fund money. So we got that. There was inflation coming out of COVID. So we had large increases in our investment income on the cash that we hold on the side. you know, pending expenditure. A lot of that's going to, we don't know where all of that's going to go, and we're definitely not going to get a lot of funding from the federal government. It's the opposite now. So we want to proceed cautiously, and that's why we strongly recommend that before we pass additional legislation that reduces income taxes. Let's do the permitted interaction group and look at the whole thing. We should look at the whole thing going forward because times are going to get tough. Thank you. Questions?

Thank you, Director Kawano. Chair Waters.

Thank you, and thank you, Director. I read your testimony, and it makes sense. However, let me ask you this. Whose job is it to figure out new ways to generate revenue? Is it the Director of Budget and Fiscal Services, your department? Is it the mayor? Is it... Well, whose job is that?

Well, I think it's all of us, Chair Waters. With regard to BFS, our focus is not revenue generation. It's managing our finances, so we manage cash coming in. What we don't have to spend right away. We invest it we manage disbursements, you know cash going out including payroll we oversee that We oversee our bond program Which is a largest part of you know, the debt that we have as a city we work with other departments to be more efficient and We continue to do that through the use of technology and through how we procure products. I think the responsibility to find new revenues is the responsibility of all of us, but at the same time, the revenues cannot be collected from our residents and businesses. They're already saying there's affordability issue. So how do you continue to collect it from folks outside, non-residents and folks outside of the state? That's the tricky part. So.

Yeah, no, you're right. But looking at your department and your view, You're saying your job is more to manage the budget rather than to look at how to generate revenue. We want to generate revenue not on the backs of our local families who are struggling to survive, But every time we come up with an idea, you come and testify against it. So I'm asking you guys, what idea do you have? I mean, if you're saying your job is to manage the budget, whose job is it? Do we ask the managing director or the mayor? How do we generate revenue so that we can lower taxes on our local people?

We can have discussion across the board. You just said we don't agree to it. Well, the sponsorship program that just got approved by Council Member Cardero, she introduced it, and I think with another Council Member, but that got approved, and that's something that we can jointly do to raise revenue. How's that going? I haven't seen anything material, but I know that I should see material.

I haven't seen anything materialized.

We passed it, but the administration's got to actually implement it. It's happening at the zoo. And I think even council members, you can introduce people too that are interested as well. I think it's a joint effort. You know, the city, as I have learned in five and a half years, we don't have all of the taxing and fee and other revenue generation authority that the state has. We just don't. And what we can levy in terms of charges and fees and taxes, we have to be careful because the feedback we're getting is everything's too expensive. people can't afford it. And from BFS's perspective, we don't really provide the services that we can charge for other than collect real property tax. But then we're collecting real property tax on behalf of all of the different agencies because real property taxes help to fund agency services across the city.

Yeah, no, I'm just asking if you have any idea on how to generate revenue not on the backs of our local residents. Do you have any ideas on how to do that?

In terms of what I've seen where other governments have large amounts of other revenues, it's through contributions, donations, and those sort of things. if it's not taxation or charging fees and so on. So some governmental entities just do better and that's something we can all focus on.

Is that something that your department is looking at? private donations to the city government?

I'm not going to say our department directly, but our Department of Enterprise Services, they're doing, I think, a good job of doing that. I think the mayor's office does it as well. And it's... It's a joint effort. It's not just BFS. It's not HPD. It's not just DES or parks. It's all of us working together. It's not CSD only.

Well, we just heard from Department of Enterprise Services that they want to siphon off money from the transit accommodation tax. Are they generating revenue or are they asking us to appropriate money from the DAP?

My theory is you have to invest and spend some to make it as well. Sure. And we're not talking of a lot. Keep in mind that the money set aside through OTAT is 8.34%. That's about $9 million a year. Half of that goes to HEART already, and we have to commit to that because it's in our full funding grant agreement with the FTA. So half of it is there. So we're talking about $4.5 million. So when you break things down, most of the 4.5 is going to parks. The zoo is getting a small fraction of the $4.5 million.

Okay, and I'm just saying it'd be great if the administration can come up with ideas on how to generate revenue.

I wish Amazon would make a contribution of some sort. They're doing more and more business on our island, and maybe downstream they might. We'll see. Thank you. Thank you, Chair.

Thank you, Chair Waters. Any further questions for Director Kawano? Director, I had one quick question. You mentioned that we, as the Council have stated, mentioned the lapse funds and you said that's from 2025. When can we get the numbers? I know we just ended fiscal year 2026. When will the numbers from last fiscal year be ready for us?

So from a timing standpoint, we normally don't release the quarter end for June 30, 2020, June 30 until the audit is done. And because of how broad the city's operations are, there are component units that have to be included in. We don't really have a number until the November, December timeframe. And that's why the quarterly report is usually delayed until the audit is issued. So that's why there's a delay because of the audit.

Okay, so just to clarify, so around November, December is when we will see last fiscal year's numbers?

I'm hoping artificial intelligence one day can audit 24-7 around the year so that when the year ends, you know, maybe the next day we have numbers, but unfortunately, it's not there yet.

Thank you. Casey, no further questions for Director Calvino? Members, we are in discussion. I want to thank you for your input. We do take into consideration greatly the input, and thank you for the testimony that was provided. Thank you, Chair Waters. I know that, again, you've been a huge proponent for how we can help our local residents and I think that the discussion can move forward and hopefully we can find a way, considering that we don't have the numbers yet for fiscal year 26, but we hopefully will have it in a few months before the year ends. Oh, Council Member Kea-Aina.

I'm sorry, late to the discussion here, but as this is the first of a few, I just wanted to... I guess, reiterate my desire. We've talked about it a lot with regard to a permitted interaction group, Chair, because I see a couple of Chair Waters as well as yourself, and I think it's all good. And for many of us who are termed, right, we only have two and a half years left where the administration, I guess what I'm thinking with the budgetary cycle starting in March, this is a wonderful window of opportunity uh... to consider it uh... as we move forward because we have done a lot of good things and i think you know uh... with a permit interaction group which i i i i would hope that we could get some experts in the field too um you know to come and talk story with us or be on it i just think that we can get prepped so that the remainder for those of us who are going to be termed out in 2028 for actionable items so that's just my mana'o thank you councilman rika aina members any further discussion okay

Okay, seeing no further discussion, the Chair recommends that Bill 45-2026 be reported out for passage on second reading and scheduling of a public hearing. Any discussion, any objections or reservations? Hearing none, so ordered. Moving on to agenda item number nine, Bill 46-2026. This bill relates to real property taxation. Members, I will once again defer to Chair Waters, the introducer of the bill, for further explanation.

Thank you so much. So yesterday I had a conversation with Mrs. Ikeda from Kapahulu. She was complaining to me about how her property taxes go up every year and she's on a fixed income and her home has been in her family, the Ikeda family, for generations and she's afraid that if things don't change, she's gonna have to sell. And that just was so sad to hear. So I explained to her that one thing that we can do is increase the homeowner's exemption for kupuna, and that's exactly what Bill 46 does. So I'd like to rename Bill 46 the Mrs. Ikeda Bill, yeah? Because we're fighting for our kupuna to stay in their homes that they grew up in. Thank you very much.

Thank you, Chair Waters. Before we call up the administration, we'll proceed first with in-person oral testimony in the council chamber. Clerks, do we have any in-person testifiers for this item?

Chair, there are none.

Thank you. Proceeding now with remote testimony. Clerks, do we have any remote testifiers for this item?

Chair, there are none.

Thank you. We'd like to welcome back with us from the Department of Budget and Fiscal Services, Director Andy Kawano. Aloha again, Director Kawano.

Good morning, again, Budget Chair Okimoto, Chair Waters, Vice Budget Chair Nishimoto, Honorable Council Members, Andy Kawano, again, Director of Budget and Fiscal Services. With regard to Bill 46, Chair Waters, by the way, I'm a kupuna too, so thank you. Thank you for thinking of me. With regard to BFS's position, we oppose for the same reasons as for Bill 46. What's really interesting is that the property owners on this island, 65 and over versus under 65, is almost split 50-50. I think there's a little more in terms of the kupuna. But I do understand that kupunas, the elderly are on fixed incomes. We do have the real property tax credit program to help. I actually have an uncle that didn't know about it. And I try to be neutral with family. My cousin found out about it and talked to me about it. And my uncle has been, using the real property tax credit now for about three or four years so yeah there are people out there that are not aware of what circuit breakers and tools are available to help to control the cost of real property tax and we will continue to do outreach and talk about it but Again, to echo what Councilmember Kiana said, we need to do a permitted interaction group and look at all of these different measures in unison and have our real property assessment team led by our administrator, Steven Takara, to run numbers as we do it and talk about it with the experts and then look at different structures. I still feel strongly that we should look at the, again, I think it was looked at back in 2010, the classification of owner-occupied, non-owner-occupied. And on the non-owner-occupied piece, we can break that down further and take a look at that closely. That's it, I'll take questions from here.

Thank you, Director Kawano. Council Member Cordero, followed by Chair Waters.

Thank you, Chair Okamoto. Thank you, Director Kawano, for bringing that up. I definitely agree with taking a look at the owner owner or non-owner occupied aspect, I know that that is sort of also in the grain of what another tax measure that we were looking at in the last two years, the last maybe five years, I should say, that didn't get passed yet. But as for Sorry. As for the different tax credits and in relation to the exemption that we're giving here, are you recommending then to also include looking at the low income tax credit too or no?

Yeah, I think we should look at tax credits as well because at the end of the day- Increasing it or lowering it? right-sizing it, depending on what kind of program we decide to go on going forward. It's hard to say. In context, it's going to be based on where we decide to go. Because in total, we want to have a program that is more palatable by you know the taxpayers here at the same time we we have to maintain revenue levels you know in terms of property tax collections to fund our core programs right so it's a balancing act that we we have to focus on you know in terms of our budget okay I kind of got it but I kind of didn't get it but what

No, prioritizing it, I get, okay, never mind, it's okay. Maybe we'll meet later.

Yeah, we can meet later.

Thank you.

Thank you, Chair Okamoto. Thank you, Council Member Cordero. Chair Waters.

Thank you so much. Perfect opportunity to educate the public on the Rural Property Tax Credit. Would you like to expand on that just a little bit?

The real property tax credit is different from an exemption. The exemption is a reduction of the assessed value that reduces your net taxable value that the tax rate gets applied to. The real property tax credit is after the fact. So it's a credit against taxes that you have essentially paid. So it's based on, there's a cap in terms of income for the title holders in a household or in a house unit, and it's $80,000. And the $80,000 is the aggregate of all of the title holders in a home. And it's been working I think quite well. Kupuna's use it a lot. I've talked to our treasury department and I think most of the applicants by far are Kupuna. What the credit does is it limits the amount of property tax to 3% of the reportable income or $300, not less than $300.

I appreciate that. We really got to get the word out there that this is available to folks. you make $80,000 or less, your property taxes would be limited to 3% of your income. or $300, whichever is less. I note that we have Civil Beat, Ben Angeron in the audience. Maybe this is a perfect opportunity to write an article on how people can save money and pay lower taxes. Yeah, we actually have a brochure posted at the city website. Can you give it to Ben Angeron from Civil Beat? I can send it to Ben. Yeah, perfect opportunity to write a really good article about how to lower taxes. Yeah. By the way, the city council raised it from $65,000 to $80,000 recently. Would you support raising it up to maybe 100,000? Because what we're talking about is all title holders.

That's the same question that Council Member Cordero asked, but differently. We got to look at it in context, right? So depending on where we go, Let's say we do the PIG, where we go with the core structure of the program. Essentially, we need to be revenue-neutral if we can. It'll depend on that analysis because if we keep giving, giving, giving, we're going to have to either increase the tax rate or reduce services.

Yeah, one of the arguments against Bill 46 is that a lot of kupuna can actually afford the property tax, right? So you're giving a tax break to people who don't need it, where really I'm trying to target those who do need it. And it's just a simpler way to increase the homeowners exemption for all kupuna. But again, this real property tax credit, you know, we got to get the word out and let people know. that this is available and out there. Can you tell us, well, I guess it's, we could talk about that on another bill, but how many people actually utilize the real property tax credit?

I just have rough numbers. I haven't checked recently, but when we were at 60,000 or 65,000 when this administration started, we would, we would receive about close to 5,000 applications and then maybe process between 4,000 to 4,500. That number has close to doubled now. So going up to 80,000 made a big difference. The benefit would be close to $5 million at the lower threshold when we raised it. We're benefits at about $9 million. So it almost doubled.

Fantastic. Okay. Thank you. Thank you, Chair.

Thank you, Chair Waters. Council Member DeSantos, 10.

Thank you. In your testimony on the bill, you mentioned the total amount of estimated revenue loss for the city, which is obviously a large number here, several million dollars. If we could educate the public, if we increase the exemption by this much, how much of a difference does that make for an individual property owner?

Each $20,000 is about $70. So you take $20,000, take away the thousands, so it's 20, and multiply that by $3.50. But that's for residential. If you're on the top end in Res A, you multiply that by 1140.

I'm much less interested in the Res A folks. But for the residential folks, so we are... trying to deliver savings through this bill of $5.83 a month for local families?

Is that what this comes down to? That's the math, yeah. Yeah, if you divide 70 by 12, yep.

Close to that. Okay, thank you.

Chair Waters.

So should we increase the homeowners exemption by much, much more so we can deliver more relief to people?

We can do the math. Every $20,000 of an increase across the board, you know, under 65, 65 and over, is about $11 million.

Yeah, I'm open to a friendly committee draft if other members want to do so to increase that. Thank you so much.

Thank you, Chair Waters. Members, any further questions for the director? Okay, seeing no further questions, members, we are in discussion. Okay. Members, I have taken into consideration, I know we heard the comments from Council Member Kea-Aina. I recognize that Director Kawano has been asking repeatedly for some time now for the pig and so we'll look into that definitely with all the measures that we're introducing because we want to make sure that while we're addressing the needs of our residents that we can balance the budget. I want to make sure that we, there's a bunch of measures moving forward so thank you for continuing to advocate for it and we will, look into that, into the pig as soon as possible. Okay, seeing no further discussion, the Chair recommends that Bill 46, 2026 be reported out for passage on second reading and scheduling of a public hearing. Any discussion, any objections or reservations? Hearing none, so ordered. Moving on to agenda item number 10, Bill 47. This bill relates to the motor vehicle weight tax. Members, I will once again defer to the introducer of the bill, Council Chair Waters, for further explanation.

Thank you so much. You know, the cost of living again in Hawaii is so high. And as I mentioned before, we don't really have control over food, medicine, but we can control how much you pay to register your car. So this is a simple way added onto perhaps the small increase in your homeowner's exemption. Every dollar counts. So what I'm asking us to look at is lowering the amount of taxes that we pay on our cars. Thank you.

Thank you, Chair Waters. Before we call up the administration, we'll proceed first with in-person oral testimony in the council chamber. Clerks, do we have any in-person testifiers for this item?

Chair, there are none.

Thank you. Proceeding now with remote testimony. Clerks, do we have any remote testifiers for this item?

Chair, there are none.

Thank you. We'd like to welcome Here in the chamber from the Department of Customer Services, Director Kim Hashiro. Thank you, Director Hashiro, for being here with us.

Hi, good morning, Budget Chair Okimoto, Chair Waters, and Council Members. Kim Hashiro, Director for the Department of Customer Services. We did submit written testimony, and we do recognize the intent to provide tax relief to residents. However, there is a significant impact to this proposed bill Regarding overall, we're estimating $20 to $30 million in reduced revenues. I'd also like to point out, and I'm sorry I don't have the details, but DTS has also informed us that the transportation fund is utilized where local dollars are actually used as multipliers for federal funding. And I know for transportation funding, that's significant. And lastly, we've had some discussions in the past about the mainframe. And the motor vehicle registration resides and operates on the mainframe. And while Director McKee and I have talked about upgrading and getting off the mainframe into a modern platform, these kinds of changes are going to require significant programming, implementation, public communication types of impacts also, so I wanted to bring that to your attention. And I'm here for any questions.

Thank you, Director Hashiro. Chair Waters.

Thank you so much. You know, at the legislature, there is a bill to make our car registration fees equal to those of the neighbor islands. Are you familiar with that bill?

There were a lot of measures this past session and in previous years, yes. And I realized that there is a difference between counties.

Yeah, and that bill seemed to grow legs, and if that were to pass, the city would have lost about $134 million in revenue, is that correct? Was my numbers correct?

Yes, it was about, there was very significant.

Right, so this is, you know, I'm afraid that that bill might come back again next year or the following year, and they want us at the city level to maybe own part of that. So this is an attempt to maybe appease the legislature and lower taxes. And by the way, I got my new driver's license. Thank you. It's pink. Nishimoto's saying nothing wrong with that. I'm just curious. I mean, did you design it?

No, I didn't. So it was a collective, collaborative effort amongst all counties and the state. They did put a lot of work into it. And I understand that some customers are not they don't appeal to this color scheme, but some do. And really what we're trying to do was retain the rainbow, which is on our license plates. It's known as a symbol for motor vehicle registration drivers licensing. However, the system itself, it's a new system that we're upgrading to, and that's a critical system because our existing system is from 2009. And we need to upgrade and get off that system into a modern system for operations, for service. There's a lot of benefit to that. And what that did was it actually created a card using a certain theme that looks different because the technology is different.

Yeah, and I got the Humuhumunukunukuapua'a on the back. Yes. But, uh, It actually took a long time to get. It was like over a month, but Anyway, that's not what we're talking about here. I get your testimony. I think it's worth talking about. I know we really need the money, is what you're saying. But at the same time, people need cash in their pocket as well. So thank you. Appreciate the discussion.

Thank you, Chair Waters. Council Member Cordero.

Thank you, Chair Okamoto. While I, of course, am wary about such, I guess, decrease in revenue for things that matter most, like with our roads and having it go back to our roads, it is an issue that has come up even more than real property taxes. people coming to us about their motor vehicle registration is because they see our pictures right there at the satellite city halls. Yeah, so they know who to go to and be like, hey, why is it so high? You know, they're direct messaging us, texting us. Well, I gotta say, I also have people from Maui texting me about it. I have no idea why. But anyway, it's okay. But while I do have concerns, it is, the top cost of living concern that has been filtered through our office and through people bringing it up online and comments, tagging us and different legislators. So I do understand this, but in addition to this, have there been discussions, whether it be with your discussions with the state legislators as well as here with the city administration, on ways we can allow for the registration, I guess, fees to be lowered without impacting it in this way, without impacting the revenue this way?

So we haven't had a lot of discussion regarding reducing fees. The vehicle weight tax was established in 2019, was the last time it was increased. And my focus has been on trying to operate and provide service the best that we can. And I know that while we bring in these revenues, the beneficiaries, as far as what these funds are dedicated towards, are really in the DTS department area, which is also very important to customers because we hear the same things about road conditions and road maintenance. So this is really the start of the conversation is how I look at it.

Thank you. And so within that grain, have you been able to discuss it with DTS as well and see where that is leading for any better impacts for the constituencies that we serve?

So we've started those conversations with them and actually I think it is a broader discussion that we need to have overall. because it is significant as you say and I I do understand council's intent you know where we all live here and you know we need to pay for a lot of different costs again our focus has been to try to maximize and make the most of the services that we provide but I I have not supported any kind of reduction in in fees. There haven't been very many, but when it has come up, just because it is something that once you do it, it's hard to go back and to raise it again. But we haven't had detailed conversations about that. I'd like to continue that.

OK, thank you. So I know that at different town halls, and especially during the mayor's town halls, it has come up before. And explaining it can be convoluted sometimes. And I know that other members have brought up streamlining processes. But is there a streamlined fee process that we could maybe propose to champion to the states just to the state or to the other counties that can just make it easier for all of us. Maybe we just handle our own and not be in compliance with everyone else and so we can just handle our own fees and registration.

I think there's definitely ways that we can help to support explaining the fee structure, what it goes towards, how it's broken down. We already have some of that information available. So we can definitely provide support in that area. Okay, thank you. Thank you Chair Okamoto.

Thank you Council Member Cordero. Council Member Kia-Aina.

Thank you, Director. $20 to $30 million is a lot of money. Can I ask, what would be the typical individual relief that someone would have? I know it's dependent on tonnage, right? But an example, I just want to know what individuals could benefit from this versus the loss. I guess I'm trying to better understand that.

So this would result in approximately a 20% reduction in the wait fee itself. So if the average car is about 350 to 450 in total registration, A customer might see a reduction in $40 to $50 depending. So the way it's calculated, it's not as straightforward as just that straight percentage. We are working with BFS to try to better understand and present more accurate numbers. But just so you know, for the last few fiscal years, about... 800,000 vehicles were subjected to the registration fees. And based on the weight, the category, different factors, that is how we came up with the $20 million to $30 million reduction. It could actually be higher. It depends. So we'd appreciate more time also to try to refine those numbers and get better projections.

Got it. And can I ask, you list a couple of items here that would be impacted. So the funds that you go, go back, does it go to the Department of Transportation Services?

Yes, so it enters the transportation fund and we summarize the impact to the roads, maintenance,

safety, bikeways, mass transit. Got it. Okay. And the Department of Transportation Services concurs with you?

So DTS, yes. We've had initial discussions with Director Morton. He is very concerned about the impact.

Okay. Can I ask you, Councilmember Toba, had worked on a measure that was enacted into law for veterans. I guess that was a registration fees, but for this on the tonnage, what if it was more narrowly confined to a segment like Kūpuna? Would that work or not work?

It could work, although we'd have to look at our system and see how the records are separated. I don't know how easy it would be to identify vehicles for Kupuna, for example, because there's no demographic data for registered owners right now.

Yeah, but it's potential. And the reason I'm throwing this out is I see $20 to $30 million, right? And kupuna would be a segment of that. And they're the ones who are in fixed income. And so, just similarly to what's going on with the real property tax exemptions, the home exemptions, I think we're just all looking for creative ways. And if we can't get everything, then we could maybe narrowly focus it to those who are most hurt, and everyone will concur it's our kupuna. Yes. Would you be open to maybe crunching the numbers to see what the impact would be if we narrowly tailored this to Kupuna?

So we can try definitely to revise the numbers based on the information that we have.

Yeah. And, you know, clearly their cars would not be the Hummers, right? But it doesn't matter. The fact is anything that's coming out of their fixed pension or social security hits the bottom line. Understood. Yeah. Okay. Thank you.

Thank you, Council Member Kia-Aina.

Council Member Cordero. Thank you, Chair Okamoto. I just want a clarification. You said that there's no demographic data that's collected when you, I guess, take in the registration and also for other motor vehicle data collection. So what data is then compiled?

So for motor vehicle registration, we have the registered owner, we have information regarding if there's any lien on the vehicle. But we don't tie that to the driver's license database. So there's no way right now to actually identify kupuna. For example, if council were to set a definition as to what age kopuna would fall up to or under, then that would be difficult to determine. So we would have to look at a different process to try to identify that and it could be something where a request or an application would need to be submitted and then the demographic data would be verified that way. So it would be a separate process.

Okay, thank you. So once again, it's the registered owner and lien on the vehicle. Yes. Understood. Thank you very much. Thank you, Chair Okima.

Thank you, Council Member Cordero. Members, any further questions? Thank you, Director Hashiro. Seeing no further questions, members, we are in discussion. Chair Waters.

Thank you so much. I did crunch the numbers. It's a 21.43 reduction for passenger cars and trucks at a 20% for commercial vehicles. So that is about $52.50 for the average passenger car and up to $97.50 for a non-commercial vehicle at the heaviest weight of 6,500 pounds. So it's not insignificant, right? It'd be a major savings for people. But I, again, also understand that the city needs this revenue, but it's just worth the discussion.

Thank you, Chair Waters. Council Member DeSantis, Tam.

Thank you. I just have one sort of observation. Council Member Kiana talked about narrowly tailoring this. I note that this also affects the commercial vehicles as well. And so maybe that's a further discussion that we can have about the personal use vehicles and the commercial side. And then because I like the technical details, I'll note that in subsection E, there is a minimum tax of $12, which implies minimum weight of a vehicle is 200 pounds and obviously that was probably from when we had very light Model T type vehicles way back in the day. We should probably also look at what that minimum tax should be today because you know no matter who's driving it they do have impacts on the road and we should have some reasonable minimum tax here that's not $12 and a 200 pound vehicle.

Thank you, Council Member Minosantos-Tam. Council Member Cordero. Thank you, Chair Okamoto. As I did mention, I do appreciate this being brought up. A lot of my constituencies, that is one of our major complaints, whether it be through my office, but especially when we are at our public meetings or just even talking to neighbors. The biggest thing is when they have to pay their motor vehicle registration. Of course, I do have the concern on how we already upkeep our roads, our many miles, not millions, but thousands of miles of roads that we have, or should I say hundreds? I don't know how many miles we have. But anyway, with that in mind, it is tough to weigh, but I do want to continue the conversation because it is a conversation that has always been brought up to us. With that, I do want to see this conversation moving forward so that we can allow for more public input and testimony. Thank you.

Thank you, Council Member Cordero. Members, any further discussion? Okay, seeing no further discussion, the Chair recommends that Bill 47-2026 be reported out for passage on second reading and scheduling of a public hearing. Any discussion, objections, or reservations? Hearing none, so ordered. Moving on to agenda item number 11, Bill 50-2026. This bill relates to funds. Members, I will now defer to the introducer of the bill, Councilmember Dos Santos-Tam, for further explanation.

Thank you, Chair. Just by virtue of a quick explanation, this land conservation fund was created in 2005 with a very good purpose to purchase private lands and allow the city to you know, do a lot of really important work around that. But in 2007, we created the Clean Water and Natural Lands Fund, which gets a whole lot more money and has a lot more flexible purposes. Since then, there's basically been zero activity in the Land Conservation Fund. There's about $220,000 in there right now that's doing absolutely nothing. And so what I'd like to do is, because we have a really robust Clean Water and Natural Lands Fund, to do away with this old land conservation fund that's not doing anything, so we can really focus in on the Clean Water and Natural Lands Fund that's actually doing a whole lot.

Thank you, Council Member DeSantos-Tam. Before we call up the administration, we'll proceed first with in-person oral testimony in the council chamber. Clerks, do we have any in-person testifiers for this item?

Chair, there are none.

Thank you. Proceeding now with remote testimony, clerks, do we have any remote testifiers for this item?

Chair, there are none.

Okay, seeing no testimonies, we would like to welcome back from the Department of Budget and Fiscal Services, Director Andy Kalano.

Andy Kawano again, for the record, no comment from Budget and Fiscal Services. We support the bill as a cleanup bill. Thank you.

Thank you, Director Kawano. Members, questions for the Director? Seeing no further questions, we are in discussion. Okay, seeing no further discussion, The Chair recommends that Bill 50-2026 be reported off for passage on second reading and scheduling of a public hearing. Any discussion, any objections or reservations? Hearing none, so ordered. Almost there, guys. Agenda item number 12, bill 67-2025. This bill relates to real property taxation. Before we call up the administration, we'll proceed first with in-person oral testimony in the council chamber. Clerk, do we have any in-person testifiers for this item?

Chair, there are none.

Thank you. Proceeding on with remote testimony, clerk, do we have any remote testifiers for this item? Chair, there are none. Thank you. I'd like to welcome back with us from the Department of Budget and Fiscal Services, Director Andy Kawano.

Thank you, Budget Chair Okimoto, Andy Kawano, Director of Budget and Fiscal Services. With regard to Bill 67, BFS and the administration oppose the bill. We issued our department communication 485-2026. It got recently posted. The details are there, but this kind of bill, like in California, Proposition 13, can have adverse impacts down the road as you go out into the future. My home... bought it in 93 and in just over 30 years it's gone up more than three times you know in our neighborhood and if you if if we cap valuations what what happens is you're going to have two valuation bases one at market and you're going to have one based on the cap and based on ordinance in terms of executing the cap. There's going to be inequities as to what people pay in terms of real property taxes. As you go on and on and on in future years, the gap between the valuations will differ. For those homeowners that have the lower value, and we're talking down the road, It could create what we call internally in BFS sort of like a locked-in effect where people don't want to renovate. They don't want to move out of their home. Kupuna may be downsized. So it would potentially impact inventory adversely. This is the kind of bill that we'd like to talk about in permitted interaction group because we believe that just based on what happened in California and other places that have capped real property assessments, the inequities, the impact to the market downstream gets adversely impacted. And what happens is the newer owners, people that want to stay here and live here, are going to pay more because they're not 65 and older. And they're going to carry more of the burden. And if we're concerned about young working families moving because everything's too expensive, this kind of bill downstream will make the situations worse, more likely than not. So respectfully, we suggest that we not pass this, think through other ways to provide more equity in the real property tax structure that we currently have, and move forward with the PIG. I'll take questions, thank you.

Thank you. Members, questions for the director? Okay, seeing no questions, members, we are in discussion. Director, I want to thank you again for your detailed testimony and explanation and your concerns with the bill. I think at this time, considering your testimony, the Chair will recommend that action on Bill 67-2025 be postponed on a date and time to be determined by the Chair. Any discussion, any objections or reservations? Hearing none, so ordered. Moving on to agenda item number 13, bill 68, 2025. This bill relates to real property taxation. Before we call up the administration, we'll proceed first with in-person oral testimony in the council chamber. Clerks, do we have any in-person testifiers for this item? Chair, there are none. Thank you. Proceeding now with remote testimony. Clerks, do we have any remote testifiers for this item? Chair, there are none. Thank you. I'd like to welcome back with us Director Andy Kawano from the Department of Budget and Fiscal Services.

Thank you, Andy Kawano again, Budget and Fiscal Services, for the record. With regard to Bill 68, Bill 68 would make a change to how we measure income for the real property tax credit such that if there's a non-titleholder spouse on record in the system that files a joint return, the income for that spouse would not be considered with regard to the $80,000 cap. We really don't know what the impact would be to this legislation, but it would probably allow more homeowners to qualify for the real property tax credit and result in reduced revenue. This one's going to be hard to measure. And I apologize because we didn't get our written testimony in on time. It'll be posted soon, if not now. But the impact is, administratively, we are gonna have to spend a lot more time validating applications because if we have a situation where we have two spouses living in a home on a joint return, And only one of the spouses is on title in the system as the filed owner. This measure would require that we ask for more information and break things down with regard to, okay, what's earned by spouse A versus spouse B. And it's going to create a lot of administrative burden on us and extra time to process applications and probably result in more appeals. On top of that, there's going to be a negative revenue impact where we, on a net basis after the credit, collect less taxes. So because we don't know the full impact of Bill 68, we strongly oppose this because I think it has to be studied further. And there are other ways to get to where you want to get to beyond trying to split income for people that own property together. I'll take questions on that, thank you.

Thank you, Director. I had a couple of questions. And thank you for your testimony. Instead of this bill and a pig, should the council consider raising the gross income level or using a HUD definition like we did 20 years ago?

I think there has been discussion of raising the gross income level. Several of the council members have brought it up from time to time. And again, as I stated earlier, we need to do the PIG because we should look at everything in totality because we're nickeling and diming our tax base. And if we do too much in the aggregate, we're gonna have a hard time balancing when we budget for the upcoming years. And we're gonna have to raise the tax rate, or we're gonna have to reduce services somewhere, make cuts across the board perhaps so that we balance the budget because things are gonna get tough in the next few years. We know that. So thank you.

Okay, thank you, Director. Members, any questions, further questions for the Director? Okay, seeing no further questions, members, we are in discussion. Director, again, I appreciate the input, and I understand, again, the advocating for the pig. I think for this measure, I would like to continue the discussion, maybe get more input from you, possibly we can meet. This comes from a constituent concern, so I'd like to be able to get the answers that I can take it back to the concerned constituent.

I'll set something up to meet with you.

Okay, thank you very much. Okay, seeing no further discussion, the Chair recommends that Bill 68-2025 be reported out for passage on second reading and scheduling of a public hearing. Any discussion, any objections or reservations? Hearing none, so ordered. Seeing no further discussion, mahalo everyone for attending and participating in today's meeting. There being no further business, this meeting is adjourned.