16 Budget and Finance Committee - Regular Meeting

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Welcome to the Budget Finance Economic Development Committee. It is now 9, what time is it, 9.10? 9.10. Welcome everybody and sorry for the delay. My name is Yukile Sugimura. I'm the chair of this committee and this meeting is being conducted in accordance with the Sunshine Law and as a reminder, when your name is called, If you're not in the council chambers, please identify by name who, if anyone, is in the room, vehicle, or workspace with you. Minors do not need to be identified. Vice Chair Betonghen is excused. Council Member Cook is excused. Member Johnson, good morning.

Council members, community members, there's no testifiers at the Lanai District Office. I'm alone on my side of the office with my doggy. She's kind of snoring and loud, and I'm here and ready to work. Thank you.

Oh, we hope to hear her. Chair Lee, good morning.

Good morning, Chair, and good morning to everyone here and watching the program. Looking forward to your meeting.

Thank you. Member Poulton is not, is she joining us? Is she excused? Okay, so she's right now, hope to be joining us excused. Member Rollins-Fernandez, nice to see you here in person.

Aloha kakahiaka, Chair. Aloha kakahiaka kākou. Happy to be here in person.

There are currently no testifiers at the Molokai District Office, and my internet's a little unstable, so I'll try to fix that. Okay, Member Sinensi, good morning.

Aloha kakahiaka, Chair. Happy to be here. No testifiers in Hana.

Member Uhajins is joining us in a few minutes. Thank you, everybody, for being at today's meeting. And thank you for the BFED staff who've worked hard to get us here. Our invited resource persons from the administration include Budget Director, Director of Finance, Chief of Staff, and Deputy Corp Counsel Wigglesworth. To assist us today, I have also invited Johnson Control, Inc. Um, and I will ask them to introduce themselves because I don't want to get their names wrong, but I have, um, Joe Caldwell and is it leaf Lake show guard, um, from Johnson controls. And members, if there are no objections, I'd like to designate them as the resource persons under Rule 18A of the Rules of the Council, based on their experience and expertise with Johnson Controls and the energy contract. Please see the last page of the agenda for information on meeting connectivity. We have two items on the BFET agenda today.

We have more guests. First Deputy, Corp Council, did you mention her?

Oh, sorry. You know, we think of her as part of our team, so. Sorry about that. Mimi Desjardins, greatest apologies. Thank you for enduring us meeting after meeting. And so on today's agenda, I have BFED 20, item number 16, Johnson Control, Inc., energy performance contract. and BFED 55, Bill 181, 2025, increasing the amount of home and long-term rental exemptions from real property tax. So let's begin with public testimony. Do we have anybody who has signed up?

Apologies, Chair. There's no individual signed up to testify at the beginning of the meeting. Would you like me to do a last call? Yes, please. To those who want to testify at the beginning of the meeting, please raise your hand on Microsoft Teams or please approach the podium. This is last call. The countdown is three.

Oh.

Somebody just signed up.

Yes, Chair. We do have one testifier at the South Maui Residency Area Office. Give us one second.

Oh, so we don't have internet connection? Or is there a problem? We're having technology slow. Okay, so I'll just read this then. Testimony instructions. Testifiers wanting to provide testimony should sign up with staff online or join the online meeting with Teams link or call in to the phone number noted on today's agenda. Written testimony is encouraged and can be submitted via e-comment link at MauiCounty.us backslash agendas as well. Under the Sunshine Law, the chair will receive oral testimony for agenda items at the beginning of the meeting and as the item is called up. For individuals wishing to testify via Teams, please raise your hand by clicking on the raise your hand button. If calling in, please follow the prompts via phone, star five to raise and lower your hand and star six to mute and unmute. Staff will add names to the testifier list and the order testifiers sign up or raise their hands. For those on Teams, staff will lower your hand once your name is added. Staff will then call the name you've logged in under or the last four digits of your phone number when it is your time to testify. At this time, staff will also enable your microphone and video. Please ensure your name appears on Microsoft Teams as the name you prefer to be referred to or as anonymous if you wish to testify anonymously. If you're in person, please testify. Please notify staff that you would like to testify anonymously. Otherwise, please state your name for the record at the beginning of your testimony. Oral testimony is limited to three minutes per item, and if you're not done, I'll give you another 30 seconds to complete. Once you are done testifying, or if you do not wish to testify, you can also View the meeting on Akaku Channel 53, 53, Facebook Live, or MauiCounty.us backslash agendas. We'll do our best to take each person up in an orderly fashion. We will now call on testifiers wishing to testify at the beginning of the meeting. Did anybody sign up?

Thank you, Chair, and I apologize. I don't believe the individual is signed up at the South Maui Residency Area Office. They're signed up at the Makua Pa'ia Haiku Residency Area Office. Okay. and I believe the first individual signed up to testify is JC Law.

I don't see anybody.

We did promote Regina Corneal, who I believe is staffing from the Residency Area Office, so she would just have to unmute her microphone and camera, and then JC Law can proceed with his testimony.

Mr. Law? Are they connected?

Chair, we're hearing that the residence area office is receiving some internet connectivity issues.

Shall we come back to it? Yeah, so we'll come back to it.

Yeah, I don't see him.

All right, so at this time then, members, I'm gonna close public testimony for the beginning of the meeting and receive written testimony on this item. So the first item that we're taking up is BFED 20 Johnson Controls, Inc. Energy Performance Contract. Members, this item is, I scheduled this item as a request of the mayor and receipt of County Communications 93-26 in which the administration notified the council of its intent to proceed with phase three under contract C7619. You may find a copy of the county communication under Granicus number eight. The administration describes phase three as a budget neutral transaction, approximately $9 million, project funded through tax exempt lease purchase financing and supported by guaranteed energy, water and operational savings. The administration also knows that the next step is the release of the tax exempt lease purchase financing, RFP, described as a no obligation process to solicit financing proposals with Johnson Controls Administration. The RFP on the county's behalf and the county retaining the oversight and selection authority. You can explain what that means. The purpose of today's discussion is to better understand the proposed scope, financing, savings, validation, and any fiscal or legal considerations before the administration proceeds. Assisting us with today's discussion is Budget Director Milner, Director Martin, Chief of Staff Lalo, and you're now the Energy Commissioner also, I think. We also have representatives from Johnson Controls today. So we're gonna receive presentations from administration and Johnson Controls, and then we'll open up for public testimony again. So who from administration would like to take the lead?

Thank you, Chair. I'll go ahead and start. So first of all, good morning, Chair and members. It's nice to see you eyeball to eyeball, most of you. As you know, phase one of this project has been completed and is already delivering measurable results. The county is realizing actual energy and operational savings from the efficiency improvements that have been implemented across our facilities. These savings not only reduce operating costs, but also allow us to reinvest resources into the services our residents depend on every day. Phase two is well underway, the photovoltaic systems being installed at facilities throughout Maui County. These projects are helping us advance our sustainability goals while also strengthening our emergency preparedness and resilience. A great example is the installation of solar systems that support critical water infrastructure, helping to improve the reliability and continuity of operations at county water well facilities. Looking ahead, phase three presents an opportunity to continue building on this momentum. In addition to expanding renewable energy projects, phase three may allow the county to address critical facility needs through roof replacements and other infrastructure improvements that can be integrated with future energy projects. This approach allows us to maximize the value of our investments while improving the condition and resilience of county facilities. This work would not be possible without the collaboration of many county departments and employees. Their partnership and commitment have been essential to moving these projects forward. I'm super grateful for that. Together, we're making meaningful progress toward a more energy-efficient, sustainable, and resilient Maui County, while improving our ability to prepare for and respond to future emergencies. As you know, our partner Johnson Controls reps are here today to answer any technical questions that you might have. And I would just want to call out budget director Leslie Milner, finance director Marcy Martin, and Ms. Lejardin. This energy project was from the previous administration, and these individuals have been essential in the continuity and consistency of this project, and we're very grateful. Thank you, Chair.

Thank you very much. Anybody else would like to say anything from the administration? Um, budget director? No. Um, Corp Council, Mimi Desjardins, you want to add something before we go to Johnson control?

Thank you, Chair. I don't have anything to add. I did receive questions from the BEFED Committee, and I did respond to those in writing yesterday, and I noticed they did get posted to Granicus, so I'm here to answer questions if there are anything that I can help with. Thank you.

Okay, thank you. The letter's dated June 1, 2026. Is it Granicus item number nine, I guess? Since eight was the last that we knew. Okay.

Johnson? Granicus item 13.

13, okay, 13. Thank you very much, Member Rollins-Fernandez. Johnson Control, do you have anything you would like to say as opening comments?

No, ma'am.

We can answer questions, though. Oh, okay, you don't wanna make a general statement about where you are or any information? We can hold you for questions, then, if that's your preference.

I think it would be easier if we just went through the questions and we need me to expand. I can do that.

Thank you very much. Um, like to welcome member Paulton to the meeting. Good morning.

Aloha Kaka Kaka Kako streaming live in there from the council chambers. My apologies for my tardiness.

Good morning. Thank you very much. Um, so at this time then I'd like to open up for public testimony again. Do we have anyone signed up?

Thank you, Chair. We'll return to JC Law, and I believe he's testifying out of the Makawau Haikupai'i Residency Area Office.

Okay.

If Regina Corneal could unmute her mic and then turn on her camera, and then JC Law can begin his testimony. Thank you.

Oh, good morning. Oh, we're having public testimony from your office. Yeah. So while we're waiting, then, member who Hodgins has come in, you need to set up but thank you very much. And we are having public testimony from your office. We're trying to Yeah.

Chair, I apologize, it looks like Regina's unmuted herself, but we're not getting any audio from her.

I can turn on my camera if somebody enables it.

Oh, can you let Member Paltin into the meeting? Okay, then we can do your welcome. Again, stalling for time.

I'm in the meeting, it's just not enabled. Oh, now it is.

Okay. Oh, there she is, okay. So do we have a testifier waiting at the Paia District Office?

Chair, that's my understanding. However, it seems like they might still be having technical issues. So we... don't have any other individuals signed up to testify at this time, so.

Okay, so we're gonna move on. Member Rollins-Fernandez.

Maybe the PAIA office could call the number instead of trying to log on via internet.

Okay.

I guess we need to take a quick minute to recess. I won't move.

I'll stay here. Have we connected? No.

Chair, if Regina wants to connect via her phone to Microsoft Teams, they would have to call in via phone number, which is 1-808-977-4067, and then there is a nine-digit passcode, 420-614-452, and the pound sign.

So I've been asked to do a recess until we can get this straightened out, so. Thank you. No objection, Chair. Till 9.30.

Thank you.

The Finance Economic Development Committee is now 936. Thank you very much for the recess. So at this time, then, we're taking public testimony from the Paia District Office.

Thank you, Chair, and I apologize for the technical difficulties. We do have the Makawa Paia Residency Area Office signed in via phone under the last four digits, 5665, and they can proceed with their testimony.

Thank you. Testifier, please proceed.

Aloha ka aha o ke ka lana o Maui. This is Jesse Long over here at Heritage Hall in Paia. And yeah, sorry about the delay there. You guys that have been in government for a while know about the delays of the procedures. And I did catch a little bit about, I'm sorry, I'm not going to grumble too much about the, um, the lack of information and, um, the, um, OCS staff did a very good job of at least allowing me to have my, my voice heard. Um, I'll try to focus on the positive and eliminate the negative because, um, yeah, I'm here and I, I can see you guys. I, um, So I'd just like to say that, that's tough. I had a couple minutes to get my thoughts together, but I just wanted to tell you guys about, there seems to be a little bit of chaos going on between the legislative branch of the government here and the judicial branch. And I would just encourage you guys to keep them separate as much as you can because state code 92 12 enforcement, it says the attorney general and a prosecuting attorney shall enforce the open meetings laws, which I feel like I've been violated over the past week or so by the clerk's office. And I know there's not much you guys can do about that, but maybe you could just take a vote. As far as like, I don't know if it would be a resolution or whatever you wanna do to say- Mr. Law, would you like to testify on Johnson Control?

Item which is on the agenda.

Yeah, could you read the agenda for me? Because I don't have an agenda. I have no access to an agenda. I have no access to the building or I'll get arrested by the police. And if I'm in jail, I sure don't have access to the agenda. So what is the agenda? So, yeah, thank you, David Ross, for doing the best you can under the circumstances. I'd just like to thank Janice Johnson. I heard a little bit about what Director Lalo said about Johnson Controls and just putting an emergency call out. All hands on deck, everybody out there that can hear me. the county needs to focus on running the government and helping the people and not trying to keep people away. So, yeah. And I heard about the guy with the gun that was challenging some of the people that work for the county. And I don't like that either as much as you guys. So it's a very pleasant experience here testifying at the FIE office. Thank you. I really appreciate that. And thank you, everybody. You too, Kayani. And tomorrow and all you guys. Thank you for letting me testify. I shall return.

Anybody have questions for the testifier? See none. Thank you very much. Next testifier.

Chair, that's all the individuals signed up to testify on this item. Would you like me to do a last call?

Yes, please.

If anyone in the audience or on teams would like to testify, please come up to the mic and begin your testimony or use the raise your hand function on teams and staff will meet you. I'll provide a brief countdown. Three, two, one. Seeing none, Chair Nguyen has indicated that they wish to testify.

Thank you very much. So I'm gonna close public testimony and continue to receive written testimony on this item. Thank you, members. So this time, then, I'd like to start with any questions that the members may have. You'll be given three minutes per. I'll start with Member Cerenci and go down, Member Ujajan, and then go to Member Rollins-Fernandez, Johnson, Paulton, and then Chair Lee.

Mahalo Chair and Mahalo Joe and Leif for being here this morning. I was just wondering how much has the grant already expended and then what year in the timeline that we're currently in? Just a brief update.

but we are rolling up into the end of the second year of performance measurement on the first phase of the project. So we have one year of verification that has been completed 24-25. And I may get the month wrong, I believe we end second year about September of 26. I'm sorry, would you like me to repeat all of that? Okay.

Does that answer your question? And then funds, have funds been expended to date?

Chair.

Sorry, Director Miller.

Director.

If I can jump in. We haven't spent any funds on this next phase that we're talking about yet. We wanted to ensure we had time to talk to the council. It's also the administration's intent to send down a resolution for the council's consideration before we commit to this next round of funding.

Thank you, Chair. Okay. Thank you, Budget Director. Thank you, Chair.

Thank you.

Member Uhl-Hodgins.

Thank you, Chair. You might have said it in the beginning as I was a little bit late, but what do you think is the, I guess, estimated amount of savings that the county has maybe saved with this changes that you folks have been doing over the past few years?

For your first full year of year one combined savings is $2.283 million. And on your total project savings, you have a guaranteed amount of $50 million across the lifetime of the project.

Lifetime is $50 million.

What was that? I'm sorry.

OK.

Other than that, Chair, I guess I'll look forward to the resolution that will come down, but I don't think I have too much questions for now. Thank you.

Thank you. Next we have Member Rollins-Fernandez.

Mahalo, Chair. Mahalo, everyone, for being with us. I'm just going through the documents on Granicus, but I guess, how are the projects on Molokai going?

Sure. Hi, Joe Caldwell. So Lowen Okamoto, who you guys may know, is our construction manager. He'd be the best person to answer that question. But I believe they are getting started with some solar PV projects over there. I don't know the current status, but I can find out from Lowen and hopefully get back with you.

And I would also add, Councilmember, that just went through the Molokai Planning Commission in relationship to permitting and all of that and passed. So we're excited about moving forward.

Yay, awesome. Okay, and then I did receive feedback from the community about wanting battery storage with those projects. Let me know how I can support to make that happen as we build toward more resilience, and battery is key to that energy resilience, as you already know, but for the public. If you have any additional feedback, please.

That was part of the conversation when it was in front of council, and we can follow up with you on that as well.

Wonderful. Fully surprised. Mahalo. Mahalo, Chair.

Wonderful. Next, we have Member Poulton. Oh, I'm sorry. Member Johnson.

Thank you, Chair. Good morning, everybody. I will also echo for Lanai or advocate for Lanai. We would love to see solar on our county public works facility. So it's always, you know, advocating for more solar and more resiliency even in our small little town of Lanai City. After reviewing some of the documents for today's meetings, I really am impressed with some of the things that Johnson Controls are doing. The energy performance contracting is a fascinating way to do business and I really appreciate that model. It's interesting and I think it's a good way forward. It's big numbers. And I understand that we don't, there's no upfront capital for the county because you use the savings to pay yourself off, which is great. But in one of the documents that Mimi D. Jardin mentioned in the, I think it was request for legal services, but it mentioned that there was $150,000 pot that I want to clarify that one. So Ms. Desjardins or whoever, can you explain that $150,000, that is an upfront cost, that is not an upfront cost? Maybe you can get into that. Thank you.

Thank you, Chair. Thank you, Council Member Johnson. So the $150,000 was encumbered when the contract was originally entered into and has remained encumbered. And if at any point we decide, you know, we don't want to move forward with this next phase, then we would just owe that $150,000 payment to JCI. Okay.

It costs money to get out of a contract?

Thank you, Chair. It's just the funding for the work that they've done in preparation for this next phase. If we choose not to move forward with it, then we just make them whole for the work they've done preparing to maybe move forward.

Okay. That was my only question, and I want to respect everybody's time. So thank you so much. Thank you, Chair.

Thank you very much. Next, we have Member Paulton.

Thank you, Chair. Thank you, presenters. My question is, I had heard, and I think it was Ms. Lalo that was talking about the solar for the water pumps as a resiliency backup plan. The last time I think the PSPS was on and we have batteries personally in my house, it was overcast. So if it's not sunny and we're thinking of like Kona Low Storm or whatever, the solar as a backup resiliency and it's not sunny, what is the backup to that backup?

So the solar is encumbered by, obviously, nighttime and overcast conditions, and the backup to the solar is gonna be the battery storage. And once the battery storage becomes depleted, then you're in a depleted situation.

In a what situation?

You're in a depleted situation.

Yeah, how do we avoid that? I mean, is it like you have storage of gasoline or diesel or generators or...

I probably have to ask the water department that question. It'd be their infrastructure, but nothing that we're installing would support that. The backup to the backup. Correct. We're not doing anything for backups to the backups. So that probably would be more appropriate for the water guys to answer.

So when you put the solar, it's just to save the cost of oil or diesel or whatever. And less pollution. Is there a phase-out plan for the end of life of the solar panels that you are using?

I'm not sure what you mean by phase-out plan. It's a 20-year power purchase agreement. It will reduce your operating expenses for the next 20 years.

Who pays to dispose of the solar panels at their end of life?

I am not sure. That would be in the PPA agreement. It would either be the owner operator or the county. I'm sorry, I don't know which.

That would cut into our savings if it's us because now we got to pay for disposal. and that hasn't been calculated into the scheme.

Thank you, Chair. Thank you, Council Member Paulton. Because this is a lease agreement, my assumption would be that the county would not be responsible for paying for those costs, but we're happy to dig further into the PPA and provide that in writing.

That'd be great. Thank you. Thank you.

Also, sorry, Chair, I did just text you, but the Water Department has made some significant investments over the last couple years in generators, so I think that would be the backup to the backup. Thank you, Chair.

Do we know how much storage of, does it run on diesel?

I think diesel, but I can confirm with Deputy Director Landgraf.

Just seeing, because when Kapalua's system was the only one running after the fire, we had to make sure that they got diesel to keep the water on, and if there's a plan put in place for that eventuality. Thank you.

Thank you. Okay, so do you still need a question sent to, or has that been answered?

I just would like to verify that we're not the ones paying for the disposal of all the solar panels at the end of their useful life. Because that would cut into any savings. Okay, thank you very much. Chair Lee.

Okay, either Lee or Joe, you mentioned that the savings over the project's life would be about 50 million, right? So what would be the cost to us?

Your overall cost to the project was roughly $25 million.

Okay, so is the net savings 50 million or 25 million?

Your net savings after all said and done is $11.9 million.

$11 million, okay. Now, to our budget director, if we chose not to proceed, and to cancel this contract, what would be some of your reasons for not proceeding?

Thank you, Chair. I think, well, A, if the council feels we shouldn't proceed with it, that would be a reason for not proceeding. But I think on the administration side, I think if we couldn't come to an agreement on the projects or the departments weren't supportive, that would be a reason on our side for not proceeding. But we have involved the department in the conversation to date, and they're supportive of these projects because it helps take things off of their CIP lists.

So you're saying unless something unusual comes up, more than likely you will be proceeding with the next phase.

Thank you, Chair. Thank you, Chair. Our preference would be to proceed, yes.

Okay, and how much is that gonna cost the next phase?

The next phase is a little bit over $9 million paid over time and then we, from whichever financing partner we partner with, and then we will pay it back on an annual basis for 20 years at a 4.4% rate.

Okay, thank you.

Okay, very good. So I have a question. So in the contract under exhibit or Schedule A, is that all the projects that we have agreed or you have agreed with us to do?

Thank you, Chair. Amendment five to the current contract includes the final project list for the first phase of the agreement. We don't have a final project list for the upcoming phase of the agreement yet because we'll need to work that out in this process once we determine the funding level. Thank you, Chair.

So are you saying that everything in Schedule A that I'm referencing, the initial list, has been completed?

Thank you, Chair. Everything in Schedule A, Appendix Five, or Amendment Five, yes, has been completed.

In previous meetings, we were told that an audit was gonna be done to figure out what our savings have been because of this JCI contract. Do you have that information?

Thank you, Chair. The audit is currently in process and we will provide the results of that audit to the council as soon as we have them from our contractor.

And that's separate from everything we're...

Yes, Chair, we do have the measurement and verification report from JCI that we received that should be coming to the council shortly, and you also received a copy of it directly from JCI late last calendar year, I believe. Thank you, Chair.

Okay, the audit. Do you wanna say anything, Leif?

I was just gonna reiterate what was just said. I think it was November of 2025, You received an M&B audit from Johnson Controls directly, and the county has engaged a third party audit that just began a month ago, a couple weeks ago, which went through an RFP process started last fall.

Okay, so do you know what the outcome of the audit was?

So the outcome of our audit is a end savings of year one at the $2.28 million. The third party audit is gonna take some time. I'm not familiar with the deliverable deadlines that they have.

Okay, so that's not under your control.

Correct, that's through the county, by the county, and it is to verify that what we are saying is correct.

Okay. In the response that we got, which is grant request number 13, June 1 from Deputy Director Mimi Desjardins, the first question, whether council approval is required before the county may execute the proposed amendment in contract C7619, which is what is before us. And the answer is council approval is not required for the contract amendment. However, the administration intends to see council approval for the tax exempt lease purchase TELP for the next phase of the Johnson Control contract to ensure council support before proceeding with any additional projects was a response. So I think I ran out of time. And if Corp Council can then respond after everybody. Does anybody have any more questions? Or can I get Corp Council to answer this? Yeah, okay.

No objection.

Thank you.

Okay, thank you, Chair. And I'll be deferring to Ms. Milner as well. But the actual contract amendment that we entered into basically says that we agree that the purchase development agreement, that we are entering into that, and we're exploring the scope and the cost. And to member Johnson's question about the $150,000, if we can't come to a meeting of the minds, we owe, under the PDA, we owe Johnson Controls $150,000 for their workup that they did in order for us to get to the place that we are at right now. which is that we have a defined scope and we have the possibility of securing financing through a financer. Ms. Miller can fill you in on that. But other than that, there are no obligations at this point. We simply amended the contract to include that PDA, but that PDA makes it clear that we are still in the final stages of coming to a meeting of the minds. and that's why there's no council support or approval required, because it's just simply a contract that we've entered into, if that makes sense.

Thank you. Member Johnson, does that answer your question? Oh, he walked away, must be. Okay, anybody else, any more questions? Member Paulton.

What was the cost of the third party audit and is that incorporated, is that plus or minus the 11.9 million savings that is estimated? Is that taken into account?

Thank you chair. Thank you council member. Pardon. Uh, the cost was a little under $29,000 for the third party audit. So, um, uh, I will refer to JCI on if they include that in their calculations, but it doesn't make a big dent in that 11 million.

It was not included in our 11.9 number.

Oh, okay. So now it's 11.8 something, something, something. That's it. Thank you.

Member Rollins-Fernandez.

Mahalo, Chair. Okay, so I don't know if this is the section that may speak to what Member Poulton asked earlier about the removal and disposal of the panels. It's section nine of, I don't remember what granicus item this is, but it's removal of system upon termination or expiration. Yeah? Upon the expiration or earlier termination of this agreement, provided purchaser does not exercise its purchase option under Section 14.B, seller shall, at its expense, unless expressly provided otherwise in this agreement, remove all of the tangible property comprising the system from the site with a targeted completion date that is no later than 90 days after the expiration of the term. The portion of the site where the system is located shall be returned to substantially its original condition, excluding ordinary wear and tear, including the removal of system mounting pads or other supporting structures and repair of restoration of the roof and the roof membrane. And then there's like a few more sentences, but it sounds like unless it's stated otherwise that it would be JCI's kuleana. Yeah? Okay, all right, so I guess the staff doesn't need to transmit a written question.

Mahalo.

JCI concur?

Yes, we do. That was a topic when we were listening to the Molokai Council meeting, and I just didn't, I wasn't sure, so I would have rather followed up than make statements that were incorrect. And yeah. And that falls to, that will end up falling to ComSolar, the PPA provider, in actuality. But nonetheless, through our project, yes.

And does the Mulliken Planning Commission meeting he was referencing?

Yeah, and that's, yes, ma'am.

Mahalo. Mahalo, sure.

Member Bolton. So the reason you guys chose 20 years as like, unless it gets terminated earlier is because it will become outdated or that's the end of the life. And then at the end of 20 years, we may or may not be still in a relationship with you folks. And so we might put out to bid like, Rollins-Fernandez controls or something like that instead. And then we'll decide how to move forward after that 20 years. I mean, some of us may not be alive then, but some of us will.

So, so hopefully we'll be alive, but, um, so you have Hawaii revised statute, the 3641 that allows all this kind of work to be done and it garners that 20 year term. So that, that is why the 20 year term, yes, we will still be involved with the County in some way, shape or form through the measurement and verification, the ongoing process. So we are committed and obligated to, to be involved there.

or in case the panels fail or something like that?

So part of this energy performance contract is the ongoing measurement verification that we do, and that's how we verify the savings, and that's also how we verify whether you're getting what you're supposed to get or there's a shortfall. And so, yes. And to your point, in 20 years, you guys will still love us, but in all seriousness, yeah, if you parted ways, went a different direction, however, that's obviously on the table, for sure.

Okay, sorry, Rollins, Fernandez, we're still gonna love John Cena.

Okay, no other questions?

That's it, thank you.

All right, so, all right, any other questions, members? None, okay. So I guess at this time, then, I'm just deferring. I'm gonna just defer this item, sorry. If no objections, I'm just gonna defer it. Okay.

No objections. Good job, folks.

Amazing. In Granicus is also a paper that Alex DeRoad, who used to be the Energy Commissioner, wrote. studying in Europe and he wrote about this project. And I guess the disclaimer is that it's not from JCI, but it is information regarding this JCI contract and Maui County. So just information for you and the public and, oh yes, member, Deputy Director Desjardins. Yeah, you don't want to be a member.

I was going to try to control myself, but I can't because I love this law, HRS 36-41, and I urge you to read it because it really is an incentive for public agencies like us to save money on energy, and it's all over the United States. Everybody's doing it, but it has really, really fantastic language in it that really protects counties, and we have a great partner. I mean, I think they've proven their... really easy to work with, but to your point, Member Paulton, there is a provision in here that does allow these contracts to go up to 20 years. And then there's language in here that says that that's contingent on appropriation of funding from you folks. Because normally we don't contract that far out, right? But there's clear language in the HRS that protects the county. So I really urge you to read it because it's a really fascinating law. Can you repeat the number? HRS 36-41. So you may be thinking about other energy projects that JCI could help us with. That would be really great. Thank you.

Yeah. we should recommend projects then. So the administration then said that the list of projects have been amended. Can you tell us again where it is?

Thank you, Chair. The final list of projects was attached to amendment five to the original contract.

Okay, okay.

Pardon me, Chair, that can be found in Granicus number two. It's the second document in that attachment.

Thank you. So on it. All right. So we are going to expect then those projects get completed. And if there was anything in that Schedule A that is not being completed, we are going to assume that it's just dropped, I guess, if we have to do a comparison. Is that correct?

Thank you chair. Yeah. Everything in that final list should have been completed, but I will let JCI chime in.

Yeah. Everything in that list has been completed as part of phase one. There's also, um, solar PV that we've talked about a little bit today. That was the phase two. Um, so that's a separate list of projects and you know, we're proposing this phase three, um, as well. So, um, you can add scope later on. That's just the final phase one list.

Anything else you want to say, Leif?

We really honestly from Johnson Controls really appreciate the partnership with the County of Maui, the opportunity to do work here and to be partners with you guys. I live on island, not on Maui. I live on Oahu. Joe lives on Oahu. Chuck lives on Maui. We are all taxpayers in this state and we all have kids in this state and we do honestly feel like this is good stewardship of our resources. And I would also go on Alex DeRuth's paper. It's got, two pages of cover to it that are basically summary that I put together for your benefit or for however you want to take that. But it's an 11 page peer reviewed academic research paper that was published in 2025. He's doing his PhD at KTH. It's a European engineering institution, and it is a case study on the County of Maui and performance contracting. It is worth the time to read. So thank you guys very much. Really appreciate it.

Thank you very much. So members, because I continue discussing, I'm gonna again mention, I'm gonna defer this item.

One moment. Yes. Member Sinensi has something to say into the mic.

Oh, you do?

Thank you. Yeah, no, I'm happy to. We have our own East Maui representative on JCI, so I have a direct contact. Thank you.

He wants batteries for Hana. We're working on it. Yeah. Okay, and then the article or the journal, the essay that... Is number 14. Alexander Francois de Rude. Is this published already? Okay. Using energy performance contracting to advance decarbonization and resiliency in local governments, a county of Maui case study. Mahalo for that. Thank you.

Okay, members, that's item number 14 on Granicus for the public. And this portion of the meeting, we're now done. So yeah, we don't wanna adjourn yet. So this item is deferred. Thank you very much, everybody, for being here. I'm gonna switch off. I'll take a little recess. So we'll come back at, oh, I don't know, 9.15, thanks. I'm sorry, 10.15. Three, two, one. All right, members, welcome back to the Budget Finance Economic Development Committee. It is now 1025. The next item and last item on the agenda is Bill 181, 2025, increasing the amount of the homeowner and long-term rental exemption from real property tax. The item was previously discussed at the Raptor Committee, thank you, Chair Lee, where Director Martin recommended waiting for certified real property tax assessment information before further action. After reviewing the assessed values, I wanted to bring this item back for discussion because I am concerned about the impact of taxpayers and would like to consider some tax relief for our residents. As drafted, the bill would increase the homeowner exemption from $300,000 to $400,000 and the long-term rental exemption from $200,000 to $300,000. For the homeowners exemption portion of Bill 181, the Department of Finance estimated in December 2025 that the proposal is $100,000 increase and would reduce real property tax revenue by $4,919,184 and affect 25,063 parcels, that's 25,063 parcels. This bill starts with the home and long-term rental exemptions and I am open to discussions from the members. Assisting us with our discussion today is Director Martin and so I'll ask for opening comments please.

Thank you, Chair. The department has reviewed Bill 181 CD1, and we are here to answer your questions. I just wanted to mention that from a policy standpoint, EXEMPTIONS PROVIDE A LUMP SUM BENEFIT, WHILE THE TIERS AND RATES PROVIDE PERCENTAGE ADJUSTMENTS, AND THERE ARE POSITIVE AND NEGATIVES TO BOTH TAX REVENUE PROGRAMS, SO WE ARE HERE TO ANSWER QUESTIONS ABOUT THAT AS WELL. We forgot to mention in the past that section 4B, this was a six-month lease for wildfire survivors where the lease was in effect in 24 and 25. So there were no applicants for fiscal 26. We would suggest removing that additional language referencing the tax year beginning July 1, 2027. And I have here Carrie Stockwell, the Real Property Tax Administrator, to assist with questions as well. Thank you.

Thank you. Ms. Stockwell, do you have anything to add?

No, just here if there are any questions. Thank you. Okay.

Director Milner, you have anything to add?

Thank you, Chair. No, nothing at this time, but happy to answer any questions the members may have.

Okay, so at this time, I'm gonna open public testimony for BFED 85. Anyone signed up?

Thank you, Chair. We do have one individual signed up on Teams, Tom Crowley.

Ah, Mr. Crowley. Good morning.

Hello, Council, Tom Crowley. You know, when you're talking about real property tax, you're going to hear from me for sure. There's actually a lot in this bill for you to give consideration to. And I really would encourage you to have a robust discussion about what Director Martin just kind of alluded to, which is the tiers and the exemptions and how they play off of each other. And I just want to make a few points here for you to consider in that discussion. First, with regard to the homeowner exemption, which, of course, I don't get. You guys know that. Increasing it by $100,000 leaves a whole bunch of people out of that. All the people that pay minimum tax, it doesn't help them in any way, shape, or form. They still pay minimum tax. That's about 3,000 taxpayers. Then there's the 1,200 that pay slightly more than minimum tax. They're only going to get a portion of that advantage for them. Then there's about 21,000 taxpayers who are going to see a $165 reduction in the net tax that they pay with this $100,000 exemption. Not a lot, right? And then there's 2,700 that will see about a $180 reduction in their taxes. And then there's 199 that are in the top tier that will see a total of $500 exemption. So kind of think about that. You're giving the greatest benefit to the people with the highest value homes. I'm not sure if you want to do that or not, but that's a policy decision for you. But I want to move on to the long-term rental thing because this really requires you to think a little deeper about the difference between exemptions and the rate tiers that you have. Adding that extra $100,000 exemption is going to help most of them with a $290 reduction in their taxes. I'm not sure how much that $290 reduction in their taxes is going to incentivize someone to go into long-term rental. But what I really want to point out is we have a certain number of taxpayers at the very top tier, okay? Over $3 million valuations, okay? And those guys, well, they would get $850 out of this extra $100,000. So that's a lot. But here's where I really want you to pay attention. You've given the top tier of long-term rental an $8.50 rate, which is one half of the $17 rate that they would get otherwise if they didn't have a long-term rental, if they were being taxed as a second home, okay? What that amounts to is that these guys on average, the guys who have homes valued at more than $3 million on average are getting a $23,800 tax reduction because they're giving a long-term rental. And I just question for you, should you be giving that much incentive for long-term rental at that highest tier? The extra $850 that this would bring forward, okay, fine, big, no big deal. But in the big picture, should you be giving them such a big rate reduction at that highest level? And what I would suggest for these long term rental exemption thing is that you actually make the exemption much, much higher, like maybe even as high as a million dollars. OK, what that would do is and then make the rates kind of leave them back where they were for for non owner occupied. So what that would do is it would basically say everyone who has a home of less than $1,200,000 who does a long-term rental pays minimum tax. So it would highly incentivize the people with the lower value homes. the ones with the higher value homes, they would still get a benefit. They would get this million dollar exemption, which might give them as much as a, let's see, $15,000 reduction in their total taxes. But you wouldn't be moving this valuation so far up the scale because in general right now, we're giving much more incentive at the very, very high end. And you've kind of let the back door open for your highest value property owners to pay a much, much, much lower total tax bill through this long-term rental exemption. And are those the rentals that you really are trying to incentivize? The ones that might be 10,000 a month, 15,000 a month? I'm sure I've seen some that are 30,000 a month. So I really would encourage you to have a robust discussion today about how this extra exemption would impact the net tax bills. And do you really want to have the tiers give that much incentive to do long-term rental at the highest valuation? I hope all that made sense. If you have any questions, I'll be happy to answer them. Thank you.

Thank you. We have a question for you from Member Uhl-Hodgins.

Thank you, Mr. Curley. I was trying to write down what you were saying as fast as I could, but I couldn't write as fast as you were speaking. So would you mind just saying the $165 exemption for about 21,000 properties, $180 exemption for how many properties, and then what was that last tier that you said?

Okay, going to the owner-occupied, that's what you're referencing there. Yes, thank you. You know, we have 28,000 owner-occupied properties total. Okay. So that's the total number of people that are in that class. And as the director might have pointed out, about 3,000 of them pay minimum tax. So they get no value whatsoever out of this additional tax reduction. about 1,200 are gonna get a partial advantage out of it. That's gonna be something less than $165. It'll be anywhere from $1 up to $165. Then you have 21,000 that would get a benefit of $165. You caught that one. Then 2,700 properties as of the valuation in this past year would get $180 benefit. And then it's only 199 properties that are over $4.5 million that are going to kick into the top tier, and they would get a $500 benefit. Those are based on what the current rate structure you have. So again, that's only referencing owner-occupied properties.

Okay. Okay. Thank you very much.

Thank you.

Thanks, Chair.

Did you submit this in writing?

No, you know, this is a complicated thing, and it could go a lot of different ways, and I really didn't want to invest a whole lot of time into it unless you guys really were going to take it seriously. I have a feeling this is going to be pushed through today because it's an election year, and reducing the taxes is a good thing, and everyone's going to want to do that. But I just want to give you these thoughts, and if you want me to do a white paper on it, I will.

Thank you. Member Paulton.

Can you do the same thing for the long-term rental that you did for a member who Hodgins on the owner occupied?

Sure The benefit in the long-term rental, let's see, I've got to look at the numbers that I have. You know, you get this great document every year from Real Property Tax that breaks down how many people are in each tier and so forth, and that's where I'm grabbing these numbers from, okay? So in the long-term rental classification, you have a total this past year of 4,350 properties, okay? So giving an extra $100,000 exemption for the guys in the first tier, which is up to $1.5 million, that's 3,890 properties that are in that first tier. And that first tier pays $2.90. So an extra $100,000 exemption is $290. So the long-term rental guys in the lowest tier will get a benefit of $290. Then in your middle tier, which goes up to $3 million, you have 387 properties. Those guys are paying a rate in the middle tier of $5 per thousand, so they will get a $500 benefit from this extra $100,000. Then you've got the top tier, which there's only 73 properties in this top tier, okay, that are hitting that top tier. But those guys pay $8.50 a thousand. So the benefit that they're gonna get out of this is $850, okay? So that's what you're discussing today is giving them this much more incentive. But my real testimony is about that top tier rate because you're giving them much more benefit with the rate than you are with this exemption. Hmm.

Thank you. Okay, thank you. Any other questions for Mr. Crowley? Thank you, we knew we would see you. Thank you very much for testifying and doing all this work. Okay, any other testifiers?

Chair, that's all the individuals signed up to testify. Would you like me to do a last call?

Yes, please.

This is the last call for oral testimony. Please come up to the podium or raise your hand on teams if you would like to testify. The countdown is three, two, one. Seeing none, Chair, no one has indicated that they wish to testify.

All right, with your permission, then I'm gonna close public testimony on this item, receive written testimony, continue. Thank you, thank you very much. So we will now do deliberations. and everyone will have three minutes. We will start with Shirley, since you have to leave at 11, so if we can get your questions in.

Do we have the totals, Marcy, Ms. Martin, on how much this is gonna cost?

Chair. Yes. So for the home exemption using this year's tiers and rates, it's about 4.9 million, and then the long-term rental is, what was it, 1.4? So you add those two together.

What did you say?

Yeah, so the 4.9 for the homeowner, 4.9 million and 1.4 million for the long-term rental.

So what's your personal opinion or your professional opinion?

regarding exemptions and rates? Regarding this proposal? Well, again, there's positives and negatives. So you have a menu of different tools that you can use. So I will start with the positive is that you lock in the reduction because it'll be codified. So that's the positive. But the negative, which is the positive for the tiers and rates, is you get a little more flexibility because... you can deliberate on that year after year. So there's, you know, it's policy decision.

So you prefer dealing more with the rates than with exemptions?

Do we prefer? Well, we'll implement both. Programs, yes.

I know you implement both programs, but I'm saying, you being the director of finance, which one would you choose if you were sitting here?

Well, I feel that... you're gonna get more flexibility with the rates and tiers. And as we had discussed during the Raptor, just in the past, we kinda knew that values were increasing, right? We had a sense of which way the market's going. And right now, things seem a little unpredictable. And it's not just locally, right? It's nationally. The rates and tiers will provide you with those options.

Okay, thank you. Thank you. Member Balton.

If our goal is to help the people that needs it most, what would your recommendation be?

So I will say that because we have the rates and tiers, no matter what we decide, we can adjust. So if you increase the exemption and then you needed to increase taxes, you can raise rates or change the tiers. So we're thankful to this body and all the work that everyone's put into real property tax. We have a lot of flexibility.

the rates and tiers portion of it is very public, whereas the homeowner exemption is, we're talking about it now, and it's not gonna affect people till July 1st. And it's not progressive in that everybody gets the same kind of amount off, although some are in higher tiers, and so then the amount off is, more and um it seems nationally that the trend is to provide greater relief for the people who don't need it as much and um I think it's a broad stroke to say that everybody that owns very expensive property does not need it as much because people are in their generational homes and it's very expensive, especially if they're closer to the ocean. But if we're giving a total of 6.3 million in tax relief, My preference is that it would be to the people that need it the most. And I think that we're not waiting it that way based on Mr. Crowley's testimony, would you agree?

Well, the advantage of the exemption is that you're locking it in. So if you needed more revenue, you would have to address it come budget time.

With the tiers and the rates.

That's the benefit of the exemption is you know how much they're getting and you can lock it in today. So it just... You also can choose one program or the other. You don't need to do it for both.

Like if we set out to give 1.4 million of tax relief to the long-term rental, then we could calculate it backwards how much the lowest tier should be kind of thing.

Yes, you have that flexibility.

Okay, thank you. Okay, thank you. Member Johnson.

Okay, thank you, Director, for joining us today. Interesting conversation. I want to kind of clarify the idea of You know, this sounds like a good thing, and if I explain it wrong, please correct me, but the way I see it is that the exemption that some folks would get, let's say they're in Tier 2, and with the exemption, it brings them down to Tier 1. Is that how it works, first off? I think that's how it is. And by doing it, bringing that unit down to Tier 1 with the exemption, then it's a totally different tax rate and it's totally different monies. I want to hear if that's actually how it works, Director.

Yes, that is how it works now that we have the tier. So it comes off the top, right?

Right, that's really important point to bring up. All 28,000 properties are in tier one. And then when the value exceeds one million, then that value is then taxed at tier two rate. So you're not in one tier or the other. Everyone's in tier one and then only the properties that exceed a million dollars, that value is then taxed at tier two and then if it exceeds three million dollars, then that value is taxed at tier three. It doesn't put you in one category or the other.

So I could clarify, it reduces your value. She's right, the tiers are progressive and if you were on the cusp of, you have a portion in that higher tier and you were on the cusp of that, this could lower your taxes in that tier.

Significantly? Or I'm sorry, I'm sorry. Go ahead, Council Member Rollins. It sounds like you guys.

It's the $100,000, right? So if your property was $1.1 million in taxable value, then the first $1 million would be taxed at Tier 1 rate. and then the 100,000 that exceeds the one million would be taxed at tier two. And so with the exemption that 100,000 would be reduced from the taxable value, so only the one million would be taxed at tier one, and there wouldn't be 100,000 to be taxed at tier two.

No. Is that sound correct, Director? It seems that makes it so complicated.

Yes, sorry. I was trying to make it simpler.

um okay i'm just trying to find out if there is a person who's in tier two and with this brings them down to tier one and they can access that that lower tax rate but you're saying you divide that parcel up by like how much money is in tier one and there's a little bit of extra in tier two and then that is where we can Oh, my God. All right. Thanks. My time's up. Thank you, Chair. Thank you.

Chair, I'm sorry. I took up like at least 30 seconds of Member Johnson's time if he can have at least 30 seconds. If he does want more time.

Okay. Director, is there a number to attach that? Do we know? Have we done the math to see? if there's a tier two person and brings them down to tier one, the excess money, how much, Oh my God, it's getting more confusing. How much of that money is get that lower tax rate? Do we, did we ever saw, uh, do that man?

That was basically what Tom Crowley was discussing was that, um, you know, that's why that it was 165 if that $100,000 was in tier one, it was $180 if that 100,000 was in tier two and then it was $500 if it's in tier three, but of course it's not that simple that $100,000 could bridge two tiers and they could get something in between and that's our great flexibility that we have.

Okay. All right.

Thank you. So are you done? Member Johnson? Yes. You are done? Okay. Member Ramos-Fernandez.

Okay, mahalo, Jay. So with the rates, you move the decimal twice, right? So if it's $1.65, that's why for tier one, it would be a savings of $165, right? And that's why the savings moves up with that 100,000, that would be taken off the taxable value of the property because it's like 165, then 185, and then five, Okay, sorry, I don't know if that's clear, but that's what it is. Okay, I already voted no on this bill in committee because I, The flexibility of having the tiers, I think, addresses the concern more appropriately. Tiers and the thresholds that we're able to adjust. I think, you know, like, I don't know. we did try to reduce tier one rate. We often do every year, and we don't get the votes for that, which would accomplish basically the same thing as doing an exemption off the total value of the property. The other thing, so in 2019, when I chaired the Real Property Tax Reform Committee, the goal for me, I won't speak for everyone in the committee, but the goal that I stated was that for long-term rentals, we needed to have the rent be affordable. And so the way that the long-term rental exemption and classification is set up now is it doesn't matter how much you rent for, you'll get the credit, you'll get the incentive and the tax relief. We already passed the bill I introduced to achieve this, which is to have the exemption and classification for long-term rentals that rent at 70% of fair market values. And that's where the people who need the help will get the help. and you have to design the systems more strategically than just going, add $100,000 more off the tax exemption. And then we're hearing, we understand that by doing that, we're primarily helping those 199 properties that pay the $5 tax exemption. rate at tier three, and that's not the intention. The intention is to help the people that we really need. So this is the scalpel approach. This is the approach that actually helps the people who need it the most, not the millionaires, billionaires.

You have no questions.

Next we have Member Uhu Hodgins followed by Member Sinetse.

Thank you, Chair. Real property tax is very confusing to begin with, so I appreciate having some time to discuss this. Is there a way that we could better target, I understand what you said, but in this, what we're talking about now, how can we better target kind of our more working class homes? I know that you gave a whole rant, and I appreciate it, I like it, but in what we have right now, during our real property tax discussions last time, I was asking you, Director Martin, again, typically our value of something goes down over the course of time, except our homes. Our home values always rise, and you said it's because we expect people to maintain them. and property values, the homes go up, even though it's the same home from 1967. But I wonder if you can answer my first question.

Thank you. So again, how real property tax rates and tiers are set up right now, it's very elastic. So you do have broad discretion within the tiers and the rates. And we have changed the tier threshold as values have gone up. raise the tier thresholds. And that's one way to push people whose values have gone up into the first tier, second tier, third tier. It is a way that you can distribute the assessed value listings between the tiers. So we do have that. And that is very elastic, whereas every year you can take all of our assessed values, look through them, and kind of sort who you want to be in that first tier category. in the second tier and that third tier.

But we're not necessarily discussing the tiers in this bill. So if we were to take this bill and to have a more scalped approach, would we say that it's applicable to X amount of home values or something? and we would, I mean, I'm not saying we're gonna do that now, I'm just saying, like, if our goal is to not give tax relief to those who probably could afford it, would we say not applicable to the third tier, hypothetically?

I think that would be something you'd have to check with court counsel on to see how we would, if that's something that can be done. And then every year you'd have to look at that number and see, whereas the exemption is usually more a broad set number. If you were to do something like that, then every year you'd really have to revisit that number after certification.

When was the last time we updated our home extension values? Do you know?

Department.

We have it in our... Sorry, I don't have the book in front of me.

Here we go.

Your favorite page.

I think it was, was it the same year as the tears?

Twice in the last five years.

Thank you. Want to speak into the mic?

And then if you wouldn't mind telling me what it was and what date, sorry, I don't have it.

Thank you, Chair. Apologies, I'll let Director Martin give the specifics, but my recollection in my time with the county is that it's changed twice in the last five years. Thank you, Chair.

Okay. Thank you, Director.

So that was on page 19 of the selected real property statistics for budget consideration. And it looks like it was 200,000 in fiscal 22, 23, and 300,000 in fiscal 23, 24, where it's remained. And then also in that, chart is the minimum tax, which kind of goes in tandem with that. At one point in time, that minimum tax was 400,000. And then another year, it was 250. So again, that's your menu of options. Thank you very much.

I heard the bell, Chair. Thank you.

Thank you. Member Sinensi.

Thank you, Chair. Did you say that in the first tier there's 21,000 homes? All 28, but there's 199 that's in the third tier and 165. So the majority is in the first tier.

Okay, I can answer this though. Let's see if I, okay, so we have, We have 28,387 in tier one. And of that, 2,750 are also in tier two. And of that, 199 are in tiers one, two, and three.

Oh, tier two and tier three. But they just get charged at the tier three. Or all three tiers.

They get all three tiers. Progressive.

Okay, thank you. budget director.

Sorry. So if I have a house that's worth $5 million, I don't. Um, the first, uh, we'll use the FY 27 tiers. The first 1.5 million of that value is taxed at the tier one rate. The next 3 million up to four and a half million is taxed at the tier two rate. And then the remaining 500,000 is taxed at the tier three rate. Thank you, chair.

Okay. So, so, uh, In essence, majority is still at the tier one and they would, there's more people receiving the exemption in tier one, the amount of people in tier one. Okay, thank you. And then my other question was, you're proposing an ASF chair. It looks like the changes from 200,000 to 300,000 last five years. This one would, your ASF would still just be for a year. The exemption in the ASF, 12 months. 12 consecutive months. And as Ms. Wigglesworth seen the ASF, the proposed ASF, you would sign off on that? Yeah. She signed it at the very bottom. Okay.

Yeah. Do you want to move forward? Go ahead.

Yes. Court counsel has approved this and it's my understanding there is one more change that needs to be made to section 4B.

Thank you. Thank you, Chair.

Okay, any other discussion? Okay, none. So then at this time then, what I'm gonna do is entertain a motion to recommend passage on first reading of Bill 181, 2025, incorporating any non-substantive revisions, because we're already talking about the ASF. So thank you.

I move to file. File.

Second.

Okay.

So there is a motion on the floor to file made by Member Rollins-Fernandez, second by Member Johnson. Any discussion?

I gave my reasons. I voted no already on this in the committee, and I'll vote again no, and I'll vote no every time. Okay.

Okay. So members, any discussion about this? Okay, roll call.

Liverpool 10. I'm not voting, I have discussion. Okay. I would be in support of this because it's a little bit like the 1.5% across the board cuts during budget. It's not taking into account that, what we're seeing is the rich getting richer and the poor getting poorer, and that the people that are struggling just to get groceries aren't being targeted for relief. You know, everybody is struggling, but if you're struggling just to get the basics, like bread and milk and peanut butter and jelly, You obviously need more assistance than somebody that can go out to dinner once a week because everybody has to eat. And this way of providing relief looks as though we're treating everyone the same because it's an across the board, 100,000 and owner occupied. But the reality is the, the lowest tier would get $160 of relief, whereas the highest tier would get $500 of relief, and who needs it more, the lowest tier or the highest tier? So I would be in favor of, at minimum, giving the 6.3 million of relief that this bill would provide in a more targeted way by addressing the tiers and rates for owner-occupied, addressing the long-term rental that helps by I mean, I could almost even be in support of the million dollar thing that Crowley was talking about, but I think it deserves more discussion. But I think that this way of doing it, doesn't provide the relief to those at this time that really needs it. It provides what looks like fair relief, but when you calculate it, provides much more relief, like times three or four to the highest end properties, which is if you're living in a, $3 million or more house, maybe you don't need it as much as somebody living in a $800,000 house. And if it's our local people on the shorelines that are struggling, we can address that in other ways, not this won't address that. specifically it'll be caught in the broader net of that we cast. But it won't specifically target like our generational families living on the beach whose property value went up exponentially due to comparable sales in the area. So I think to me if, if we're in these times where people need relief and we're willing to give up to 6.3, $6.5 million of relief, we should do it in a more targeted fashion. Thank you.

Any other discussion? Member Rollins-Fernandez.

This same type of relief can be done in the rates. We just reduce the rates. And next budget session, we won't have the two members that vote against reducing tier one rates, members Sugimura and member Lee. So we could potentially have the votes in order to provide that relief to lower the rates. We just never had the votes to do that. And Mr. Crowley is correct. It is an election year and the budget chair is running for mayor and this would be a feather in her cap and that's all I see it as.

Oh, we're really not talking about elections, but anybody else have any comments? Member Uhajans.

Thank you, Member Johnson. Sorry, I see your hand up. I will be super quick. I'm just asking for a roll call because this is very complex, and I just would have appreciated a little bit more time to discuss, but I understand we're voting now, so I'm just gonna... No, that's okay. I don't think I'm gonna understand it within the next 48 minutes. Not that I don't understand what you're saying. I think it's just because we only have one thing to discuss and it seems like it's more of a two-pronged situation. that we need to discuss, but we just also passed RPT and we're just gonna finalize our second budget on Friday. So that's my point, but I'll just be voting no at this time only because I would have appreciated To understand it more for myself, I think you guys had a head start. I understand that part, so thank you. That's it for me.

Thank you. Any other discussion? Member Rollins-Fernandez.

Chair, I'm also happy, oh, sorry, Member Johnson.

Oh, sorry, Member Johnson, go first.

To defer, if Member Uhudjian wants to discuss it more.

Member Johnson. I'll vote no next time it's brought up, too. Member Johnson. Sorry about that.

That's okay. You know, I think with the prices of houses going out of control, and I do think we should, you know, target, you know, those folks that are struggling. That's why we had the circuit breaker. That's why this discussion comes up during property tax rate time. And every time, like, we can't seem to get there. So there is work to be done. And I think I'd be open to a deferral today as well. We're missing a few members. I'm up for more discussion. But I just feel that, you know, I understand that we're trying to find relief for folks that need it the most. And this bill... it's kind of seesawed in the wrong direction. And that's just, that's why I think maybe come back with another bill. But if we want to have a more robust discussion, I'm open for deferral, Chair. Thank you.

Thank you. Any other discussion? Okay. So are you guys open to deferring this then and take it up again? That's what I'm hearing. That's fine.

Chair. Yes. I think there's a... Yeah, there's a motion on the floor, a motion to file.

Okay, so we can withdraw the motion, Member Rollins-Fernandez.

I withdraw my motion.

Second by Member Palten, is that right? I withdraw my second. Okay, okay, so here we go. I'm gonna then, the motion was withdrawn to file. I'll bring it up again for a greater discussion in depth and we'll ask for more information from, the department as well as we'll get member, not member, Tom Crowley to send us something on his, what we will call a white paper to look at it in depth. I will then defer this item. All right, members, anything else on this? If not, thanks for the meeting and the meeting is now adjourned at 11-11.