Seasons Greetings & Happy New Year

Happy_Holidays_2012

Have a wonderful Holiday Season, with happiness and prosperity throughout 2014!

Thank you for your continued support and I look forward to what we can accomplish, together, in the upcoming year.

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With Aloha,
Mike & Whitney White

untitledSinclair, Whitney, and Rob with me at the Council’s Inaguration.

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Application deadline for circuit breaker tax credit extended to Jan. 31

WAILUKU, Hawaii – The Maui County Council today passed Bill 95 (2013) to extend to Jan. 31 the application deadline for the “circuit breaker” tax relief program, Councilmember Mike White announced.

“I encourage all candidates for the circuit breaker tax credit to apply for the exemption,” Councilmember White said at today’s Council meeting. “Even if there are qualification doubts, apply anyway.”

Council Meeting

The County’s Department of Finance shall notify homeowner applicants who do not qualify for the circuit breaker tax credit on or before March 1.

Councilmember White, who chairs the Council’s Budget and Finance Committee, said the circuit breaker tax credit is intended to help alleviate hardships of homeowners with a household income of no more than $100,000 and building values of no more than $400,000 in paying for their real property taxes. Applicants whose real property taxes exceed 2 percent of their adjusted gross income may apply for the homeowner exemption.

“Our intent is to make the system more effective by identifying those who really need the credit,” Councilmember White said.

The circuit breaker tax credit application is available at www.mauicounty.gov/CircuitBreakerApp.

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Viewpoint: Setting the facts straight on Launiupoko

Viewpoint by Councilmember Mike White

Setting the facts straight on Launiupoko

The Arakawa Administration has embarked on a public relations campaign to pressure the Council to acquire 186 acres in Launiupoko.  Much has been said by the Administration, but there is a need to set the facts straight.

The concerns are not with negotiations, but rather the Administration substantially misrepresenting the market value of the Launiupoko lands by manipulating the appraisal process and being less than honest with the Council.  In fact, the Council was told only one appraisal existed, but there were actually two final appraisals and a draft.

The appraiser has stated that he provided a draft appraisal, and as the negotiations progressed, he received instructions from the County on how to recalculate the property value.  The Administration has admitted that the instructions were given to the appraiser at the insistence of the seller.  One unsupportable recalculation increased the value by $4.3 million.

The Administration inserted themselves into the appraisal process and eliminated the independence of the appraiser.  This is highly unusual and simply wrong.

The Council should have been presented with an unbiased market value appraisal along with the seller’s price demand.   If the market value was significantly less than what the sellers were asking, the Council could have decided to condemn the property rather than agree to the higher price.

As the Council inquired about the validity of the appraisal, we were continually mislead by the Administration.

On August 19, 2013, the Budget Committee asked that the Finance Department to provide, “all appraisals related to the County’s purchase of any lands in Launiupoko, Maui.”  The Finance Director only provided the same November 2, 2012, appraisal given to the Council at the start of deliberations.  No other appraisals were provided.

Subsequently, Committee staff contacted the Finance Department, notifying them that it was our understanding an earlier appraisal was on file.  Staff was informed a “draft” existed, but it had been “destroyed.”

On September 20, 2013, the Committee sent a letter to Mayor Arakawa requesting, “any earlier versions of the appraisal of the property at Launiupoko, including drafts,” in addition to “any correspondence or other documents between the County and ACM Consultants, Inc., relating to the factors, conditions or other information.”  The response: “The Mayor and Managing Director have decided not to respond to your request.”

Therefore, the Committee held a hearing and invited the appraiser who completed the November 2, 2012 appraisal.  During the hearing, he stated, “initially we were to look at the properties as a bulk parcel, then based upon negotiations between the County and the seller, the assignment changed accordingly, according to how negotiations were going.”  The appraiser confirmed that he provided a “draft” appraisal based on the bulk land appraisal method.

After serious questioning at the October 29, 2013 hearing, which was held to authorize a second, unbiased, appraisal on the Launiupoko property, the Finance Director presented the Committee with an appraisal dated, October 3, 2012, in the amount of $8.7 million.  This was not the draft referred to by the appraiser.  This document should have been provided to the Committee when requested ten weeks earlier.

Since an official offer was made to the seller with the appraisal, it cannot be considered a “draft appraisal.”  In addition, the appraisal was not done as a “bulk parcel” valuation as stated by the appraiser on October 15, 2013.

With the Administration’s unwillingness to provide requested documents, the Council’s responsibility to scrutinize the deal and obtain the truth has been stalled.  The Council made the proper decision to order a second, independent appraisal so that there will be a valid estimate of value on which a decision can be made.

Many feel the Launiupoko lands are “priceless” and should be preserved at any cost.  However, we must be responsible with our resources and be mindful that while the land may be “priceless,” our resources are not endless.

It is the Council’s job to provide oversight of the Administration’s decisions.  We have done our job.  Unfortunately, through this process, we have once again exposed a splintered trust.

I look forward to receiving a new, unbiased appraisal that will allow the Council to make a responsible and informed decision on behalf of taxpayers and move ahead appropriately.

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Council honors World Series Winner Shane Victorino

At the Friday, November 15, 2013 Council Meeting, Councilmember White introduced a resolution on behalf of Chair Baisa and the other members of the Council to congratulate Shane Victorino of the Boston Red Sox for Winning the 2013 Major League Baseball World Series.

Shane’s parents, Councilmember Mike & Joycelyn Victorino were on hand to receive the resolution.

Councilmember White made the following remarks on the resolution:

It is with great pleasure and honor that we congratulate our Maui native, Shane Victorino of the Boston Red Sox for winning the 2013 World Series Championship.

It is amazing that such a wonderful athlete grew up right here in our backyard of Wailuku.  I have tracked Shane’s career over the years and I am continually amazed by his perseverance, talent and success.  He was a star member of the Philadelphia Phillies and played a key role in this most recent World Series win.

In fact, I could hear Mr. Victorino screaming for joy all the way in Olinda, when Shane hit his grand slam in game six of the American League Championship Series –- the key hit that sent the Rod Sox to the World Series.  I am sure that is a moment Shane and the entire Victorino Ohana will never forget.

I, along with many others throughout the community continue to be very proud of Shane and his accomplishments, but I feel that his success can also be attributed to his strong family support system. Mr. and Mrs. Victorino and his brother Michael Jr. and his extended Maui Ohana have all supported Shane from the beginning — from little league to the major leagues, and I know instilled important values in him.

Thank you, Mr. and Mrs. Victorino for raising a fine young man, and I know you must have so much pride and joy.  Mrs. Victorino, I hear you have quite an impressive scrapbook collection dating back to when Shane first started playing sports – that is quite impressive and I know many fans would like to see it in the future!

In closing, there is so much to be said of Shane Victorino.  But, despite all of his success and busy schedule, I do want to thank him for continuing to give back to his hometown.  Through his foundation, he will be holding a baseball clinic and sharing his talent with our youth.  He is a great role model and an example of what can be accomplished if you dream big and work hard.

I send my congratulations to Shane and his entire Ohana on this special occasion and I look forward to another World Series win next year. Mahalo Chair.

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White to represent councils, selected to serve on Employer-Union Health Benefits Task Force

Press release by:
Office of Councilmember Mike White
Maui County Council

White to represent councils, selected to serve on Employer-Union Health Benefits Task Force

WAILUKU, Hawaii – The Hawaii State Association of Counties Executive Committee on Oct. 22 selected Maui County Councilmember Mike White to serve on the Hawaii Employer-Union Health Benefits Trust Fund Task Force.

The HSAC Executive Committee also selected Hawaii County Councilmember Valerie Poindexter to serve as Councilmember White’s alternate.

Act 268 (2013), establishes the Hawaii Employer-Union Health Benefits Trust Fund Task Force within the State Department of Budget and Finance.

The Task Force is required to examine the unfunded liability of the Trust Fund (known as the EUTF). Recent estimates put the EUTF’s unfunded liability around $11 billion to $18 billion. The Task Force must submit a report to the legislature, in consultation with the State Director of Finance, and include findings, recommendations and proposed legislation. The report must be submitted by Dec. 26.

“I am honored to be selected by my fellow Council members to serve on this important Task Force, and represent the views of all four county councils,” Councilmember White said. “The goal is to identify solutions that will address our unfunded liabilities, while upholding the benefits promised to our public employees.

“I look forward to the discussions that I hope will help shape the future of EUTF.”

Councilmember White served in the Hawaii State House of Representatives from 1993 to 1998 and was a member of the Finance Committee, among many other committee assignments. He chairs the Budget and Finance Committee of the Maui County Council and holds the Makawao-Haiku-Paia residency seat.

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Viewpoint: Getting it right with County spending

A version of this viewpoint appeared in the Sunday, October 27, 2013 version of The Maui News.

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Getting it right with County spending

The price tag: $13 million. The question: Are County taxpayers paying too much?

The County Council is being asked to authorize the purchase of 186 acres in Launiupoko based on a $13 million appraised value that is fundamentally flawed. The land consists of a 148-acre parcel and a portion of a 214–acre parcel.

The valuation is surprising when compared to an appraisal done on the same 214-acre parcel just five years earlier by the same appraiser. The appraised market value in 2007 was just $6.25 million–even though overall prices back then were 40% higher than today. Adjusted to today’s values, the price could be $4.2 million. Twelve years ago, the property was purchased for less than $1.1 million.

It is time for a new appraisal by a second appraiser.

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The first indication something was amiss came when we heard there had been an earlier draft of the appraisal at a much lower value. We requested a copy of the draft from the administration and were told it had been “destroyed”.

We then requested copies of correspondence initiating the job, a copy of the draft that could have been retrieved from the appraiser and copies of subsequent correspondence with instructions on how the appraisal was to be done. The administration refused to provide the committee with the requested documents and until today, has provided no reason for the decision.

After learning of the earlier draft, we took a closer look at the appraisal itself.  The appraisal is fundamentally flawed because the client (the county administration) provided the appraiser with certain conditions and assumptions to be used in calculating value. The result, understandably, is an inflated price rather than an estimate of fair market value which would likely have been achieved without such directions.

There are two problems with the appraisal. The first is that the appraiser was told to value the 148-acre parcel as a completed 8-lot subdivision but only deduct estimated construction costs, or a portion of the cost normally used to adjust gross value to arrive at a valid estimate of what the parcel is worth.

The appraisal further states that the “highest and best use” for the 37.7 and 32.7-acre non-developable properties is open space or park use. Yet, both properties are valued using comparable sales of developable lots. These properties account for $5.8 million of the purchase price even though these lots, once subdivided, have NO market value because nothing can be built on them.

On September 20, the council passed a resolution authorizing a reappraisal by the same appraiser, but without relying upon dissimilar land sales, hypothetical conditions, and extraordinary assumptions in valuing the properties. This past week, the appraiser responded, agreeing to do a reappraisal, but indicating it could take up to 90 days, past the December 31 deadline set by the seller.

In the past, the same appraiser completed a reappraisal on the County’s purchase of 63 acres in Paukukalo within a matter of days.

Is the 90-day timeframe part of a strategy to allow the clock to run on the council making an informed decision? And why? If we are going to give a developer a $12 million profit for 12 years of ownership, we should take the time and do everything possible to make sure we have the value right.

It is my understanding the appraisal presented would not be deemed acceptable by a financial institution as a statement of value in a bank-funded transaction. Why, then, should the Council accept it?

The council is being asked to make a $13 million purchase based on only one opinion of value. Even for office purchases or travel arrangements, the council typically requires three quotes. More information is sorely needed.

To provide the appropriate oversight and due diligence, the Council must now move ahead with at least one new appraisal done by a second appraiser without the flawed conditions and assumptions provided by the administration.

Last November, voters approved a Charter amendment declaring it to be the policy of the county to “promote economy, efficiency and improved service in the transaction of the public business in the legislative and executive branches of the county by: (1) Limiting expenditures to the lowest amount consistent with the efficient performance of essential services, activities, and functions.”

A second and separate appraisal is needed to know whether this purchase is prudent. My request to authorize the Council Chair to obtain such an appraisal will be considered at the Budget and Finance Committee meeting on Tuesday.

You, the voters, want the County to spend your hard-earned money wisely. Ensuring the proposed purchase price is fair is the first step toward fulfilling that mandate.

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White confirmed to Transportation Steering Committee for National Association of Counties

WAILUKU, Hawaii – Maui County Councilmember Mike White’s nomination to the Transportation Steering Committee of the National Association of Counties was confirmed by NACo President Linda Langston in a letter dated Sept. 6, Councilmember White’s office announced today.

NACo steering committee members play a critical role in advancing legislative and policy priorities important to the nation’s counties. The members also help establish goals and priorities for the organization.

Councilmember White, who will serve for the 2013-2014 term, said he intends to advocate for measures that will positively impact Maui County.

“I am honored for this opportunity to participate on a national level and share our unique perspective,” Councilmember White said. “Hawai‘i faces the challenge of relying on air service and limited sea transportation for the delivery of basic goods.  I want to ensure our voice is represented nationally in hopes of identifying transportation solutions to assist our residents.”

Councilmember White chairs the Council’s Budget and Finance Committee.

“Because Maui County’s primary economic engine is the visitor industry, I aim to collaborate with other jurisdictions to learn best practices on public transportation and airport and harbor development,” said Councilmember White, who has been the general manager of the Kaanapali Beach Hotel since 1985 and has been an advocate for the Hawaiian culture through various community non-profits.

Councilmember White, who served in the Hawaii State House of Representatives from 1993 to 1998, has been elected for consecutive terms to the Maui County Council, in 2010 and 2012, holding the residency seat for the Makawao-Haiku-Paia area.

Several adopted policies of the NACo Transportation Steering Committee are posted on its website at www.naco.org/legislation/policies/pages/transportation.aspx

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Council Opening Remarks – Reflecting on our Constitution

On Friday, September 20, 2013, Councilmember White delivered opening remarks at the Council Meeting, reflecting on the Constitution of the United States of America in honor of Constitution Day.

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Earlier this week on September 17, according to federal law, we celebrate Constitution Day – a day that we reflect and learn about the Constitution of the United States of America.

In keeping with this spirit, I feel compelled to discuss three articles of the Constitution that in my opinion is the bedrock of our national democracy. Article I vests all legislative powers to a Congress of the United States; Article II vests executive power in a President of the United States; and Article III vests judicial power of the United States in one Supreme Court.

Three separate but equal branches of government were created to establish checks and balances to help ensure that no one branch becomes too powerful.

US Flag and Constitution of the United States of America

This concept is important to remember, as one of our founding fathers John Adams stated, “only by balancing each against the other two, can freedom be preserved”.

Even until today, the balance of power is still critical in maintaining a government that is responsive and accountable to the people. One branch of government cannot unilaterally make decisions on its own, which ensures that actions in government are vetted and debated in hopes of making responsible decisions.

Public participation in our democracy is also critical, whether by testifying, learning about pending projects, protesting, or giving feedback to elected officials – whether good or bad.

Elected officials must remember that we are only representatives of our fellow citizens and any decision that is made, funds appropriated or spent is not for personal gain, but for the good of the entire public.

I cannot imagine a government without a proper system of checks and balances as I feel it is one of the main reasons we have strong and vibrant communities.

It is unfortunate however, that many in our society take for granted the opportunity to elect their representatives. Voter turnout in Hawaii has dwindled since statehood, but we must remember that many before us fought long and hard for the right to vote.

It took two amendments to our Constitution before voting rights was given to all citizens. The Fifteenth Amendment prohibits denying citizens the right to vote based on a citizens race, color or previous condition of servitude and the Nineteenth Amendment prohibits any citizen from being denied the right to vote on the basis of sex.

We have come very far as a society and I am glad that we are able to take a moment to reflect on our constitution and our freedoms that definitely were not free.

In closing, this past Monday, I was saddened to hear of the tragedy that took the lives of 12 innocent men and women working at Washington D.C.’s Navy Yard and injuring 8 others.

This unfortunate turn of events reminded me that we can never take our safety for granted and we must always cherish the time we have with our loved ones, as you never know when it might be your last.

In honor of the 12 victims of Tuesday’s tragedy, I would request that we take a moment of silence to remember the lives of those who were serving our nation as federal employees.

Thank you madam Chair.

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Statement on Tuesday, September 17 Meeting on proposed Launiupoko parcel purchase

Following the Tuesday, September 17, 2013 Budget and Finance Committee Meeting, Councilmember Mike White offered the following statement on the proposed Launiupoko parcel purchase discussed at the meeting.

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“I support the purchase of open space for future generations and I believe this acquisition is one that the County should pursue. However, the question is not about the need for open space, but rather at what cost? What good is purchasing land for future generations if the future tax base will not be able to afford it?

“An appraisal that was presented to the Budget and Finance Committee was fundamentally flawed and its assumptions were dictated by the administration, instead of using industry best practices. The appraisal compares developable parcels to lands that cannot be further developed. Therefore, the County could be paying substantially more than what the property is actually worth. Because of this, I feel a second opinion on the lands value is warranted.

“We have expenses that are growing rapidly and to a great degree, beyond our control. An easy example is the wage and salary increases that have been awarded this year will amount to cost increases in excess of $45 million by Fiscal Year 2017. In order to cover this expense, we will have to expand our tax base by the equivalent of three times the taxes in Kahului and nearly four times the taxes paid by all of Wailuku.

“Although the members of the Budget and Finance Committee did not agree upon a second appraisal today, I will once again request a second appraisal at Friday’s Council meeting.

“It is vital that when spending taxpayer funds, we are doing so in a diligent and accountable manner. It would be highly irresponsible to move forward on a $13 million land purchase without appropriate due diligence.”

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Statement on Old Wailuku Post Office Investigation

At the Friday, July 5, 2013 Council Meeting, Councilmember White made the following statement on the Policy and Intergovernmental Affairs Committee Report No. 13-78. 

The measure recommend adoption of a resolution authorizing the Policy and Intergovernmental Affairs Committee to conduct a formal investigation of the Department of Management; Department of Finance; Budget Office, Office of the Mayor; Department of Public Works; and Department of the Corporation Counsel into the potential misuse of County funds appropriated for rehabilitation of the Old Wailuku Post Office.

The resolution was adopted by a vote of 5-3.

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I fully support the majority of the Mayor’s agenda and congratulate him on bringing together a management team and department heads that are moving Maui forward in positive ways. The mayor’s apology is appreciated, and his acknowledgement that he is fine with the Council conducting an investigation, will help us move through this issue and get it behind us.

As stated in the past, I also fully support the mayor’s plan to have the County construct additional space so that we can reduce the high level of on-going lease rents. It is important to all of us to be able to move ahead with the design for the new structure on the Post Office site. As noted earlier, I will expedite a budget amendment to fund the design work if the Administration will send us an amendment for the design work alone.

While the majority of the public discussion has been about the demolition, it was the expenditure for the master planning of the County’s Wailuku properties that first came to our attention. Following a presentation of the Master Plan, a member of the Administration was asked what the source of funding was for the payments to Group 70. We were told that the Administration had approved the design contract amounting to $780,000 to be paid using an appropriation for the Old Wailuku Post Office Rehabilitation. The individual stated that others approved the expenditure and declared “it wasn’t my decision”.

There is little to support the claim of miscommunication in the Administration’s handling of the Master Planning contract. As mentioned in Mr. Reagan’s timeline, our first hint of space planning (not master planning) was during “visioning” sessions in September, but there was no discussion of cost or the extent of the work for which Group 70 had been engaged. Yet, at this point, there had been three actions taken by the administration over a five month period that were not included in the timeline:

  • On April 8, 2012, the Administration published a “Request For Proposal” for the planning, design and construction of new buildings at the County Campus. No communication, no Council Action requested.
  • On July 19, 2012, the Administration received a letter from Group 70 noting the subject matter “Kalana O Maui Campus Expansion – Master Plan Fee Proposal with a thorough outline of the scope of work and a fee of $781,203. No communication, no Council Action requested.
  • On September 11, 2012 the contract between Maui County and Group 70 was certified committing the County to the full amount requested. No communication, no Council Action requested.

This cannot be called miscommunication.

The plan to document all individual meetings with Council members is unnecessary. All the Council requires is a budget amendment with a justification of the new project.

The Administration is unable to redirect funds to another project without Council authorization. This is the law. The law was not followed.

Under the Charter, only the Council is able to approve a change in the use of funds appropriated for County Capital Improvement Projects (CIP) in the Budget ordinance. In the presentation of the original County Charter to the Board of Supervisors on February 9, 1967 the Charter Commission stated on page 18 that “The Council holds the “purse strings”.” And on page 19 offers a simple example that applies to our current discussion: “if the budget calls for the expenditure of X dollars for the repair of Road A, (and) if the Mayor desires to use half of this money for the repair of Road B, he must obtain the consent of the Council.”

The Mayor and others in the administration have been involved on both sides of this process for many years and understand what is required to change course on a project. It is a budget amendment that is presented to the Council and passed by a majority of its members. This is the process and well known to these veterans of our County government.

As with so many other County processes, just talking about what you would like to do and having it covered by the media is simply NOT adequate to secure approval to move forward with a project. Example: A member of the public has a County building permit to renovate their home. Instead, they want to demolish the house and build a much larger home. Can they do that without first submitting another permit application, providing new plans and waiting for approval? No. If the owner apologized and explains “I talked to you about it several times and you said you thought it was a great idea” would the permitting staff accept the explanation and give the owner a break? Not a chance.

The government should be expected to follow the rule of law to the same degree as the public. The administration should set the example by respecting the law and following all the steps in the process.

Some members of the public wonder if, in fact, an Environmental Assessment (EA) was required prior to the demolition. While straightforward demolitions are exempt from state law, large projects where a building is being replaced by a structure more than twice its size would seem to require an EA. How was the determination made that no EA was necessary?

It has been argued that the Council is responsible for holding up the project and costing the County $150,000 a month in office rent. But, if the Administration had sought Council approval legally and in a timely manner, we would be well on our way by now.

Simply stated, the charter assigns the Council the duty to investigate and audit the activities of the administration to insure that the administration is held accountable. It is our responsibility to perform the duties assigned to us by charter or we risk damaging the integrity of the Council itself.

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