Tavares Testifies: Maui Shortfall will Jump to $73 Million Without TAT Revenues

By Wendy Osher

Maui Mayor Charmaine Tavares will testify today before the House of Representatives’ Committee on Finance at the State Capitol.  Tavares is expected to comment on House Bill 2598 Relating to Transient Accommodations Tax or TAT- which proposes to suspend the distribution of revenues to the counties.  The three year suspension, if approved, would run from July 1, 2010 to June 30 2013.

Tavares said that even with the county’s share of the TAT, Maui is facing a significant revenue shortfall of around $53 million.  “Without the TAT, our shortfall jumps to $70 – $73 million,” said Tavares.  “Making up for these shortfalls puts a huge burden on county taxpayers,” she said.

In written testimony dated February 16, 2010, Tavares said, “The TAT is not a hand out from the State to the Counties—it is a share of what is generated in each county.”

“The visitors will continue to pay the taxes, but if the State takes back our share, we will have an additional 17-20 million dollar shortfall that will have to be made up by County taxpayers,” said Tavares.

Tavares estimates that under the current formula, Maui County would receive 84 cents out of the $12.25 collected in taxes on a room that costs $100 per night.

Tavares said Maui County invests over $3 million in county funds to support the visitor industry.  “We recognize the importance of this industry to the economic well-being of our County,” said Tavares.  She continued, “The investment directly impacts how much TAT is collected.”

In her testimony, Tavares urged the legislature to examine all sources of state revenue including special funds and the state’s own taxing authorities.

“Shifting the responsibility from the State to the County property tax payers and the fee/rate payers for County services, is not fair and undermines the partnership with the State that we have enjoyed in the past,” said Tavares.

Maui Files Suit Claiming it was Stranded with $44 Million in Debt Securities

By Wendy Osher

The County of Maui is demanding a jury trial in a lawsuit it filed last week against Merrill Lynch Pierce Fenner & Smith Inc. The county claims it was stranded with $44.2 million in debt instruments when the firm abandoned its practice of supporting auctions for the SLARS or Student Loan Auction Rate Securities.

According to the docket filed with the U.S. District Court of Hawaii, the County of Maui purchased the securities on or after August 16, 2007.  The suit claims the firm abandoned its practice of supporting SLARS auctions on or about February 13, 2008, claiming it could no longer sell the securities at par.

Today, the County of Maui owns $32 million of SLARS that are not liquid.

The County of Maui further claims it would not have purchased SLARS at all if it had known of the grown risks associated with the investments.

SLARS are secured by pools of student loans guaranteed by government agencies under the Federal Family Education Loan Program.

Maui Mayor Charmaine Tavares is expected to comment on the litigation during a press conference in Honolulu later today.

VIDEO: Tavares Issues Challenge on TAT in her State of the County Address

By Wendy Osher

In her fourth State Of The County Address today, Maui Mayor Charmaine Tavares challenged the state administration and the Legislature to examine other sources of revenue before cutting the counties share of income from the hotel room tax.

Maui Mayor Charmaine Tavares, State of the County 2010. Photo by Wendy Osher.

“Taking away the TAT revenue from the counties breaks a promise and shifts the tax burden for these costs from the visitors to local residents,” said Tavares.

Tavares said, without the Transient Accommodation Tax revenues, the county’s shortfall will rise from $50 million to $70 million.  Fellow Mayor Mufi Hannemann agreed with Tavares saying the counties at the end of the day are the key to the visitor industry.

“You can do all the marketing in the world.  But if people don’t feel that it’s safe to visit Maui, the Big Island, Kauai and Honolulu, they will not come.  That’s what we do: we’re the home of the first responder, we fix the infrastructure, we maintain the parks, we’re there 24-7.  So that’s a very important message that was said today,” said Hannemann.

In addressing the county’s economic climate, Tavares said she wants no part of the layoffs seen at the state level.  She said the options are simple:  a combination of raising revenues and cutting spending.

“In my mind, we must have a combination of those choices—reduce services and raise revenues—to find a balance that will enable us to keep our community strong,” said Tavares.

Looking ahead to the future Tavares said, the county’s “quest for energy independence through renewable energy resource development is one of the most important programs our county can pursue to ensure success in the future.”

Maui to Use Stimulus Funds to Improve Energy Efficiency of County Facilities

The County of Maui is seeking proposals from qualified vendors to conduct investment grade energy audits using federal stimulus funds. Twelve county facilities, including fire stations, senior centers and a community center will be audited under the plan. The audit is expected to provide baseline energy data, physical condition of the buildings, and basis for energy efficiency savings measures.  Funds for the audit were provided by the U.S. Department of Energy utilizing American Recovery and Reinvestment Act funds.

“This is a significant step towards finding energy savings for the County,” said Mayor Charmaine Tavares. “From this study we can make decisions based on data collected and make good progress on our efforts to reduce our carbon footprint.”

The deadline for proposals to be submitted is 4:00 p.m. on Friday, February 26th, 2010. Proposals will be accepted by the Department of Finance, Purchasing Division, located in the Wells Street Professional Center at 2145 Wells Street, Suite 104, in Wailuku.

Solicitation documents are available at the Office of the Department of Finance, Division Purchasing, or online at www.mauicounty,gov/bids.aspx

(Posted by Wendy Osher; Supporting Information Courtesy County of Maui)

Mayor Proclaims February “Got Choice… Think Local” Month on Maui

Mayor Charmaine Tavares issued a proclamation today declaring February “Got Choice… Think Local” month in the County of Maui.

Mayor Charmaine Tavares looks at a promotional t-shirt displayed by Economic Development Coordinator Deidre Tegarden (left). Photo courtesy County of Maui.

The proclamation kicked off the county campaign, which promotes the support of Maui businesses and encourages the public to keep their dollars circulating within the community.

Promotions featured during the month-long campaign include incentives like a complimentary reusable shopping tote for consumers with receipts totaling at least $50 spent at any business in Maui County this year, and coupons valid for various benefits offered by the more than 180 participating local businesses.

During the proclamation signing, Tavares said, “You have choices to make everyday on what to spend your dollar on. This is the way we can all make a positive difference in our community during these tough times. Put your dollar into the right hands – the hands of someone in our own community.”

County of Maui Economic Development Coordinator Deidre Tegarden said the campaign is, “already taking off in a big way.”

In her remarks, Mayor Tavares said, “Buying local is an investment in our community that supports local families, and highlights how buying locally produced, fresh and nutritious agricultural products can help ensure that there will be farms and ranches in our county for future generations.”

New County Grant Program Helps Seven Maui Families Get First Home

Seven Maui families moved into their own homes, purchased with help from a new County of Maui grant program that assists first-time home buyers with their down-payment and/or closing costs. Mayor Charmaine Tavares and County Council Vice-Chair Michael Molina met recently with the families at the home of Joy and Charles Au of Waihee, who enjoyed their first Christmas in their newly purchased home.

Maui Mayor Charmaine Tavares & Council Vice-Chair Michael Molina visited with several families who recently purchased their own home under the FTHBG program. L-R: Manny Visitacion and daughters Tiffany (13), Ashley (16) and Seryna (10); siblings Rudolfo Queja & Irene Queja Bala; Mayor Tavares; Councilmember Molina; Joy & Charles Au with son Makahinu, 14 mos. Photo Courtesy County of Maui.

The First-Time Home Buyer’s Grant (FTHBG) program began taking applications on November 2, 2009.  Administrators suspended the acceptance of applications about three weeks after the program launch when an overwhelming 300-plus applications were received.

The program provides maximum grant awards of $15,000, was initiated by County Council Vice-Chair Michael Molina in 2005 when housing prices were inflated. The legislation passed with support of the full County Council and is being administered by Evergreen Home Loans through the County of Maui Department of Housing and Human Concerns (DHHC), Housing Division.

County officials say a total of 8 families completed paperwork for the purchase of their homes, and there are still one or two transactions pending.

“I wanted to establish a program that would help middle-income families purchase their first home, said Vice-Chair Molina. “I am excited for these hard-working families who can now experience the dream of home ownership in Maui County. It’s very gratifying to hear their stories and see their pride of being new homeowners,” said Molina.

Charles Au and his wife Joy are teachers at Lokelani Intermediate School in Kihei; their son, Makahinu, is 15 months old. The Au’s and the other families gathered at their home thanked Mayor Tavares, Council Vice-Chair Molina, DHHC Deputy Director Jo-Ann Ridao and Housing
Administrator Wayde Oshiro.

“I grew up in a family of 11 children in rural Oahu, and we always rented,” Au said. He continued, “My whole life I thought I would never have the opportunity to own a home because of the cost. Thank you so much for taking away that obstacle.”

Manny Visitacion, who is raising three young daughters, said the program was a dream come true.  “For the longest time I was trying to get a house for my kids, and I never dreamed I could do it,” he said. ‘But a couple friends encouraged me to try for the (FTHB) program, and with the help of the Mayor and the Council, I was able to achieve this dream,” said Visitacion.

“For these families it’s a once-in-a-lifetime opportunity that I’m glad was available to them,” said Tavares.

No re-payment of the grant will be required unless one of the grantee refinances the first mortgage loan and receives cash; the grantee no longer uses the property as the borrower’s principle residence; or the borrower sells the property within 15 years. If the grantee sells, moves, or refinances to receive cash within 15 years, the amount of $15,000 will be paid back to the County.

To qualify for the FTHBG Program, applicants were required to reside in the County of Maui at the time of application; be at least 18 years of age, be a first-time homebuyer and a United States citizen or resident alien; meet income and asset requirements; and not have a greater than 50 percent interest in fee-simple or leasehold land suitable for dwelling purposes.

The County set the maximum household income at 140 percent of HUD’s established median family income for residents of most areas of Maui, which is $105,560. The income requirements were adjusted for residents of Hana, $90,888; Lanai, $91,938; and Molokai, $70,238.

(Posted by Wendy Osher; Supporting information and photos courtesy County of Maui)

Mayor Tavares Meets President Obama in Discussion Over Federal Support

Maui Mayor Charmaine Tavares was among the group of Mayors that had the opportunity to meet with President Barack Obama this week to discuss economic conditions, unemployment, transportation and jobs.

Mayor Charmaine Tavares is greeted by President Barack Obama. Photo Credit: U.S. Conference of Mayors.

The discussion was part of the Winter meeting of the U.S. Conference of Mayors held this week in Washington D.C. During the discussion, President Obama spoke with mayors on the urgent need to create more jobs and invest in communities.

President Obama noted that he enjoys meeting with mayors because it reminds him of where he got his start: “Working with folks at the local level, doing our best to make a real impact on the lives of ordinary Americans — and that’s what each of you does every single day,” said the President.

“You’re the first interaction citizens have with their government when they step outside every morning…It’s just not easy being a mayor. But rarely, if ever, has it been more difficult than it is today. Your constituents are feeling the pain of the greatest economic crisis since the Great Depression — not to mention an economy that wasn’t working for a lot of them long before this particular crisis hit. Many have lost jobs; many have lost their health care; some maybe even have lost their homes. And they’re looking to you and all of us to regain some sense of economic security. And just when they need more from you, you’re stuck with falling revenues, leaving you with impossible choices that keep mounting up — putting projects on hold,” said President Obama.

Mayor Tavares responded to the President’s remarks, saying that it was an “amazing opportunity to meet with President Obama. His comments really hit home for us as mayors. The President listened to our concerns about the importance of having federal support make its way through to the county level and I feel that he will do his best to make funding available to us without so much of it first going directly to state agencies before trickling to the counties.”

For the full text of President Obama’s remarks and for more information on the U.S. Conference of Mayors’ Winter meeting, visit http://www.usmayors.org.

(Posted by Wendy Osher; Supporting information and Photo provided by the County of Maui)