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Subdivision improvement exemptions and county audit of deferral agreements

By Staff | Aug 16, 2018

The issue of two-lot or less road improvement exemptions was brought to my attention at the end of February 2018; that in 2015, the full council passed an exemption for road improvements at subdivision.

What seemed odd to the individual who brought it to my attention was that it was discussed and passed within an ordinance pertaining to the Upcountry Water Meter List.

Upon researching and reviewing the minutes of the 2015 committee meetings and the committee report, it was very clear that the council intended the exemption to ONLY apply to the Upcountry Water Meter List and not countywide.

In early March, right before budget session started, we began work on formulating a bill that would rectify the error and correctly reflect the council-intended outcome of that 2015 adopted bill.

To take it a step further, I am now wrapping up efforts to incorporate the two-lot or less family subdivisions but with much better restrictions. I often talk about utilizing county subsidies for infrastructure as an incentive to create an increase to our affordable housing inventory, and I feel that this is an opportunity to take an unintended flaw and turn it into a positive solution for affordable housing.

I look forward to sharing my bill with the community and receiving feedback during its review.

Separately, but somewhat related, is the issue of “three-lot or less deferral agreements” that were created in the 1970s to help afford families the opportunity to subdivide without also triggering the costly infrastructure improvements that are usually required, like road widening, overhead utilities, storm water infrastructure, curbs, gutters and sidewalks.

By signing a deferral agreement contract with the county, families could hold off on these improvements and instead contribute their fair share when the county was scheduled to perform improvements along that property’s frontage anyway.

In theory it makes sense, and at the time it may have been helpful to any number of families building homes for their children on family land. The problem was it was intended for families and ended up becoming a loophole for developers to circumvent costly infrastructure improvements for larger projects while banking on the fact that the county may never come knocking to collect.

Fast forward to 2007 and growing community wariness over the administration’s ability to properly manage, track and collect on these recorded agreements resulted in the preceding West Maui Councilmember, Joanne Johnson-Winer, introducing and passing a bill that abolished deferral agreements from the Maui County Code for good.

In 2012, my second year in office, the issue of collectability was brought to my attention, and I made a genuine effort within my Infrastructure and Environmental Management (IEM) Committee to get to the bottom of the details and concerns being raised by community members. We determined that the best solution would be establishing a formula to help assess and collect on the agreements whenever collection was triggered.

The committee was assured by the Department of Public Works and Corporation Counsel that they were working together on the formula and would be looking into the ability to seek compensation from certain developer agreements.

In January of 2018, I was asked by the same community members to follow up on the department’s progress and the status of the formula’s completion, since none had been provided to the committee. I sent a letter to the department requesting the update and then scheduled the item for a status update in my IEM Committee, in which an extensive presentation was given by the concerned party to the council members, providing a history and overview of the long and arduous issue.

The questions before us today remain: what is owed to the county, if anything? Have any county improvements happened that should have triggered collection? If there have been instances where collection should have been triggered, can we still collect?

These are questions that will be examined by the county auditor through the adoption of Resolution 17-174, which was passed unanimously by the full council on Dec. 15, 2017.

Although the resolution for the audit was approved, it was not yet scheduled by the auditor, and the concerned individuals were not appeased by this council action.

In March of 2018, at the request of the same concerned individuals, I sent a letter to a third-party consultant that specialized in this type of assessment and resolve. The council was beginning our review of the FY2019 budget, and I agreed to offer this as an option in my own budget proposal.

My feeling was that the issue had lingered and been brought up time and time again without easy conclusion, and perhaps it was time to bring in experts in the field to help this county determine the best solution moving it forward. The proposal I requested from the consultant party that the individuals recommended to me never came, and thusly was never inserted into my budget proposal.

On June 29, 2018, the Office of the County Auditor submitted their audit plan to the council for FY2019, and gratefully the project is included in their plan and will be conducted sometime in the next ten months.

I am optimistic that the county auditor will be able to retain all the information needed to recommend a remedy.