Property values hiked
under pressure,
official says

Supposedly, the state budget director
said assessments needed to
spur more revenue

By Gordon Y.K. Pang
Star-Bulletin

The administrator for the Real Property Assessment Division says he altered values on Waikiki and downtown properties in 1995 because of pressure from Budget Director Malcolm Tom.

Ray Higa told a special meeting of the City Council's Executive Matters Committee yesterday that Tom complained that the Finance Department's Real Property Assessment Division's numbers were too low and wouldn't bring in enough revenue for city coffers.

Tom acknowledged disagreeing with assessors but denied putting any pressure on the division to change numbers.

"If they felt I put pressure on them, I apologize to them," Tom said.

Council members said they are disturbed by Higa's allegations and said they will either audit the Finance Department, turn the matter over to white-collar police detectives or use its subpoena powers to investigate.

"The public's confidence in government, that they are being treated fairly, is in question," said Councilwoman Donna Mercado Kim. "There seems to have been a blatant manipulation of taxes."

"There's a dark, dark cloud hanging over the city tonight," said Councilman Duke Bainum, who had earlier pressed colleagues to look into the matter further.

Higa said he altered the numbers to reflect the previous year's assessments only when he demanded and got a request from then-Finance Director Russell Miyake.

"This was the first time that the budgetmr7 Malcolm

Tom director has told the finance director how to do his job."

Higa confirmed information previously given to reporters showing how the 1995 assessed values of six Waikiki properties were altered mysteriously just before tax bills were sent to property owners. All six owners appealed the rates and won the right to pay lower taxes.

Higa, who retired from the city several months ago after 31 years as an assessor and supervisor, said he stood firm despite pressure in subsequent years to override assessments.

"I refused to do it after that," Higa said.

Higa said Tom met with assessors "at least five times" in 1995.

Mayor Jeremy Harris wants to merge the budget and finance departments in a reorganization, placing Tom in charge.

Higa said he does not want to see a merger. "If you're going to have someone as aggressive as Malcolm Tom, I don't think it's going to work."

Higa's comments were echoed by Robert Magota, a supervising real property appraiser in the division.

"My concern was what was the person from the Budget Department telling property assessors what to do."

Magota said he and his colleagues were "shocked and upset" over Tom's pressure.

"There was no analysis to support these increases," Magota said.

When Tom was asked what would happen if landowners appealed their tax bills, he responded that only three of 10 landowners ever appealed their bills, Magota said.

Tom told Council members he welcomes an investigation. Tom said he suggested that Miyake look into the matter and assumed that Miyake asked Higa to change the assessments.

Tom said he does not know if the numbers were changed illegally. "It should not have been changed capriciously," he said.

He said he has disagreed with Miyake and current Finance Director Roy Amemiya over assessed values. There was also an initial meeting with Higa which was "very awkward," he said.

Letters given last week to reporters showed pointed disagreement over the assessments by Tom and Amemiya.

Amemiya told Council members last night that "we've had a lot of disagreement over the year, but I don't believe we have done anything outside the law."

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City gives pink slips
to 94 workers

By Helen Altonn
Star-Bulletin

The city has notified 94 workers in nine departments they are being laid off -- setting off a bumping process that could affect all 26 departments and agencies.

Some employees receiving layoff notices could be eligible to bump those with less seniority from their jobs.

Initially, about 151 people were expected to be laid off, said Carol Costa, city information director. But the total, including retirements and vacancies, isn't that high, she said.

Five positions were vacant and a number of people retired when informed they would be laid off, she said.

Notices to 38 people in the real property tax assessment office won't go out until October, because their layoff date is January, she said.

Nine positions were restored in negotiations with the City Council, she said, including two in the municipal reference and records center, six in the planning department and one in the housing department.

Contracts won't be renewed for 35 contract hires.

Laid-off workers are given work history applications and questionnaires to be filled out for the personnel department to determine if they are eligible to bump someone else from a position.

"The process does take awhile," Costa said. "As a person is bumped, a new time clock starts. There is anxiety in all departments until the bumping process is completed.

"It is a very painful thing the administration is having to do. . . . We're trying to be as sensitive as we can."

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Reorganization may cost
city $1 million

By Gordon Y.K. Pang
Star-Bulletin

Members of the City Council Budget Committee say Mayor Jeremy Harris' plan to reorganize government may cost taxpayers $1 million.

Councilwoman Donna Kim questioned Budget Director Malcolm Tom about $1,065,310 in the construction budget that would go to renovating city offices.

Harris has touted the reorganization as a way to save money but has never specified any costs.

"That is the cost that we anticipate in the realignment or relocation of many of the offices moving from one area to the next and to provide necessary furniture and office

blrb Mayor Harris has touted the reorganization as a way to save money but has never specified any costs. equipment," Tom said at the meeting. "The objective is to move the offices by department."

Later, however, administration spokeswoman Carol Costa said Tom "basically misspoke."

While some of the money could eventually be tied to costs associated with the reshuffling, the fund is primarily for "ongoing improvements to the office space at the Honolulu Municipal Building."

The building is aging and "is in dire need of some improvement," Costa said.

"I don't think we have determined where people are going to be relocated."

Kim later, however, showed the Star-Bulletin a list of equipment appropriations in the construction budget that includes $1.065 million under the heading "Start-up technological equip for reorganized depts."

Kim said the list came from the administration.

The administration had no further response.

Harris has said layoffs associated with the reorganization will save the city about $10 million, but he and his administration say it's too early to determine how much else the reorganization will save.

Kim says the reorganization may end up costing taxpayers money.

The Hawaii Government Employees Association has also challenged the projected $10 million in savings from the layoffs.

The union believes the savings will be substantially less after vacation, sick leave and other costs are considered.