Maui County Budget Finance Economic Development Committee Meeting – June 2, 2026

The Budget Finance Economic Development Committee (BFED) met on June 2, 2026, starting at 9:10 AM and adjourning at 11:11 AM, with a brief recess. Chair Yukile Sugimore presided. The meeting addressed two major items: a proposed Phase 3 of the Johnson Controls Inc. Energy Performance Contract (BFED-20) and Bill 181 (2025) to increase homeowner and long-term rental property tax exemptions. Key discussions included savings verification, financing, equity of tax relief, and council oversight.

Public Comments & Testimony

• Jesse Law (via Paia office, after technical delays) spoke generally about perceived conflicts between legislative and judicial branches, and urged the council to focus on running government and helping people. He did not directly address the Johnson Controls item.
• Tom Crowley (via Teams) provided detailed testimony on Bill 181, analyzing the distributional impact of the proposed $100,000 exemption increase. He noted that under the current progressive tier system:
  • Of 28,000 owner-occupied properties, about 3,000 pay minimum tax and receive no benefit; 21,000 would see a $165 reduction; 2,700 would see $180; and only 199 (top tier) would see $500.
  • For long-term rentals (4,350 properties): 3,890 in tier 1 would get $290; 387 in tier 2 would get $500; 73 in top tier would get $850. He argued the rate structure already gives disproportionate benefit to high-value properties and suggested a larger exemption (e.g., $1 million) combined with rate adjustments could better target relief to lower-value rentals.

Discussion Items

1. Johnson Controls Inc. Energy Performance Contract (Phase 3) – BFED-20

• Administration presentation (Budget Director Milner, Finance Director Martin, Chief of Staff Lalo, Deputy Corp Counsel Dejardin): Phase 1 is complete, delivering $2.283 million in actual savings in year one; Phase 2 (solar PV) is underway. Phase 3 (~$9 million) is described as a budget-neutral transaction funded by tax-exempt lease purchase financing, supported by guaranteed energy savings. The administration intends to seek council approval via a resolution before committing to financing.
• Johnson Controls representatives (Joel Caldwell, Leaf Shogard): The total project cost is about $25 million, with guaranteed lifetime savings of $50 million and net savings of $11.9 million. Phase 3 would be financed at an estimated 4.4% over 20 years. The 20-year term is enabled by HRS 36-41.
• Council questions and concerns:
  • Member Senancy asked about expended funds and timeline; the administration noted no funds have been spent on Phase 3 yet.
  • Member Uhodgins asked about total savings; the $50 million lifetime guarantee was cited.
  • Member Rollins Fernandez inquired about Molokai projects and battery storage; JCI confirmed community feedback and progress on permitting.
  • Member Johnson asked about the $150,000 encumbered payment; Dejardin explained it covers JCI’s preparatory work if the county decides not to proceed.
  • Member Palton questioned solar backup during overcast conditions, end-of-life panel disposal, and the cost of a third-party audit (~$29,000). JCI noted that disposal costs would fall on the solar provider per the PPA, and the county’s audit is ongoing.
  • Chair Lee asked about the project list; the final Phase 1 list (Amendment 5) is complete; Phase 3 projects are not yet finalized.
• Outcome: The item was deferred without objection, pending further information and the anticipated resolution from the administration.

2. Bill 181 (2025) – Increasing Homeowner and Long-Term Rental Exemptions

• Finance Director Martin presented the bill: raising the homeowner exemption from $300,000 to $400,000, and the long-term rental exemption from $200,000 to $300,000. Estimated revenue loss: $4.919 million for homeowner, $1.4 million for long-term rental, affecting 25,063 parcels. The department noted flexibility with tiers and rates, and recommended removing a section referencing a six-month lease for wildfire survivors (no applicants for FY26).
• Council discussion:
  • Member Rollins Fernandez argued the exemption is a blunt tool that benefits higher-value properties disproportionately, and preferred using rate adjustments to target relief to lower-income homeowners. She noted past attempts to reduce tier 1 rates failed due to lack of votes.
  • Member Palton expressed concern that the $6.3 million in relief is not progressive; the highest tier gets $500 while the lowest gets $165. She advocated for a more targeted approach via rates and tiers.
  • Member Uhodgins asked about better targeting; Director Martin noted that exemption changes are less flexible than annual rate/tier adjustments.
  • Member Senancy clarified that the majority of properties (over 20,000) are in tier 1, so most benefit goes to lower-valued homes, but the dollar amount per parcel is small.
• Motion to file was made by Member Rollins Fernandez, seconded by Member Johnson, but later withdrawn after Member Uhodgins requested more time to study the issue. The bill was deferred for further discussion, with a request for a white paper from Tom Crowley.

Key Outcomes

• Johnson Controls Phase 3 (BFED-20): Deferred. The administration will bring a resolution for council approval before proceeding. A third-party audit of savings is underway.
• Bill 181 (2025): Deferred. The committee will hold additional discussions, incorporating stakeholder input and analysis of tiered relief options. No vote was taken.