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L) <br />March 1, 2004 2004 ��� �� U r, <br />10 <br />The Honorable James Y. Arakaki, Chair and Members of the County Council CC, <br />Hawaii County Council COUNI ' q= HAV✓AI� <br />Hilo, HI 96720 <br />Dear Chairman Arakaki and Council Members: <br />Transmitted herewith is the Capital Budget for FY 2004-05 submitted for your review and approval, and the Capital Program for the next <br />six years from FY 2004-05 to 2009-10 for your information. The Capital Budget includes 39 projects requiring a total appropriation of <br />$46,839,000, of which $250,000 is Federal Grants Receivable and $46,589,000 is County -financed through State Revolving Fund loans, <br />bonds, or other sources (see Table 1 and Figure 1). <br />Project Highlights <br />Every year, we strive to present a budget that is fiscally constrained (in terms of prudent debt service planning) and selective based on <br />rational criteria. The guideline we have used for a prudent debt service limit is 15% of general expenditures. According to the latest <br />unaudited annual financial report, current debt service comprises approximately 9.9% of general expenditures. We will analyze the debt <br />service schedule to develop a more definitive projected debt capacity. At this time, our best estimate for a prudent annual CIP budget is <br />$50M, which does include an allowance that certain projects may fall out for various reasons (e.g., need changes, plans not ready, <br />controversial). Funding requests from the agencies were initially screened to ensure that the agency had the capacity to implement the <br />project during the fiscal year (i.e., whether to defer or phase the project), that current requests were reconciled with previous <br />appropriations (i.e., unused amounts from previous appropriations were sufficient to carry the project through the coming fiscal year), that <br />the projects were not more appropriately funded through the operational budget (e.g., minor repairs), and that the projects were as <br />equitably distributed geographically as possible while meeting the selection criteria discussed below. <br />The selected projects met at least one of the following criteria (see Table 3): <br />1) Legal mandate approximately $14.25M relates to unfunded mandates such as ADA, EPA gang cesspool prohibitions, EPA <br />landfill restrictions, and legal settlements such as with the union representing the lifeguards; <br />2) Critical for public safety or health approximately $8.61M relates to protection of public safety (e.g., emergency response, flood <br />control) or public health (sanitation); <br />3) Priority objectives approximately $12.41M relates to targeted objectives that include ameliorating Kona traffic, managing solid <br />waste, maintaining/improving public parks, increasing public access to the shoreline, and encouraging affordable housing. <br />4) Major deficiency—approximately $11.33M relates to meeting basic level of service goals and maintenance standarrNnim No. s &XL <br />Ref. To:cG. <br />Ref. Date MAR I W4 <br />