COM 0718.001 2004-2006 - Laserfiche WebLink

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May 5, 2006 The Honorable Stacy Higa, Chair and Members of the County Council Hawaii County Council Hilo, HI 96720 Dear Chairman Higa and Council Members: Transmitted herewith is the Amended Capital Budget for FY 2006-07 submitted for your review and approval, and the Capital Program for the next six years from FY 2006-07 to 2011-12 for your information. The Amended Capital Budget includes 89 projects requiring a total appropriation of $134,822,000, of which $4,700,000 is Federal or State Grants Receivable and $130,122,000 is County -financed through State Revolving Fund loans, bonds, or other sources (see Table 1). The major changes from the March budget submittal included significant increases to two projects, the West Hawaii Civic Center and the Hawaii County Building Renovations, to enable bidding those projects in one phase in recognition of the need for these projects notwithstanding the escalating construction costs.I Debt Service and Funding Sources Every year, we strive to present a budget that is fiscally constrained (in terms of prudent debt service planning) and selective based on rational criteria. The guideline we have used for a prudent debt service limit is 15% of general expenditures. The lower the interest rate and the greater the revenues, the more that can be borrowed while staying within the prudent debt service limits. The proposed operating budget for this coming fiscal year includes debt service of approximately $1,963,651 for $50M in bonds floated in February 2006, which is offset by approximately $981,825 in revenue from Department of Water Supply for their portion of the bonds. At this budgeted amount, the resulting total debt service is estimated at 9.26% of the general expenditures. This fiscal year's operating budget for 2006-07 includes $1M to enable floating a $47M bond. This additional debt service will still keep the debt service under 12% of general expenditures. It is anticipated that additional bonds may be sold in early calendar year 2007, which will not impact the 2006-07 operating budget because the interest payments start in the ensuing fiscal year. Approximately $114.8M of the proposed capital budget may require bond funding. This total assumes that approximately $3.3M will likely be funded from current revenue funds, such as the Highway Fund (fuel taxes) or the County Council's discretionary funds (see Table 1, the field labeled "Other Funds"). Of the $114.8M anticipated to be bond -funded, the two civic building projects (West Hawaii Civic Center and the Hawaii County Building Renovations) alone total $47M. The scale of these projects are not typical CIP projects, resulting in a CIP budget that is extraordinary. In 2004, the Council passed a bond authorization for $40M, over and above the typical CIP budget, to address extraordinary transportation needs. This is a similar situation.' Comm. No. The highlights in Table 1 indicate changes from the March budget submittal. 4?;U 23(0) or. 3-'� Ref. To: Ref. Date MAY t�520