REP FC 336 09/23/2008 2006-2008 - Laserfiche WebLink

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REPORT OF THE COMMITTEE ON FINANCE DATE: September 23, 2008 Re: Comm. No. 1455/Bill No. 368 PLACE: Council Chambers TIME: 9:00 a.m. Council Chair and Members Hawaii County Council Hilo, Hawaii 96720 Your Committee on Finance, to which was referred Bill No. 368, reports as follows: Bill No. 368, transmitted by Director of Finance William Takaba, via Communication No. 1455, dated September 9, 2008, authorizes the Mayor of the County of Hawaii to enter into an intergovernmental agreement for a State Water Pollution Control Revolving Fund Loan (SRF) of $1,000,000 for the County's Komohana Heights Large Capacity Cesspool Replacement project; and authorizing the issuance of general obligation bonds for the purpose of financing this improvement project. The U.S. Environmental Protection Agency (EPA), on December 7, 1999, had promulgated a regulation prohibiting the construction of new large capacity cesspools, and a requirement that all large capacity cesspools must be closed or upgraded to prevent the endangerment of underground sources of drinking water. The Komohana Heights Large Capacity Cesspool replacement project was initially approved by the State of Hawaii Department of Health for a State Revolving Fund loan in the amount of $2 million, which was authorized by the County Council under Ordinance No. 03-155. The estimated construction costs and requested State Revolving Funds for this project is $3 million. Due to the cancellation of another project, the Department of Health was able to shift an additional $ I million to the Komohana Heights project, bringing the approved funding level to $3 million. Approval of this additional amount will bring the funding in line with the existing $3 million appropriation to be funded by the State Revolving Fund. Pursuant to the County Procedures Manual for Participation in the Hawaii State Revolving Fund Loan Program, prepared by the Wastewater Branch of the Hawaii Department of Health in April 1994, part of the loan process requires a "resolution or ordinance passed by the County Council which authorizes the SRF loan application and identifies the dedicated source(s) of revenue (i.e., general obligation bonds), which will fund the project and repayment of the loan with interest." The Council's authorization of the issuance of general obligation bonds will serve as a pledge of its general obligation authority as security for repayment of the loan and interest.