BIL 209 Draft 02 2012-2014 (Part II)

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Honorable Members of the County Council May 5, 2014 Page 2 • Addition of"KALO Gymnasium:" $2.5 million • Addition of"Liliuokalani Gardens Renovations:" $1.0 million • Addition of"Na'alehu Park Playground Equipment:" $0.3 million • Addition of"Kilauea - Keawe Street Resurfacing (Ponahawai St. to Waianuenue Ave.):" $4.75 million • Increase of$3.0 million for "Kamakoa Nui Workforce Housing Community" • Addition of"Island-wide Bus Shelter Project:" $0.39 million. Debt Service 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 Government Finance Officers Association, a professional organization of government officials, recommends a prudent debt service limit to be 15 percent of general expenditures. The lower the interest rate and the greater the revenues, the more can be borrowed while staying within the prudent debt service limits. The proposed operating budget for this coming fiscal year includes debt service for short term bond anticipation notes, which are used to reduce carrying cost and insure that cash will be available for projects as needed. As budgeted, the resulting total debt service is estimated at 8.67 percent of the general expenditures. If all debt that has been authorized by the County Council was issued, the debt service percentage would be 12.24 percent of the general expenditures. What is a Capital Improvement Project? A project is eligible for funding from the capital budget if it is a major nonrecurring expenditure, such as: 1. Land acquisition; 2. Infrastructure improvement other than buildings that add value to the land or improves utility (roads, drainage, sewer lines, parking, landscape or similar construction); 3. New buildings or structures or additions to buildings, including related equipment and appurtenances which are integral to the new structure; 4. Nonrecurring rehabilitation, remodeling or expansion of infrastructure and buildings; 4