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Harry Kim <br />Mayor <br />Wil Okabe <br />Managing Director <br />Barbara J. "sow n <br />Deputy Managingairectof:?:('7 <br />County of Hawal 1 <br />Office of the Mayor <br />25 Aupuni Street, Suite 2603 • Hilo, Hawaii 96720 • (808) 961-8211 • Fax (808) 961-6553 Ln <br />KONA: 74-5044 Ane Keohokalole Hwy., Bldg C • Kailua-Kona, Hawaii 96740 C 7 <br />(808)323-4444 • Fax(808)323-4440 <br />May 5, 2017 N <br />Honorable Members of the County Council <br />County of Hawaii <br />25 Aupuni Street <br />Hilo, HI 96720 <br />Aloha Council Members: <br />RE: Capital Budget for FY 2017-2018 <br />Transmitted herewith is the Capital Budget for FY 2017-2018 submitted for your review and approval <br />and the Capital Program for the next six years from FY 2017-2018 to 2022-2023. The Capital Budget <br />includes 48 projects requiring a total appropriation of $173.9 million. <br />Funding Sources <br />Capital projects are typically funded by debt (bonds, State Revolving Fund loans), revenue sources <br />(fuel tax, other special revenues), state grants, federal grants or loans, and other financing options <br />(fair share contributions or special financing districts). The Capital Budget presented herein includes <br />capital projects of which about $97 million are intended to be funded in whole or part by bonds, $67 <br />million to be funded by the State Revolving Loan Fund or State CIP, $9.8 million to be funded by <br />federal, and $0.05 million to be funded by fair share contributions (see Table 1). <br />Debt Service <br />Every year, we strive to present a budget that is fiscally constrained (in terms of prudent debt service <br />planning) and selective based on rational criteria. The Government Finance Officers Association, a <br />professional organization of government officials, recommends a prudent debt service limit to be 15 <br />(fifteen) percent of general expenditures. <br />The lower the interest rate and the greater the revenues, the more can be borrowed while staying <br />within the prudent debt service limits. The proposed operating budget for this coming fiscal year <br />includes debt service for short term bond anticipation notes, which are used to reduce carrying cost <br />and insure that cash will be available for projects as needed. As budgeted, the resulting total debt <br />service is estimated at 9.57 percent of the general expenditures. If all debt that has been authorized <br />County of Hawaii is an Equal Opportunity Provider and Employer. Comrm No. qz' <br />3 ' <br />Ref. T®: .,�. <br />��� `d `a l Dr- :� `% Ref. Date MAY U <br />