Communication No. 2018-18- 2018-2019 CIP DRAFT Handout

Home

May 4, 2018 Honerable Members of the County Council County of Hawai'i 25 Aupuni Street Hilo, HI 96720 Aloha Council Members: Transmitted herwith is the Capital Budget for FY 2018-2019 submitted for your review and approval and the Capital Program for the next six years from FY 2018-2019 to 2023-2024. The Capital Budget includes 46 projects requiring a total appropriation of $205.1 million. Funding Sources Capital prjects are typically funded by debt (bonds, State Revolving Fund loans), revenue sources (fuel tax, other special revenues), state grants, federal grants of loans, and other financing options (fair share contributions or special financing districts). The Capital Budget presented herein includes capital projects of which about $126.1 million are intended to be funded in whole or part by bonds, $77.3 million by the State Revolving Loan Fund or State CIP, $0.38 million to be funded by Federal, $0.07 million to be funded by private grants, and $1.25 million to be funded by fair share contributions (see Table 1). 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 Officer Association, a professional organization of government officials, recommends a prudent debt service limit to be 15 (fifteen) percent of general expeditures. The lower the interest rate and the greater the revenues, the more can be borrowed while staying within the prdent 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,