HomeMy WebLinkAboutCOM 0037.000 2002-2004 vv or y_.
Harry Kim ~ Dixie Kaetsu
Mayor Managing Director
• K•;;•N:+~ Pe[er T. Young
Deputy Managing Director
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~uuntp of ~a~iai`i ~ . '
25 Aupuni Street, Room 215 • Hila, Hawaii 96720-4252 • (R08) 961-8211 • Fax (808) 96]-6553 ~
KONA: 75-5706 Kuakini Highway, Suite 103 • Kailua-Kona, Hawaii 96740
(R08) 329-5226 • Fax (808) 326-5663 t
December 5, 2002
The Honorable James Y. Arakaki, Chairman, and
Members of the Hawaii County Council
County of Hawaii
Hilo, Hawaii 96720
Subject: Bill for an Ordinance Authorizing the Issuance of General Obligation Bonds
Dear Chairman Arakaki and Members of the County Council:
Attached for your consideration is a bill authorizing the issuance of up to $21 million in
general obligation bonds of the County ofHawai`i.
Soon after taking office, 1 met with the Finance Department and the departments that utilize
bonds for capital projects. It was decided that it would facilitate planning if the County sold
about 0 million in bonds on an annual basis rather than waiting and selling $30 million
every three years, as had been the practice in the recent past. Attached (Schedule A) is a copy
of the general guidelines developed by the Finance Director that we are following on the
issuance of bonds. With these guidelines in mind, last year we requested and received
authorization to issue $15 million in bonds, and these were issued in July of 2001. The
attached Schedule B shows what these funds were used for.
We planned to issue an additional $10 million this year. However, because of the magnitude
of the County's immediate needs, I am requesting authorization for up to $21 million
(estimated $20 million for projects and up to $1 million for issuance costs). This amount,
while in excess of the planned $10 million, still leaves the County at a prudent debt service
level. Schedule C shows the projected debt service on the new bonds, and Schedule D shows
the County's present debt service, the projected requirements for the new bonds, and the
projected total debt service after issuance.
li i l l / to
Comm. No.
File No.
Ref. To: "C'
Ref. Date DEC 0 9 ZOO2
December 5, 2002
James Y. Arakaki
Page 2
Priority Projects
To arrive at the amount of bonds that must be sold, the following priority projects were
considered, in summary and detail:
Ke Ala O Keauhou (Ali`i Parkway) $ 9,000,000
ADA Curb Cuts 2,900,000
ADA Parks Facilities Renovations 1,600,000
West Hawaii Civic Center - Design/Construction 2,000,000
Fire -Land Acquisition/Renovation 2,500,000
Puna County Complex 1,250,000
Police Communications Facility (Radio Shop) 750,000
Estimated total needs 20 000 OOq
Project Details
Ke Ala O Keauhou (A[i `i Parkway) The first phase of this long-awaited project in West
Hawaii is going out to bid this month. Federal funds to cover 80% of the projected cost of
$32.5 million is available this year, and the County's estimated share of $6.5 million is needed
before the construction contract can be awarded. In addition, Public Works is requesting $1.5
million to begin land acquisition for the second phase. To be conservative, an extra $1
million is included to cover any unanticipated needs, as the actual construction cost will not
be known until the bids come in. Bids are expected to be opened in February, with awazd by
the end of April and construction beginning in August, 2003. Completion is projected by
August of 2005.
ADA Curb Cuts The County of Hawaii is under court order to comply with the Americans
with Disabilities Act (ADA) by constructing curb cuts at various intersections in Hilo and
Kona. Part of the court settlement is a schedule committing the County to completion of
certain intersections by specific dates. The curb cuts on the first schedule must be completed
by December of 2003. The Department of Public Works estimates that $2.9 million is needed
now to complete this legal requirement.
ADA Parks Facilities Renovations As with curb cuts, the County is also under court order to
make its facilities accessible under the requirements of the ADA. The deadline for the first
scheduled renovations is also 2003, and $1.6 million is needed to meet this deadline.
December 5, 2002
James Y. Arakaki
Page 3
Kona Civic Center Design/Construction The Governor recently signed an Executive Order
granting 7 acres in Kealakehe (in Villages of Lai Opua) to the County for a West Hawaii
Civic Center. At the present time, the County leases space at various sites in West Hawaii
for County agencies, at a cost in excess of $500,000 a year. On this central site, we plan a
civic center that will eventually bring all County agencies together in one place for the
convenience of the public. The design will be modular so that we can construct the buildings
as funds permit. This initial funding of $2 million is expected to master plan the facility and
construct the first module, which will house the Kona Drivers Licensing and other agencies to
be determined.
Fire -Land Acquisition/Renovation The Fire Department Administration has been moved
from site to site three times in recent years, and is presently located temporarily in the County
Building. Administration, along with Fire Dispatch, needs to be moved out of the tsunami
inundation zone. The former Sun Sun Lau building on Kino`ole Street is now for sale, and
indications are that we would be able to acquire it for around $1.5 million. The building has
about 14,000 square feet of usable space, and sits on a total of about four acres of land. A
preliminary evaluation by the Department of Public Works indicates that the building is in
good shape and can easily accommodate Fire Administration, Dispatch, and also training
operations. Also included in this bond issue is million for renovations, which will enable
preliminary renovations to be done to accommodate Fire Administration.
Puna County Complex For a long time, the needs of the district of Puna have been neglected.
Included in this proposed bond issue is $1.25 million to plan for police, fire and parks. Work
will include community involvement in selection of an appropriate site or sites, and design of
facilities to serve the Puna area. Future bonds will be designated to fund construction.
Police Communications This estimated $750,000 is to complete the interior of the Police
radio shop. The building was completed seven years ago, and stands empty while the radio
shop personnel work out of cramped quarters. Completion of this facility has been a police
priority for several years.
Conclusion
For funding flexibility, this bill proposes that the bond funds can be used for any existing
authorized capital appropriation. If one project comes in over estimate, for example, and
another under its estimate, these adjustments can be made with no delay. Also, if funds
remain after the above projects are completed, they can be used for other priorities without
further action.
December 5, 2002
James Y. Arakaki
Page 4
As always, we commit that we will communicate with you and report to you on the use of this
bond money. I thank you for your continued support, and your help as we work to make
Hawaii County a better place to live.
A a,
Harry Ki
MAYOR
Attachments
~V 0/ M~
Harry Kim ~ •W'~ William Takaba
Mayor Director
Nancy E. Crawford
• .iyoi•N'i~
Depury DireG°r
County of Hawaii
Finance Department
25 Aupuni S[reet, Room I IS Hilo, Hawaii 96720
(808) 961-8234 Fax (808) 961-8248
Memorandum
To: Harry Kim, Mayor
County of Hawaii _
From: William Takaba, Director of Finance ~ J
Date: October 25, 2002
Re: Issuance of Bonds
The following general guidelines will be followed on the issuance of general obligation bonds for
capital improvement projects:
Frequency: Annually, as opposed to issuing lazger bonds every 3-4 years. This will allow projects
to be spread out more evenly and planning to be done more efficiently.
Amount: Between $10 million - $20 million (does not include refunding of existing debt or
projects for which the County is reimbursed).
Limits: Must stay within *le>;al debt limit of IS% of the total assessed value of county real
property as established for tax purposes. The County debt is currently at 1.5% of its
total assessed value of real property.
Recommend staying within prudent debt service limit of I S% of >;eneral expenditures
(includes general fund, special revenues, debt service). The County debt service is
currently at 10.0% of its general expenditures.
*State Constitution
Should changes be necessary, please let me know. Thank you.
wt
cc: Nancy Crawford, Deputy Director
Mike Okumoto, Treasurer
Deanna Sako, Controller
Enclosures
Schedule A
/795
2001 Series A Bonds
Net proceeds: 23,153,796.33
To DWS (8,053,494.38)
15,100, 301.95
Use of funds:
Police radio system (8,000,000.00)
J.C. Penneys renovations (1,500,000.00)
P&R ADA requirements (2,000,000.00)
DPW ADA curb cuts (1,700,000.00)
Keaukaha Gym (250,000.00)
Cellblock detention facility CO (160,000.00)
P&R wastewater upgrades (250,000.00)
Palai Stream feasibility study (228,000.00)
Keopu feasibility study (380,000.00)
P8R Repairs to Facilities (75,751.00)
Kawailani St Bridge Replacement (100,000.00)
Balance 456,550.95
Schedule B
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