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Home My WebLink AboutCOM 1168.096 2006-2008 4~ • Jc~ 'ii Harry Kim Dixie Kaetsu Mayor Managing Director sT•.' Mot•'~` Barbara Kossow 4TF'O F •H P~P Deputy Managing Director Couutp of 'aiuai`f 891 Ululani Street • Hilo, Hawaii 96720 • (808) 961-8211 • Fax (808) 961-6553 KONA: 75-5706 Kuakini Highway, Suite 103 • Kailua-Kona, Hawaii 96740 (808) 329-5226 • Fax(808)326-5663 June 18, 2008 The Honorable Pete Hoffmann, Chairperson, and Members Hawaii County Council 333 Kilauea Avenue Hilo, Hawaii 96720 Re: Bill 285, Draft 2 - General Obligation Bond Authorization Dear Chairperson Hoffmann and Council Members: Thank you for the opportunity to present my viewpoint on Bill 285 Draft 2, the proposed bond authorization ordinance. In this correspondence there are four points on which I would like to elaborate. The projects: The projects proposed for funding through this bond issue have been categorized by priority. • Priority One - These are projects that address legal mandates. I believe that further discussion on these projects is not necessary at this point as they are projects that the County must do to fulfill legal requirements, primarily from the federal government. • Priority Two - These projects are identified as falling into the category of correction of major deficiencies or related to improvements necessary for reasons of public safety or health. • Priori Three - The projects in this category address environmental or lifestyle concerns, operational efficiency, or maintain/improve existing assets. Should the Council have any specific questions on any of these projects, the appropriate department would be more than glad to provide any needed information. Fiscal responsibility: There have been some concerns expressed that the amount or timing of the proposed bond issue is not prudent. This administration from the onset has made and followed fiscal policies that ensure that the collection of revenues is fair and the expenditure of funds is prudent. These policies were established during very difficult times in the early years of this administration, when funds were extremely limited and needs were high. The policy on borrowing money was set after review of what bond rating companies and other experts in the field advise as reasonable debt and debt service levels. Based on this, we adopted guidelines that reasonable debt service should not exceed 15% of total expenditures. This was felt to be a good and prudent level based on information such as that from Standard Comm. No. 00• ~L Ref. To.. h~ Hawaii County is an equal opportunity provider and employer. Ref. Date JUN June 18, 2008 The Honorable Pete Hoffmann and Council Members Page 2 & Poor's, which establishes up to 15% to be a moderate level of debt service as a percent of total expenditures. For your information, a high level of debt service is established by Standard & Poor's as above 25%. Although 15% was established as the outside limit, it was always the goal of this administration to stay well under that number, and that has been done and will continue to be so. If this bond is authorized, the debt service level will be at just under 12% of total expenditures. I do believe in all measurements of fiscal responsibility and debt service, this will be viewed as prudent borrowing. It is emphasized here that it has been and always will be our goal to ensure that we do not borrow an excessive amount that will create fiscal difficulties for future councils, mayors, and taxpayers. Rationale for project selection: The issue of selection of the projects to be funded by this proposed bond issue was never based on an East Hawaii or West Hawaii perspective. Departments were given only one instruction: Determine the needs of the people of Hawaii Island, and which needs can best be addressed at this time. As is often the case, needs outweigh the available resources. It was not always easy to identify the projects that were given a lower priority. West Hawaii Civic Center: It seems that there have been some discussions on the single project of the West Hawaii Civic Center. I would like to provide some background. Initial proposal: The idea of a civic center for West Hawaii originated in the year 2001. This occurred with the very simple realization that even at that time, the difficulty of servicing the public of West Hawaii due to how services were dispersed. For example, drivers' licensing was in a very old building at the old Kona Airport. The Department of Liquor Control was in the First Federal Building. Other departments such as Public Works and Planning were at Hanama Place. As you can see, service to the public was dispersed and very inconvenient. This is simply because office and operational spaces were based on what was available and not the convenience of the public or providing adequate working space for employees. For your additional information, at the present time the County is paying $800,000 a year rental for facilities for operations that will be moved to the West Hawaii Civic Center when it is completed. Available land: In looking for land to locate a civic center, the following criteria were established: ¦ Central location convenient to serve the needs of Kohala and Kona; ¦ Priority to sites with infrastructure already in place; and ¦ Preference to land that might be available at no cost. Fortunately, the present site on state land was located and a request was made to Governor Cayetano in April of 2001 for conveyance of this land to the County. This was finally accomplished by Executive Order in late 2002. Design o~ acilitE: It was decided that this facility would be designed to meet the needs of West Hawaii in more than just government office space but also serve in part as a community gathering place. This was identified as very important due to the shortage of areas and June 18, 2008 The Honorable Pete Hoffmann and Council Members Page 3 facilities for community use for public functions and meetings. It was also decided that the design of this facility should involve the community as well as the departments that will be located there to be sure of addressing all needs. A consultant was hired in 2005 to develop a conceptual design and get the County to the point where a Request for Proposals could be issued for a design/build project. A community planning charrette was held at the beginning of the project, as well as additional public meetings as the planning process proceeded, prior to finalizing the preliminary plan. The proposal documents were completed by the consultant in 2007, and the best and final offer was received May 12, 2008 from all three companies who qualified to participate in this project. Tentative selection of a proposal has been made pending funding. Visions of the civic center: In the presentation to prospective bidders for the design/build contract, one guideline was given by this office at that meeting. It is required that the successful bidder work with the people of West Hawaii and develop a facility that not only meets the needs of the people and the County, but is also of a design that represents West Hawaii. Civic center conclusion: I believe this facility is good for West Hawaii. I believe this facility is good for the people of the Island of Hawaii. I believe this facility will address the needs of the community in regards to government services as well as other community needs. I do not believe it is an extravagant or elaborate facility. CONCLUSION While I must admit that this was not in our minds at the time the project list was being developed, this bond is very timely due to the present economic situation in Hawaii. For especially the construction industry, the timing of these projects and the circulation of over $100 million in new money within the next fiscal year could not be better. This bond will be good for the many residents who work in construction as well as for other businesses that will benefit directly or indirectly. I do strongly believe that in this way, the County government is playing a very important role in responding to the economic situation. I ask and urge you to pass this bond authorization as we truly believe the proposed projects are needed and good for the Island of Hawaii. I do firmly know that this bond authorization is very fiscally prudent. Harry Kim MAYOR