HomeMy WebLinkAboutCOM 0152.001 2008-2010
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William P. Kenoi i. William T. Takaba
Mayor _ Maneging Director'
Walter K.M. Lau
County of Hawai`I Depun, Managing Director
891 Ululani Street • Hilo, liawai`i 96720-3982 • (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
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May 5, 2009 0
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The Honorable J Yoshimoto, Chair '
and Members of the County Council
Hawaii County Council ? 3
333 Kilauea Avenue
Hilo, HI 96720 ' c
Dear Chairman Yoshimoto and Council Members:
Transmitted herewith is the Capital Budget for FY 2009-2010 submitted for your review and
approval, and the Capital Improvements Program for the next six years from FY 2009 - 10 to
2014 - 15 for your information. The Capital Budget includes 52 projects requiring a total
appropriation of $203,386,000.
Funding Sources
Capital projects are typically funded by debt (bonds, State Revolving Fund loans), revenue
sources (fuel tax, other special revenues), state grants, federal grant or loans, and other
financing options (fair share contributions or special financing districts). The Capital Budget
presented herein includes those capital projects of which approximately $173,717,000 is
intended to be funded in whole or part by bonds, $8,219,000 to be funded by the State
Revolving Fund and $21,900,000 to be funded from Federal Grants Receivable (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 Officers
Association, a professional organization of government officials, recommends a prudent debt
service limit to be 15% of general expenditures.
County of Hawaii is an Equal Opportunity Provider and Employer Comm. `io._ I
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Honorable 1 Yoshimoto
May 5, 2009
Page 2
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 so that cash will be
available for projects as needed. As budgeted, the resulting total debt service is estimated at
9.9% of the general expenditures. If all debt that has been authorized by the County Council
was issued, the debt service percentage would be 12.2% 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 addition to a building; including related equipment
and appurtenances which are integral to the new structure.
4. Nonrecurring rehabilitation or deferred maintenance of infrastructure and
buildings, provided that the cost is $25,000 or more and the improvement will have a
useful life of 10 years or more;
5. Planning, feasibility, engineering, or design studies related to individual capital
improvement projects or to a program that is implemented through individual capital
improvement projects.
6. Information and communications technology provided that the cost is $25,000 or
more.
Pending vs. New Projects
Approximately 16 of the 52 proposed projects require reappropriations totaling $24,455,000 as
funds would lapse and cannot be encumbered by June 30, 2009. Appropriations are normally
active for three (3) years from the effective date of the ordinance appropriating the project.
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Honorable J Yoshimoto
May 5, 2009
Page 3
Tables
Five (5) tables were created to provide a summary of capital budget projects in different
formats:
Table 1. List of Projects and Proposed Funding Sources includes proposed projects that are
requesting funds for this fiscal year, what makes them eligible as a capital project, location,
council benefit district, funding source, 6-year forecast of funding needs and total project costs.
Table 2. Capital Project Eligibility List categorizes projects by their eligibility.
Table 3. Location of Project by Council District indicates the Council District that the project is
located in.
Table 4. Council Benefit Districts identifies all the council districts that will actually benefit
from a particular project.
Table 5. Six-Year Capital Program FY 2009-2010 to 2014-2015 lists all projects proposed by a
department and provides the projected funding forecast for the next six fiscal years, and total
estimated project cost. This list includes projects that do not require funding this FY, but
forecast a funding need within the upcoming six years).
Project Data/Financial Impact Statements
This document organizes the proposed projects in sections by Departments. The first
document in each section is A Summary of Department Requests. This highlights all the projects
that a Department is submitting this year. Following the Summary, are the individual Project
Data/Financial Impact Statements, which are prepared for each project and which provides
helpful information in determining the value of a project. This form provides us with
information on the Lead County Agency for a project, location, project description,
council benefit districts, project consistency with long range plans, impact on operating
budget, sustainability focus, project readiness; etc. For a better understanding of how
these forms were completed, see Appendix A for the Instructions and Checklist for Completing
the CIP 2009-2010 Project Data/Financial Impact Statement (FIS).
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Honorable J Yoshimoto
May 5, 2009
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Fair Share Contributions
At this time, there are no projects proposing to use Fair Share Contributions. However,
separate appropriation requests may be approved by ordinance during the year. A Fair Share
Contributions Annual Report as of June 30, 2008, was submitted to the County Council as a
separate document and transmitted on March 1, 2009. This document provides information on
the total fair share contributions assessed, collected and expended during the Fiscal Year July 1,
2007-June 30, 2008.
We ask for your favorable consideration of this Capital Budget and Program.
Aloha,
William P. Kenoi, Mayor
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