The URL can be used to link to this page

Home My WebLink AboutCOM 0112.000 2010-2012William P. Kenoi Mayor County of Hawaii 25 Aupuni Street,* Hilo, Hawaii 96720 • (808) 961 -8211 • Fax (808) 961 -6553 KONA: 75 -5722 Hanama Place, Suite 102 • Kailua -Kona, Hawaii 96740 (808) 329 -5226 • Fax (808) 326 -5663 March 1, 2011 The Honorable Dominic Yagong, Chair and Members of the County Council Hawai'i County Council 25 Aupuni Street Hilo, HI 96720 Dear Chairman Yagong and Council Members: William T. Takaba Managing Director Walter K.M. Lau Deputy Managing Director Transmitted herewith is the Capital Budget for FY 2011 -2012 submitted for your review and approval and the Capital Improvements Program for the next six years from FY 2011- 12 to 2016 - 17 for your information. The Capital Budget includes 45 projects requiring a total appropriation of $177,085,000. Funding Sources Capital projects are typically funded by debt (bonds, State Revolving Fund loans), revenue sources (fuel tax, other special revenues), state grants, federal grants or loans, and other financing options (fair share contributions or special financing districts). The Capital Budget presented herein includes capital projects of which approximately $168,980,000 are intended to be funded in whole or part by bonds, $5,715,000 to be funded by State Revolving Fund Loans, $1,140,000 to be funded from Federal Grants Receivable, and $1,250,000 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 Officers Association, a professional organization of government officials, recommends a prudent debt service limit to be 15% of general expenditures. County of Hawai'i is an Equal Opportunity Provider and Employer t 13 a ( 3 0 1 Comm. No. J Ref. To; Ref, Dw-e 0 1 2 011 Honorable Dominic Yagong March 1, 2011 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, which are used to reduce carrying cost and insure that cash will be available for projects as needed. As budgeted, the resulting total debt service is estimated at 10.6% of the general expenditures. If all debt that has been authorized by the County Council was issued, the debt service percentage would be 12.1% 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 additions to buildings, including related equipment and appurtenances which are integral to the new structure; 4. Nonrecurring rehabilitation, remodeling or expansion of infrastructure and buildings; 5. Planning, feasibility, engineering, or design studies related to capital improvement projects; 6. Information and communications technology infrastructure. Pending vs. New Projects Approximately 20 of the 45 proposed projects are reappropriations of existing projects totaling $127,960,000 because appropriations are lapsing and funds will not be encumbered by June 30, 2011. Generally, appropriations are active for 3 years from the effective date of the ordinance appropriating the project. Honorable Dominic Yagong March 1, 2011 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 2011 -2012 to 2016 -2017 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 County Departments. The first document in each section is A Summary of Department Requests for FY 2011 -2012. Following the Summary are the individual Project Data /Financial Impact Statements, which include information about the lead County agency, location, project description, Council benefit districts, project consistency with long range plans, impact on operating budget, sustainability focus, project readiness, etc. Fair Share Contributions A Fair Share Annual Report as of June 30, 2010 was submitted to the County Council on October 29, 2010. This document provides information on the total fair share contributions assessed, Honorable Dominic Yagong March 1, 2011 Page 4 collected and expended to date as well as a summary of funds available for capital improvements. At this time, there is one request to fund a portion of a project's cost using fair share contributions. However, separate appropriation requests may be approved by ordinance during the year. We have and will continue to strongly urge the use of fair share contributions to fund CIP projects when possible. We ask for your favorable consideration of this Capital Budget and Program. Aloha, C William P. Kenoi Mayor