HomeMy WebLinkAboutREP FC 488 12/11/1991 �. . REPORT OF THE
COMMITTEE ON FINANCE
Date: December 11, 1991
Place: Councilroom
Time: 10 : 00 a .m.
Chairman and Members
Hawaii County Council
Hilo, Hawaii 96720
Your Committee on Finance, to which was referred Communication
No . 3061, reports as follows :
The purpose of Communication No . 3061 is to inform the Council that
the Department of Water Supply is receptive to the Mayor ' s concept
of providing them $75, 000 . 00 per year for the debt service on the
$2 million loan if the loan period is more than twenty years .
Communication No . 1677, dated May 8, 1990, from H. William Sewake,
Manager, Department of Water Supply (DWS) , informed the Council of
the DWS ' s desire to vacate offices in the County Building and to
build or purchase another facility if the County will loan the
department $2 million and service the debt .
At the May 22, 1990 Finance Committee meeting, the Manager of DWS
estimated a $2 million loan, at 7 . 25 percent interest for 20 years,
would cost the County $93 , 000 per year in debt service and DWS
$100, 000 per year in principal payments . The request for a loan was
referred to the previous Administration for input .
At the February 12, 1991 Finance Committee meeting, your Committee
reviewed Communication 2292 from Mayor Lorraine Inouye, dated
January 7, 1991, commenting on Communication 1677 . The Mayor stated
that the County cannot provide the $2 . 0 million interest-free loan
requested by DWS, but would support providing up to $75 , 000 per year
debt service on the loan. Your Committee referred
Communication 2292 to DWS.
At the December 11, 1991 Finance Committee meeting, your Committee
reviewed Communication 3061 from Mr . Sewake, dated October 31, 1991,
which stated that the present value of these payments (computed at a
rate of 6 percent) is much lower than the $2 million they estimated
the department ' s interest to be and the number of payments should be
more than the current loan period of 20 years .
FC REPORT N0, 488
ADOPTED: JAN 2 2 1992
r
FC-488 Page 2 December 11, 1991
Your Committee on Finance also reviewed Communication 3115 from
Glenn Y. Taguchi , Land Agent, State Department of Land and Natural
Resources, dated November 18, 1991, which transmits for comments, a
letter from Mr. Sewake, dated October 29, 1991, requesting to
acquire 3 . 5 acres located at Waiakea Cane Lots, Waiakea, South Hilo,
for an office site.
The Committee learned from Mr. Sewake that the proposed office site
is on the corner of Kawili and Kapiolani Streets .
The Committee, after a lengthy discussion, estimated that the County
of Hawaii , after 20 years, will have paid $1. 5 million for debt
service and will have received the $2 million principal from DWS.
Your Committee on Finance recommended limiting the loan period to
20 years and agreed with the proposal for DWS to secure a $2 million
loan with the County paying debt service up to $75, 000 per year for
a 20-year period.
4, / � • a
HELENE H. HALE, CHAIRWOMAN
ROBERT H. MAKUAKANE, VICE CHR. IAN J. DE LIMA, MEMBER
TAKA HI DOMINGO, MEMBER MERLE LAI , ME • ; R
HARRY S RUDDLE, MEMBER PEN E K. SCHUTTE, MEMBER
EJT