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Home My WebLink AboutCOM 0707.001 2014-2016 .;MVV•Oi M ' ..!+,•' Randall M.Kurohara <. Managing Director William P.Kenoi ,. ••• ;Mayor --t- - , Robert H.Command •14;r•'r' ►� Deputy Managing Director GI • NI County of Hawaii Office of the Mayor 25 Aupuni Street,Suite 2603 • 11ilo,l lawaii 96720 • (808)961-8211 • Fax(808)961-6553 KONA. 74-5044 Ane Keohokalole Hwy.,Bldg.C • Kailua-Kona.Hawaii 96740 (808)323-4444 • Fax(808)323-4440 o. (2(—) CD May 5, 2016 Honorable Members of the County Council County of Hawai'i �? - 25 Aupuni Street Hilo, HI 96720 Aloha Council Members: Transmitted herewith is the amended Capital Budget for FY 2016-2017 submitted for your review and approval and the amended Capital Program for the next six years from FY 2016- 2017 to 2021-2022. The Capital Budget includes 74 projects requiring a total appropriation of $184.069 million. 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 about $117.507 million are intended to be funded in whole or part by bonds, $27.764 million to be funded by the State Revolving Loan Fund or State CIP, $36.32 million to be funded by federal, and $1.98 million to be funded by private grants, and $0.50 million 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 percent of general expenditures. 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 8.98 percent of the general expenditures. If all 3 Comm. No. .707. 4131 ll tib) Ref. To: C oKr,G.i Ref, Date MAY 05 201 Honorable Members of the County Council May 5, 2016 Page 2 debt that has been authorized by the County Council was issued, the debt service percentage would be 12.56 percent of the general expenditures. ŷğƷ źƭ ğ /ğƦźƷğƌ LƒƦƩƚǝĻƒĻƓƷ tƩƚƆĻĭƷͪ A project is eligible for funding from the capital budget if it is a major nonrecurring expenditure, such as: Њ͵ \[ğƓķ ğĭƨǒźƭźƷźƚƓ; Ћ͵ LƓŅƩğƭƷƩǒĭƷǒƩĻ źƒƦƩƚǝĻƒĻƓƷ other than buildings that add value to the land or improves utility (roads, drainage, sewer lines, parking, landscape or similar construction); Ќ͵ bĻǞ ĬǒźƌķźƓŭƭ ƚƩ ƭƷƩǒĭƷǒƩĻƭ ƚƩ ğķķźƷźƚƓƭ Ʒƚ ĬǒźƌķźƓŭƭ, including related equipment and appurtenances which are integral to the new structure; Ѝ͵ bƚƓƩĻĭǒƩƩźƓŭ ƩĻŷğĬźƌźƷğƷźƚƓͲ ƩĻƒƚķĻƌźƓŭ ƚƩ ĻǣƦğƓƭźƚƓ ƚŅ źƓŅƩğƭƷƩǒĭƷǒƩĻ ğƓķ ĬǒźƌķźƓŭƭ; Ў͵ tƌğƓƓźƓŭͲ ŅĻğƭźĬźƌźƷǤͲ ĻƓŭźƓĻĻƩźƓŭͲ ƚƩ ķĻƭźŭƓ ƭƷǒķźĻƭ related to capital improvement projects; Џ͵ LƓŅƚƩƒğƷźƚƓ ğƓķ ĭƚƒƒǒƓźĭğƷźƚƓƭ ƷĻĭŷƓƚƌƚŭǤ źƓŅƩğƭƷƩǒĭƷǒƩĻ. ğĬƌĻƭ Five tables were created to provide a summary of capital budget projects in different formats: ğĬƌĻ Њ͵ \[źƭƷ ƚŅ tƩƚƆĻĭƷƭ ğƓķ tƩƚƦƚƭĻķ CǒƓķźƓŭ {ƚǒƩĭĻƭ 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, six-year forecast of funding needs and total project costs. ğĬƌĻ Ћ͵ /ğƦźƷğƌ tƩƚƆĻĭƷ 9ƌźŭźĬźƌźƷǤ categorizes projects by their eligibility. ğĬƌĻ Ќ͵ \[ƚĭğƷźƚƓ ƚŅ tƩƚƆĻĭƷƭ ĬǤ /ƚǒƓĭźƌ 5źƭƷƩźĭƷ indicates the Council district where each project is located. ğĬƌĻ Ѝ͵ /ƚǒƓĭźƌ .ĻƓĻŅźƷ 5źƭƷƩźĭƷƭ identifies all the Council districts that will benefit from a particular project. ğĬƌĻ Ў͵ {źǣΏĻğƩ /ğƦźƷğƌ tƩƚŭƩğƒ C ЋЉЊЏΏЋЉЊА Ʒƚ ЋЉЋЊΏЋЉЋЋ lists all projects proposed by an agency and provides the projected funding forecast for the next six fiscal years and total estimated cost for each project. This list includes projects that do not require funding next fiscal year but forecast a funding need within the following five years. 4 Honorable Members of the County Council May 5, 2016 Page 3 Pending vs. New Projects Approximately 33 of the 74 proposed projects are reappropriations of existing projects totaling $34.837 million in County funds, because appropriations are lapsing and funds will not be encumbered by June 30, 2016. Generally, appropriations are active for 3 years from the effective date of the ordinance appropriating the project. Implementation of Community Development Plans Pursuant HCC 16-6(4), Community Development Plan Action Committees are to provide timely recommendations to the County on priorities relating to the CIP budget and program. Because so many Community Development Plan (CDP) priorities are already appropriated, we have encouraged the Action Committees to review the status of each priority project and tailor recommendations to the most appropriate next steps for each (e.g., identify funding, secure an allotment, etc.). This proposed capital budget supports 15 projects totaling$27.259 million to help achieve community objectives and implement the CDPs. Project Data/Financial Impact Statements Proposed capital projects are organized in sections by County agencies. The first document in each section is a Summary of Department Requests for FY 2016-2017. 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, 2015 was submitted to the County Council in January 2016. This document provides information on the total fair share contributions, appropriations, and funds available for capital improvements. At this time, there are$0.5 million requested to fund a project using fair share contributions. However, separate appropriation requests may be approved by ordinance during the year. We have and will continue to strongly encourage the use of fair share contributions to fund capital projects when possible. We ask for your favorable consideration of this Capital Budget and Program. Aloha, William P. Kenoi, Mayor P:\CIP\CIP FY 16.17 May 5 Submittal\CIP Mayors Letter 5 05 16.doc 5