HomeMy WebLinkAboutREP FC 547 08/29/1988 1984-1988 rr
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411 REPORT OF THE •
COMMITTEE ON FINANCE
Date: August 29, 1988 Re: Comm. 1758
Place: Councilroom
Time: 10 :00 a.m.
Chairman and Members
Hawaii County Council
Hilo, Hawaii 96720
Your Committee on Finance, to which was referred Bill 621, reports
as follows:
The purpose of Bill 621 is to authorize the issuance of $25,000,000
general obligation bonds of the County of Hawaii for the purpose of
financing the construction of various capital improvements and the
purchase of certain equipment of the County of Hawaii and describing
the same; fixing the form, denominations and certain other features
of such bonds and providing for their sale; and authorizing the
issuance and sale of a like principal amount of general obligation
bond anticipation notes in anticipation of the issuance and sale of
said bonds .
The ordinance will authorize the sale of $25 million in general
obligation bonds which will be split as follows : $19 to $20 million
for capital improvement projects and $5 to $6 million for the
purchase of equipment (see Exhibit "A" for the breakdown of the
equipment ) .
The Finance Director made opening remarks in regards to Bill 621
pointing out highlights of the proposed ordinance. He pointed out
that the intent of the bond issue was to be predicated on a series
of issues rather than only one , depending on the cash requirements
of projects. An immediate start is necessary because of the length
of time ( 6 to 8 months) it takes to get the needed equipment .
In order to speed up the acquisition of funds, authorization will
have to be sought to borrow money from the1General Fund at no
interest . In answer to inquiries, the Finance Director pointed out
that if the bonds don't go through and the General Fund can't be
refunded, monies will have to be borrowed from local banks. But in
any case, he gave reassurance that borrowing from the General Fund
would not jeopardize the original reasons the funds were allocated
for .
He emphasized that certain CIP projects needed funding in the near
future and among those were the Kona Sports Complex, Hilo Sewer
Treatment Facility and the Kealakehe Wastewater Treatment Plant .
FC REPORT No . 547
ADOPTED : SEP 7 198
111
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FC- 547 Page 2 August 29, 1988
Your Committee was informed by the Finance Director of the urgency
of starting now by "getting the ball rolling. "
Your Committee heard discussion relative to the process of floating
the bonds and how the equipment lists were determined . It was
pointed out by the Managing Director that it was decided during the
budget review that equipment requests would be financed from
subsequent bond floats and that the needs of the various departments
would be evaluated, consolidated and bonds would be issued . The
result is the bond issue before the Committee now.
The requests of the departments were compiled and prioritized. The
priority was based on age, condition, need and mileage in the case
of automobiles. The equipment is to last for at least a 10-year
period.
All departments indicated needs for new equipment but the bulk of
the requests were from the Department of Public Works . Funds for
the Emergency Operating Center (Civil Defense) will be reimbursed
from the Federal Government .
Your Committee was informed that the bulk of the bond float is for
capital improvement projects. The lists in prior CIP Ordinances
( 86-64, 87-59 and 88-81) were used to come up with the present
list . (Equipment listed in the operating budget was not in the bond
float . ) There were no other CIPs at this time but the Finance
Director pointed out that the list was "dynamic" and it could
fluctuate. The initial plans were to float it in 1989, but the
needs are immediate, therefore, new time frames were determined -
January 1989 , June 1989 and June 1990 . (A prioritized proposed
expenditure plan was submitted for the Committee ' s inspection. )
Your Committee requested that the Finance Director make available to
the Council by the next meeting, a list of projects that were taken
out of CIP ordinances and identified. The Committee was assured
that there were none beyond the CIP ordinances . Your Committee was
also informed that the Council can come up with its own list .
A concern was raised about the relocation of the Kealakehe
Wastewater Treatment Plant . It was suggested that the plans called
for a golf course planned nearby to be watered by the effluent from
the sewage plant . The State has since requested that the site be
moved . It is the Governor ' s prerogative to give the "go ahead" on
the project and huge sums of funds could be lost if the project
isn ' t on schedule. The costs of moving have been identified and the
bids should be out in November 1988.
Concerns were expressed by members of the Committee about the
additional costs caused by the projected move and it was felt that
the State should share in meeting the added costs.
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FC-- 547 Page 3 August 29, 1988
Questioned about the County' s debt service, the Finance Director
explained that while the County is in the prudent range (even with
the floating of this bond) , it is fast approaching a cautionary
point .
A Council member expressed concern about why Ford Tauruses were
purchased by the County instead of other more economical models . It
was explained that specifications are given to auto dealers and the
purchases are based on the fulfillment of these by the dealers
rather than on what the model and make might be. It was agreed that
maybe lower specifications could be submitted to result in more
economical and suitable autos.
In answer to a question about the discrepancy in computer prices, it
was explained that price differences are the result of different
equipment being needed for a difference in the volume of usage. As
to why computer bids are according to brands and not by
specifications, it was pointed out that the County utilizes the Wang
and the personal computers are the McIntosh. The Data Processing
Manager can answer questions about the adequacy or compatibility of
the systems.
It was explained to the Committee that the three blue and white
police cars that were deleted from the budget have been added to the
equipment list . It was further explained that older vehicles are
put out to bid with the Council ' s permission and some revenues are
derived from their sale.
This bond and the series, of which it is a part, are issued under
and pursuant to and in full compliance with the Constitution and
laws of the State of Hawaii, including Part I of Chapter 47, Hawaii
Revised Statutes, as amended, the Charter of the County of Hawaii
and proceedings of the aforesaid Council duly taken thereunder .
Your Committee on Finance is in accord with the intent and purpose
of Bill 621 but on condition that further input be made by members
of the Council before it be approved on first reading.
(ABSENT & EXCUSED) ' / , ; . AWN 40-%
FRANK DE LUZ III, CHAIRMAN ORRA' E R. '1AP CHAKU--I NO E V C.
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TA , 'SHI Do NGO, EM�E' USSELL S. KOKUB N, MEMBER
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MERL K. LAI, MEMBER SPENCER K. SCHUTTE, MEMBER
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