HomeMy WebLinkAbout2019-05-03 Letter to County Council transmitting FY2019-20 Capital Budget
Wil Okabe
Managing Director
Harry Kim
Mayor
Barbara J. Kossow
Deputy Managing Director
Office of the Mayor
25 Aupuni Street, Suite 2603 96720 (808) 961-8211 Fax (808) 961-6553
KONA: 74-5044 lole Hwy., Bldg C Kailua-96740
(808) 323-4444 Fax (808) 323-4440
May 3, 2019
Honorable Members of the County Council
25 Aupuni Street
Hilo, HI 96720
Aloha Council Members:
Transmitted herewith is the Capital Budget for FY 2019-2020 submitted for your review and
approval and the Capital Program for the next six years from FY 2019-2020 to 2024-2025. The
Capital Budget includes 60 projects requiring a total appropriation of $238 million.
CǒƓķźƓŭ {ƚǒƩĭĻƭ
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 $98.9 million are intended to be
funded in whole or part by bonds, $89.5 million to be funded by the State Revolving Loan Fund
or State CIP, $48.8 million to be funded by federal, $0.33 million to be funded by private grants,
and $0.49 million to be funded by fair share contributions (see Table 1).
5ĻĬƷ {ĻƩǝźĭĻ
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 (fifteen) 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,
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Honorable Members of the County Council
May 3, 2019
Page 2
the resulting total debt service is estimated at 8.9 percent 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 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.
tƩƚƆĻĭƷ 5ğƷğΉCźƓğƓĭźğƌ LƒƦğĭƷ {ƷğƷĻƒĻƓƷƭ
Proposed capital projects are organized in sections by County agencies. The first document in
each section is a Summary of Department Requests for FY 2019-2020. 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.
CğźƩ {ŷğƩĻ /ƚƓƷƩźĬǒƷźƚƓƭ
A Fair Share Annual Report as of June 30, 2018 was submitted to the County Council on January
29, 2019. This document provides information on the total fair share contributions,
appropriations, and funds available for capital improvements. At this time, there are three
projects proposed to use fair share contributions. 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,
Harry Kim
Mayor
County of Hawai`i is an Equal Opportunity Provider and Employer.
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