HomeMy WebLinkAbout2017-05-05 Message to Honorable Members of the County Council re Hawaii County CIP Budget for FY 2017-2018 pis` Wil Okabe
r •': Managing Director
Harry Kim
Mayor
Barbara J.Kossow
Deputy
County of Hawai`i
Office of the Mayor
25 Aupuni Street,Suite 2603 • Hilo,Hawaii 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
May 5, 2017
Honorable Members of the County Council
County of Hawaii
25 Aupuni Street
Hilo, HI 96720
Aloha Council Members:
RE: Capital Budget for FY 2017-2018
Transmitted herewith is the Capital Budget for FY 2017-2018 submitted for your review and approval
and the Capital Program for the next six years from FY 2017-2018 to 2022-2023. The Capital Budget
includes 48 projects requiring a total appropriation of$173.9 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 $97 million are intended to be funded in whole or part by bonds, $67
million to be funded by the State Revolving Loan Fund or State CIP, $9.8 million to be funded by
federal, and $0.05 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
(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, the resulting total debt
service is estimated at 9.57 percent of the general expenditures. If all debt that has been authorized
County of Hawai`i is an Equal Opportunity Provider and Employer.
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Honorable Members of the County Council
May 5, 2017
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by the County Council was issued, the debt service percentage would be 12.63 percent 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.
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 2017-2018. 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, 2016 was submitted to the County Council in January
2017. This document provides information on the total fair share contributions, appropriations, and
funds available for capital improvements. At this time, there is one project 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,
Harr im, Mayor
County of Hawi is an Equal Opportunity Provider and Employer.
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