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Council reins in bond wishes

December 19, 2013 - 11:04am

Three County Council members must have been feeling the holiday spirit Wednesday, attempting to load another eight projects and $2.4 million onto a $61.5 million bond authorization requested by Mayor Billy Kenoi.

A parliamentary move by Kona Councilman Dru Kanuha stopped the projects before they even got a hearing, when he forced the council to vote for the original bill without considering the amendments.

“I thought that the bond issue needed to stay as it was. It was fiscally irresponsible for us to keep adding more and more on the bond,” Kanuha said after the meeting. “We need to make sure we are spending taxpayer money in the right way.”

The amendments were proposed by Hilo Councilman Dennis Onishi, Puna Councilman Greggor Ilagan and Kohala Councilwoman Margaret Wille, all who opposed Kanuha’s parliamentary motion to call for the question.

The council then voted 8-1, with Wille voting no, to approve the bond authorization, Bill 156, on first reading. A final reading is likely to be scheduled for the council’s Jan. 8 meeting.

The council’s action came after Finance Director Nancy Crawford warned the legislative body that pushing county debt too high could hurt the county’s bond rating, ultimately making it cost more to borrow money in the future. She said council members can express their desires for certain projects by adding them to the long-term capital improvement budget, also known as the county’s “wish list.”

“You are authorizing debt,” Crawford said. “That puts it on a whole different level.”

County administration has advised the council that it’s a good time to borrow, and the county’s fund balance, the accumulation of revenues minus expenditures, is at its highest level ever at $37.3 million as of June 30. The bonds would raise annual debt service — the payments on the bonds — to 13.4 percent of total annual expenditures, below the 15 percent ceiling recommended by the Government Finance Officers Association.

Hamakua Councilwoman Valerie Poindexter, who serves as the council’s Finance Committee chairwoman, agreed with Crawford’s analysis, adding that floating bonds increases the annual payments taxpayers must pay on the debt.

“As Finance chair, I look at things in a more strategic fashion,” Poindexter said. “When it comes time to pay this, we are going to put that burden on the back of the taxpayers.”

Wille, whose three projects — Puako sewer study, Waimea transit hub and Kawaihae community center — would have added $1 million to the total, said she wouldn’t have had to offer more projects if the administration had conferred with her about her district. She said the mayor hasn’t been available to meet with her about the needs of her district.

“I do not respect how the administration handled this,” Wille said. “I think it’s ‘together we can’ (Kenoi’s campaign slogan) not just in words but in deeds.”

Kenoi told West Hawaii Today that he makes it a point to visit the communities involved before making decisions about what most needs work.

“Ms. Wille is certainly entitled to her opinion,” Kenoi said. “I think that we’ve shown over the years that we’re willing to work collaboratively and cooperatively.”

In addition to Wille’s proposals, Onishi wanted to add $800,000 to the total for three projects: the Kamana senior center, Hualani Park stadium lights and Kalanianaole trailways improvements. He also wanted to add $260,000 to the $40,000 Kenoi had included for the Kaipalaoa Landing park.

Ilagan wanted to add $340,000 for the Hawaiian Paradise Park community park and a Pohoiki swimming area feasibility study. He said now is the perfect time to add to the debt because of low interest rates.

The bond issue had been increased previously at the Finance Committee level. South Kona/Ka‘u Councilwoman Brenda Ford, noting there were no projects proposed for her district, added three more at a total cost of $494,000. Her fellow council members reluctantly backed her request, with Puna Councilman Zendo Kern, Ilagan and Hilo Councilman J Yoshimoto voting no.

Ford added $250,000 for a children’s playground at Naalehu Park, $150,000 for a water main extension at Kahuku Park and $94,000 for an Ocean View park-and-ride lot.

“I want to truly believe that it was an oversight to not put any projects in District 6,” Ford said of Kenoi’s original request list.

The largest amount of the bond authorization, $20 million, would go for a new park on county-owned property in Pahoa Village. The first phase of a district park in Waimea would receive $2.5 million, as would the Honokaa rodeo arena. There’s $1.5 million to replace the clubhouse at Hilo Municipal Golf Course and $1 million for a park in Alii Kai subdivision in Kona.

Other projects include road extensions and repairs, new and renovated playgrounds, upgrades to comply with the Americans with Disabilities Act and repair for neglected parks facilities and money for sewer improvements and land purchases.