Kenoi proposes $99M bond issue

Mayor Billy Kenoi is proposing the county take on an additional $99 million in debt to build a host of new projects during his final 18 months in office.

In a letter to Council Chairman Dru Kanuha dated Thursday, Kenoi asked that the request be fast-tracked to the June 3 council meeting, skipping the Finance Committee entirely, because of “the time sensitive nature of this matter.” Kenoi is term-limited and will leave office late next year.

Kenoi told West Hawaii Today on Wednesday that the bond authorization request, his largest ever, is likely to be his last as well.

“There are a lot of important projects about to be completed that need funding. There are parks and recreation projects islandwide, some that have been talked about and discussed for decades, that will be completed this next year,” Kenoi said. “There are public works and road projects islandwide to be worked on as well as environmental management and civil defense and fire.”

The request includes a list of 48 projects in eight county departments and all nine council districts.

Slightly more than half, $50 million, will go for 18 projects for the Department of Parks and Recreation, with new facilities ranging from the Waimea District Park, to a community park in Hawaiian Paradise Park to improvements to tennis courts, Hilo Municipal Golf Course clubhouse and Hilo Drag Strip.

Another $20 million would be spent on 12 Public Works improvement projects, including Mamalahoa Highway, Ane Keohokalole Highway, Kilauea-Keawe Street resurfacing, Komohana Street, Waikoloa shoulder widening and more.

Finance Committee Chairwoman Karen Eoff, who signed off on Kenoi’s request to skip her committee, said the funding is neeeded to complete some projects that have already been started.

“There are projects evenly distributed throughout the island,” Eoff said.

She said she was particular happy to see phase 3 of Ane Keohokalole Highway on the list. That project in her district would create an alternative route to Kona International Airport, she said.

The $10 million for six Department of Environmental Management projects would focus on the Hilo sewer outfall repair, Kealakehe effluent reuse, various other wastewater projects and recycling project improvements.

Fire Department funding of $9 million would include the Haihai station and the Waimea volunteer fire station. Mass Transit funding of $5,000 would build bus shelters and create a master plan for islandwide bus routes.

Radio tower repairs for the Civil Defense Agency, $1 million to design an office for the County Prosecutor at the West Hawaii Civic Center and micro housing and other affordable housing initiatives round out the list.

The county will pay another $750,000 on top of the bond issue for the cost of issuing the bonds.

The county’s annual debt service — how much interest and principal it pays annually on its borrowing — is currently 7.9 percent of revenues. That figure would go up to 12.12 percent if all the borrowing currently authorized by the council were issued. It would reach 13.81 percent if the proposed bonds are authorized.

The Government Finance Officers Association recommends a ceiling of 15 percent.

Total bonded indebtedness for the county now stands at $357.6 million, or $318.7 million of bonds maturing this year, bonds reimbursable by the county Department of Water Supply against its revenues and bonds to be repaid by improvement districts are subtracted.

The full faith and credit of the taxpayer is pledged under general obligation, or G.O., bonds, compared to other types of bonds that rely on revenues from services or special districts, for example.

“When considering how many projects there are from multiple departments, and that the projects will benefit the entire island community, and that we will be well under the proposed cap for capital improvement program funding, we believe this is a strategic and beneficial bond float,” Kenoi said. “We look forward to the County Council’s input and consideration.”