There’s going to be a whole lot of construction going on.
There’s going to be a whole lot of construction going on.
The county is poised to increase its bond debt 28 percent to complete a flurry of improvements to parks, roads, sewers and garbage facilities following a unanimous vote Wednesday by the County Council.
The council has one more vote on Bill 58, authorizing $99.75 million requested by Mayor Billy Kenoi. The request includes a list of 48 projects in eight county departments and all nine council districts.
“This is an excellent time to invest in our county infrastructure,” said Council Chairman Dru Kanuha of Kona. “This touches each and every one of us islandwide, touches each and every district.”
The county’s annual debt service — how much interest and principal it pays annually on its borrowing — is currently 7.9 percent of expenditures. 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 once the proposed bonds are authorized and issued.
The Government Finance Officers Association recommends a ceiling of 15 percent.
Total bonded indebtedness for the county now stands at $357.6 million not counting the new bond issue. 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.
While all council members want to see projects built, Hilo Councilman Aaron Chung injected a cautionary note. He wanted assurances the county could afford not only the extra annual payment of principal and interest, but also repair and maintenance on all the new projects being built.
“It’s something we’ve got to deal with,” Chung said. “As long as everyone knows, they’re forewarned.”
Finance Director Deanna Sako said the county will use short-term financing, called bond anticipation notes, and won’t actually issue the bonds until it’s ready to spend the money. She said the county was rated AA- by Fitch Rating Agency a few months ago. That’s not the highest rating, but it’s considered a quality investment.
Hilo Councilman Dennis “Fresh” Onishi praised Kenoi and his administration for pushing the bond issue. Kenoi has said he wants to see projects that have already begun get finished. He’s term-limited and leaves office at the end of 2016.
“This is the most awesome mayor we have and administration to see facilities get built. … It’s all needed,” Onishi said. “I’m really, really happy that the mayor with his staff had a vision.”
Of the bond issue, 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.
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.