County debt nears half a billion
HILO — It’s getting closer to the half-billion mark.
The county’s current outstanding debt, including bonds, state revolving loans, bank notes and bonds reimbursable by the Department of Water Supply, now stands at $477.6 million, a 34.4% increase over the $355.4 million debt in 2008.
That doesn’t include $40 million the state loaned the county for lava recovery work, Finance Director Deanna Sako told the County Council Finance Committee on Tuesday. Under questioning from Kohala Councilman Tim Richards, Sako said she hasn’t included it in the required annual report because the county hasn’t spent it yet.
“Once we use it, it would be a new line item for state loans,” Sako said.
The report is required in a specific format under state law.
The county is paying $52.9 million in principal and interest on its debt during the fiscal year that started July 1. While that may seem like a substantial chunk out of a $585.5 million overall county operating budget, it’s below limits imposed by general accounting principles and state law.
The county’s bond debt ratio, based on all debt approved by the County Council, is at 11.4% of general expenditures, nearing the 15% ceiling recommended by the Government Finance Officers Association. But the county has so far borrowed about 9.1%.
The county added $30 million to the debt load earlier this year, taking out bond anticipation notes in advance of a future bond float. The county uses the notes, said Finance Director Deanna Sako, to avoid having to pay interest on bond money sitting around before money is ready to be spent.
The bond was previously approved by the council and will be used to pay for $15 million in Americans with Disabilities Act improvements at county parks, as well as construction of the 16,000-square-foot, two-story prosecutor’s office building at the West Hawaii Civic Center. The council in 2017 had approved $12.5 million in bonds for that project.
Few council members have historically balked at the borrowing, reasoning that a growing population needs facilities. The capital improvement budget proposed this year by Mayor Harry Kim — basically a “wish list” of projects that may not all get built right away — includes 39 projects requiring a total appropriation of $160 million.
