Mayor Mitch Roth is asking the County Council to approve a $139.5 million bond authorization that will take the county smack up against the recommended debt ceiling for sound financial management.
Roth, in an interview earlier this week with West Hawaii Today, said years of neglect have contributed to failing infrastructure in the county at the same time that pandemic-related shortages led to high costs for materials and labor.
“We have some really significant needs in our county,” Roth said. “These aren’t nice to have; they are have to have.”
The general obligations bonds are backed by the full faith and credit of county taxpayers.
Among the projects that are planned to be paid for with the infusion of new money: $100 million to fix the failing Hilo sewage treatment plant, $13 million for Parks and Recreation repairs and maintenance, $10 million for Public Works repairs and maintenance, $10 million for Housing repairs and maintenance, $3 million for Solid Waste Division repairs and maintenance, $2.5 million for animal control facilities repairs and maintenance and $1 million for bond issuance costs.
The bond authorization, Bill 132, is scheduled to be heard at the council’s Finance Committee meeting at 9 a.m. Wednesday.
Roth said the county debt service capacity has been reviewed to ensure the county has the capacity to issue additional bonds up to the requested amount.
The county’s debt service ratio, based on all debt approved by the County Council, will be at 14.6% of general expenditures, if the bond authorization is approved. The Government Finance Officers Association guideline states that debt service expenditures should be below 15% of total expenditures each year.
But the county has for some years taken out bond anticipation notes from financial institutions once the bonds are authorized rather than getting the entire authorized amount all at once. This keeps the county from having large sums of money sitting around unused, said Finance Director Deanna Sako.
The debt service percentage when taking just issued debt into account is 8.9%.
Council Finance Committee Chairman Matt Kanealii-Kleinfelder said he appreciated he way the administration borrowed the money. He said he knows the Hilo sewer plant needs significant work, which was the main purpose of the bond request, but other departments also will have some of their most pressing needs me at the same time.
“What I like about the bonds is we’re not drawing it in full but just as it’s needed,” Kanealii-Kleinfelder said.
As far as the upcoming budget process, Kanealii-Kleinfelder urged the public to be involved during hearings that start in April. At that point, council chambers should be open, he said, enabling for greater in-person public participation. The budget, meanwhile, will be on the county website for the public to view, he said.
“We’re gearing up for the budget season,” he said. “I’m asking the public to please participate in the process. That’s why it’s done like this.”
