Board committee advances $149.5 million bond issue

County board members were enthusiastic about a $149.5 million bond authorization on Wednesday, saying the money could help the county secure “once in a generation” federal dollars for projects which he badly needed.

The council’s finance committee voted 9-0 to advance the bond takeover measure, Bill 132, with a positive recommendation at two more hearings after adding an additional $10 million to the original amount for a grant Federal Build Back Better. Projects eligible for funding include housing, broadband, clean energy, environmental health and climate change mitigation.

Council members urged the administration to move quickly to take advantage of federal money by lining up shovel-ready projects.

“It’s a once-in-a-generation opportunity, there’s so much free money,” said Puna councilwoman Ashley Kierkiewicz. “Why aren’t we more aggressive and why are we just carrying this debt? »

General duty bonds are backed by the full faith and credit of the ratepayers of the county.

“We want to show that we have our money in place,” said chief financial officer Deanna Sako. “There are infrastructure projects across the island that need repairs, some of which have been waiting for some time.”

Among the projects expected to be paid for with the infusion of new funds: $100 million to fix the failing Hilo sewage treatment plant, $10 million for parks and recreation repairs and maintenance, $13 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 repairs and maintenance of animal control facilities and $1 million for bond issuance costs.

Sako said she was preparing a more detailed list of department heads and would submit it in time for the upcoming hearings.

With most of the money pledged for sanitation projects, other department heads have acknowledged that their shares will not go very far.

“Just like other directors, you see $10 million and your eyes get really big and then you start putting it down and all of a sudden the $10 million is gone,” said the director of parks and recreation, Maurice Messina.

Park projects in the bond application include improvements to Laaloa Beach Park and Magic Sands in Kailua-Kona as well as design work for the Kohala Pool, Waiohinu Park, Coconut Island Bridge, repairs to the Kawananakoa Gymnasium in Keaukaha and improvements to the Civic Auditorium in Hilo.

“We tried to do our best to put a bit in each district,” Messina said.

The committee amended the bill to add the additional $10 million after Sako submitted updated figures based on property values ​​and budget figures not available when she submitted the original bill request. This money will be used for recycling and composting facilities.

Hilo adviser Sue Lee Loy was far from optimistic about the reach of the money.

“I’m preparing for each of these projects that will need more money just because of the global economy,” Lee Loy said.

The new numbers mean the county’s debt service, the amount of principal and interest paid annually, will be around $50 million.

The county’s debt service ratio, based on all debt approved by the county council, will be 13.69% of general expenditure, if bond authorization is approved. The Government Finance Officers Association guideline states that debt service expenditures should be less than 15% of total expenditures each year.

But the county has for some years purchased bond anticipation notes from financial institutions once bonds have been cleared rather than getting the full amount cleared at once. The percentage of debt service taking into account the debt that has just been issued is 8.5% of the budget.

Kona City Councilwoman Rebecca Villegas called the bond clearance measure a “brave ask” and necessary given the weakened infrastructure around the island.

Responding to questions from Hilo City Councilman Aaron Chung, Sako said she stays in regular contact with bond rating agencies and is confident the county has sufficient liaison capacity.

“I think over the years you’ve really shown yourself to be a deft navigator in bond financing,” Chung said. “It’s the purchase, it will allow us to raise more money, whether it’s federal or state.”