County Council members Wednesday were enthusiastic about a $149.5 million bond authorization, saying the money could help the county secure “once in a generation” federal dollars for badly needed projects.
The council Finance Committee voted 9-0 to advance the bond appropriation measure, Bill 132, with a positive recommendation to two more hearings after adding an additional $10 million to the original amount for a federal Build Back Better grant match. Among projects qualifying for funding are housing, broadband, clean energy, environmental health and climate change mitigation.
Council members pushed the administration to act fast to take advantage of federal money by lining up shovel-ready projects.
“This is a once in a generation opportunity, there’s so much free money,” said Puna Councilwoman Ashley Kierkiewicz. “Why we aren’t we more aggressive going out there and why we are just saddling ourselves with this debt?”
The general obligation bonds are backed by the full faith and credit of county taxpayers.
“We want to show we have our money in place,” said Finance Director Deanna Sako. “There are infrastructure projects across the island that are needing repair, some of which have been waiting some time.”
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, $1o 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 animal control facilities repairs and maintenance and $1 million for bond issuance costs.
Sako said she’s putting together a more detailed list from the department heads and will submit it in time for the next hears.
With the bulk of the money pledged for wastewater projects, other department heads acknowledged their shares won’t 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 the sudden, the $10M is gone,” said Parks and Recreation Director Maurice Messina.
Parks projects in the bond request include improvements at Laaloa and Magic Sands beach parks in Kailua-Kona as well as design work for the Kohala pool, Waiohinu Park, Coconut Island bridge, Kawananakoa Gym repairs in Keaukaha and upgrades to the Hilo Civic Auditorium.
“We tried to do our best to put a little bit in each district,” Messina said.
The committee amended the bill to add the extra $10 million after Sako presented updated numbers based on property values and budget figures not available when she submitted the original bill request. That money will be used for recycling and composting facilities.
Hilo Councilwoman Sue Lee Loy was less than optimistic about how far the money could go.
“I’m bracing for every one of these projects gonna need more money just because of the global economy,” Lee Loy said.
The new numbers mean the county’s debt service, the amount of principle and interest paid annually, will be about $50 million.
The county’s debt service ratio, based on all debt approved by the County Council, will be at 13.69% 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. The debt service percentage when taking just issued debt into account is 8.5% of the budget.
Kona Councilwoman Rebecca Villegas termed the bond authorization measure a “courageous ask” and necessary considering the debilitated infrastructure around the island.
Responding to questions from Hilo Councilman Aaron Chung, Sako said she keeps in regular contact with bond rating agencies and is confident the county has sufficient bonding capacity.
“I think over the years you have truly shown yourself as a skillful navigator when it comes to bond funding,” Chung said. “This is the buy in, this will enable us to leverage more money whether it’s federal or state.”
