We’re another day older and deeper in debt.
The lyrics to the song made famous by Tennessee Ernie Ford continue to be true today, as Hawaii County finds its debt load continuing to creep upward.
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 $475.2 million, a 33.7 percent increase from the $355.4 million debt in 2008.
The county added $30 million to the debt load earlier this month, 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 County 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 approved $12.5 million in bonds for that project.
Last year, the council approved $30 million in bonds to comply with a 2012 ADA settlement agreement. A 1997 class action suit filed in federal court claimed the county wasn’t doing enough to give disabled individuals access to parks and facilities.
The work was supposed to have been completed by 2016, under the court order. It now needs to be done by 2020, after the county missed that first deadline that was set in 2011.
The county is paying $52.7 million in principle and interest on its debt in the next fiscal year. While that might seem like a substantial chunk out of a $573.5 million overall county operating budget, it’s below limits imposed by general accounting principles and state law.
Few council members have historically balked at the borrowing, reasoning that a growing population needs facilities. The capital improvement budget released earlier this month by Mayor Harry Kim — basically a “wish list” of projects that might not all get built right away — includes 39 projects requiring a total appropriation of $160 million.
“Every year, we strive to present a budget that is fiscally constrained (in terms of prudent debt service planning) and selective based on rationale criteria,” Kim said in his budget message to the County Council.
The county’s bond debt ratio, based on all debt approved by the County Council, is at 11.4 percent of general expenditures, nearing the 15 percent ceiling recommended by the Government Finance Officers Association. But the county has so far borrowed about 9.1 percent.
“We do look at the total debt issued; we’re constantly monitoring that,” Sako recently told the County Council. “You know, not only do we work for the county, but we also live here. … We also pay our real property taxes … so we’re not going to do anything that would cause anyone additional pain, or anything like that.”
Email Nancy Cook Lauer at email@example.com.
Source: Hawaii Tribune Herald