The county has sold $77.1 million in general obligation bonds to retire old debt and free up money to pay for new capital projects, Finance Director Deanna Sako said in a report to the County Council.
General obligation bonds are backed by the full faith and credit of county taxpayers.
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 $482.9 million, up from $449.4 million in August, according to the report that the council Finance Committee is set to receive today.
The county budgeted $59.4 million out of a $585 million overall county operating budget to pay principal and interest on its bond debt during the fiscal year that ends June 30.
The bonds were sold in November, with a combined interest cost of 2.2%. Some of the money was used to refund $17.6 million in 2010 borrowing, saving the county about $2 million. Other bond proceeds went to pay off $30 million in bond anticipation bank notes.
It’s not immediately known what new projects will be funded with the bonds.
“We always want to have projects shovel-ready, especially if there are federal funds available to help with the recovery,” Sako said Monday.
County Council members, when approving $103 million in additional bonding last spring, identified these projects as priorities: Transportation priorities specified in the bill are: Ane Keohokalole Highway Phase III-Hina Lani Street to Kaiminani Drive, Puna Connectivity and Emergency Access Routes, Paniolo Avenue Rehabilitation/ Waikoloa Intersection Construction, Kawili Street Shoulder Improvements, Mamalahoa Highway Resurfacing-Hohola Drive to Kekehau Street, Plumeria Street Rehabilitation and Waianuenue Avenue.
“Some of the money will be used for the projects listed in the ordinance; many are currently in the planning and design phase,” Sako said.
The bonds received a rating of “AA” with a stable outlook from S&P Global Ratings Inc., “Aa2” with a stable outlook from Moody’s Investors Service, and “AA+” with a negative outlook from Fitch Ratings.
“So initially we wanted to issue bonds last spring, however, with COVID the market wasn’t quite right. So we waited until fall when the market conditions were better,” Sako said. “We had already been put on negative outlook last summer due to COVID. However, the other two rating agencies kept us at a stable outlook. The negative outlook did not impact the sale of our bonds. We sold the bonds at a very good time and were able to get a very good rate.“
The county’s bond debt ratio, based on all debt approved by the County Council, is at 12.9% of general expenditures, nearing the 15% ceiling recommended by the Government Finance Officers Association.
