WAILUKU - The Maui County Council Budget and Finance Committee approved on Tuesday a measure that would allow the Department of Water Supply to secure a $9 million appropriation of state revolving loan funds to develop the West Maui Mahinahina water well, instead of using its own generated revenue and county-issued general obligation bonds.
The state loan has a lower interest rate than county bonds, and using the state money would allow the department to save its existing funds for long-term projects, according to water department Director Dave Taylor. He described the action as simply "accounting housekeeping," which has been done countless of times before.
"We're just moving money around," Taylor said. "Our intention is not to change the budget that the council approved, but to absorb this extra $9 million in (state revolving loan fund) loans and move the money around so the projects are no different from any the council had already approved."
The county had already approved $9 million for the project in the 2014 fiscal year budget, with $4 million in county bonds, $4 million from the department's restricted funds (funds generated from water meter issuance that may only be used for developing new source and water transmission lines) and $1 million from the department's unrestricted funds.
"Using the cash (existing department funds) now is not a good idea," Taylor said. "We're going to try to get as much (state revolving loan funds) as we can, it's a better long-term strategy to fund all these improvements."
Other approved projects include Makawao-Pukalani-Kula distribution system improvements, Makawao-Pukalani-Kula treatment plant improvements and West Maui water source improvements.
Council Member Riki Hokama suggested the department provide more specific details on the proposed projects.
"I would like to see some projections, or a spreadsheet on how this adjusts the budget," Hokama said. "I think it's great that the director presents these options for us, but I want to see how it changes the department's finances . . . that would make it easiest for a committee that deals with numbers."
Other council members recognized the merit in borrowing from the state reserve.
"This means that future new users will help share the cost," Council Member Don Couch said. "I like spreading it out and keeping the cash in reserve as much as we can, (until) we actually need to spend it."
On Tuesday, the committee also recommended full council approval of:
* A bill to amend the current fiscal year budget to add a $920,000 appropriation from a state grant for improvements to the War Memorial Stadium. The money will be used for plans, design and construction for improvements and to upgrade the stadium field complex and grounds.
* A bill to amend the current fiscal year budget to increase the estimated revenue amount for carryover savings in the highway fund by $340,000. That money will be used to resurface the upper portion of Baldwin Avenue, from Haliimaile Road to Makawao Avenue.
* Eileen Chao can be reached at email@example.com.