Maui committee raises temporary bond cap to $150 million, defers cash-conversion measure

The Maui County Council Budget, Finance & Economic Development Committee voted to recommend on first reading an administration bill that raises the county's temporary borrowing ceiling, amending the proposal to increase the maximum aggregate amount of unreimbursed transfers and loans from county funds to the bond fund from $100,000,000 to $150,000,000.

Committee members and administration officials spent more than two hours questioning budget and finance staff, bond counsel and municipal advisors about how the county has been using cash to advance capital improvement projects (CIP) and the timing and risks of a general obligation bond issuance. After discussion, the committee approved the amendment and the main motion on a voice/hand-count vote recorded in the meeting as nine ayes and no nays.

Why it matters: the county has been advancing cash for CIP projects that were previously authorized to be paid from future bond proceeds. Administration officials told the committee they are close to the statutory ceiling on such unreimbursed transfers and need either to convert previously bond-authorized projects to cash funding or to raise the ceiling so the county can continue paying contractors while preparing a bond issuance.

The administration presented two alternatives: (1) a cash conversion bill that would recognize roughly $51.8 million in carryover savings and move selected projects off the bond fund and onto general-fund carryover (the administration and finance staff said, however, that the conversion would reduce carryover savings by about $32 million in terms of the loan-transfer cap), or (2) a bill to raise the cap from $100 million to $250 million. Committee members said both options would allow ongoing CIP work to continue, but they asked for more transparency about which projects would be affected and how federal reimbursements, hazard-mitigation grants and other outside funding would layer with county funding.

Administration position and timing: managing director Josiah Nishita and budget director Leslie Milner told the committee that raising the cap would preserve more cash for non-bond-eligible needs and give the county more flexibility until a bond sale can be executed. Municipal advisors from Columbia Capital Management and the county's bond counsel explained that waiting to issue a bond until market and legal uncertainties are better resolved could yield better interest rates and investor reception; they estimated a realistic bond-sale target in the late summer months (the administration said August was a reasonable goal, but emphasized timing is subject to market and federal tax-law developments).

Committee changes and votes: Rather than adopt the administration's larger increase to $250 million, the committee amended the bill to raise the cap to $150 million as an interim measure while asking the administration for more detailed, project-level timelines and an updated spend-down forecast. The amendment passed on a recorded in-meeting vote reported as nine ayes. The main motion (recommendation of first reading for the bill as amended) also passed by the same margin.

Separately, the committee deferred the administration's cash-conversion measure (the bill that would move particular bond-authorized projects to cash funding, sometimes referenced as Bill 15 during the meeting) to a later date so members could review an updated project-by-project schedule and discuss priorities.

What the committee asked for next: members asked the administration to provide a clearer, visual breakdown of CIP projects (status, which are bond-authorized, which are encumbered, what is unspent), an estimate of how much of the CIP list might be reimbursable by federal or state sources (FEMA public assistance, CDBG-DR, hazard mitigation), and updated cash projections through the anticipated bond issuance window. Several members asked for a Gantt-style timeline to show which projects could reasonably be encumbered or completed before the bond issuance.

Public testimony on the issue was taken; no public speakers were recorded for the bond-cap items, and the committee proceeded to take written testimony when the oral list was empty.

Implementation and next steps: the committee's recommendation of first reading will be forwarded to full Council for consideration. The committee stated it expects the administration to return with more detailed project schedules and spend-down forecasts before any final decision that would materially change the interim cap.

Ending: The committee's interim choice to raise the cap to $150 million was framed by members as a compromise that buys time for fuller review while allowing the county to keep paying contractors for authorized CIPs; members repeatedly asked the administration to come back earlier if it appears the county will need more than the approved $150 million before an anticipated bond sale.