HomeMy WebLinkAboutCOM 0958.000 2004-2006
CONSTANCE R. KIRIU WILLIAM E. SMITH
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County Clerk Deputy County Clerk
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County of Hawai `i
Office of the County Clerk
25 Aupuni Street cv~
Hilo, Hawn `t 96720
(808) 961-8255 Facsimile: (808) 961-8912 C'`. C_-
Telephone. 2
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June 22, 2006
TO: Council Me bets ru
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FROM: William E. Smtt
Deputy County Clerk
RE: Financial Audit Report for Fiscal Year Ending June 30, 2005
For your review, deliberation, and acceptance, I am submitting the post-audit Financial Audit
Report of the County of Hawai `i for the Fiscal Year Ended June 30, 2005, and Management
Letter dated March 22, 2006, as prepared by KPMG LLP. The Report and Management Letter
satisfy the requirement of Section 10-13, Hawaii County Charter, relating to the responsibility
of the County Council to conduct an annual independent audit of the accounts and other
evidences of financial transactions of the County and of every county agency and executive
agency.
KPMG LLP has issued an unqualified opinion, which opined that the Financial Audit Report is
presented fairly in all material respects.
This year's Management Letter contains findings and recommendations related to:
• Collection of Receivables
The auditors will be present at the Finance Committee meeting on July 6, 2006, to answer any
questions you may have. Appropriate department head(s) or their representative(s) will also be
asked to attend the meeting.
In the meantime, please feel free to contact Lane Shibata should you require further information.
Enclosures wTS
Comm. No. G~
cc w/o enclosures: Ralph Kanetoku, KPMG LLP Ref. To.
Department of Finance Ref. Data'
Department of Environmental Management -
(Note: County of Hawaii, State of Hawaii Financial Audit Report for the Fiscal
Year Ended. June 30, 2005 is on file in the office of the County Clerk.)
L Rdemk,::ounty Is An Equal opportunity provider Ana r niptuyer
COUNTY OF HAWAII
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Financial Audit Report
for the Fiscal Year Ended
June 30, 2005
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: CONSTANCE R. KIRIU 0WILLIAM E. SMITH
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County Clerk Deputy County Clerk
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County of Hawai `i
Office of the County Clerk
r 25 Aupuni Street
Hilo, Hawaii 96720
Telephoner (808) 961-8255 Facsimile: (808) 961-8912
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Forward
This financial audit report is the result of the audit of the basic financial statements of the County
of Hawaii, State of Hawaii (County), for the fiscal year ended June 30, 2005. The audit was
conducted by KPMG LLP, certified public accountants.
The audit was performed in accordance with auditing standards generally accepted in the United
States of America adopted by the membership of the American Institute of Certified Public
Accountants. In addition, the audit was governed by the "Specifications for a Financial Post-
Audit and Systems and Procedures Examination of the County of Hawaii, issued by our office.
This report is divided into two sections. Section 1, "Management Letter" includes the auditors'
findings and recommendations based upon their consideration of the County's internal control
and recently issued government accounting pronouncements in connection with their audit of the
County's financial statements for the fiscal year ended June 30, 2005. It is our practice to
request agencies to submit their comments on the auditors' findings and recommendations and to
indicate what action has been or will be taken.
Section 11, "Comprehensive Annual Financial Report" for the fiscal year ended June 30, 2005,
displays the basic financial statements and schedules of the County, the auditors' report as to the
fairness of presentation of the basic financial statements and also includes statistical information.
We wish to express our sincere appreciation for the cooperation and assistance extended by the
management and staff of the various departments during the audit.
¦
Constance R. Kiriu
County Clerk
County of Hawaii
Hawat 'i County Is An Equal Opportunity Provider And Employer
ar
COUNTY OF HAWAPI
Financial Audit Report
rr For the Fiscal Year ended June 30, 2005
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s Table of Contents
Page
SECTION I - MANAGEMENT LETTER
Management Letter I
Current Year Findings and Recommendations 2
Recently Issued Governmental Accounting Pronouncements 4
Comments by the Affected Agencies 7
SECTION II - COMPREHENSIVE ANNUAL FINANCIAL REPORT
Introductory Section I
y Financial Section I1
Statistical Sections III
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r SECTION I
MANAGEMENT LETTER
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COUNTY OF HAWAII
STATE OF HAWAII
Management Letter
For the Fiscal Year ended June 30, 2005
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Table of Contents
Page
Management Letter I
CURRENT YEAR FINDINGS AND RECOMMENDATIONS 2
Collection of Receivables 2
RECENTLY ISSUED GOVERNMENTAL ACCOUNTING PRONOUNCEMENTS 4
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KPMG LLP
law PO Box 4150
Honolulu, HI 96812-4150
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March 22, 2006
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PRIVATE & CONFIDENTIAL
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.w To the Members of the
County Council of Hawaii
County of Hawaii
Hilo, Hawaii:
We have audited the basic financial statements of the County of Hawaii, State of Hawaii (the County),
for the year ended June 30, 2005, and have issued our report thereon dated March 22, 2006. We have also
audited the County's compliance with requirements applicable to its federal financial assistance programs
and have issued our report thereon dated March 22, 2006. In planning and performing our audit of the
County's basic financial statements, we considered the County's internal control over financial reporting in
order to determine our auditing procedures for the purpose of expressing our opinion on the basic financial
r statements. An audit does not include examining the effectiveness of internal control and does not provide
assurance on internal control. We have not considered internal control since the date of our report.
During our audit, we noted certain operational matters that are presented for your consideration. These
comments and recommendations, all of which have been discussed with the appropriate members of
management, are intended to result in operating efficiencies. We have also provided a brief summary of the
recently issued governmental accounting pronouncements for your consideration.
Our audit procedures are designed primarily to enable us to form an opinion on the basic financial
statements, and therefore may not bring to light all weaknesses in internal control policies or procedures
that may exist. We aim, however, to use our knowledge of the County's organization gained during our
work to make comments and suggestions that we hope will be useful to you.
This report is intended solely for the information and use of the County Council and the County
Administration and is not intended to be and should not be used by anyone other than these specified
parties.
We would like to take this opportunity to express our appreciation for the courtesy and assistance extended
to us by the personnel of the County of Hawaii during the course of our audit. Should you wish to discuss
w any of the matters contained herein, we will be pleased to meet with you at your convenience.
Very truly yours,
LrP
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KPMG LLP, a U.S. limited liability partnership, is the U S.
member firm of KPMG International, a Swiss cooperative.
COUNTY OF HAWAII
STATE OF HAWAII
Current Year Findings and Recommendations
For the Fiscal Year ended June 30, 2005
COLLECTION OF RECEIVABLES
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The timely collection of solid waste (landfill) and wastewater (sewer) receivables continues to be a problem for
the Department of Environmental Management. To address delinquencies in landfill receivables, new
requirements for claiming residential credits and new provisions for trash removal contracts were established in
2003, resulting in an 8% decrease in the greater than 90 days balance since June 30, 2003. For sewer receivables,
an ordinance was passed in the current year that will add a 1.5% per month interest charge to all accounts that are
past due. In addition, the ordinance will also allow the County to take a lien against the property owners for
customers with delinquent balances. Despite the improvements being made, landfill and sewer receivables
outstanding more than 90 days still account for a significant portion of the respective balance as follows:
2005 2004
Amount Percentage of Amount Percentage of
outstanding total outstanding total
Landfill
Current $ 583,650 43% $ 525,386 35%
31 - 60 days 360,564 26 330,010 22
61 -90 days 42,185 3 291,930 20
90+ days 390,208 28 350,711 23
$ 1,376,607 100% $ 1,498,037 100%
90+ days
23%
90+ days
28% Comm
35%
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43%
61 - 90 days
3% 61 - 90 days
20%
31 - 60 days 31 - 60 days
260/6 22%
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2 (Continued)
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COUNTY OF HAWAII
STATE OF HAWAII
Current Year Findings and Recommendations
w For the Fiscal Year ended June 30, 2005
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2005 2004
Amount Percentage of Amount Percentage of
w outstanding total outstanding total
Sewer
Current $ 631,261 31% $ 863,376 39%
M 31 - 60 days 25,391 1 129,344 6
61 - 90 days 107,497 5 79,460 4
90+ days 1,282,697 63 1,139,556 51
w $ 2,046,846 100% $ 2,211,736 100%
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current
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39%
90+ days
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90+ days 31 - 60 days
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63% °
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5% 31 -60 days
61 - 90 days 6%
4%
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Recommendation
We recommend that the Department of Environmental Management continue to work with the Department of
r Finance to improve collection efforts on specific delinquent accounts. Approximately 65% of the landfill
receivable balance outstanding more than 90 days and 50% of the sewer receivable balance outstanding more
than 90 days relate to five and four customers, respectively. In early 2006, results have already been seen as the
do County collected on the sewer receivable balance outstanding more than 90 days for a single customer, which
comprised approximately 30% of the total sewer receivable balance outstanding more than 90 days at year end.
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COUNTY OF HAWAII
STATE OF HAWAII
' Recently Issued Governmental Accounting Pronouncements
rr For the Fiscal Year ended June 30, 2005
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The following are recently issued governmental accounting pronouncements which should be evaluated for their
impact to the County upon adoption:
r ¦ GASB Statement No. 42: Accounting and Financial Reporting for Impairment of Capital
_ Assets andfor Insurance Recoveries.
This statement establishes accounting and financial reporting
standards for impairment of capital assets. A capital asset is
' considered impaired when its service utility has declined
¦ significantly and unexpectedly. This statement also clarifies and
establishes accounting requirements for insurance recoveries. The
" provisions of this statement are effective for fiscal periods
,r beginning after December 15, 2004.
¦ GASB Statement No. 43: Financial Reporting for Postemployment Benefit Plans Other Than
Pension Plans.
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This statement establishes uniform financial reporting standards
for other postemployment benefit (OPEB) plans and supersedes
the interim guidance included in GASB Statement No. 26,
Financial Reporting for Postemployment Healthcare Plans
Administered by Defined Benefit Pension Plans. The approach
r followed in this statement generally is consistent with the approach
adopted in GASB Statement No. 25, Financial Reporting for
Defined Benefit Pension Plans and Note Disclosures for Defined
Contribution Plans, with modifications to reflect differences
between pension plans and OPEB plans.
The requirements of this statement are effective one year prior to
the effective date of GASB Statement No. 45 (see below), for the
employer (single-employer plan) or for the largest participating
employer in the plan (multiple-employer plan). The requirements
of this statement are effective in three phases based on a
government's total annual revenues in the first fiscal year ending
after June 15, 1999, either for periods beginning after
¦ December 15, 2005, December 15, 2006, or December 15, 2007.
Earlier application of this statement is encouraged.
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r COUNTY OF HAWAII
STATE OF HAWAII
Recently Issued Governmental Accounting Pronouncements
For the Fiscal Year ended June 30, 2005
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¦ GASB Statement No. 44: Economic Condition Reporting: The Statistical Section - an
Amendment of National Council on Government Accounting
(NCGA) Statement 1.
This statement amends the portions of NCGA Statement 1,
Governmental Accounting and Financial Reporting Principles,
that guide the preparation of the statistical section. The statistical
section presents detailed information, typically in ten-year trends,
that assists users in utilizing the basic financial statements, notes to
basic financial statements, and required supplementary information
to assess the economic condition of a government. The provisions
of this statement are effective for statistical sections prepared for
periods beginning after June 15, 2005.
¦ GASB Statement No. 45: Accounting and Financial Reporting by Employers for
Postemployment Benefits Other Than Pensions.
In addition to pensions, many state and local governmental
employers provide OPEB as part of the total compensation offered
to attract and retain the services of qualified employees. OPEB
includes postemployment healthcare, as well as other forms of
postemployment benefits (for example, life insurance) when
provided separately from a pension plan. This statement
establishes standards for the measurement, recognition, and
display of OPEB expense/expenditures and related liabilities
(assets), note disclosures, and, if applicable, required
supplementary information in the financial reports of state and
local governmental employers.
The approach followed in this statement generally is consistent
with the approach adopted in Statement No. 27, Accounting for
Pensions by State and Local Governmental Employers, with
modifications to reflect differences between pension benefits and
OPEB. Statement No. 43, Financial Reporting for Postemployment
Benefit Plans Other Than Pension Plans, addresses financial
i statement and disclosure requirements for reporting by
administrators or trustees of OPEB plan assets or by employers or
sponsors that include OPEB plan assets as trust or agency funds in
their financial reports.
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COUNTY OF HAWAII
STATE OF HAWAPI
Recently Issued Governmental Accounting Pronouncements
¦1 For the Fiscal Year ended June 30, 2005
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The requirements of this statement are effective in three phases
based on a government's total annual revenues in the first fiscal
M year ending after June 15, 1999, either for periods beginning after
December 15, 2006, December 15, 2007, or December 15, 2008.
Early application of this statement is encouraged.
M ¦ GASB Statement No. 46: Net Assets Restricted by Enabling Legislation - an amendment of
GASB Statement No. 34.
r This statement clarifies that a legally enforceable enabling
legislation restriction is one that a party external to a
government-such as citizens, public interest groups, or the
judiciary-can compel a government to honor. The statement
states that the legal enforceability of an enabling legislation
restriction should be reevaluated if any of the resources raised by
the enabling legislation are used for a purpose not specified by the
enabling legislation or if a government has other cause for
reconsideration. Although the determination that a particular
restriction is not legally enforceable may cause a government to
review the enforceability of other restrictions, it should not
w. necessarily lead a government to the same conclusion for all
enabling legislation restrictions.
This statement also specifies the accounting and financial reporting
requirements if new enabling legislation replaces existing enabling
legislation or if legal enforceability is reevaluated. Finally, this
statement requires governments to disclose the portion of total net
assets that is restricted by enabling legislation. The requirements of
this statement are effective for financial statements for periods
beginning after June 15, 2005.
¦ GASB Statement No. 47 Accounting for Termination Benefits
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This statement establishes accounting standards for termination
benefits. The requirements of this statement are effective in two
parts. For termination benefits provided through an existing
defined benefit OPEB plan, the provisions of this statement should
be implemented simultaneously with the requirements of
Statement 45. For all other termination benefits, this statement is
effective for financial statements for periods beginning after
June 15, 2005. Earlier application is encouraged.
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~ 4oJNSV of N,~
Harry Kim Barbara Bell
Mayor - Director
a ~TF OF
Nelson Ho
Deputy Director
(fautift o Cr'afunii
DEPARTMENT OF ENVIRONMENTAL MANAGEMENT
25 Aupuni Street, Room 210 + Hilo, Hawaii 96720-4252
(808) 961-8083 • Fax (808) 961-8086
MEMORANDUM
.a DATE April 20, 2006
TO Constance Kiriu, County Cler
FROM Barbara Bell, Director
SUBJECT : FY2005 Preliminary Draft Management Letter
We have reviewed the FY2005 draft Management Letter concerning the Collection of
Receivables and concur with the audit recommendations.
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We are continuing to work with the Department of Finance and the Office of the
_ Corporation Counsel to improve collection efforts. As the auditors have noted,
improvements have been made and we are continuing our efforts to further reduce the
receivables outstanding for more than 90 days.
Our collection of solid waste (landfill) receivables has shown significant improvement
- over the past few years. Amounts outstanding over 90 days have been reduced from 47%
OFF of the total receivables at the end of FY2002 to 28% at the end of FY2005. We are
continuing our efforts to tighten up the collections of our landfill tipping fees and to
further reduce amounts outstanding over 90 days.
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The sewer receivables have been significantly reduced in 2006 by the collection of the
' largest delinquency. To aide in the collection of sewer fees, a bill was passed by the
rl County Council which makes the property owner ultimately responsible for the sewer
bills. Because we are unable to discontinue sewer services for delinquent accounts,
collections on those accounts pose a greater challenge. Sewer fees were previously billed
¦ to the Water Supply account holder, which is often a lessor or a renter. By making the
property owner responsible, we will now be able to place a lien on the property for past
4% due sewer charges. This new ordinance, which went into effect on October 1, 2005, also
W provides for a 1 %2 % per month interest charge on past due balances, this replaces the
previous one time penalty of 10%.
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nP Hawai'i County is an equal opportunityprovider and employer.
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SECTION II
COMPREHENSIVE ANNUAL FINANCIAL REPORT
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_ COMPREHENSIVE
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ANNUAL FINANCIAL REPORT
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_ Fiscal Year Ended June 30, 2005
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COUNTY OF HAWAII
Hilo, Hawaii
Harry Kim
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Mayor
Dixie Kaetsu
Managing Director
Prepared by
r+ The Department of Finance
William Takaba
Director of Finance
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COUNTY OF HAWAII
_ Comprehensive Annual Financial Report
For the Fiscal Year Ended June 30, 2005
i
Table of Contents
a Payee
INTRODUCTORY SECTION
Letter of Transmittal I
GFOA Certificate of Achievement 7
Organization Chart 8
M List of Elected Officials 9
List of Principal Officials 10
FINANCIAL SECTION
Independent Auditors' Report 11
Management's Discussion and Analysis 13
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Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Assets 24
Statement of Activities 26
Fund Financial Statements:
Balance Sheet - Governmental Funds 28
Reconciliation of the Governmental Funds Balance Sheet to the
Statement of Net Assets 29
Statement of Revenues, Expenditures, and Changes in Fund Balances -
Governmental Funds 30
r Reconciliation of the Change in Fund Balances of Governmental
Funds to the Statement of Activities 32
Statement of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual (Budgetary Basis) - General Fund 34
Statement of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual (Budgetary Basis) - Sewer Fund 38
r Statement of Net Assets - Proprietary Funds 39
Statement of Revenues, Expenditures, and Changes in Fund Net Assets -
Proprietary Funds 40
Statement of Cash Flows - Proprietary Funds 41
Statement of Fiduciary Net Assets - Fiduciary Funds 42
Statement of Changes in Fiduciary Net Assets - Fiduciary Funds 43
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Notes to the Basic Financial Statements 44
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FINANCIAL SECTION (Continued)
Page
Combining and Individual Nonmajor Fund Statements and Schedules:
Combining Balance Sheet - Nonmajor Governmental Funds 82
Combining Statement of Revenues, Expenditures, and Changes in Fund
Balances - Nonmajor Governmental Funds 86
Schedules of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual (Budgetary Basis):
Highway Fund 89
Solid Waste Fund 90
Cemetery Fund 91
Parking Meter Fund 92
Vehicle Disposal Fund 93
Bikeway Fund 94
Workforce Investment Act Fund 95 p
Golf Course Fund 96
Geothermal Relocation Revolving Fund 97
Beautification Fund 98
Hawaii County Housing Agency 99
Park Dedication Fund 100
Combining Balance Sheet - Agency Funds 102
Combining Statement of Changes in Assets and Liabilities - Agency Funds 104 r
Combining Statement of Net Assets - Private Purpose Trusts 108
Combining Statement of Changes in Net Assets - Private Purpose Trusts 109
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STATISTICAL SECTION
Table 1 - Government-Wide Revenues 111
Table 2 - Government-Wide Expenses by Function 112
Chart 1 - General Governmental Revenues and Expenditures Comparison 113
Table 3 - General Governmental Expenditures by Function 114
Chart 2 - General Governmental Expenditures by Function 115
Table 4 - General Governmental Revenues by Source 116
Chart 3 - General Governmental Revenues by Source 117
Table 4a - General Governmental Tax Revenues by Source 118
Table 5 - Property Tax Levies and Collections 119
Table 6 - Assessed and Estimated Actual Value of Taxable Real Property 120
Table 7 - Real Property Assessed Values by Classification and Tax Rates 121
Chart 4 - Assessed Value of Real Property 125
Table 8 - Principal Taxpayers 126
Table 9 - Computation of Legal Debt Margin 127
Table 10 - Ratio of Net Bonded Debt to Assessed Value and Net Bonded
Debt Per Capita 128
Table 1 I - Ratio of Annual Debt Service Expenditures for General Obligation -Y
Bonded Debt to Total General Governmental Expenditures 129
Table 12 - Demographic Statistics 130
Table 13 - Property Value, Construction and Bank Deposits 131
Table 14 - Miscellaneous Statistical Data 132
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i INTRODUCTORY SECTION
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c~ .4 William Takaba
Harry Kim
Mayor Director
Nancy E. Crawford
DeputyDirector
County of Hawaii
Finance Department
25 Aupuni street Room 118 • Hilo, Hawaii 96720
r (808) 961-8234 • Fu(808)961-8248
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March 22, 2006
The Honorable Mayor and Members of the Council
County of Hawaii
r 25 Aupuni Street
Hilo, Hawaii 96720
We transmit herewith the Comprehensive Annual Financial Report for the County of Hawaii,
State of Hawaii, for the fiscal year July 1, 2004 to June 30, 2005.
INK
This report was prepared by the County's Department of Finance. The accuracy of the financial
statements and the completeness and faimess of their presentation are the responsibility of the
County government. We believe the enclosed data are complete and accurate in all material
_ respects and are reported in a manner designed to present fairly the financial position and results
of operations of the various funds of the County. All disclosures necessary to convey the
maximum understanding of the County's financial activities have been included. Management's
_ discussion and analysis is also included to aid users of the financial statements.
This report presents the financial position of the County of Hawaii at June 30, 2005 and results
of operations for the fiscal year then ended. The report is divided into three sections:
The Introductory Section includes this transmittal letter, a Certificate of Achievement for
Excellence in Financial Reporting, the County of Hawai`i's organization chart and lists of
elected and principal officials.
The Financial Section contains management's discussion and analysis, the basic financial
i statements, related notes, the combining and individual fund budgetary financial statements,
and the independent auditors' report.
m • The Statistical Section includes selected financial and demographic information, generally
presented on a multi-year basis.
This report includes all funds of the County of Hawaii, including its component unit, the
Department of Water Supply, established by the County Charter as a semi-autonomous body of
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the County government. This component unit is included in the County's reporting entity
because of its financial relationship with the County.
The County provides the full range of municipal services. These include police and fire
protection; emergency medical care; public prosecutor; culture and recreation; sanitation; social
services; water; planning and zoning; construction and maintenance of highways, streets and
infrastructure; real property assessment and tax collection; and general administrative services.
However, the County does not provide such other traditional services as public education,
hospitals and courts. These services are provided by the State government.
The County of Hawaii consists of the island of Hawaii, 4,028 square miles in size. It is twice
as large as the combined area of all the other inhabited islands in the Hawaiian Archipelago.
Since there is no other local or municipal government within the County, there are no
overlapping taxes and no overlapping debt. The County of Hawaii has an elected mayor and a
nine-member council.
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Economic Condition and Outlook
The island of Hawaii, commonly known as the Big Island, is located 214 miles from Honolulu, .v
the state capital; 2,200 miles from the west coast of the continental United States; and 4,000 .A
miles from Japan. The city of Hilo on the east side of the island serves as the county seat as well
as the transportation and financial center for the Big Island. Hilo's infrastructure includes Hilo
Harbor, a deep-water port, and Hilo International Airport, which is capable of handling fully- ¦
loaded wide-bodied aircraft. Kailua-Kona and South Kohala, major tourist destination areas on r„
the west side of the Big Island, are served by flights from the United States mainland, Japan and
Canada through the Kona International Airport. Scheduled freight services are available
between the islands by air and sea transport. Communities on the island are linked by a network
of State and County maintained streets and highways.
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The Big Island is the most diversified of the neighbor island economies. As a result it is buffered Ir
when any one industry lags. Currently, the Big Island is enjoying its best economic times in
recent years. The west side growth is fueled by surging visitors numbers and record construction R'
activity, while the east side economic activity is led by the University of Hawaii at Hilo and Ir
other government construction projects. Dr. Leroy Laney, economics consultant to First
Hawaiian Bank, summarized the Big Island economy as "hitting on all cylinders". ¦
Continued increasing population has contributed to a growing labor force that numbered 82,300
in September 2005. The expanding economy has matched the growth in available work force
and unemployment continues to follow a downward trend, with an average 3.4 percent for 2005.
Total and per capita personal income have been steadily increasing.
Tourism - Tourism is the major industry on the island. In addition to the mild climate and
natural beauty it shares with other areas in the state, the County features the Hawaii Volcanoes
National Park. A popular attraction, the park is the most visited site in the state, handling over 2
million visitors annually.
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Total visitors to Hawaii increased slightly compared to the prior year, with 1,278,713 arrivals in
2004. A developing source for bringing tourists to the island of Hawaii is the cruise ship
industry. Over 300,000 cruise ship visitors are expected in 2005.
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Scientific Research and Development - Due largely to its unique geographic characteristics
which has attracted scientists in fields of astronomy, meteorology, volcanology, and
agriculture/aquaculture, Hawaii County has benefited economically by the significant
investments made in scientific research. The total astronomy related capital investment on
Mauna Kea exceeds $600 million and combined annual budgets are about $60 million. The
Hawaiian Volcano Observatory in Hawaii Volcanoes National Park and the National Energy
Laboratory of Hawaii Authority at Keahole, Kona are also major contributors to international
research and the local economy.
Agriculture - Forestry, nut and fruit orchards, and floral and vegetable farms have successfully
replaced lands where sugar once grew. Demand for Kona coffee is improving and macadamia
nut prices have been rising. Papaya remains the largest orchard crop. Agriculture makes a
substantial contribution to the County's economy and produces a variety of goods for export as
well as for local consumption.
Major Initiatives
For the Year
During the year, the County focused on public works, public safety, planning, and other issues
" affecting the quality of life in the County.
- Public Works - The $35 million Puainako Street Extension was completed and opened during
" the year. Construction of intersection curb cuts and facilities upgrades to meet Americans with
Disabilities Act (ADA) requirements is an on-going project. Construction began on the
Kawailani Street bridge and various road projects. Preliminary work on several West Hawaii
road projects continued.
- Public Safety - The Police Department has a dedicated Ice Task Force to work exclusively on
fighting crystal methamphetamine ("Ice") in our communities. The department also has
- expanded its efforts in the targeting of illicit drug trafficking with a Drug Interdiction Task Force
(DITF). This DITF is responsible for investigating drug smuggling through the airports and
.W other venues. These officers who are Federally deputized to investigate, identify, and apprehend
individuals and organizations involved in the smuggling of illicit drugs into the County of
r Hawai'i.
Planning - The revised General Plan was passed by the County Council during the fiscal year.
Real Property Taxes - During the fiscal year, the County Council approved significant changes
to the real property tax laws. The changes offer relief for homeowners faced with rapidly
increasing property values by limiting the increase in the market value of properties in the
homeowners class to not more than 3% per tax year; by shortening the dedication period for non-
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speculative residential use; and, by creating an additional exemption of 20% of a property's
assessed value for properties eligible for the home exemption. Additionally, major changes were
made to the agricultural sections of the tax code to clarify definitions, include homesite valuation
and modify the dedication program.
For the Future
Public Safety - Expansion and upgrade of Fire and Police facilities around the island are being
planned and site selection is in process.
Public Works - The County is working on developing a West Hawaii Civic Center. This
facility will improve access to government for the Kona residents. Additionally, the County is
working on several major road projects to enhance traffic in West Hawaii.
Environmental Management - As the Hilo landfill approaches full capacity, the County will be
looking at solid waste technology alternatives to divert waste from the Hilo landfill to enable the
County to close that facility. It is anticipated that a request for proposals will be issued in the
next year. The County is also working closely with the State Department of Health to extend the
life of the Hilo landfill. "
op
Health, Education and Welfare - The Office of Aging is very excited about its plans to
establish an Aging and Disability Resource Center, a one-stop shop for services for our seniors `
and disabled population. The federal government's Centers for Medicare and Medicaid Services
and Administration on Aging have approved the County Office of Aging's grant application for 1r
the establishment of Aging and Disability Resource Centers in the State of Hawai'i. The one-
stop shop on Hawai'i Island will provide a single, coordinated system of information and access
for all persons seeking long-term support. The estimated opening date is in early 2007.
Other Financial Information r
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Internal Control
II•
The management of the County is responsible for establishing and maintaining an internal
control structure designed to ensure that the assets of the County are protected from loss, theft or
misuse and to ensure that adequate accounting data are compiled to allow for preparation of ~r
financial statements in conformity with generally accepted accounting principles. The internal
control structure is designed to provide reasonable, but not absolute, assurance that these
objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control V
should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits
requires estimates and judgments by management.
Budgetary Control
The County maintains budgetary controls to ensure that legal provisions of the annual budget are
complied with and that expenditures do not exceed budgeted amounts.
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WE Activities of the general fund and special revenue funds are included in the annual appropriated
operating budget. Project-length financial plans are adopted for the capital projects fund.
Budgetary control is established at the department level.
Formal budgetary integration is employed as a management control device for the general fund,
special revenue funds, and the capital projects fund. Budgetary control for the debt service fund
is achieved through general obligation bond indenture provisions.
The basis of accounting used for the budgets of the general and special revenue funds differs
from generally accepted accounting principles. Intergovernmental revenues are recognized when
awarded by the granting agency, encumbrances and unexpended allotments are treated as
expenditures for purposes of determining legal compliance with the annual budget, all leases are
treated as operating leases, and accounts payable are not accrued.
The County also maintains an encumbrance accounting system as one technique of
accomplishing budgetary control. Encumbrances outstanding at fiscal year end are reported as
+r reservations of fund balances and do not constitute expenditures or liabilities because they will
be honored during the following year. As demonstrated by the statements and schedules
included in the financial section of this report, the County continues to meet its responsibility for
sound financial management.
Pension Plan
All full-time employees of the County participate in the Employees' Retirement System of the
State of Hawaii, a cost-sharing, multiple-employer defined benefit public employee retirement
„ system.
Cash Management
Cash temporarily idle during the year was invested in demand deposits, certificates of deposit
and repurchase agreements. The average yield on investment was 1.84%.
The County's policy is to minimize credit and market risks while maintaining a competitive yield
on its portfolio. Accordingly, with the exception of $320,147 held by bond paying agents and a
rental management agent, deposits were either insured by federal depository insurance,
collateralized, or secured by irrevocable letters of credit. All collateral on deposit was held for
safe keeping with a County-designated agent in the County's name.
+W Risk Management
The County maintains insurance coverage for privately owned police vehicles as well as for
M other purposes. The County is substantially self-insured for its vehicles as well as for all other
perils including workers' compensation and general liability.
^
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Other Information
Independent Audit
The Hawaii County Charter requires an annual audit by independent certified public w
accountants. KPMG LLP was selected by the County Council to perform the audit.
Employee Union Contracts
County employees are members of seven different bargaining units. All of the bargaining units
have contracts that run through June 30, 2007.
Certificate of Achievement
The Government Finance Officers Association of the United States and Canada (GFOA)
awarded a Certificate of Achievement for Excellence in Financial Reporting to the County of
Hawaii for its Comprehensive Annual Financial Report for the fiscal year ended June 30, 2004.
This was the seventeenth consecutive year that the government has achieved this prestigious
award. In order to be awarded a Certificate of Achievement, a government must publish an
easily readable and efficiently organized comprehensive annual financial report. This report
must satisfy both generally accepted accounting principles and applicable legal requirements.
s
A Certificate of Achievement is valid for a period of one year only. We believe our current
Comprehensive Annual Financial Report continues to meet the Certificate of Achievement
Program's requirements, and we are submitting it to the GFOA to determine its eligibility for
another certificate.
Acknowledgments
¦
The preparation of this report on a timely basis was made possible by the efficient and dedicated ¦
services of the entire staff of the Department of Finance and fiscal personnel in other
departments. I am grateful for their help in preparing this report. I also thank the Mayor and the 1P
members of the County Council for their interest and support in assuring the continuing sound Ir
financial condition of the County of Hawaii.
Ift
¦
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WILLIAM AKABA
Director of Finance
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Certificate of
Achievement
for Excellence
in Financial
Reporting
¦ Presented to
County of Hawaii
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2004
W
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
W standards in government accounting
and financial reporting.
W "~/,gyp yn
T ~ VAN President
ftno
Executive Director
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County of Hawaii
Organization Chart
County Electorate
County Council Mayor Prosecuting Attorney
County Clerk
Office of Manaeement:
Managing Director
Departments and agencies Agencies under Departments under
under direct supervision administrative supervision commissions and
of the Mayor and/or of the Mayor: administrative supervision
Managing Director: of the Mayor:
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Corporation Counsel Civil Defense Civil Service V
Finance Office of Aging Police ib
Planning Mass Transportation Liquor Control
Environmental Management Housing & Community Fire Ip
Research & Development Development Water Supply y
Public Works (semi-autonomous)
Parks & Recreation
Data Systems Yr
I¦
¦
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County of Hawaii
Elected Officials
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Administrative Officers (Term: 2004-2008)
Harry Kim Mayor
Jay T. Kimura Prosecuting Attorney
rr County Council (Term: 2004-2006)
Stacy K. Higa Chair
Virginia Isbell Vice Chair
James Y. Arakaki Member
Pete Hoffmann Member
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Fred C. Holschuh, M.D. Member
Donald Ikeda Member
Bob Jacobson Member
K. Angel Pilago Member
Gary Safarik Member
v.
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Principal Officials
June 30, 2005
pF
County Clerk Connie Kiriu
Legislative Auditor Vacant
Managing Director Dixie Kaetsu
Deputy Managing Director Peter L. Hendricks
Corporation Counsel Lincoln Ashida
Director of Finance William Takaba
Planning Director Christopher Yuen
Director of Personnel Michael R. Ben
Director of Research and Development Jane Testa
Chief of Police Lawrence K. Mahuna
Fire Chief Darryl Oliveira
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Director of Public Works Bruce McClure
Director of Environmental Management Barbara Bell 10
Director of Parks and Recreation Patricia Engelhard r
Manager, Department of Water Supply Milton Pavao ~r
Civil Defense Administrator Troy M. Kindred
Director of Liquor Control Janice A. Pakele
Transit Operations Administrator Thomas Brown
Executive on Aging Alan Parker
Administrator, Office of Housing and
Community Development Edwin S. Taira re
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FINANCIAL SECTION
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KPMG LLP
PO Box 4150
Honolulu, HI 96812-4150
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Independent Auditors' Report
To the Chair and Members of the
County Council
r County of Hawaii
State of Hawaii:
We have audited the accompanying financial statements of the governmental activities, the business-type
r activities, the discretely presented component unit, each major fund, and the aggregate remaining fund
information of the County of Hawaii, State of Hawaii (the County) as of and for the year ended June 30,
2005, which collectively comprise the County's basic financial statements as listed in the table of contents.
r These financial statements are the responsibility of the County's management. Our responsibility is to
express opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material
r misstatement. An audit includes consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the County's internal control over financial reporting. Accordingly, we
r express no such opinion. An audit also includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the accounting principles used and the
significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, the discretely
presented component unit, each major fund, and the aggregate remaining fund information of the County
,A as of June 30, 2005, and the respective changes in financial position and, where applicable, cash flows,
thereof, and the respective budgetary comparisons for the general fund and the sewer fund for the year
then ended in conformity with U.S. generally accepted accounting principles.
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KPMG LLP, a U.S. limited liability partnership, is the U.S.
member firm of KPMG Interndidd , a Swiss cooperative.
In accordance with Government Auditing Standards, we have also issued a report dated March 22, 2006 on rr
our consideration of the County's internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. w
The purpose of that report is to describe the scope of our testing of internal control over financial reporting
and compliance and the results of that testing, and not to provide an opinion on the internal control over
financial reporting or on compliance. That report is an integral part of an audit performed in accordance
with Government Auditing Standards and should be considered in assessing the results of our audit.
The management's discussion and analysis on pages 13 through 22 is not a required part of the basic
financial statements but is supplementary information required by U.S. generally accepted accounting
principles. We have applied certain limited procedures, which consisted principally of inquiries of
management regarding the methods of measurement and presentation of the required supplementary
.r
information. However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the County's basic financial statements. The introductory section, the combining and individual
nonmajor fund financial statements, and the statistical section are presented for purposes of additional r
analysis and are not a required part of the basic financial statements. The combining and individual
nonmajor fund financial statements have been subjected to the auditing procedures applied in the audit of
basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the r
basic financial statements taken as a whole. The introductory section and the statistical section have not
been subjected to the auditing procedures applied in the audit of the basic financial statements, and °i
accordingly, we express no opinion on them.
MP
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LL-P r
Honolulu, Hawaii
March 22, 2006 w
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1.. MANAGEMENT'S DISCUSSION AND ANALYSIS
This section of the County of Hawai`i's (the County) Comprehensive Annual Financial Report
presents a narrative overview and analysis of the financial activities of the County for the fiscal
year ended June 30, 2005. We encourage readers to consider the information presented here in
conjunction with additional information that we have furnished in our letter of transmittal.
i FINANCIAL HIGHLIGHTS
• The assets of the County exceeded its liabilities at the end of the fiscal year by $396.2 million
# (net assets).
• The government's total net assets increased by $31.5 million during the fiscal year.
1/ • As of the close of the current fiscal year, the County's governmental funds reported combined
ending fund balances of $174.1 million, an increase of $40.0 million from the prior year.
Approximately 57 percent of this total amount, $99.1 million, is available for spending at the
do government's discretion (unreserved fund balance).
_ • At the end of the current fiscal year, unreserved fund balance for the general fund was $15.7
million, or 10 percent of total general fund expenditures.
Ir
• The County's total long-term liabilities increased by $32.4 million (13 percent) during the
current fiscal year. The key factors in this increase were the net new debt ($35.4 million) and
the net increase in claims and judgments ($6.6 million) offset by normal principal reductions.
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OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the County's basic financial
_ statements. The County's basic financial statements comprise three components: (1)
Government-wide financial statements, (2) Fund financial statements, and (3) Notes to the basic
financial statements. This report also contains other supplementary information in addition to
the basic financial statements themselves.
r Government-wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview
of the County's finances, in a manner similar to a private-sector business.
The statement of net assets presents information on all of the County's assets and liabilities,
with the difference between the two reported as net assets. Over time, increases or decreases in
net assets may serve as a useful indicator of whether or not the financial position of the County is
improving or deteriorating.
The statement of activities presents information showing how the County's net assets changed
during the most recent fiscal year. All changes in net assets are reported as soon as the
underlying event giving rise to the change occurs, regardless of the timing of related cash flows.
Thus, revenues and expenses are reported in this statement for some items that will only result in
Wr cash flows in future fiscal periods, such as revenues pertaining to uncollected taxes and expenses
pertaining to earned but unused vacation and sick leave.
Both of the government-wide financial statements distinguish functions of the County that are
principally supported by taxes and intergovernmental revenues (governmental activities) from
other functions that are intended to recover all or a significant portion of their costs through user
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fees and charges (business-type activities). The governmental activities of the County include
public safety, highways and streets, health, education and welfare, culture and recreation,
sanitation and general government. The business-type activities of the County include rental
housing for senior citizens and families. The government-wide financial statements include not only the County itself (known as the
primary government), but also the Department of Water Supply, a legally separate entity that the .F
County is financially accountable for. Financial information for this component unit is reported
separately from the financial information presented for the primary government itself
Fund Financial Statements
The fund financial statements are designed to report information about groupings of related
accounts which are used to maintain control over resources that have been segregated for specific -
activities or objectives. The County, like other state and local governments, uses fund accounting
to ensure and demonstrate compliance with finance-related legal requirements. All of the funds
of the County can be divided into the following three categories: governmental funds,
proprietary funds, and fiduciary funds.
Governmental funds. Governmental funds are used to account for essentially the same
functions reported as governmental activities in the government-wide financial statements - rx
i.e., most of the County's basic services are reported in governmental funds. These
statements, however, focus on (1) how cash and other financial assets can readily be
converted to available resources and (2) the balances left at year-end that are available for
spending. Such information may be useful in determining what financial resources are
available in the near future to finance the County's programs. Il~r
Because the focus of governmental funds is narrower than that of the government-wide rr
financial statements, it is useful to compare the information presented for governmental
funds with similar information presented for governmental activities in the government-wide ¦
financial statements. By doing so, readers may better understand the long-term impact of the ib
government's near-term financing decisions. Both the governmental fund balance sheet and
the governmental fund statement of revenues, expenditures, and changes in fund balances Op
provide a reconciliation to facilitate this comparison between governmental funds and r
governmental activities.
I!
The County maintains several individual governmental funds organized according to their rr
type (general, special revenue, debt service, and capital projects). Information is presented
separately in the governmental fund balance sheet and in the governmental fund statement of pip
revenues, expenditures, and changes in fund balances for the general fund, sewer fund and
capital projects fund, which are considered to be major funds. Data from the remaining to
governmental funds are combined into a single, aggregated presentation. Individual fund
data for each of the non-major governmental fimds is provided in the form of combining
statements elsewhere in this report.
The County adopts an annual appropriated budget for its general fund and special revenue
funds. A budgetary comparison statement has been provided for these funds to demonstrate
compliance with this budget. The budgetary comparison statement for the general fund and
sewer fund is located in the basic financial statements, whereas the budgetary comparison
statements for the nonmajor special revenue funds are presented elsewhere in this report.
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Proprietary funds. Proprietary funds are generally used to account for services for which
the County charges outside customers. Proprietary funds provide the same type of
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a information as shown in the government-wide financial statements, only in more detail. The
County maintains only one type of proprietary funds, enterprise funds. Enterprise funds
are used to report the same functions presented as business-type activities in the government-
W wide financial statements. The County uses enterprise funds to account for the operations of
the Kulaimano Elderly Housing Project and the Ouli Ekahi Affordable Housing Project.
m Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of
parties outside the County. The Geothermal Asset Fund, Shippers' Wharf Trust Fund and
the agency funds are reported under the fiduciary funds. Since the resources of these funds
are not available to support the County's own programs, they are not reflected in the
government-wide financial statements. The accounting used for fiduciary funds is much like
that used for proprietary funds.
_ Notes to the Basic Financial Statements
The notes to the basic financial statements provide additional information that is essential to a full
understanding of the data provided in the government-wide and fund financial statements.
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Other Supplementary Information
In addition to the basic financial statements and accompanying notes, this report also presents
supplementary information, including the combining statements referred to earlier in connection
with nonmajor governmental funds and budget comparison statements for the nonmajor special
revenue funds. This supplementary information is presented immediately following the notes to
the basic financial statements.
' GOVERNMENT-WIDE FINANCIAL ANALYSIS
Net Assets
June 30, 2005
WIN Primary Government
Governmental Activities Business-type Activities Total
2005 20014 2005 2004 2005 2004
Assets:
Current and other assets S 202,715,246 $ 155,434,993 $ 1,339,425 $ 1,281,768 S 204,054,671 $ 156,716,761
Capital assets 497,287,738 475,741 526 1,367,085 1,390,359 498,654,823 477,131,885
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Total assets $ 700,002,984 S 631,176,519 $2,706,510 $2,672,127 S 702 709494 S 633,848,646
I/
Liabilities:
Long-term liabilities
outstanding 286,831,687 254,407,321 1,041,285 1,065,417 287,872,972 255,472,738
f1 Other liabilities 18,300,401 13,384,344 306,296 227,282 18,606,697 13,611,626
Total liabilities $ 305,132,088 $ 267,791,665 S 1,347,581 $ 1,292,699 S 306,479,669 $ 269,084,364
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Net assets:
Invested in capital assets, net
of related debt 364,662,377 336,435,768 325,800 324,942 364,988,177 336,760,710
'r Restricted 41,950,262 37,333,730 182,167 180,782 42,132,429 37,514,512
r Unrestricted (deficit) (11,741,743) (10,384,644) 850,962 873,704 (10,890,781) (9,510,940)
Total net assets $ 394,870,896 S 363,384,854 S 1,358,929 $ 1,379,428 S 396,229,825 $ 364,764,282
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4
Analysis of Net Assets
As noted earlier, net assets may serve over time as a useful indicator of a government's financial
position. In the case of the County, assets exceeded liabilities by $396,229,825 at the close of the
most recent fiscal year.
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By far the largest portion of the County's net assets (92 percent) reflects its investment in capital
assets (e.g., land, buildings, infrastructure, and equipment), less any related debt used to acquire
those assets that is still outstanding. The County uses these capital assets to provide services to
citizens; consequently, these assets are not available for future spending. Although the County's
investment in its capital assets is reported net of related debt, it should be noted that the resources
needed to repay this debt must be provided from other sources, since the capital assets themselves so
cannot be used to liquidate these liabilities.
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An additional portion of the County's net assets (I 1 percent) represents resources that are subject
to external restrictions on how they may be used. A
At the end of the current fiscal year, the County is able to report positive balances in two of three
categories of net assets, both for the government as a whole, as well as for its separate
governmental and business-type activities. The negative balance in unrestricted net assets of r,
$10,890,781 results primarily from the additional long-term liabilities placed on the books to be
in compliance with GASB Statement No. 34. ¦r
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The government's net assets increased by $31,465,543 during the current fiscal year.
Approximately $9.9 million of the increase is due to increases in real property tax valuations and
collections. The remaining increase represents the degree to which increases in ongoing revenues
have outstripped similar increases in ongoing expenses. r
The government's current and other assets increased by $47,337,910 during the current fiscal O'
year. Approximately $42.2 million of the increase is due to an increase in cash and cash
equivalents.
The government's capital assets increased by $21,522,938 due to the large amount of capital r
improvement projects done by the County during the current fiscal year. See further discussion
of the increase in capital assets on page 21. A
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The government's long-term liabilities outstanding increased by $32,400,234 due to the new
general obligation bond issues during the current year. See further discussion of the increase in rw
long-term liabilities outstanding on page 22. r
The government's other liabilities increased by $4,995,071 due to an increase in interest payable
($0.5 million) and the increase in unearned revenue relating to intergovernmental grants ($2.3
million).
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art Changes in Net Assets
For the Fiscal Year Ended June 30, 2005
Primary Government
,r Governmental Activities Business-type Activities Total
205 2004 2005 2004 2005 2004
Revenues:
Program revenues:
Charges for services $ 35,377,514 S 29,188,014 $ 314,971 $ 303,047 S 35,692,485 S 29,491,061
Operating grams and contributions 36,370,993 33,327,191 135,829 143,769 36,506,822 33,470,960
Capital grants and contributions 26,221,627 9,668,981 - 26,221,627 9,668,981
,y General revenues:
Property taxes 129,775,410 119,864,237 - - 129,775,410 119,864,237
Other taxes 19,948,903 18,257,939 - - 19,948,903 18,257,939
Grants and contributions, unrestricted 16,734,850 15,251,443 - - 16,734,850 15,251,443
Investment earnings 2,957,188 1,729,531 13,580 8,006 2,970,768 1,737,537
Miscellaneous - 3,657,794 4,825,259 - - 3,657,794 4,825,259
Total revenues 271,044,279 232,112,595 464,380 454,822 271,508,659 232,567,417
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Expenses:
~ General government 51,262,329 40,085,357 - - 5162,329 40,085,357
Public safety 94,422,057 90,434,696 - - 94,422,057 90,434,696
M Highways and streets 20,857,341 17,563,608 - - 20,857,341 17,563,608
Health, education and welfare 21,503,635 23,041,963 484,879 466,143 21,988,514 23,508,106
ova Culture and recreation 16,124,457 15,979,854 - - 16,124,457 15,979,854
Sanitation 26,669,660 20,084,654 - - 26,669,660 20,084,654
as Interest on long-term debt 8,718,758 9,553,966 - 8,718,758 9,553,966
Total expenses 239,558,237 216,744,098 484,879 466,143 240,043,116 217,210,241
r Increase (decrease) in net assets 31,486,042 15,368,497 (20,499) (11,321) 31,465,543 15,357,176
Net assets at beginning of year 363,384,854 348,016,357 1,379,428 1,390,749 364,764,282 349,407,106
Net assets a end of year S 394,870,896 $ 363,384,854 $ 1,358,929 $ 1,379,428 S 396,229,825 S 364,764,282
Analysis of Changes in Net Assets
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Governmental activities. Governmental activities increased the County's net assets by
$31,486,042 or primarily all of the total growth in net assets of the County.
The County's property taxes increased by $9,911,173 (eight percent) during the year. Most of
this increase is attributable to the increase in assessed values. Capital grants and contributions
increased by $16,552,646 (171 percent) due to an increase in donated roads received during the
"a fiscal year ($5.5 million) with the remaining increase being from increased federal funding
do provided for two bridges and various highway projects.
„aa Total expenses increased by $22,814,139. This increase was primarily due to an increase of
$11,176,972 in expenditures related to general government. Part of the increase is related in an
increase in claims and judgments ($6.6 million) while the remainder of the increase is the result
of negotiated pay raises and related benefits. Much of the increase in all areas is due to the
ill increased cost of employee benefits, particularly employee retirement and health insurance costs.
For the most part, other fluctuations in expenses closely paralleled inflation and growth in
,a demand for services.
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Expenses and Program Revenues - Governmental Activities .n
Year Ended June 30, 2005 w
100,000,000
sw.
90,000,000
IMP
¦ Expenses
80,000,000
OProg2m feVenUEa
w
70,000,000
r:
60,000,000
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50,000,000
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40,000,000
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30,000,000
20,000,000
so
10,000,000
General Public safety Highways and Health, Culture and Sanitagon Interest on
govemrnerd streets education and recreation long-term debt
"Nam
Revenues by Source - Governmental Activities
Year Ended June 30, 2005
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Investment earnings
1% Miscellaneous
1% Mile
Grants and contributions not
restricted to specific
Pro9rarns Charges for services
6% 13%
Ogler taxes
7%
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Operating grants and
contributions w
13%
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Capital grants and
contributions
10%
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Property taxes
49% ar
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rr The charts above illustrate the County's governmental expenses and revenues by function, and its
revenues by source. As shown, public safety is the largest function in expense (39 percent),
followed by general government (21 percent) and sanitation (11 percent). General revenues such
as property and other taxes are not shown by program, but are effectively used to support
program activities countywide. For governmental activities overall, without regard to programs,
property taxes are the largest single source of funds (49 percent), followed by operating grants
and contributions (13 percent) and charges for services (13 percent).
Business-type activities. Business-type activities decreased the County's net assets by $20,499.
Expenses for health, education and welfare account for all of the $484,879 of expenses. Charges
M for services were $314,971, operating grants and contributions were $135,829 and investment
earnings were $13,580.
a FINANCIAL ANALYSIS OF THE COUNTY'S FUNDS
As noted earlier, the County uses fund accounting to ensure and demonstrate compliance with
r finance-related legal requirements.
Governmental funds. The focus of the County's governmental funds is to provide information
r on near-term inflows, outflows, and balances of spendable resources. Such information is useful
in assessing the County's financing requirements. In particular, unreserved fund balance may
serve as a useful measure of a government's net resources available for spending at the end of the
fiscal year.
As of the end of the current fiscal year, the County's governmental funds reported combined
ending fund balances of $174,140,118, an increase of $39,980,125 in comparison with prior year.
Approximately 57 percent of this total amount ($99,105,482) constitutes unreserved fund balance,
which is available for spending at the government's discretion. The remainder of the fund
balance is reserved to indicate that it is not available for new spending because it has already been
W committed 1) to liquidate contracts and purchase orders for last fiscal year ($31,171,171), 2) to
pay debt service ($15,041,758), or 3) for a variety of other restricted purposes ($28,821,707).
The general fund is the chief operating fund of the County. At the end of the current fiscal year,
unreserved fund balance of the general fund was $15,664,272, while total fund balance reached
$23,978,072. As a measure of the general fund's liquidity, it may be useful to compare both
unreserved fund balance and total fund balance to total fund expenditures. Unreserved fund
balance represents 10 percent of total general fund expenditures, while total fund balance
represents 15 percent of that same amount.
The fund balance of the County's general fund increased by $4,254,864 during the current fiscal
year. Key factors in this increase are as follows:
it • An increase of $9,219,043 (eight percent) in property tax revenue due to increasing property
values and collection efforts on past due taxes.
• An increase of $6,390,001 (17 percent) in intergovernmental revenue due to an increase in
transient accommodations tax proceeds ($1.5 million) and emergency medical services
proceeds ($1.3 million) from the state and increased federal grant revenue related to transit
and homeland security, as well as many other programs.
r
_19-
• An increase of $2,751,437 (30 percent) in pension and retirement system contributions and an
increase of $1,744,787 (13 percent) in employees' health insurance. Both benefit programs
continued their upward trend.
• An increase of $6,626,366 (10 percent) in public safety expenditures due primarily to
increases in expenditures for police ($2.1 million), fire ($3.0 million) and civil defense ($1.1
million). Increases were noted in many of the grant-funded programs as well as in salaries
and wages due to negotiated pay increases.
• An increase of $3,079,977 (101 percent) in capital outlay due primarily to CDBG and HOME
grant programs for capital improvements ($2.4 million).
The debt service funds, included in other governmental fiords, have combined total fund balances
of $15,041,758, all of which is reserved for the payment of debt service. The net increase in the
combined fund balances during the current year in the debt service funds was $1,372,228 (10
percent).
Proprietaryfunds. The County's proprietary funds provide the same type of information found
in the government-wide financial statements, but in more detail.
Unrestricted net assets of the Kulaimano Elderly Housing Project (Kulaimano) at the end of the
year amounted to $872,706, and those for Ouli Ekahi Affordable Housing Project (Ouli Ekahi)
amounted to ($21,744). The net assets for Kulaimano decreased by $8,179 and the net assets for s
Ouli Ekahi decreased by $12,320. Other factors concerning the finances of these two funds have
already been addressed in the discussion of the County's business-type activities.
GENERAL FUND BUDGETARY HIGHLIGHTS pr
W
Differences between the original budget and the final amended budget were primarily the result
of a $11,738,569 increase in appropriations and a $6,465,322 increase in transfers out and can be op
briefly summarized as follows:
• $6,552,905 in increases due to the appropriation of higher than expected fund balance to be
used in the year's operations. r
• $11,421,635 in increases due to the appropriations for capital and operating grants and
contributions.
r
Differences between the final budget and the actual (budgetary basis) resulted in $1,605,762 more
revenues than expected and $10,995,917 less expenditures than appropriated. This is primarily
due to the following factors:
• $1,282,072 favorable variance in taxes and assessments revenue resulting from collections
being more than expected.
• $1,723,131 favorable variance in interest and penalties revenue resulting from higher
earnings on cash and investments than expected.
• $1,765,558 unfavorable variance in intergovernmental revenue, including $1,468,972 in
federal grants and $296,586 in state grants.
• $2,734,266 favorable variance in general government expenditures caused by an overall
effort by each department to hold the line on expenditures.
-20-
n•
• $3,458,267 favorable variance in public safety expenditures primarily created by vacant
positions in the police and fire departments as well as an increased effort to control costs
during the budget year.
• $3,156,906 favorable variance in miscellaneous expenditures, due primarily to lower than
expected costs relating to such accounts as claims and judgments.
+r CAPITAL ASSET AND DEBT ADMINISTRATION
Capital assets. The County's investment in capital assets for its governmental and business-type
activities as of June 30, 2005 amounts to $498,654,823 (net of accumulated depreciation). This
investment in capital assets includes land, buildings and improvements, equipment, and
do infrastructure assets, which consists of primarily roads and bridges. The total increase in the
County's investment in capital assets for the current fiscal year was five percent.
an
Major capital asset events during the current fiscal year included the following:
ar
• Construction continued on the Puainako Street extension; construction in progress as of the
end of the current fiscal year had reached $34,661,860.
• Construction continued on the Kamuela Senior Housing Project; construction in progress as
of the end of the current fiscal year had reached $3,654,551.
• Construction began on Hoolulu Accessibility Improvements; construction in progress as of
the end of the current fiscal year had reached $2,474,132.
w • Construction began on Kawailani Street Bridge; construction in progress as of the end of the
current fiscal year had reached $6,890,727.
• Construction began on Kinoole Street Corridor Improvements; construction in progress as of
the end of the current fiscal year had reached $1,155,157.
• Construction began on Kilauea Avenue Corridor Improvements; construction in progress as
of the end of the current fiscal year had reached $1,132,611.
• Construction began on Scotty White Bridge; construction in progress as of the end of the
current fiscal year had reached $1,281,796.
r
Capital Assets
(net of depreciation)
Primary Government
Governmental Activities Business-type Activities Total
2005 2004 2005 2004 2005 2004
nr Land $ 19,560,739 $ 19,610,464 S 753,877 $ 753,877 S 20,314,616 $ 20,364,341
InOastructure assets 156,145,061 150,650,636 - - 156,145,061 150,650,636
Ground and site improvements - 93,861 97,616 93,861 97,616
Buildings and improvements 216,853,443 218,742,753 502,034 526,649 217,355,477 219,269,402
Equipment 28,603,325 26,535,175 17,313 12,217 28,620,638 26,547,392
Constmction work in progress 76,125,170 60,202,498 76,125,170 60,202,498
Total $ 497,287,738 S 475,741,526 $ 1,367,085 $ 1,390,359 $ 498,654,823 S 477,131,885
Additional information on the County's capital assets can be found in note 6 to the basic financial
statements.
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Long-term debt. At the end of the current fiscal year, the County had total bonded debt
outstanding of $182,158,285. This entire amount was comprised of general obligation bonds
which are backed by the full faith and credit of the County.
The County's total bond debt increased by $24,249,985 (15 percent) during the current fiscal
year. The key factors in this increase were new debt ($33.9 million) and normal principal w
reduction.
The County maintains an "A" rating from Standard & Poor's and an "A I" rating from Moody's
for general obligation debt.
State statutes limit the amount of general obligation debt the County may issue to 15 percent of
the total assessed value of all county real property as established for tax purposes on the last tax
assessment rolls. The current debt limitation for the County is $2,180,093,969, which is in excess
of the County's outstanding general obligation debt. Currently the County's outstanding debt
represents nine percent of our debt limitation.
Additional information on the County's long-term debt can be found in note 10 to the basic
financial statements. re
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES iw
• The unemployment rate for the County is 3.3 percent, which is down from a rate of 5.1
percent a year ago.
• The number of visitors to the County for the most recent calendar year was 1,278,713, up six
percent from the previous year's count of 1,208,022.
IN
Both of these factors were considered in preparing the County's budget for the 2006 fiscal year. r"
At the end of the current fiscal year, unreserved fund balance in the general fund was •
$15,664,272. The County has appropriated $8,779,460 of this amount for spending in the 2006
fiscal year budget.
s
REQUESTS FOR INFORMATION y,
This financial report is designed to provide a general overview of the County's finances for all ow
those with an interest in the government's finances. Questions concerning any of the information
provided in this report or requests for additional information should be addressed to the Director
of Finance, County of Hawaii, 25 Aupuni Street, Room 118, Hilo, Hawaii 96720. W
r
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a BASIC FINANCIAL STATEMENTS
r
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COUNTY OF HAWAII
Statement of Net Assets
June 30, 2005
Primary Government w
Governmental Business-type Component
Activities Activities Total Unit
Assets
Current Assets:
Cash and cash equivalents (notes 3 and 14) $ 151,029,229 $ 368,857 $ 151,398,086 $ 17,930,436
Restricted cash and cash equivalents (note 3) 320,147 29,540 349,687 -
Investments (notes 3 and 14) 14,745,079 700,000 15,445,079 9,450,094
Receivables, net (note 4) 26,746,300 48,388 26,794,688 3,852,764
Internal balances (note 5) 5,400 (5,400) - -
Inventories 2,139,447 - 2,139,447 1,093,462
Prepaid expenses - 1,287 1,287 752,922
Other 1,088,623 - 1,088,623 -
Total current assets 196,074,225 1,142,672 197,216,897 33,079,678
Investments (note 3) 2,753,528 - 2,753,528 -
Restricted cash and cash equivalents (note 3) - 196,753 196,753 -
Restricted investments (notes 3 and 14) - - 11,914,168
Loans receivable, excluding current portion - - 682,979
Receivable from improvement district (note 4) 3,887,493 3,887,493 -
Deferred charges - - 7,106,983
Capital assets (notes 6, 8 and 14):
Utility plant in service, net - - 145,737,496
Infrastructure assets, net 156,145,061 - 156,145,061 - ¦r
Ground and site improvements, net - 93,861 93,861 -
Buildings and improvements, net 216,853,443 502,034 217,355,477 -
Equipment, net 28,603,325 17,313 28,620,638 - ¦
Construction work in progress 76,125,170 - 76,125,170 40,640,738
Land 19,560,739 753,877 20,314,616 787,657
¦r
Total capital assets, net 497,287,738 1,367,085 498,654,823 187,165,891
rr
Total noncurrent assets 503,928,759 1,563,838 505,492,597 206,870,021
Total assets 700,002,984 2,706,510 702,709,494 239,949,699
W
(Continued)
i
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-24-
COUNTY OF HAWAII
u Statement of Net Assets
- June 30, 2005
(Concluded)
Primary Government
Governmental Business-type Component
i Activities Activities Total Unit
Liabilities
Current Liabilities:
Accounts payable and accrued liabilities $ 4,775,165 $ 302,866 $ 5,078,031 $ 2,456,701
Unearned revenue (note 7) 7,186,683 3,430 7,190,113 -
'r Interest due on long-term debt 3,209,881 - 3,209,881 283,375
Customers' deposits for service connections - - 701,170
Other 3,128,672 - 3,128,672
i
Total current liabilities 18,300,401 306,296 18,606,697 3,441,246
Noncurrent liabilities:
Due within one year:
Bonds and loans payable, net
(notes 10 and 14) 12,882,126 21,899 12,904,025 1,091,000
Compensated absences (note 10) 5,783,235 - 5,783,235 1,333,831
Claims and judgments (notes 10, 12 and 14) 5,270,695 - 5,270,695 61,000
Capital leases (notes 8 and 10) 1,118,589 - 1,118,589 -
Landfill costs payable (notes 9 and 10) 149,610 - 149,610 -
Due in more than one year:
Bonds and loans payable, net
(notes 10 and 14) 199,289,089 1,019,386 200,308,475 16,472,062
Compensated absences (note 10) 16,790,020 - 16,790,020 807,865
Claims and judgments (notes 10, 12 and 14) 21,331,594 - 21,331,594 211,000
Capital leases (notes 8 and 10) 2,524,339 - 2,524,339 -
Landfill costs payable (notes 9 and 10) 21,692,390 - 21,692,390 -
Customers' deposits payable from
restricted assets - - 11,914,168
Total noncurrent liabilities 286,831,687 1,041,285 287,872,972 31,890,926
Total liabilities 305,132,088 1,347,581 306,479,669 35,332,172
T Net Assets (Deficit)
Invested in capital assets, net of
related debt 364,662,377 325,800 364,988,177 170,201,794
Restricted for:
Capital projects 26,908,504 - 26,908,504 -
Debt service 15,041,758 182,167 15,223,925 -
Unrestricted (11,741,743) 850,962 (10,890,781) 34,415,733
Total net assets $ 394,870,896 $ 1,358,929 $ 396,229,825 $ 204,617,527
u. See accompanying notes to the basic financial statements.
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W
COUNTY OF HAWAII
Statement of Activities
For the Fiscal Year Ended June 30, 2005 "
Program Revenues
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions
Primary government:
Governmental activities:
General government $ 51,262,329 $ 3,227,420 $ 2,404,814 $ 5,760,067
Public safety 94,422,057 6,262,259 16,668,122 187,971
Highways and streets 20,857,341 7,629,139 248,433 20,265,443
Health, education and welfare 21,503,635 1,272,091 16,055,203 -
Culture and recreation 16,124,457 1,521,127 311,311 8,146
Sanitation 26,669,660 15,465,478 683,110 -
Interest on long-term debt 8,718,758 - - - r
Total governmental activities 239,558,237 35,377,514 36,370,993 26,221,627 Iw
rs
Business-type activities:
Health, education and welfare 484,879 314,971 135,829 -
Total primary government $ 240,043,116 $ 35,692,485 $ 36,506,822 $ 26,221,627
Component unit:
Water (note 14) $ 35,848,662 $ 31,945,689 $ - $ 11,612,284
op
General revenues:
W6
Taxes:
Property taxes, levied for general purposes 11r
Public service company taxes y,
Franchise taxes
Fueltaxes A
Grants and contributions not restricted to specific programs to
Investment earnings
Miscellaneous er
Total general revenues
Change in net assets
Net assets, beginning of year
Net assets, end of year
r
See accompanying notes to the basic financial statements.
-26-
r
Net (Expense) Revenue and Changes in Net Assets
Primary Government
0 Governmental Business-type Component
Activities Activities Total Unit
rr
(39,870,028) $ - $ (39,870,028) $ -
(71,303,705) - (71,303,705) -
7,285,674 - 7,285,674 -
(4,176,341) - (4,176,341) -
(14,283,873) - (14,283,873) -
(10,521,072) - (10,521,072) -
r (8,718,758) - (8,718,758)
(141,588,103) - (141,588,103)
r
(34,079) (34,079)
(141,588,103) (34,079) (141,622,182) -
~r - - - 7,709,311
129,775,410 - 129,775,410 -
61351,273 - 6,351,273 -
6,016,890 - 6,016,890 -
7,580,740 - 7,580,740 -
s 16,734,850 - 16,734,850 -
2,957,188 13,580 2,970,768 766,318
3,657,794 - 3,657,794
173,074,145 13,580 173,087,725 766,318
31,486,042 (20,499) 31,465,543 8,475,629
r9 363,384,854 1,379,428 364,764,282 196,141,898
$ 394,870,896 $ 1,358,929 $396,229,825 $204,617,527
all
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COUNTY OF HAWAII
Governmental Funds M
Balance Sheet
June 30, 2005
Other Total
Sewer Capital Governmental Governmental
General Fund Projects Funds Funds "
Assets
Cash and cash equivalents (note 3) $ 17,061,244 $ 8,333,847 $ 90,541,902 $ 35,092,236 $151,029,229
Investments (note 3) 4,309,169 - 10,000,000 3,189,438 17,498,607
Receivables, net (note 4) 6,490,197 2,177,474 829,000 929,444 10,426,115
Due from other governmental
funds (note 5) 1,304,107 75,800 196,984 134,131 1,711,022
Due from other nongovernmental
funds (note 5) - 5,400 - - 5,400
Receivables from other
governments (note 4) 6,238,297 - 9,658,347 423,541 16,320,185 w
Restricted cash with escrow (note 3) 320,147 - - - 320,147
Inventories 2,139,447 - - 2,139,447 M,
Other 447,077 - 641,546 1,088,623
r
Total assets $ 38,309,685 10,592,521 $ 111,226,233 40,410,336 $200,538,775
Liabilities and Fund Balances R"
Liabilities: r
Accounts payable $ 1,648,426 $ 618,503 $ 1,148,176 $ 1,360,060 $ 4,775,165
Due to other governmental
funds (note 5) 186,866 165,761 21,583 1,336,812 1,711,022
Unearned revenue (note 7) 9,795,726 2,177,474 3,846,681 963,916 16,783,797
Other 2,700,595 47,443 - 380,635 3,128,673
Total liabilities 14,331,613 3,009.181 5,016,440 4,041.423 26.398.657
Fund balances: M
Reserved for:
Encumbrances 5,378,176 2,064,210 15,408,227 8,320,558 31,171,171
Inventories 2,139,447 - - - 2,139,447
Taxicab investigations 59,300 - - 59,300
Liquor control 736,877 - - - 736,877
Unexpended allotments - - 25,886,083 - 25,886,083
Debt service - - - 15,041,758 15,041,758
Unreserved, reported in:
General fund 15,664,272 - - 15,664,272
Special revenue funds - 5,519,130 - 13,006,597 18,525,727
Capital projects funds - - 64,915,483 - 64,915,483 w
Total fund balances 23,978,072 7,583,340 106,209,793 36,368,913 174,140,118 m
Total liabilities and fund balances $ 38,309,685 $10,592.521 $ 111,226,233 40,410,336 $200,538,775
ar
See accompanying notes to the basic fmancial statements.
-28-
COUNTY OF HAWAII
'W Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets
June 30, 2005
r
Total fund balances - governmental funds $ 174,140,118
in
Amounts reported for governmental activities in the statement of
AL net assets are different because:
Capital assets used in governmental activities are not financial
r resources and therefore are not reported in the funds. These assets
consist of
r Land 19,560,739
_ Infrastructure assets, net 156,145,061
Buildings and improvements, net 216,853,443
Equipment, net 28,603,325
Construction work in progress 76,125,170
Total capital assets 497,287,738
s
Some of the County's revenues will be collected after year-end but are
not available soon enough to pay for the current period's expenditures
and therefore are deferred (unearned) in the funds. 9,597,115
r Some liabilities are not due and payable in the current period and
therefore are not reported in the funds. Those liabilities consist of
s
Bonds and loans payable, net (208,283,722)
Accrued interest on bonds (3,209,881)
w
Capital leases (3,642,928)
Compensated absences (22,573,255)
Claims and judgments (26,602,289)
Landfill closure/postclosure costs (21,842,000)
Total long-term liabilities (286,154,075)
r
Net assets of governmental activities $ 394,870,896
' See accompanying notes to the basic financial statements.
a/
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rl
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COUNTY OF HAWAII r
Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Fiscal Year Ended June 30, 2005
!
Other Total
Sewer Capital Governmental Governmental
General Fund Projects Funds Funds
Revenues
Property tax $131,087,099 $ $ $ $131,087,099
Public service company tax 61351,273 6,351,273 !
Fuel tax - 7,580,740 7,580,740
Public utility franchise tax - - 6,016,890 6,016,890 No
Licenses and permits 7,305,129 7,136,954 14,442,083
Intergovernmental 43,824,406 - 14,962,084 14,585,053 73,371,543
Charges for services 4,222,289 5,929,961 - 7,996,482 18,148,732
Investment earnings 3,022,382 - 81,744 3,104,126
Miscellaneous 1,565,986 8,903 1,457,776 1,417,815 4,450,480
Total revenues 197,378,564 5,938,864 16,419,860 44,815,678 264,552,966 A
r
Expenditures
Current: p
General government 26,182,748 - - - 26,182,748
Public safety 72,596,189 - 3,808,166 76,404,355
Highways and streets 2,012,485 - - 7,774,983 9,787,468 R
Sanitation 722,221 4,348,471 - 16,811,941 21,882,633 r
Health, education and welfare 5,299,063 - - 14,571,058 19,870,121
Culture and recreation 13,206,761 - - 775,141 13,981,902
Pension and retirement
contributions (note 13) 11,902,147 349,158 - 1,953,101 14,204,406
Employees' health insurance 14,869,722 190,248 - 1,107,925 16,167,895
Miscellaneous 4,118,043 1,155,127 - 859,775 6,132,945
Debt service:
Principal 700,786 - - 12,449,195 13,149,981
r
Interest 66,280 - 9,467,510 9,533,790
Capital outlay 6,125,869 - 26,689,667 - 32,815,536
Total expenditures 157,802,314 6,043,004 26,689,667 69,578,795 260,113,780 r
Excess (deficiency) of revenues
over expenditures 39,576,250 104,140 (10,269,807) (24,763,117) 4,439,186
(Continued)
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-30-
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COUNTY OF HAWAII
Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances
as For the Fiscal Year Ended June 30, 2005
(Concluded)
M Other Total
Sewer Capital Governmental Governmental
General Fund Projects Funds Funds
M
Other Financing Sources (Uses), including transfers
Sale of assets $ 1,485,446 $ - $ $ - $ 1,485,446
to Capital leases (note 10) 288,387 - - 1,080,541 1,368,928
State Revolving Fund loans (note 10) - - 1,504,078 - 1,504,078
Sale of bonds (note 10) - - 30,000,000 - 30,000,000
'r Premium on bonds (note 10) 1,418,651 - 1,606,219 - 3,024,870
Refunding bonds (note 10) 24,595,140 - - - 24,595,140
Refunding bonds issuance costs
s (note 10) (129,089) - - (129,089)
Payment to refunded bond escrow
agent (note 10) (25,884,702) - - - (25,884,702)
Transfers in (note 5) - 8,058,103 34,061,322 42,119,425
Transfers out (note 5) (36,671,487) - - (5,447,938) (42,119,425)
r+ Total other financing sources (uses) (34,897,654) - 41,168,400 29,693,925 35,964,671
Net change in fund balances 4,678,596 (104,140) 30,898,593 4,930,808 40,403,857
Fund balance at begriming of year 19,723,208 7,687,480 75,311,200 31,438,105 134,159,993
•
Decrease in reserve for inventories (423,732) - - - (423,732)
Fund balance at end of year $ 23,978,072 $ 7,583,340 $106,209,793 $ 36,368,913 $174,140,118
See accompanying notes to the basic financial statements.
1
M
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COUNTY OF HAWAII
Reconciliation of the Change in Fund Balances of Governmental Funds
to the Statement of Activities `
For the Fiscal Year Ended June 30, 2005
Net change in fund balances - total governmental funds $ 40,403,857
Amounts reported for governmental activities in the statement of activities are
different because:
Capital outlays are reported as expenditures in governmental funds.
However, in the statement of activities, the cost of capital assets is
allocated over their estimated useful lives as depreciation expense. In
the current period, these amounts are:
Capital outlay 39,489,806
Depreciation expense and loss on disposals (17,943,594)
Excess of capital outlay over depreciation expense 21,546,212
s
Borrowings provide current financial resources to governmental funds;,
however, issuing debt increases long-term liabilities in the statement
of net assets. In the current period, proceeds were received from:
r
General obligation bonds (30,000,000)
Premium on bond issuance (1,606,219) O
Deferred amount on refunding of bonds 1,294,002
SRF loan obligations (1,504,078)
Capital lease obligations (1,368,928)
Total debt proceeds (33,185,223)
OF
Repayment of long-term debt is reported as an expenditure in governmental 4
funds, but the repayment reduces long-term liabilities in the statement of
net assets. In the current year, these amounts consist of:
Bond principal retirement 9,637,508
SRF loan repayment 2,240,947 'w
Capital lease payments 1,273,085
Total long-term debt repayment 13,151,540
Because some revenues will not be collected for several months after the
County's fiscal year end, they are not considered "available" revenues and r.
are "deferred" in the governmental funds. Unearned revenues decreased by
this amount this year. (994,827)
(Continued)
-32-
COUNTY OF HAWAII
Reconciliation of the Change in Fund Balances of Governmental Funds
to the Statement of Activities
For the Fiscal Year Ended June 30, 2005
(Concluded)
Some items reported in the statement of activities do not involve current
financial resources and therefore are not reported as expenditures in
governmental funds. These activities are:
Decrease in inventory $ (423,732)
ar Increase in compensated absences (1,630,967)
Increase in claims and judgments (6,573,289)
Increase in landfill closure/postclosure care costs (327,000)
s Amortization of premium from bond issuance 92,766
Amortization of deferred amount on refunding of bonds (64,700)
Net increase in accrued interest (508,595)
Net additional expenditures (9,435,517)
Change in net assets of governmental activities $ 31,486,042
See accompanying notes to the basic financial statements.
+r
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s
COUNTY OF HAWAII a,.
General Fund `
Statement of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2005
Variance
Original Final Favorable
Budget Budget Actual (Unfavorable)
Revenues:
Taxes and assessments:
Real property taxes $ 131,036,300 $ 131,036,300 $ 131,087,099 $ 50,799
Public service company taxes 5,120,000 5,120,000 6,351,273 1,231,273
Total taxes and assessments 136,156,300 136,156,300 137,438,372 1,282,072
Licenses and permits:
Nonbusiness licenses and permits 3,668,484 3,712,608 4,728,035 1,015,427
Business licenses 1,151,775 1,151,775 1,040,927 (110,848)
Street use 1,420,000 1,420,000 1,536,167 116,167
Total licenses and permits 6,240,259 6,284,383 7,305,129 1,020,746 r
Intergovernmental:
Federal:
Programs for the aged 1,811,801 1,835,301 1,405,013 (430,288) P'
Community development block grants - 2,672,100 2,672,100 r
HOME program grant - 1,036,554 1,036,554
Civil defense 118,000 118,000 172,655 54,655
Law enforcement 1,519,600 1,859,097 1,054,854 (804,243)
Other 1,284,343 7,860,907 7,571,811 (289,096)
Total federal 4,733,744 15,381,959 13,912,987 (1,468,972)
State:
State General Fund - Act 185, ap
SLH 1990 15,506,000 15,506,000 16,417,336 911,336 r
Emergency medical services 9,862,620 9,862,620 9,980,724 118,104
Other 3,974,204 4,747,624 3,344,726 (1,402,898)
Child support enforcement 942,979 942,979 1,019,851 76,872 1r
Total State 30,285,803 31,059,223 30,762,637 (296,586)
Total intergovernmental revenue 35,019,547 46,441,182 44,675,624 (1,765,558)
Charges for current services:
General government 2,403,571 2,403,571 2,782,698 379,127 PP
Culture and recreation 814,125 814,125 764,736 (49,389) s
Highways and streets 582,000 582,000 527,453 (54,547)
Public safety 146,784 146,784 147,402 618
Total charges for current services 3,946,480 3,946,480 4,222,289 275,809
Fines and forfeitures 1,322,500 1,322,500 647,327 (675,173) so
Rents 51,800 51,800 51,738 (62)
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(Continued)
-34-
COUNTY OF HAWAII
General Fund
Statement of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2005
yr Variance
Original Final Favorable
` Budget Budget Actual (Unfavorable)
w
Revenues (continued):
Interest and penalties $ 1,250,000 $ 1,250,000 $ 2,973,131 $ 1,723,131
rr Miscellaneous 5,353,519 5,515,295 5,260,092 (255,203)
Total revenues 189,340,405 200,967,940 202,573,702 1,605,762
Expenditures:
Current:
d6 General government:
Finance 6,732,240 7,020,502 6,262,769 757,733
. General government building 2,765,744 2,775,356 2,762,853 12,503
Law 2,906,846 2,906,846 2,705,894 200,952
Planning and zoning 1,982,622 2,866,622 2,701,712 164,910
Legislative 3,855,022 2,762,388 2,550,741 211,647
Automotive equipment 2,048,604 2,452,249 2,438,313 13,936
Research and development 1,797,582 2,094,864 1,702,274 392,590
Mayor's office 1,133,216 1,829,236 1,327,007 502,229
Personnel services 1,345,282 1,427,392 1,300,368 127,024
Engineering 1,564,368 1,510,897 1,274,758 236,139
Data Systems 881,296 881,296 850,104 31,192
Chief engineer 761,009 737,625 735,578 2,047
Elections 583,654 583,654 502,290 81,364
r Total general government 28,357,485 29,848,927 27,114,661 2,734,266
Public safety:
Police department 39,089,777 38,535,901 37,442,348 1,093,553
Fire department 25,228,987 25,898,113 25,233,212 664,901
Prosecuting attorney 5,866,468 6,559,362 5,170,613 1,388,749
Protective inspection 1,751,201 1,957,512 1,954,424 3,088
Liquor control 1,119,275 1,142,725 938,531 204,194
Flood control 153,939 273,529 273,529 -
Civil defense agency 513,832 2,228,357 2,124,575 103,782
Humane Society 954,215 954,215 954,215 -
Total public safety 74,677,694 77,549,714 74,091,447 3,458,267
Highways and streets:
Mass transit 1,821,843 4,254,266 4,250,058 4,208
(Continued)
-35-
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COUNTY OF HAWAII Ap
General Fund
Statement of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2005
Variance
Original Final Favorable
Budget Budget Actual
(Unfavorable)
Expenditures (continued):
Current (continued):
Sanitation:
Environmental management $ 796,714 $ 801,201 $ 723,390 $ 77,811
Health, education and welfare:
Office of Aging 1,848,907 1,861,692 1,248,557 613,135
Elderly Activities 2,919,719 2,988,219 2,693,817 294,402 r
Education 55,000 55,000 47,416 7,584
Social programs 726,000 726,000 726,000 -
Cemeteries 273,632 260,632 249,768 10,864 1'
Physical examination 102,942 102,942 102,942
Total health, education and welfare 5,926,200 5,994,485 5,068,500 925,985
Culture and recreation:
r
Community music 182,134 166,134 163,817 2,317
Organized recreation:
Maintenance 5,401,304 5,494,599 5,464,834 29,765 r„
Recreation 2,040,977 2,099,977 2,010,756 89,221
Aquatics 2,795,075 2,791,285 2,501,060 290,225 ¦
Hoolulu Park complex 718,656 722,566 709,097 13,469 r
Administration 649,959 729,064 714,231 14,833
Children's zoo 493,935 497,935 462,117 35,818
Summer/Intersession 383,365 363,365 320,441 42,924
Culture and arts 124,506 137,806 118,804 19,002 r+
Elderly activities administration 621,048 582,158 514,310 67,848
r
Total culture and recreation 13,410,959 13,584,889 12,979,467 605,422
w
Pension and retirement contributions 12,552,295 12,552,295 12,519,243 33,052
Health fund 14,568,159 14,869,723 14,869,723 -
Miscellaneous 6,351,416 5,962,266 2,805,360 3,156,906
Total current 158,462,765 165,417,766 154,421,849 10,995,917 ~w
w
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(Continued)
-36-
COUNTY OF HAWAII
General Fund
" Statement of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2005
(Concluded)
_ Variance
Original Final Favorable
r
Budget Budget Actual (Unfavorable)
Expenditures (continued):
Capital Outlay:
Community Development Block
grants (HUD) $ - $ 2,762,545 $ 2,762,545 $ -
r
CFDA Program - 919,138 919,138 -
HOME Program - 1,101,885 1,101,885 -
r Total capital outlay - 4,783,568 4,783,568 -
Total expenditures 158,462,765 170,201,334 159,205,417 10,995,917
Excess of revenues over expenditures 30,877,640 30,766,606 43,368,285 12,601,679
Other financing uses:
" Transfers out:
Capital Projects Fund (2,610,165) (2,610,165) -
Housing Fund (700,000) (700,000) -
.r
Solid Waste Fund (9,907,851) (10,332,212) (10,332,212) -
Golf Course Fund (161,804) (161,804) (161,804) -
Highway Fund (221,102) (221,102) -
Self Insurance Fund (2,500,000) (2,500,000) -
Disaster/Emergency Fund (100,000) (100,000) (100,000) -
Improvement District 18 Fund (9,694) (9,694) -
Debt Service Fund (24,921,138) (24,921,138) (24,785,683) 135,455
Total transfers out (35,090,793) (41,556,115) (41,420,660) 135,455
Total other financing uses (35,090,793) (41,556,115) (41,420,660) 135,455
r Excess (deficiency) of revenues and other
sources over expenditures and other uses (4,213,153) (10,789,509) 1,947,625 12,737,134
a Fund balance at beginning of year 19,723,208 19,723,208 19,723,208 -
-Fund balance at end of year $ 15,510,055 $ 8,933,699 $ 21,670,833 $ 12,737,134
r
See accompanying notes to the basic financial statements.
r
-37-
ar
COUNTY OF HAWAII AM
Sewer Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual (Budgetary Basis) `
For the Fiscal Year Ended June 30, 2005
Variance
.w
Original Final Favorable
Budget Budget Actual (Unfavorable)
Revenues:
Charges for current services - sewer fees $ 6,370,188 $ 6,370,188 $ 5,929,961 $ (440,227)
Miscellaneous 100 100 8,903 8,803
Total revenues 6,370,288 6,370,288 5,938,864 (431,424)
Expenditures:
Sanitation 5,220,660 5,220,660 4,602,646 618,014
Pension and retirement contributions 358,374 358,374 349,158 9,216
Health fund 194,378 194,378 190,248 4,130
Miscellaneous 1,790,085 1,790,085 491,063 1,299,022
Total expenditures 7,563,497 7,563,497 5,633,115 1,930,382
Excess (deficiency) of revenues over expenditures (1,193,209) (1,193,209) 305,749 1,498,958 ~1
Fund balance at beginning of year 7,687,480 7,687,480 7,687,480 - 1P
Fund balance at end of year $ 6,494,271 $ 6,494,271 $ 7,993,229 $ 1,498,958 alb
See accompanying notes to the basic financial statements.
R
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-38- M
COUNTY OF HAWAII
Proprietary Funds
Statement of Net Assets
June 30, 2005
Business-type Activities-
Enterprise Funds
Kulaimano Ouli Ekahi
.r Elderly Affordable
Housing Housing
Project Project Totals
r
Assets
Current assets:
Cash and cash equivalents (note 3) $ 173,290 $ 195,417 $ 368,707
Restricted cash and cash equivalents (note 3) 9,290 20,250 29,540
Investments (note 3) 700,000 - 700,000
Imprest fund (note 3) 50 100 150
Receivables (note 4) 5,932 42,456 48,388
Prepaid expenses 1,287 - 1,287
Total current assets 889,849 258,223 1,148,072
Noncurrent assets:
Restricted cash and cash equivalents (note 3) 182,123 14,630 196,753
Capital assets (note 6):
Land and site improvements 511,000 503,877 1,014,877
Buildings and equipment 1,229,340 - 1,229,340
Less accumulated depreciation (877,132) (877,132)
Total capital assets 863,208 503,877 1,367,085
Total noncurrent assets 1,045,331 518,507 1,563,838
Total assets 1,935,180 776,730 2,711,910
Liabilities
Current liabilities:
Accounts payable 942 266,049 266,991
_ Internal balances (note 5) 5,400 - 5,400
Due to developer - 7,729 7,729
¦r Security deposits payable from restricted assets 9,290 18,856 28,146
Deferred revenue (note 7) 1,467 1,963 3,430
Notes payable, current portion (note 10) 21,899 - 21,899
Total current liabilities 38,998 294,597 333,595
Noncurrent liabilities:
M Notes payable (note 10) 1,019,386 - 1,019,386
Total liabilities 1,058,384 294,597 1,352,981
Net Assets
dff Invested in capital assets, net of related debt (178,077) 503,877 325,800
Restricted for debt service 182,167 - 182,167
Unrestricted 872,706 (21,744) 850,962
r Total net assets $ 876,796 $ 482,133 $ 1,358,929
See accompanying notes to the basic financial statements.
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-39-
COUNTY OF HAWAII
Proprietary Funds
Statement of Revenues, Expenses, and Changes in Fund Net Assets
For the Fiscal Year Ended June 30, 2005 `
Business-type Activities-
Enterprise Funds
Kulaimano Ouli Ekahi w
Elderly Affordable
Housing Housing
Project Project Totals
Operating revenues:
Rental receipts from tenants $ 91,552 $ 219,082 $ 310,634 w
Rental subsidy from federal government - HUD 135,829 - 135,829
Laundry receipts 1,931 - 1,931
Miscellaneous - 2,406 2,406
Total operating revenues 229,312 221,488 450,800
Operating expenses:
Utilities 31,848 21,019 52,867
General and administration 81,857 96,289 178,146
Maintenance and repairs 33,211 40,325 73,536
Lease expense - 76,226 76,226
Depreciation (note 6) 34,095 - 34,095
Total operating expenses 181,011 233,859 414,870 p
Operating income (loss) 48,301 (12,371) 35,930 it
Nonoperating revenues (expenses):
op
Investment income 13,529 51 13,580
Interest expense (69,780) - (69,780)
Loss on disposal of assets (229) (229)
Total nonoperating revenue (expenses) (56,480) 51 (56,429)
Change in net assets (8,179) (12,320) (20,499)
Total net assets - beginning 884,975 494,453 1,379,428
Total net assets - ending $ 876,796 $ 482,133 $ 1,358,929
See accompanying notes to the basic financial statements.
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-40-
COUNTY OF HAWAII
Proprietary Funds
Statement of Cash Flows
For the Fiscal Year Ended June 30, 2005
Business-type Activities -
' Enterprise Funds
Kulaimano Ouli Ekahi
Elderly Affordable
Housing Housing
Project Project Totals
Cash Flows from Operating Activities
Receipts from tenants $ 96,195 $ 223,690 $ 319,885
Receipts from federal government - HUD 135,829 - 135,829
r Payments to suppliers for goods and services (144,222) (157,634) 301,856
Net cash provided by operating activities 87,802 66,056 153,858
Cash Flows from Capital and Related Financing Activities
it
Principal paid on notes payable (24,132) - (24,132)
Interest paid on notes payable (69,781) (69,781)
Purchase of capital assets (11,050) (11,050)
Net cash used in capital and related financing activities (104,963) (104,963)
T Cash Flows from Investing Activities
Purchase of investments (1,400,000) (1,400,000)
Proceeds from maturities of investments 1,400,000 1,400,000
Interest on investments 13,689 61 13,750
M
Net cash provided by investing activities 13,689 61 13,750
Net increase (decrease) in cash and cash equivalents (3,472) 66,117 62,645
r Cash and cash equivalents at beginning of year 368,225 164,280 532,505
Cash and cash equivalents at end of year $ 364,753 $ 230,397 $ 595,150
M
Reconciliation of operating income (loss) to net cash
provided by operating activities
Operating income (loss) $ 48,301 $ (12,371) $ 35,930
Adjustments to reconcile operating income (loss) to net cash
provided by operating activities:
w Depreciation expense 34,095 - 34,095
Change in assets and liabilities:
Receivables 1,209 896 2,105
Prepaid expenses 14 - 14
Accounts and other payables 3,287 77,545 80,832
Unearned income 896 (14) 882
Net cash provided by operating activities $ 87,802 $ 66,056 $ 153,858
See accompanying notes to the basic financial statements.
•
-41-
COUNTY OF HAWAII
Fiduciary Funds
Statement of Fiduciary Net Assets
June 30, 2005 OR
Private-
Purpose Agency
Trusts Funds PP
Assets
Cash and cash equivalents (note 3) $ 3,186,718 $ 3,253,439
Investments (note 3) 974,418 -
Receivables:
Due from other agency funds - 3,141
Other receivables 4,102 30,038
r?
Total receivables 4,102 33,179
Restricted cash and cash equivalents (note 3) 637,000 ow
Total assets 4,165,238 3,923,618
Liabilities
Due to other agency funds - 3,141 r
Accrued liabilities - 1,684,598 R
Advances payable - 193,230
Assets held for benefit of improvement districts - 2,042,649
Total liabilities 3,923,618 ¦
Net Assets
Held in trust for other parties 4,165,238
Total net assets $ 4,165,238 $
R
See accompanying notes to the basic financial statements.
s
-42-
COUNTY OF HAWAII
w Fiduciary Funds
Statement of Changes in Fiduciary Net Assets
For the Fiscal Year Ended June 30, 2005
Private-
Purpose
Trusts
Additions
Contributions:
Puna Geothermal Venture $ 50,000
Investment earnings:
Net decrease in fair value of investments (22,307)
Dividends 44,600
s Interest 78,622
Total additions 150,915
Deductions
w
Appraisal fees 1,902
Grants awarded 16,957
Total deductions 18,859
Change in net assets 132,056
Net assets - beginning of year 4,033,182
Net assets - end of year $ 4,165,238
r See accompanying notes to the basic financial statements.
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-43-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2005
w.
The accounting policies of the County of Hawaii (the County) conform to U.S. generally
accepted accounting principles (GAAP) as applicable to local governmental units. The
following notes to the basic financial statements are an integral part of the County's
Comprehensive Annual Financial Report. "
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Financial Reporting Entity
The County has implemented Governmental Accounting Standards Board Statement No. 14,
The Financial Reporting Entity, (GASB Statement No. 14). All organizations, activities or
functions that meet the criteria in GASB Statement No. 14 for inclusion in the reporting entity
are included from the County's basic financial statements.
Primary Government The County operates under the Mayor-Council form of government`
under a charter that became effective on January 2, 1969, and was amended in 1979, 1982, a
1990 and 2000. The County's operations are organized by the following functions: general
government; public safety; highways and streets; sanitation; health, education and welfare;
culture and recreation; pension and retirement contributions; health fund; miscellaneous;
capital outlay; and debt service. The State of Hawaii (State) assumes full responsibility for
several major functions usually performed by local governments, including education, ¦
welfare, health and judicial functions. There are no separate city, county or township `
governments nor any school districts, special districts, authorities or public corporations with
overlapping authority. PP
GASB Statement No. 14 defines component units as legally separate organizations for which
the elected officials of the primary government are financially accountable. "Financial
accountability" is the level of accountability that exists if a primary government appoints a
voting majority of an organization's governing board and is either able to impose its will on
that organization or there is a potential for the organization to provide specific financial
benefits to, or impose specific financial burdens on, the primary government. A primary
government has the ability to impose its will on an organization if it can significantly
influence the programs, projects, activities or level of services performed or provided by the
organization. An organization has a financial benefit or burden relationship with the primary
government if any one of three conditions exist: (1) The primary government is legally
entitled to or can otherwise access the organization's resources; (2) The primary government
is legally obligated or has otherwise assumed the obligation to finance the deficits of, or
provide financial support to, the organization; or (3) The primary government is obligated in
some manner for the debt of the organization.
r
-44-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2005
As required by GAAP as set forth in GASB Statement No. 14, these basic financial
statements present the County of Hawaii (the primary government) and its component unit,
the Department of Water Supply. This component unit is included in the County's reporting
entity because of its financial relationship with the County.
Discretely Presented Component Unit The component unit column in the basic financial
statements includes the financial data of the Department of Water Supply (Department), a
legally independent agency of the County that is accounted for as an enterprise fund. It is
reported in a separate column to emphasize that it is legally separate from the County. The
members of the Water Commission, the governing body of the Department, are appointed by
the Mayor of the County and confirmed by the County Council. The Department is granted
corporate powers by state statute and the County Charter. Although the County does not have
the authority to approve or modify the Department's operational and capital budgets, the
County has issued bonds on the Department's behalf that are general obligations of the
County. Because the County is obligated to repay these bonds in the event of default by the
Department, the County is financially accountable for the debts of the Department. See Note
14 for component unit disclosures for the Department. Complete financial statements of the
Department can be obtained from the Department of Water Supply, 345 Kekuanaoa Street,
Suite 20, Hilo, Hawaii 96720.
r
_ Basic Financial Statements
" The basic financial statements include both government-wide (based on the County as a
whole) and fund financial statements. Both the government-wide and fund financial
4 statements (within the basic financial statements) categorize primary activities as either
i governmental or business-type. In the government-wide statement of net assets, both the
governmental and business-type activities columns (a) are presented on a consolidated basis
by column, (b) and are reflected, on a full accrual, economic resource basis, which
+r incorporates long-term assets and receivables as well as long-term debt and obligations.
' The government-wide statement of activities reflects both the gross and net costs per
r functional category (general government, public safety, highways and streets, etc.) which are
otherwise being supported by general government revenues (property taxes, certain
intergovernmental revenues, etc.). The statement of activities reduces gross expenses
(including depreciation) by related program revenues, operating and capital grants. The
program revenues must be directly associated with the function (general government, public
safety, highways and streets, etc.) or a business-type activity. The operating grants include
operating-specific and discretionary (either operating or capital) grants while the capital
grants column reflects capital-specific grants. The net cost (by function or business-type
activity) is normally covered by general revenues.
rr
The government-wide focus is more on the sustainability of the County as an entity and the
change in aggregate financial position resulting from the activities of the fiscal period.
r
-45-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2005
FP
W
The fund financial statements' emphasis is on the major funds in either the governmental or
business-type categories. Nonmajor funds (by category) are summarized into a single
r
column.
The governmental funds in the fund financial statements are presented on a current financial
resource and modified accrual basis of accounting. This is the manner in which these funds
are normally budgeted. This presentation is deemed most appropriate to (a) demonstrate legal
and covenant compliance, (b) demonstrate the source and use of liquid resources, and (c)
demonstrate how the County's actual experience conforms to the budget fiscal plan. Since m
the governmental fund statements are presented on a different measurement focus and basis of
accounting than the government-wide statements' governmental column, a reconciliation is IA
presented on the page following each statement, which briefly explains the adjustments No
necessary to transform the fund based financial statements into the governmental column of
the government-wide presentation. dw
r
The County's fiduciary funds are presented in the fund financial statements by type (private
purpose and agency). Since by definition these assets are being held for the benefit of a third ¦
party (private parties, state government, etc.) and cannot by used to address activities or
obligations of the government, these funds are not incorporated into the government-wide
statements.
r
Government-wide and fund financial statements - The government-wide financial
statements (i.e., the statement of net assets and the statement of changes in net assets) report
w
information on all of the nonfiduciary activities of the primary government and its component
unit. For the most part, the effect of interfund activity has been removed from these r
statements. Governmental activities, which normally are supported by taxes and ¦r
intergovernmental revenues, are reported separately from business-type activities, which rely
to a significant extent on fees and charges for support. Likewise, the primary government is
reported separately from certain legally separate component units for which the primary
government is financially accountable.
r.
The statement of activities demonstrates the degree to which the direct expenses of a given
function or segment are offset by program revenues. Direct expenses are those that are
clearly identifiable with a specific function or segment. Program revenues include (a) charges
to customers or applicants who purchase, use, or directly benefit from goods, services, or
privileges provided by a given function or segment and (b) grants and contributions that are a
restricted to meeting the operational or capital requirements of a particular function or
segment. Taxes and other items not properly included among program revenues are reported
instead as general revenues.
Separate financial statements are provided for governmental funds, proprietary funds, and
fiduciary funds, even though the latter are excluded from the govemment-wide financial
-46-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2005
statements. Major individual governmental funds and major individual enterprise funds are
reported as separate columns in the fund financial statements.
Activities in funds - The financial transactions of the County are recorded in individual
funds. Each fund is accounted for by providing a separate set of self-balancing accounts that
comprises its assets, liabilities, reserves, fund equity, revenues and expenditures/expenses.
The various funds are reported by generic classification within the financial statements.
GASB Statement No. 34 sets forth minimum criteria (percentage of the assets, liabilities,
revenues or expenditures/expenses of either fund category or the governmental and enterprise
combined) for the determination of major funds. The nonmajor funds are combined in a
column in the fund financial statements and detailed in the combining section.
The County reports the following major governmental funds:
General Fund - The general fund is the general operating fund of the County. It is used
to account for all activities of the general government, except those required to be
accounted for in other funds.
Sewer Fund - Used to account for costs of operating the County's various sewerage
systems. Financing is provided by charges to users for sewer services.
Capital Projects Fund - Used to account for the costs of constructing County capital
improvements financed with general obligation bond proceeds, federal and state grants,
and general and special revenue fund revenues. The capital projects fund is used to
account for financial resources to be used for the acquisition or construction of major
general government capital facilities and infrastructure (other than those financed by
proprietary funds and trust funds) when separate project centers are needed to control
w costs.
The County reports the following major proprietary funds:
r
Rulaimano Elderly Housing Project - Used to account for the operation of a rental
housing project for low-income senior citizens located north of Hilo.
+r
Ouli Ekabi Affordable Housing Project - Used to account for the operation of a 33-unit
single-family affordable rental housing project located in Waimea.
t
The County reports the following fiduciary funds:
Private-Purpose Trust Fund -Used to account for funds received from geothermal
developers to mitigate the effects of geothermal energy development. Also used to
r
-47-
r
COUNTY OF HAWAII
Notes to the Basic Financial Statements
~n
June 30, 2005 r ,
account for investment income on funds received from import businesses at the port of "
Hilo and the related expenditures to promote health and safety on the Island of Hawaii.
Agency Funds - Used to account for assets held by the County for other governmental
units and individuals. The agency funds are custodial in nature and do not involve or
measurement of results of operations. The County has the following agency funds:
Ift
• State Weight Tax Fund ¦
• Improvement District No. 17 Fund
• Improvement District No. 18 Fund
• Improvement District Revolving Fund IA
• Improvement District Bond and Interest Redemption Fund
Performance and Refundable Deposits Fund
• Payroll Clearance Fund Ap
• Flexible Spending Account r
• Lapsed Warrants Fund
• Non-Profit License Plates Fund op
• Organ and Tissue Education Fund fro
Basis of Accounting
r
Basis of accounting refers to the period in which revenues and expenditures (or expenses) are
recognized in the accounts and reported in the basic financial statements. Basis of accounting
relates to the timing of the measurements made, regardless of the measurement focus applied.
The government-wide financial statements and the proprietary, fiduciary and component unit A0
fund financial statements are presented on an accrual basis of accounting. The governmental
funds in the fund financial statements are presented on a modified accrual basis.
Accrual Basis - Revenues are recognized when earned and expenses are recognized when the
related obligation is incurred.
Modified Accrual Basis - Revenues are recorded when susceptible to accrual (that is, both
measurable and available). "Measurable" means the amounts are determinable. "Available"
means the amounts are collectible within the current period or soon enough thereafter (within
60 days) to be used to pay liabilities of the current period.
Licenses and permits, charges for current services, fines and forfeitures, penalties and
miscellaneous revenues are recorded as revenues when received in cash because they are
generally not measurable until actually received. State Revolving Fund loan proceeds are
considered available when collected.
-48-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
+ June 30, 2005
r
In applying the susceptible to accrual concept to intergovernmental revenues, the legal and
contractual requirements of the numerous individual programs are used as guidance. There
are essentially two types of these revenues. In one, monies must be expended on the specific
purpose or project before any amounts will be paid to the County; therefore, revenues are
recognized based upon the expenditures recorded. Most construction grants and many
operating grants fall into this category. In the other, monies are virtually unrestricted as to
purpose of expenditure and are usually revocable only for failure to comply with prescribed
compliance requirements. These resources are reflected as revenues at the time of receipt or
earlier if the susceptible to accrual criteria are met.
The County reports unearned revenue in its fund financial statements (see Note 7). Unearned
revenues arise when potential revenue does not meet both the "measurable" and "available"
criteria for recognition in the current period. In subsequent periods, when both revenue
recognition criteria are met, the liability for unearned revenue is removed from the combined
+ balance sheet and revenue is recognized.
Expenditures are recognized under the modified accrual basis of accounting in the accounting
period in which the fund liability is incurred. Exceptions to this general rule include: (a)
accumulated compensated absences and claims and judgments which are recognized as
expenditures when paid; (b) liabilities related to municipal solid waste landfill closure and
postclosure care costs; and (c) principal and interest on general long-term debt which are
recognized as expenditures when due.
In accordance with GASB Statement No. 20, Accounting and Financial Reporting for
'r Proprietary Funds and Other Governmental Entities That Use Proprietary Fund Accounting,
the County applies all applicable GASB pronouncements as well as the following
pronouncements issued on or before November 30, 1989, unless those pronouncements
m conflict with or contradict GASB pronouncements; Financial Accounting Standards Board
statements and interpretations, Accounting Principles Board opinions, and Accounting
Research Bulletins of the Committee on Accounting Procedures.
r
Encumbrances
i The general, special revenue, and capital projects follow encumbrance accounting under
which purchase orders, contracts and other commitments are recorded as a reserve of fund
balance and provide authority for the carryover of appropriations to the subsequent year in
order to complete these transactions. Encumbrances outstanding at year end are reported as
reservations of fund balances and do not constitute expenditures or liabilities because the
+ commitments will be honored during the subsequent year.
r
-49-
r
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2005
Unexpended Allotments
Allotment accounting is employed in the general and capital projects funds to reserve
appropriations to complete capital projects that were funded during a given fiscal period. `
Unexpended allotments represent reserves of capital projects appropriations that are available
to complete such projects in future fiscal periods.
r
Cash and Investments
Cash and cash equivalents include cash on hand, amounts in demand deposits and short-term
investments with a maturity date of three months or less from the date acquired by the
County.
n
Investments consist of time certificates of deposit at financial institutions and bank repurchase
agreements with original maturities exceeding three months. Included are participating
interest-earning investment contracts (repurchase agreements) that have remaining maturities 1?
at the time of purchase of one year or less, as well as nonparticipating interest-eaming
investment contracts (time certificates of deposit and repurchase agreements). Both W
categories of investments are stated at amortized cost (see Note 3). Investments also consist Yh
of equity securities in the fiduciary fund financial statements. These investments are stated at
fair value. R
r.
Real Property Taxes
i
The County's real property taxes are levied July 1 each year on assessed valuation as of
January 1. The taxes become a lien on the property assessed as of the levy date. Taxes are
due and payable in two equal annual installments on August 20 and February 20. w
Accordingly, real property taxes receivable as of June 30 are delinquent. Each delinquent
installment bears interest at 1% per month and penalties of up to 10% of the amount due.
Assessments are based on 100% of estimated fair market values.
Inventories `
Inventories consist of materials and supplies and are reported as expenditures at the time of
purchase (purchase method). Police and fire department inventories are stated using the first
in, first out (FIFO) method. Other inventories are stated at average cost.
Liquor Control
Section 281 of the Hawaii Revised Statutes requires that liquor license revenues collected be
used only for costs and expenses directly relating to operational and administrative costs
actually incurred by the liquor commission collecting such fees. The unexpended fees at June
30, 2005 of $736,877 are reflected as a reserve of general fund balance.
n
-50-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2005
Capital Assets
r Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads,
bridges, curbs and gutters, streets and sidewalks, drainage systems, lighting systems, and
similar items), are reported in the applicable governmental or business-type activities columns
in the government-wide financial statements. Capital assets are defined by the government as
assets with an initial, individual cost of more than $1,000 and an estimated useful life in
excess of two years. Such assets are recorded at historical cost or estimated historical cost if
purchased or constructed. Donated capital assets are recorded at estimated fair market value
at the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or
r materially extend the life of the asset are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed.
Interest incurred during the construction phase of capital assets of business-type activities is
included as part of the capitalized value of the assets constructed.
Capital assets of the primary government is depreciated using the straight line method over
the following estimated useful lives of the assets:
Assets Years
Infrastructure 20 to 100 years
Buildings and improvements 50 to 100 years
Equipment 5 to 40 years
Depreciation is recorded in one enterprise fund, the Kulaimano Elderly Housing Project. It is
computed using the straight-line method over the following estimated useful lives of the
assets:
Buildings 50 years
Furnishings and equipment 5 to 10 years
Ground and site improvements 20 to 50 years
Long-term Obligations
r The County reports long-term debt of governmental funds at face value on the government-
wide statement of net assets. Certain other governmental fund obligations not expected to be
financed with current available resources are also reported on the government-wide statement
of net assets. Long-term debt and other obligations financed by the proprietary funds are
reported as liabilities in those funds.
rr
-51-
s.
COUNTY OF HAWAII
rw
Notes to the Basic Financial Statements
June 30, 2005
Compensated Absences
Employees earn vacation credit at the rate of one and three-quarter working days for each `
month of service. Up to ninety days of vacation leave credits can be accumulated per M
employee. In addition, employees who work overtime can elect to take compensatory time off
instead of overtime pay. The time off is earned at the rate of one and a half hours for each r¦
hour of overtime worked. There is no statutory limit to the amount of compensatory tin ii, off M
an employee can accumulate. Both compensatory time off and vacation credits are cony;rted
to pay upon termination of employment.
The amounts expected to be liquidated with expendable available resources are accrued in the
appropriate funds and the amounts payable from future resources are recorded in the
government-wide statement of net assets along with the estimated liability for FICA taxes and
employers' retirement contributions on those amounts. All accumulated unpaid vacation and
compensatory time off at June 30, 2005 are expected to be liquidated with future expendable r.
resources. In prior years, the following funds have been used to liquidate this liability for
compensated absences: General Fund, Highway Fund, Sewer Fund, Solid Waste Fund,
Vehicle Disposal Fund, Golf Course Fund and the Housing Agency.
Sick leave accumulates without limit. Sick leave can be taken only in the event of illness: and op
is not convertible to pay upon termination of employment. Accumulated sick leave at June r
30, 2005 totaled $53,682,000 for the primary government.
IR
Leases
Leases transferring substantially all of the risks and benefits of ownership are recorded a;
capital leases; other leases are operating leases (see Note 8). Capital leases are recorded as
capital asset additions at their estimated fair market value at the inception of the lease an d the
related present value of the future minimum lease obligations is recorded as long-term debt.
Operating lease expenditures and expenses are recognized when the lease obligation is paid.
Retirement Plan Contributions
¦r
The County's contribution to the Employees' Retirement System of the State of Hawai'i is
based upon an actuarial computation and includes the normal cost plus the level annual
payment required to amortize the unfunded actuarial accrued liability over a remaining period
of twenty-six years from July 1, 2003. The County's policy is to fund its actuarially r
determined required contribution annually (see Note 13).
r
-52-
COUNTY OF HAWAII
+r Notes to the Basic Financial Statements
June 30, 2005
Operating Revenues and Expenses
Revenues and expenses are distinguished between operating and nonoperating items for the
proprietary funds. Operating revenues generally result from providing services in connection
with the proprietary funds' principal ongoing operations. The principal operating revenues of
the proprietary funds are fees charged to residents for rent and rental subsidies received from
+ the federal government.
Operating expenses include the costs associated with providing housing for tenants, such as
utilities, lease rent, and maintenance and repairs; administrative expenses, and depreciation
on capital assets. All revenues and expenses not meeting these definitions are reported as
nonoperating revenues and expenses.
r
Use of Estimates
The preparation of the basic financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of assets and
liabilities, as well as disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues, expenditures, and other financing sources
and uses during the reporting period. Actual results could differ from those estimates.
Reclassifications
r
Certain 2004 amounts have been reclassified to conform to the 2005 financial statement
presentations. Such reclassifications had no effect on previously reported change in net
assets.
Recently Adopted Governmental Accounting Pronouncements
For the fiscal year ended June 30, 2005, the County implemented GASB Statement No. 40,
Deposit and Investment Risk Disclosures - an Amendment of GASB Statement No. 3. This
wr statement addresses common deposit and investments risks related to credit risks,
concentration of credit risk, interest rate risk, and foreign currency risk. As an element of
interest rate risk, this statement requires certain disclosures of investments that have fair
values that are highly sensitive to changes in interest rates. Deposit and investment policies
related to the risks identified in this statement also are required to be disclosed.
Implementation of GASB Statement No. 40 did not have an impact on the County's financial
statements as of and for the year ended June 30, 2005 but required additional disclosures
related to deposits and investment risks (see Note 3).
-53-
r
COUNTY OF HAWAII
Notes to the Basic Financial Statements
w•
r
June 30, 2005
r
2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
Annual Budget
The County follows these procedures in establishing its operating and capital budgets:
• On or before March 1, the Mayor submits to the County Council proposed operating and r
capital projects budgets for the fiscal year commencing the following July 1. The
operating budget includes proposed expenditures for the general fund and special
revenue funds, and the means of financing them. A project-length budget is submitted to r
the County Council for the capital projects fund.
mr
• The Mayor submits to the County Council amendments to the proposed operating and r
capital budgets within ten working days after the close of the state legislature, but not
later than May 5.
r.
• The County Council conducts public hearings on the proposed operating and capital
budgets after March 1 but prior to the first reading on the budget bills, which must be A
after May 5.
• On or before June 30, the County Council adopts the budgets. The legal level of
budgetary control is the department level because the Mayor can transfer funds from any lp
unencumbered appropriation to another within a department or agency without Council 16
approval. During the year, the budget may be amended by action of the Council, except
for appropriations required by law and appropriations for debt service, which may not be ¦
decreased or deleted. Supplemental appropriations were made during the 2004-2005 16
fiscal year to recognize revenue from sources not anticipated at the time of the original
budget and to establish the authorization for such funds to be expended. Such P
supplemental appropriations totaled $18.2 million in the general fund and $5.9 million in yr,
the special revenue funds.
1s
• Appropriations for the operating budget lapse at the end of the fiscal year to the extent
that they have not been expended or encumbered. Appropriations for capital aft
expenditures that are not encumbered lapse at the end of two fiscal years following the 10
fiscal year that the appropriation was made.
r
• Formal budgetary integration is employed as a management control device during the
year for the general fund, special revenue funds, and capital projects fund. Formal
budgetary integration is not employed for debt service funds because effective budgetary
control is alternatively achieved through general obligation bond indenture provisions.
• The accompanying statement of revenues, expenditures and changes in fund balances -
budget and actual (budgetary basis) - general fund presents a comparison of the legally
adopted budget with actual data on a budgetary basis. Accounting principles applied for
r
-54-
r
COUNTY OF HAWAII
MW Notes to the Basic Financial Statements
® June 30, 2005
purposes of developing data on a budgetary basis differ significantly from those used to
present financial statements in conformity with GAAP. On the budgetary basis,
intergovernmental revenues are recognized when awarded by the granting agency,
encumbrances and unexpended allotments are treated as expenditures, accounts payable
are not accrued, and all leases are treated as operating leases. In preparing the financial
statements on a GAAP basis, accounts payable are accrued and treated as a reduction of
encumbrances for balance sheet presentation.
Budget to GAAP Reconciliation
r
The following is a summary of the adjustments necessary to convert fund balances of the
County's general fund and sewer fund from a GAAP basis to a budgetary basis at June 30,
2005:
General Fund Sewer Fund
Ending fund balance - GAAP basis $23,978,072 $7,583,340
w
Encumbrance adjustments:
Beginning encumbrances and unexpended allotments 3,890,862 2,474,199
Ending encumbrances and unexpended allotments (5,378,176) (2,064,210)
r Other adjustments (819.925) (1001
Ending fund balance - Non-GAAP budgetary basis $21.670.833 ~i•993 2a
3. CASH AND INVESTMENTS
- The Director of Finance is responsible for the safekeeping of all monies paid to the County.
The Director of Finance invests any monies of the County which in the Director's judgment
are in excess of the amounts necessary for meeting the day to day operating needs of the
County. Legally authorized investments include obligations of or guaranteed by the U.S.
government, obligations of the State, federally-insured savings and checking accounts, time
certificates of deposit and repurchase agreements with federally-insured financial institutions.
r~ Cash
The County maintains approximately 18 bank accounts for various purposes at locations
throughout the state. Bank deposits are under the custody of the Director of Finance. For
ur
financial statement reporting purposes, cash and short-term investments consist of cash, time
certificate of deposit, and money market accounts. Cash and short-term investments also
include repurchase agreements and U.S. government securities with original maturities of
three months or less.
The carrying amount of the County's unrestricted and restricted deposits (cash, time
certificates of deposit, and money market accounts) as of June 30, 2005 was $151,398,086
r
-55-
a.
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2005
and $546,440, respectively, for the primary government and $6,440,157 and $637,000,
respectively, for the fiduciary funds.
Information relating to bank balance, insurance and collateral of cash deposits is determined
on a countywide basis. Total bank balances of deposits for the primary government and
fiduciary funds amounted to $175,111,723 at June 30, 2005. Of that amount, $174,909,413
represent bank balances covered by federal deposit insurance or by collateral held by the
County's fiscal agents in the name of the County. The remaining bank balances of $202,310
represent deposits held by a management agent and were uncollateralized. Accordingly, these
deposits were exposed to custodial credit risk. Custodial credit risk is the risk that in the even
of a bank failure, the County's deposits may not be returned to it. For demand or checking
accounts and time certificates of deposit, the County requires, in accordance with State
statutes, that the depository banks pledge collateral based on the available bank balances to
limit its exposure to custodial credit risk. All securities pledged as collateral are held by the
County's fiscal agents in the name of the County. The County also requires that no more than
60% of the County's total funds available for deposit may be deposited in any one financial .e
institution, in accordance with State statutes.
W
Investments
The County holds investments both for its own benefit and on behalf of some of the Fiduciary PO
Funds. The County's investments of funds not required for immediate payments are r
predominately comprised of repurchase agreements, while equity securities are held by the
fiduciary fund.
The County's investments and maturities at June 30, 2005 are as follows:
IP
Maturity (in yearsl
Fair Value Less than 1 11=5
Investments - Primary Government:
Certificates of deposit $15,445,079 $15,445,079 $
Repurchase agreements 2.753.528 2.753.528 o'
$18.198.607 $15.455.079 $2-753-528
r
Investments - Fiduciary Funds:
Equity securities $2Z4
w.
Interest Rate Risk: As a means of limiting its exposure to fair value losses arising from rising
interest rates, the County's investment policy generally limits maturities on investments to not
more than five years from the date of investment.
r
Credit Risk: The County's investment policy limits investments in state and U.S. Treasury
securities, time certificates of deposit, U.S. government or agency obligations, repurchase
-56-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2005
agreements, commercial paper, bankers' acceptances, and money market funds, or other
securities maintaining a Triple-A rating.
Custodial Risk: For an investment, custodial risk is the risk that, in the event of failure of the
counterparty, the County will not be able to recover the value of its investments or collateral
securities that are in the possession of an outside party. The County's investments are held by
i its fiscal agent and the securities held by the fiduciary fund are held by the County. In
addition, the County requires the institutions to set aside in safekeeping, certain types of
securities to collateralize repurchase agreements.
Concentration of Credit Risk: The County's investment policy contains no limitations on the
' amount that can be invested in any one issuer beyond that stipulated by the Hawaii Revised
Statutes.
Restricted Cash and Cash Equivalents and Investments
r
Cash and cash equivalents and investments classified as restricted assets amounted to
$1,183,440 at June 30, 2005 consist of the following:
Primary government $ 546,440
Fiduciary funds 637,000
$1.183.440
The County entered into a capital lease to purchase a new financial accounting computer
" system. Upon execution of the lease documents, the leasing company deposited into an
escrow account in the County's name the full lease proceeds. As progress billings are
received for the new system, the County will authorize withdrawals from this escrow
account to pay the bills. The balance in this account at June 30, 2005 was $320,147.
Tenant security deposits received by the County for the Kulaimano Elderly Housing
Project and the Ouli Ekahi Affordable Housing Project are recorded as restricted assets.
Such funds amounted to $9,290 and $20,250, respectively, at June 30, 2005.
Restricted amounts set aside by the Kulaimano Elderly Housing Project under its loan
agreement with the Farmers Home Administration totaled $182,123 at June 30, 2005. This
amount is restricted for debt service, or for other purposes with prior approval from the
Farmers Home Administration. An operating reserve fund was established by the Ouli
Ekahi Affordable Housing Project pursuant to an agreement with the developer of the
project. This restricted reserve amounted to $14,630 at June 30, 2005.
The Improvement District No. 17 Fund has restricted $637,000 as a bond reserve at June
30, 2005 to comply with the requirements of its Kaloko Subdivision bond issuance.
-57-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2005
4. RECEIVABLES
Receivables as of June 30, 2005, for the County's individual major funds and nonmajor funds
in the aggregate, including the applicable allowances for uncollectible accounts, are as iw
follows:
Governmental activities:
Capital Nonmajor
General Sewer Projects Governmental °i
Fund Fund Fund Funds Total
Receivables:
Real property taxes $6,490,197 $ $ $ $ 6,490,197
Accounts receivable:
Sewer 3,253,509 3,253,509
Solid waste 1,364,338 1,364,338
Capital Projects 829,000 829,000 M
Intergovernmental 6.238297 9,658.347 423.541 16.320.185
Gross receivables 12,728,494 3,253,509 10,487,347 1,787,879 28,257,229 rt
Less: allowance for
uncollectibles (1,076,0351 43( 4,894) (1.510.929)
Net total receivables $12.728.494 $2.177.474 $10.487347 $ ULM $26.746.300
aw
Business-type activities: rb
Enterprise
Funds
Receivables: r
Accounts receivable:
Rent $45,767 lr'
Other 2.621 ¦a
Gross receivables 48,388
Less: allowance for
uncollectibles
Net total receivables $4 $
During the fiscal year, the County issued $3,887,493 in general obligation bonds on behalf of
Improvement District No. 18, an agency fund. At year end, the outstanding balance of
$3,887,493 is reflected in the government-wide statement of net assets as a receivable (see
Note 10).
¦m
-58-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2005
a
5. INTERFUND RECEIVABLES AND PAYABLES
Interfund receivables and payables consist of the following at June 30, 2005:
Receivable Fund Payable Fund Amount
General fund Sewer fund $ 165,761
Capital projects fund 11,903
Other governmental funds 1,126,443
1.304.107
Sewer fund General fund 75,712
Other governmental funds 88
75.800
Capital projects fund General fund 19,000
Other governmental funds 177.984
196.984
Other governmental funds General fund 92,154
Capital projects fund 9,680
Other governmental funds 32,297
134,131
ry Total 14
Sewer fund Enterprise funds $
The above interfund balances result from the time lag between the dates that interfund goods
and services are provided or reimbursable expenditures occur, transactions are recorded, and
payment between funds are made.
Transfers for the fiscal year ended June 30, 2005 consisted of the following:
Transfers out:
Nonmajor
General Governmental
Fund Funds Total
+W Transfers in:
Capital projects fund $ 2,610,165 $5,447,938 $ 8,058,103
Non major governmental funds 34,061,322 34,061,322
$36.671.487 55.447.938 $42.119.425
The interfund transfers noted above include transfers from the general fund to provide
At support for various County programs and to provide resources for the payment of debt
r
-59-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2005
services. In addition, some of the nonmajor governmental funds have made transfers to the .W
capital projects fund for the construction of various projects.
6. CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2005 for the County was as follows:
Balance Balance
June 30, June 30,
2004 Additions Retirements 2005
Governmental activities: ob
O
Capital assets not being depreciated:
r
Land $ 19,610,464 $ $ (49,725) $ 19,560,739
Construction in
progress 60,202.498 19.581.664 (3,658.99 2 76,125,170
Total capital assets not
being depreciated 79,812,962 19,581,664 (3.708.7171 95.685.909 lop
Capital assets being depreciated: 0~
Buildings and
improvements 257,402,551 1,600,609 259,003,160 r
Machinery and t
equipment 65,267,793 6,717,030 (1,587,872) 70,396,951
Infrastructure 233.319.758 15.249.495 248,569,253 op
Total capital assets tr
being depreciated 555,990.102 23,567.134 (1,587.872) 577.969.364
Less accumulated depreciation for: b
Buildings and
improvements (38,659,798) (3,489,919) (42,149,717) op
Machinery and
equipment (38,732,618) (4,359,403) 1,298,395 (41,793,626) 1?
Infrastructure (82.669,122) (9,755.070) (92,424.192)
Total accumulated
depreciation (160,061,538) (17.604.392) 1.298.395 (176.367,535)
Total capital assets,
being depreciated,
net 395.928.564 5.962.742 (289.477) 401.601.829
Governmental
activities capital
assets, net 475.741.526 5.544.40E ($3998.194) $497287.738 No
rW
-60- •
COUNTY OF HAWAII
w Notes to the Basic Financial Statements
June 30, 2005
a
Balance Balance
40 June 30, June 30,
2004 Additions Retirements 2005
Business-type activities:
.a
Capital assets not being depreciated:
Land 753,877 $ $ $ 753,877
r
Capital assets being depreciated:
Buildings 1,136,008 1,136,008
Ground and site
improvements 261,000 - 261,000
Furnishings and
equipment 90,624 11,050 (8,342) 93,332
Total capital assets
being depreciated 1,487,632 11,050 (8,342) 1,490,340
Less accumulated depreciation for:
Buildings (609,359) (24,615) (633,974)
- Ground and site
improvements (163,384) (3,755) (167,139)
Furnishings and
equipment (78,407 (5,725 8,113 (76,019)
Total accumulated
depreciation (851,150) (34,095 8,113 (877,132)
Total capital assets,
being depreciated,
net 636,482 (23,045 229 613,208
Business-type
activities capital
assets, net $1"390.359 {$23.045) 22 1.367.085
r
rtl
- 61 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements "
June 30, 2005
Depreciation expense was charged to functions/programs of the primary government as
follows:
Governmental activities:
General government $ 1,424,873
Public safety 1,538,261
Highways and streets 10,588,047 -
Sanitation 2,880,958
Health, education and welfare 173,537
Culture and recreation 998.716
Total depreciation expense - governmental activities $17.604392
Business-type activities:
Kulaimano Elderly Housing Project $34,095
Total depreciation expense - business-type activities $Q9
7. UNEARNED REVENUE `
Unearned revenue consists of the following at June 30, 2005:
r
Capital Other Total
General Sewer Projects Governmental Governmental W
Fund Fund Fund Funds Funds Mb
Real property taxes $7,703,927 $ $ $ $ 7,703,927
Liquor control revenue 174,815 174,815 I¦
Sewer revenue 2,177,474 - 2,177,474 r
Solid waste revenue 929,443 929,443
Intergovernmental 1,916,984 3,846,681 34.473 5.798.138 1o
Total presented in r
fund financial
statements 9,795,726 2,177,474 3,846,681 963,916 16,783,797 s
Less adjustments for o t
accrual of revenues (6,490.1971 (2,177,4741 - (929,443) (9.597.114)
Total government- r
wide financial
statements $ 30529 $ $3.846.681 $__3473 $ 7.186.683
Enterprise
Funds
Unearned rental income
-62-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2005
u.
w 8. LEASES
The County leases machinery and equipment under noncancellable leases expiring at various
r dates through April 2010 which meet the criteria for capitalization. These capital leases are
financed from general fund resources.
.r The estimated value of the leased machinery and equipment at the inception of the capital
leases and accumulated depreciation, amounting to $8,294,845 and $2,965,484, respectively,
and the related present value of the remaining obligations under the capital leases amounting
to $3,642,928 at June 30, 2005 are included in capital assets and long-term debt, respectively.
The County also leases land, office facilities and other equipment under noncancellable
M operating leases expiring through July 2020. Expenditures for such operating leases were
$738,489 for the fiscal year ended June 30, 2005.
s
The future minimum obligations under capital and operating leases at June 30, 2005 are as
w follows:
Governmental
r
Activities -
Capital Operating
Leases Leases
r Year Ending June 30:
2006 $1,243,199 $479,909
2007 1,064,352 293,529
2008 937,025 162,782
2009 438,269 83,536
2010 236,840 72,361
¦ 2011-2015 337,803
2016 - 2020 1.800
Total minimum lease payments 3,919,686 $14~31~
Less amount representing
interest (276,758)
Obligations under capital leases $3-641928
.r
r
r
_ -63-
r
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2005
9. SOLID WASTE LANDFILL CLOSURE AND POSTCLOSURE CARE COSTS r
Hilo Landfill The County owns and operates a landfill located in the city of Hilo. State and
federal laws require the County to place covers on certain landfill sites and to monitor and
maintain the sites for thirty years after the facility is closed. Although the closure and
postclosure care costs will be paid near and after the date that the landfill stops accepting
waste, the County recognizes a portion of the closure and postclosure care costs in each `
operating period. The liability for these costs is included in the government-wide statement
of net assets. The amount recognized each year is based on the landfill capacity used as of
the balance sheet date. At June 30, 2005, the County recognized a liability of $13,330,000,
based on the use of 97% of the estimated capacity of the landfill. During the fiscal year
ended June 30, 2005, $34,875 was spent on closure of the landfill. The remaining $380,791
in estimated cost of closure and postclosure care will be recognized as the remaining
estimated capacity is used. These amounts are based on what it would cost to perform the
required closure and postclosure care in 2005. Actual costs at that time may be higher due to
inflation, changes in technology, or changes in regulations.
The County's permit to operate the landfill expired October 9, 1998. The County filed for an
extension which was approved by the state until permitted capacity is reached. In accordance NOW
with state statute, the County is allowed to continue operations provided that the County acts
consistently with the permit previously granted and the extension application, plans, ¦
specifications and all other information contained therein. r.
Kealakehe In October 1993, the County closed its Kealakehe landfill in Kona. Under state PP
and federal requirements, the County would have to monitor and maintain this site for ten it
years from the closure date. However, the County anticipates monitoring and maintaining the
site for thirty years because there is presently a subterranean fire which requires active MI'
management. The estimated cost of closure and postclosure is $15,250,000, based on what it bb
would cost to perform the required closure and postclosure care in 2005. Actual costs may be
higher due to inflation, changes in technology, or changes in regulations. Through IMP
June 30, 2005, $6,737,687 was spent on closure and postclosure care of the landfill. The
remaining estimated liability of $8,512,000 is included in the government-wide statement of r`
net assets. During the year ended June 30, 2005, a total of $124,982 was spent on this
landfill. This amount was for the management of the subterranean fire. The County is
providing financial assurance for postclosure care and remediation through self insurance as
explained below.
Pu'uanahulu In May 1993, the County contracted with a private company to construct and
operate a new landfill on County land at Pu'uanahulu in West Hawaii. The present contract
calls for County employees to perform the daily operations of the landfill, and for the private
company to retain the overall management as well as perform all construction work on the r
landfill cells. Under the terms of the contract, the County has no responsibility for
ta?
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COUNTY OF HAWAII
- Notes to the Basic Financial Statements
June 30, 2005
remediation, closure or postclosure care. Accordingly, no liability for this landfill is included
in the County's financial statements.
' Financial Assurance For fiscal year 2005, the County has provided for financial resources
that will be available to provide for closure, postclosure care and remediation or containment
of environmental hazards at the above landfills. The Environmental Protection Agency's
financial assurance rules include a local government financial test consisting of a financial
component, a public notice component, and a recordkeeping component. Local goverments
are required to satisfy each of the three components to pass the annual test. Management
believes that the County has satisfied each of the components of the local government
financial assurance requirements.
10. LONG-TERM DEBT
General Obligation Bonds
The County issues general obligation bonds to provide funds for the acquisition and
construction of major capital facilities. These bonds have been issued by the County for the
primary government, component unit activities (see Note 14) and an improvement district.
The following is a summary of general obligation bond transactions reported in the
- government-wide statement of net assets for the County for the fiscal year ended June 30,
2005:
Bonds Issue Bond Balance Bond Balance Due within
" Authorized Amount June 30, 2004 Issues Retimmcnts June 30, 2005 one
1977 Series A $ 500,000 S 202,000 $ - $ 202,000 $ - $ -
1993 Ref& PI 86,770,000 43,525,000 - 3,870,000 39,655,000 4,090,000
1996 Series A 30,000,000 22,650,000 - 21,145,000 1,505,000 1,505,000
1997 Series A 4,000,000 3,006,000 - 3,016,000 - -
r. 1999 Series A 30,000,000 27,700,000 - 1,240,000 26,460,000 1,300,000
1999 Refunding 18,940,000 7,775,000 - 2,475,000 5,300,000 2,590,000
2001 Series A 23,000,000 15,000,000 - 554,348 14,445,652 573,913
2001 Series A PI 1,800,000 1,740,300 - 1,740,300 - -
2003 Series A 36,310,000 36,310,000 - - 36,310,000 -
2004 Series A 30,000,000 - 30,000,000 - 30,000,000 -
2004 Ref Ser B 19,545,000 - 19,545,000 - 19,545,000 -
2004RefSerC 5,050,140 5,050,140 - 5,050,140 447,364
~r 2004 P1 Ser A 2,776,400 - 2,776,400 - 2,776,400 -
2004 PI Ser B 920,000 - 920,000 - 920,000 -
2004 PI Set C 191,093 191,093 191.093
289,802,633 157,908,300 58,482,633 34,232,648 182,158,285 10,506,277
Add unanuruzed
premium 2,658,425 968,275 1,606,219 92,766 2,481,728 132,921
Less deferred amount
on refunding (12940021 - (1,294,002 (64,700) (1,229,302 ( 129,4001
SS 9I S158876575 $51.794" 5734,260,714 $183A10J11
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COUNTY OF HAWAII
Notes to the Basic Financial Statements "
June 30, 2005 r
~r
General obligation bonds payable reported on the government-wide statement of net assets at
June 30, 2005 are comprised of the following individual issues: ¦r
Public improvement and/or refunding bonds: r
1993 Refunding & PI at 5.4% to 5.6%, due through 2013 $ 39,655,000
1996 Series A at 4.6%, due through 2006 1,505,000
1999 Series A at 5.125% to 6.0%, due through 2019 26,460,000
1999 Refunding at 4.75% to 4.875%, due through 2007 5,300,000 An
2001 Series A at 4.0% to 5.5%, due through 2021 14,445,652
2003 Series A at 2.0% to 5.125%, due through 2024 36,310,000 Yr
2004 Series A at 3.0% to 5.25%, due through 2024 30,000,000
2004 Refunding Series B at 3.5% to 5.0%, due through 2015 19,545,000 1V
2004 Refunding Series C at 2.0% to 3.7%, due through 2014 5,050,140 ab
2004 PI Series A at 4.75%, due through 2039 2,776,400
2004 PI Series B at 4.375%, due through 2039 920,000 M
2004 PI Series C at 3.0%, due through 2010 191,093
Total general obligation bonds payable $182.158.285
Annual debt service requirements to maturity for the above general obligation bonds are as ib
follows:
Governmental Activities W
Fiscal year ending June 30: Principal Interest
2006 $ 10,506,277 $ 8,812,122 o'
2007 12,555,883 8,332,715 1r
2008 11,424,440 7,734,343
2009 11,844,481 7,214,488 M'
2010 12,496,183 6,646,458
r`
2011 -2015 59,114,665 23,833,827
2016-2020 36,887,564 11,581,408 ¦
2021- 2025 24,906,272 3,345,928
2026 -2030 606,429 472,912
2031 -2035 761,424 314,301
2036- 2040 954,667 115,126
Total $182.158.285 78.403.628
Refunded Bonds
2004 Series B In fiscal year 2005, the County issued $19,545,000 in refunding bonds as the
2004 Series B general obligation bond issue. The refunding bonds have a true interest cost of
3.51 % and were issued to advance refund the $19,705,000 outstanding balance of the 1996 ib
Series A general obligation bond issue.
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M
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2005
The bonds refunded bore interest at rates ranging from 4.70% to 5.20%. The par amount of
$19,545,000 plus a premium of $1,418,651 and a payment of $102,114 from the debt service
fund, minus $173,736 in underwriting fees, insurance, and other issuance costs resulted in net
proceeds of $20,892,029. The net proceeds were used to purchase U.S.government
securities, which were deposited in an irrevocable trust administered by an escrow agent and
provided full payment on the outstanding 1996 Series A refunded bonds on February 1, 2006.
+ The bonds were considered defeased and are not included in the government-wide statement
of net assets.
The County's total debt service requirements over the next twelve years will decrease by
$1,417,104 as a result of the refunding, and the net economic gain (difference between the
present values on the old and new debt) after taking into account all allocable costs of
issuance of the bonds was $826,306.
2004 Series C Also in fiscal year 2005, the County issued $5,050,140 in refunding bonds as
the 2004 Series C general obligation bond issue. The refunding bonds have a true interest
cost of 3.37% and were issued to current refund the 1977 Series A and 1997 Series A issues
for a total of $3,619,000 and advance refund the $1,677,700 outstanding balance of the 2001
Series A Public Improvement Bonds.
r
The bonds refunded bore interest at rates ranging from 4.85% to 5.00%. The net proceeds of
$4,992,673 were used to purchase U.S. government securities. Those securities were
deposited in an irrevocable trust administered by an escrow agent and provided payoffs on the
1977 Series A and 1997 Series A bonds on October 12, 2004 and will provide full payment on
the outstanding 2001 Series A Public Improvements bonds on August 1, 2006. The bonds
were considered defeased and are not included in the government-wide statement of net
rr
assets.
The County's total debt service requirements over the next eleven years will decrease by
$891,837 as a result of the refunding, and the net present value savings was $380,218.
As of June 30, 2005, bonds outstanding considered defeased amounted to $22,303,705.
s
Bond Premiums
yn During the year, a bond premium of $1,606,219 was received from the 2004 Series A general
obligation bonds. At June 30, 2005, total unamortized bond premiums were $2,481,728
which is being amortized over the remaining life of the respective bond issues.
+r1
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r
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2005
!
Bonds Authorized and Unissued
The County Council has authorized the issuance of $47 million in general obligation bonds to
finance specified capital improvement projects. At June 30, 2005, $17 million were not yet r
issued.
rn
Subsequent Events
On February 23, 2006, the County issued $50 million in general obligation bonds (2006
Series A). The interest rates range from 4.0% to 5.0% and are due through 2026. Of the
bonds issued, $25 million is for the Department of Water Supply (the Department), the
County's component unit. The payments for these bonds will be reimbursed to the County by
the Department. The bonds were authorized in January 2006. w
rr
State Revolving Fund Loans
The County has obtained loans to assist in financing mandated wastewater projects from the
State Water Pollution Control Revolving Fund (SRF). The purpose of this revolving fund is
to provide low-interest, long-tern loans and other financial assistance to the four counties in
the state to finance construction of wastewater projects. The County has fifteen projects IP
approved for funding with these loans. The schedule below shows the County's SRF n
transactions for the fiscal year ended June 30, 2005:
Loans Approved Loan Balance Loan Balance Due within
Authorized Amount June 30- 2004 Additions Retirements June 30, 2005 one vear
Hilo WWTP $12,724,311 $6,584,170 $ - $ 661,425 $5,922,745 $ 677,961
Waiakea Mill 1,300,000 735,643 - 65,663 669,980 67,304 !
Waiakea Hslts 459,321 238,644 23,973 214,671 24,573
Waiakea Hslts 11 5,024,266 4,192,631 - 231,730 3,960,901 237,836 r'
Ainako A&B 2,239,174 1,307,418 112,733 1,194,685 115,067
Kalanianaole 1,499,944 1,000,842 - 74,108 926,734 76,362 10
Kalmimaole RH 5,000,000 - 1,504,078 - 1,504,078 73,549
Alii Drive A&B 3,210,243 1,871,634 - 164,599 1,707,035 169,207 Yr
AN Drive C&D 3,780,000 2,410,806 - 187,918 2,222,888 191,810
AM Drive E&F 2,112,654 1,502,526 - 105,476 1,397,050 108,686
Waiaha Bay 3,697,893 2,418,133 181,113 2,237,020 186,182
Kealakehe 1,300,071 734,303 - 65,543 668,760 67,181 r,
Holualoa Bay 3,080,000 2,200,130 - 147,270 2,052,860 151,751
Paukaa CCS 2,143,448 1,758,118 - 98,857 1,659,261 101,142
Pahoehoe 2.817.760 2.542375 120,539 2.421.836 123 717 !
$59 899 8 $24 7 3 $15Q4 428 $ 40 97 $2 32fl
i.r
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2005
The loans bear interest at 2.06% to 3.02%, exclusive of a 1.00% loan fee, and require
payments through fiscal year 2025. Debt service to maturity for disbursements to date on
these projects are as follows:
w.
Governmental Activities
Fiscal year ending June 30: Principal Interest
2006 $ 2,372,328 $1,013,579
2007 2,421,420 959,150
2008 2,483,831 891,327
2009 2,547,994 821,614
2010 2,613,720 750,194
2011-2015 11,931,117 2,442,385
2016 - 2020 3,813,445 453,652
2021- 2025 576.649 37.404
Total $28.760.504 $1.
Other General Long-term Obligations
The following is a summary of other general long-term obligations transactions for the fiscal
year ended June 30, 2005:
Balance Deductions Balance Due within
June 30, 2004 Additions & Payments June 30, 2005 one ear
Governmental activities:
Compensated absences $20,942,288 $ 9,518,036 7,887,069) $22,573,255 $ 5,783,235
Claims and judgments
(see Note 12) 20,029,000 11,433,825 (4,860,536) 26,602,289 5,270,695
A Capital lease obligations
(see Note 8) 3,547,085 1,368,928 (1,273,085) 3,642,928 1,118,589
rr Landfill closure costs
(see Note 9) 21.515.000 487.000 (160.000) 21.842.000 149.610
Total 660 t 22.807.789 ($14.180.6901 74.660.472 $12.322.129
s
Fund Balances - Debt Service Funds
The fund balance in the debt service funds at June 30, 2005 includes $14,429,594 which is
available for principal payments on general obligation bonds and $612,164 which is reserved
for the payment of interest on the bonds.
Enterprise Fund Notes Payable
The Kulaimano Elderly Housing Project is indebted to the U.S. Department of Agriculture,
Farmers Home Administration on two notes payable with balances aggregating $1,041,285 at
June 30, 2005. The notes, which mature in September 2029, are repayable in monthly
rrv
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2005
installments of $7,826 including interest and are collateralized by substantially all of the
project's property and equipment. Although the stated annual rate of interest on the notes is s
9%, such rate is reduced to 7% for as long as the Project has a U.S. Department of Housing
and Urban Development Section 8 Housing Assistance Payment contract in effect for all or
part of the units within the Project, M
The following is a summary of enterprise fund notes payable transactions for the fiscal year IN
ended June 30, 2005:
Balance at June 30, 2004 $1,065,417
Deductions (24,132
Balance at June 30, 2005 1,041,285
Less current portion (21,899
)
Note payable, net of s
current portion SLO19,A6
The following is a summary of the annual maturities for the enterprise fund notes payable:
PP
Business-type Activities r
Fiscal year ending June 30: Principal Interest
2006 $ 21,899 $ 72,013
2007 23,279 70,633 I'
2008 24,962 68,950 Yr
2009 26,767 67,145
2010 28,702 65,210
2011-2015 177,797 291,763 op
2016 - 2020 252,050 217,510 to
2021 -2025 357,312 112,248
2026 - 2030 128.517 7.172 so
Total $1-041,285 $4 r
Special Assessment Bonds Illp
The County has outstanding special assessment bonds for one improvement district. In 1991,
the County issued $14 million of special assessment bonds for Improvement DistrictNo. 17,
Kaloko Subdivision, to finance a roadway and water system. In 2001, the County refunded
the remaining bonds outstanding of $6,370,000. The bonds mature annually through 2011
and bear interest at 7.375%.
Total special assessment bonds payable were $5,070,000 at June 30, 2005. These are not
general obligation bonds and the County is not obligated in any manner for the repayment of
these bonds. The bonds are secured by a first lien on the land benefited by the improvements,
and are to be repaid from the annual assessments levied against the owners of the land. The
County acts as an agent for the property owners within the improvement districts to collect
assessments receivable, forward payments to bond-paying agents at appropriate dates and if
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2005
required, administer foreclosure proceedings. Accordingly, these bonds are not reflected on
the County's government-wide statement of net assets.
i The following is a summary of special assessment bond transactions for Improvement District
No. 17, Kaloko Subdivision, for the fiscal year ended June 30, 2005:
Balance at June 30, 2004 $5,610,000
Deductions (540,000)
4. Balance at June 30, 2005 $5.0
a
The following is a summary of the annual maturities for the special assessment bonds:
Year ending June 30: Principal Interest
2006 $ 580,000 $ 352,525
2007 620,000 308,275
• 2008 670,000 260,706
2009 715,000 209,634
2010 770,000 154,875
2011-2012 1715 000 128,879
Total $5.070.000 X1.414.894
The County has issued general obligation bonds on behalf of Improvement District No. 18 for
water improvements (see Note 4). The Improvement District is responsible for the payment of
the debt service on these bonds, but the County remains liable because they are general
M obligations of the County. The bonds mature annually through 2039 and bear interest at 3.0%
to 4.75%. Total general obligation bonds payable included in the government-wide statement
of net assets were $3,887,493 at June 30, 2005.
¦
The bonds are secured by a first lien on the land benefited by the improvements, and are to be
repaid from the annual assessments levied against the owners of the land. The County acts as
r an agent for the property owners within the improvement districts to collect assessments
receivable, forward payments to bond-paying agents at appropriate dates and, if required,
administer foreclosure proceedings.
rr
The following is a summary of bond transactions for Improvement District No. 18,
+.i Coastview/Wonderview Water Improvements, for the fiscal year ended June 30, 2005:
Balance at June 30, 2004 $
Additions 3,887,493
Deductions
Balance at June 30, 2005
a
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COUNTY OF HAWAII PIP
Notes to the Basic Financial Statements
June 30, 2005
r
r
The following is a summary of the annual maturities for the improvement district general
obligation bonds:
Year ending June 30: Principal Interest `
2006 $ $ 88,931
2007 82,556 176,239
2008 85,802 172,927 `
2009 89,181 169,478
2010 92,699 165,888
2011-2015 346,986 780,462 r"
2016 - 2020 384,737 699,770
2021 -2025 483,013 599,204 IMP
2026 -2030 606,428 472,912
2031 -2035 761,424 314,302
2036 -2040 954,667 115.128
Total 3.887.493 3 5 2412 M`
R
11. COMMITMENTS AND CONTINGENCIES Yr
Contractual commitments - Contractual commitments for capital projects, expenses, and
supplies at June 30, 2005, except in the enterprise funds, are reflected in the balance sheets as Yr
fund balance reserved for encumbrances. Contractual commitments for the enterprise funds
were immaterial.
r
Intergovernmental revenues - The County has received federal and state grants for specific
purposes that are subject to review and audit by grantor agencies. Such audits could lead to
requests for reimbursement to the grantor agency for expenditures disallowed under terms of r`
the grant. In the opinion of management of the County, disallowed costs, if any, would not be
material.
Claims - Numerous claims and lawsuits have been filed against the County in the normal
course of its operations. A liability for probable losses is included on the government-wide
statement of net assets (see Note 12). Although the outcome of the various claims and
lawsuits is not presently determinable, in the opinion of the County's attorneys, the resolution
of such matters will not have a material adverse affect on the financial condition of the
County.
r
ADA compliance - The County has entered into two stipulated agreements approved by the
federal court to implement provisions of the Americans with Disabilities Act (ADA). With
respect to the first stipulated agreement relating to curb cuts, the County, with the help of a
consultant, surveyed 669 intersections, then ranked them in order of priority. A transition n,
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2005
plan, along with a funding commitment, was approved by the County Council. The total cost
of all curb cuts was estimated to be $6.2 million. The cost of the first phase of the plan was
$3 million, to be used in high priority areas such as government facilities, schools, and
r hospitals. The remaining cost will cover curb cuts at parks and in low-density single family
residential areas. All corrective action was to be completed by July 2005, with an estimated
682 ramps to be completed. Funding allocated so far for this effort is $5.9 million. Since the
rr proposed timetable proved to be too ambitious, the parties amended the agreement to require
contracting by July 2005, rather than completion by that date. Pursuant to the April 2005
Stipulation of the Parties and Order of the Court, all curb ramps for 2005 and most curb
ramps for 2004 were deferred. There were 50 curb ramps constructed in 2005. There are 295
curb ramps to be completed by the end of December 2006; all ramps have been designed.
The second stipulated agreement relates to the Department of Parks and Recreation (the Parks
Department). The agreement required the Parks Department to establish practices, policies
and procedures regarding its programs, and prepare a transition plan by the middle of the year
2000. The self-evaluation and transition plan for programs, practices and procedures has
r been completed and approved by the County Council. The cost impact of implementation is
not material because the necessary modifications are primarily procedural. This is an
ongoing effort. The second part of this stipulated agreement is the reevaluation of all County
facilities, which was completed and accepted by the County Council on June 30, 2000.
Approximately 240 County facilities were surveyed as part of this effort. The tentative
completion date of all necessary repairs and renovations is 12 years from the date the County
m Council accepted the self-evaluation. The original estimated cost of the facilities repairs was
$14.8 million, which will be spent over the 12 year period. Funding allocated so far for
facilities repairs is $11.2 million, with another $4 million of federal funding anticipated
through community development block grants over the next 3 years. Since 2000, the
Department of Parks and Recreation has requested $2 to $3 million a year for the different
park facilities' ADA projects, and recently, the Department of Public Works has requested an
additional $2 million a year for the other County ADA facilities' project. Parties are
currently working on a plan to ensure implementation of the Transition Plan with the
assistance of an ADA Specialist, and to obtain extension on the deadlines for completion.
r
12. RISK MANAGEMENT
The County is exposed to various risks of losses related to torts; theft of, damage to, and
destruction of assets; errors and omissions; injuries to employees; and natural disasters. The
County maintains fire and commercial multiple peril insurance on County facilities, flood
r insurance on selected structures, medical malpractice insurance for emergency medical
technicians, general liability insurance for water safety officers, aviation liability for
helicopter operations, automobile coverage on transit buses, and no-fault insurance coverage
40 for privately owned police vehicles. There was no reduction in insurance coverage during the
year from coverage in the prior year. During the past three fiscal years, the amount of
settlements in cases covered by insurance have not exceeded the insurance coverage. The
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
w
June 30, 2005
w
County is substantially self-insured for its vehicles as well as for all other perils including r
workers' compensation and general liability. n,
Liabilities are reported when it is probable that a loss has occurred and the amount of that loss
can be reasonably estimated. These losses include an estimate of claims that have been M
incurred but not reported (IBNR). Claim liabilities, including IBNR, are based on the
estimated ultimate cost of settling the claims, and include incremental costs for the hiring of r
special counsel and expert witnesses. Claims liabilities are estimated by a case-by-case
review of all claims and the application of historical experience to outstanding claims.
Estimates of IBNR are based on historical experience. The liability for claims and judgments r
is reported on the government-wide statement of net assets. At June 30, 2005, the amount of
this liability was $26,602,289. This is the County's best estimate based on available op
information. Changes in the reported liability since June 30, 2003 are given below. r
General Workers' Total PP
Liabili Compensation Liabili ob
Balance at June 30, 2003 $6,670,511 $11,902,820 $18,573,331
Incurred claims (including IBNR)* 2,759,512 4,795,010 7,554,522 V
Claim payments (2,591,639 (3,507,2141 (6,098.8531 Ir
Balance at June 30, 2004 $6,838,384 $13,190,616 $20,029,000
Incurred claims (including IBNR)* 4,669,502 6,764,323 11,433,825 10
Claim payments (1,544,734 (3,315.8021 (4,860,536)
16.639.137 $26.602.289
Balance at June 30, 2005 $9,963,152
*Net of new claims liability and old claims resolved at less than previous estimate.
i
13. EMPLOYEE BENEFIT PLANS
Pension Plan r`
Plan description All full-time employees of the County participate in the Employees'
Retirement System of the State of Hawaii (System), a cost-sharing multiple-employer
defined benefit pension plan. The System was established by Chapter 88 of the Hawaii
Revised Statutes (HRS) and is governed by a Board of Trustees. All contributions, benefits
and eligibility requirements are established by Chapter 88, HRS, and can be amended by
legislative action.
The System regards the County, including its component unit, as one employer. Therefore,
separate information for the primary government and its component unit is not available. All
information given below on the pension plan is for the reporting entity as a whole, including
both the primary government and its component unit.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
T June 30, 2005
r
,o All of the County's full-time employees are eligible to participate in the System. The System
consists of a contributory retirement plan and a noncontributory retirement plan. Eligible
" employees, in service and a member of the existing contributory plan on June 30, 1984, were
given an option to remain in the existing plan or join the noncontributory plan, effective
January 1, 1985. All new eligible employees hired after June 30, 1984 generally become
members of the noncontributory plan. Both plans provide death and disability benefits and a
cost of living adjustment. In the contributory plan, employees generally may elect normal
retirement at age 55 with 5 or 10 years of credited service or elect early retirement at any age
with 25 years of credited service. Such employees are generally entitled to retirement
benefits, payable monthly for life, of 2% or 2V2% of their average final salary, as defined, for
each year of credited service with certain limitations. Benefits fully vest on reaching five
years of service; retirement benefits are reduced for early retirement. In the noncontributory
plin, employees may elect normal retirement at age 62 with 10 years of credited service or at
age 55 with 30 years of credited service, or elect early retirement at age 55 with 20 years of
credited service. Such employees are entitled to retirement benefits, payable monthly for life,
of 1.25% of their average final salary, as defined, for each year of credited service. Benefits
fully vest on reaching ten years of service; retirement benefits are reduced for early
retirement.
' The System issues a Comprehensive Annual Financial Report that may be obtained by writing
to the Employees' Retirement System of the State of Hawaii, 201 Merchant Street, Suite
1400, Honolulu, Hawaii 96813.
Funding policy All funding requirements are established by Chapter 88, HRS, and can be
amended by the state legislature. Covered contributory plan employees are required to
contribute 7.8% or 12.2% of their salary to the plan; the County is required to contribute the
remaining amounts necessary to pay contributory plan benefits when due. The County is also
required to contribute all amounts necessary to pay noncontributory benefits when due. The
County's contribution requirements are actuarially determined based on actuarial assumptions
established by Chapter 88, HRS. The County's contributions to the System for the fiscal
years ended June 30, 2003, 2004 and 2005 were $4,212,000, $7,394,683 and $10,487,763,
respectively, equal to the required contributions for each year.
Post-Retirement Benefits
In addition to providing the pension benefits described above, the County is required by state
statute to contribute to the Hawaii Employer-Union Health Benefits Trust Fund (the EUTF),
a statewide program which provides health and group life insurance for all retired and active
County employees, their dependents and their beneficiaries. The state and other counties also
participate in the fund. For employees hired prior to July 1, 1996 who retire with at least ten
years of credited service, the County is required to pay 100% of the premiums of the medical,
adult dental, prescription drug, vision, and group life insurance plans elected by the retiree.
For employees hired prior to July 1, 1996 who retire with less than ten years of credited
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2005
R
service, the County is required to pay half of the monthly premium cost of the above plans. r
For employees hired July 1, 1996 or after, the amount of the premium cost the County is
required to pay varies depending on the employee's years of service at the time of retirement.
Currently, the County has 1,060 former employees who have retired with at least ten years of
credited service and are receiving the full benefit. One additional employee has retired with
less than ten years of service and has half of his medical premiums paid by the County. For
each retiree and retiree's spouse eligible for Medicare, the County also pays $78.00 per month
as reimbursement of their Medicare premiums.
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The County's contribution is recorded as an expenditure when paid. The amount of the
contribution is limited by state statute to the actual cost of benefit coverage. During the fiscal
year ended June 30, 2005, the County's contribution to the Health Fund for retired employees tiw
totaled $6.5 million.
PP
Deferred Compensation Plan rY
County employees are permitted to participate in a deferred compensation plan of the State of V
Hawaii, adopted pursuant to Internal Revenue Code (IRC) section 457. The plan permits y,
eligible employees to defer a portion of their salary until future years by contributing to a
fund managed by a plan administrator. The deferred compensation amounts are not available ?
to employees until termination, retirement, death, or unforeseeable emergency.
All plan assets are held in a trust fund to protect them from claims of general creditors and
from diversion to any uses other than paying benefits to participants and beneficiaries. The it
County has no responsibility for loss due to the investment or failure of investment of funds
and assets in the plans, but does have the duty of due care that would be required of an
ordinary prudent investor. Therefore, in accordance with GASB Statement No. 32,
Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred
Compensation Plans, deferred compensation plan assets are not reported in the accompanying
basic financial statements.
14. COMPONENT UNIT DISCLOSURES
Deposits and Investments
At June 30, 2005, cash, time certificates of deposit, money market funds, and repurchase w
agreements of $39,294,698, with bank balances of $41,795,164, were held by the County on
behalf of the Department. These balances were fully insured or collateralized with securities
held by the County's agent in the County's name.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
r June 30, 2005
The deposits and investments include investments received by the Department that are
refundable or restricted as to use, and is recorded as a restricted asset. Such funds amounted
to $11,914,168 at June 30, 2005.
ar
At June 30, 2005, the Department's investment portfolio consists primarily of time
certificates of deposit held by the County on behalf of the Department.
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Capital Assets
r The Department began operations as of January 1, 1950. At that date, the utility plant in
service was transferred to the Department from the County at the cost of the utility plant
assets acquired by the County for its water system from January 1, 1924 to
December 31, 1949, less accumulated depreciation. Acquisitions prior to 1924 and
acquisitions by gift or grant prior to 1950 are not included in utility plant. Additions to utility
plant since January 1, 1950 are stated at original cost and include contributions by
governmental agencies, private subdividers and customers at their cost or estimated cost.
r Construction costs include amounts for contract work, engineering supervision and other
direct and indirect costs. Construction period interest is capitalized on utility plan constructed
with tax-exempt debt.
Depreciation on the Department utility plant assets in service is computed using the straight-
line method over the estimated useful lives of the assets as follows:
Structures and improvements 40 to 50 years
Machinery and equipment 5 to 20 years
Water systems 10 to 40 years
The capital assets of the Department at June 30, 2005 were as follows:
Utility plant in service $269,379,520
r Less: accumulated depreciation (123.642,024)
145,737,496
Land and rights 787,657
r Construction in progress 40,640,738
Net capital assets $187.165.891
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2005 .w
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Long-term Debt
The County has issued general obligation bonds on behalf of the Department. The
Department is responsible for the payment of the debt service on these bonds, but the County
remains liable because they are general obligations of the County. The Department has ,
recorded a liability for these general obligation bonds, which amounted to $14,657,708
at June 30, 2005.
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General obligation bonds payable issued on behalf of the Department and other long-term
debt at June 30, 2005 are comprised of the following:
Public improvement bonds: w
1993 Series A at 5.05% to 5.6%, due through 2013 $ 5,570,000 r
1998 Series A at 4.5%, due through 2033 699,300
2001 Series A at 4.0% to 5.5%, due through 2021 7,704,348 IPA
2004 Series D at 4.5%, due through 2039 259.200 Ir
Total public improvement bonds 14,232,848
Public improvement refunding bonds: AIR
2004 Series at 5.0%, due through 2015 424,860 1b
State revolving fund loan, interest at 1.01 % to 1.37%,
due through 2022 2,905,354 AIR
Total $17.563.062 •
At June 30, 2005, future principal payments for long-tern debt are scheduled as follows:
Fiscal year ending June 30:
2006 $ 1,091,000 r
2007 1,142,000
2008 1,195,000
2009 1,241,000
2010 1,311,000
2011- 2015 5,665,000 f
2016 - 2020 3,765,000
2021- 2025 1,707,000
2026 -2030 215,000 r
2031 -2035 177,000
2036 -2039 54,062
Total $17,563.062
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COUNTY OF HAWAII
.a Notes to the Basic Financial Statements
June 30, 2005
r Contributions in Aid of Construction
Effective July 1, 2000, the Department adopted GASB Statement No. 33, which requires the
M Department to recognize contributions in aid of construction as nonoperating revenues.
Contributions in aid of construction were previously recognized as contributed capital. The
Department recognized $11,612,284 of contributions in aid of construction as nonoperating
M revenues for the fiscal year ended June 30, 2005.
Commitments and Contingent Liabilities
s
Claims and judgments - The Department is self-insured for workers' compensation and
other perils. The liability at June 30, 2005 for workers' compensation claims of $272,000
was estimated based on a combination of case-by-case review and the application of historical
experience to outstanding claims.
m Construction contracts - The Department is obligated under construction contracts for the
r utility plant and other projects. Such commitments approximated $23,234,000 at
June 30, 2005.
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NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
HIGHWAY FUND -Used to account for the costs of maintaining the County's highways and streets.
Financing is provided primarily by fuel, motor vehicle weight and public utility franchise taxes.
SOLID WASTE FUND - Used to accumulate moneys for the operation, maintenance, and administration of
the County's solid waste management, collection and disposal systems. Financing is provided by tipping
fees at the landfills and by disposal permit fees.
CEMETERY FUND -Used to accumulate moneys to guarantee the future maintenance of County cemetery
sites. Financing is provided from the sale of burial lots in County cemeteries.
PARKING METER FUND - Used to account for the costs of maintaining County on-street and off-street
parking areas. Financing is provided by the proceeds from parking meters.
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VEHICLE DISPOSAL FUND - Used to accumulate moneys for the towing, removal, disposal and recycling
of abandoned or discarded automobiles and automobile parts. Financing is provided by annual fees
r collected with motor vehicle registrations.
BIKEWAY FUND - Used to accumulate moneys for the construction of bikeways within the County.
Financing is provided by bicycle license fees.
WORKFORCE INVESTMENT ACT FUND - Used to account for employment and training services
provided to economically disadvantaged adults, dislocated workers and youth. Financing is provided by
federal grants.
GOLF COURSE FUND - Used to account for the cost of operating the Hilo Municipal Golf Course.
Funding is provided from green fees and payments from restaurant and pro shop concessionaires.
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GEOTHERMAL RELOCATION REVOLVING FUND -Used to account for the County's share of
geothermal resource royalties received from the operator of a geothermal power plant located in the County.
The funds are earmarked for a geothermal relocation program.
BEAUTIFICATION FUND - Used to accumulate moneys for the beautification of highways and disposal of
abandoned vehicles within the County. Financing is provided by assessments on vehicle registrations.
HAWAH COUNTY HOUSING AGENCY- Used to account for Federal and County moneys used to provide
public housing assistance within the County.
r PARK DEDICATION FUND - Used to account for moneys deposited with the County by subdividers to
provide land for parks and playgrounds in subdivisions.
DEBT SERVICE FUNDS
INTEREST FUND - Used to accumulate moneys for payment of interest on general obligation bonds.
Moneys required to service interest maturities are transferred annually from the General Fund.
BOND REDEMPTION FUND - Used to accumulate moneys for the payment of general obligation bonds.
Moneys required to retire the bonds are transferred from the General Fund one year in advance of maturity.
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COUNTY OF HAWAII
Nonmajor Governmental Funds
Combining Balance Sheet A
June 30, 2005 r
Special Revenue Funds
Solid Parking Vehicle
Highway Waste Cemetery Meter Disposal
Fund Fund Fund Fund Fund
Assets
Cash and cash equivalents $ 9,046,905 $3,726,043 $ 50,331 $97,812 $1,540,607 r
Investments - - - - -
Imprest fund - 250 - - -
Receivables:
Due from State of Hawaii - 78,173 - - - IF
Due from federal government - 107,850 - - -
Due from other governmental funds 9,680 - - - -
Due from other nongovernmental funds - - - - - OF
Trade, net of allowance for doubtful accounts 929,444 - - -
Other - 520,875 - - -
9,680 1,636,342 - - -
Total assets $ 9,056,585 $5,362,635 $ 50,331 $97,812 $1,540,607 tr
Liabilities and Fund Balances
Liabilities: op
Accounts payable $ 106,111 $1,198,559 $ - $ - $ 5,319 Ir
Due to other governmental funds 661,096 216,433 - - 3,998
Deferred revenue - 963,916 - - -
Accrued liabilities - 487 - - - tr
Total liabilities 767,207 2,379,395 - - 9,317 ¦
Fund balances:
Reserved for: •
Encumbrances 2,292,874 309,494 - - 243,446
Debt service - - - - -
Unreserved: 5,996,504 2,673,746 50,331 97,812 1,287,844
Total fund balances 8,289,378 2,983,240 50,331 97,812 1,531,290 w
Total liabilities and fund balances $ 9,056,585 $5,362,635 $ 50,331 $97,812 $1,540,607 r
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Special Revenue Funds
Workforce Golf Geothermal Beauti- Park
Bikeway Investment Course Relocation fication Housing Dedication
Fund Act Fund Fund Rev.Fund Fund Agency Fund
$ 346,176 $ $ 121,856 $ 1,521,678 $ 585,346 $ 2,602,668 $ 75,642
- - - - 3,189,438 -
2,000 200
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237,518 -
r - - - - - 124,451 -
1w - 38,994 1,164 - - 80,513 -
276,512 1,164 204,964 -
$ 346,176 $ 276,512 $ 125,020 $ 1,521,678 $ 585,346 $ 5,997,270 $ 75,642
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w. $ - $ - $ 33,951 $ $ 65 $ 16,055 $ -
276,512 55,174 - 123,599
- 47,184
- 276,512 89,125 65 186,838
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9,000 - - 1,340,416 1,540 4,123,788
r 337,176 35,895 181,262 583,741 1,686,644 75,642
346,176 35,895 1,521,678 585,281 5,810,432 75,642
$ 346,176 $ 276,512 $ 125,020 $ 1,521,678 $ 585,346 $ 5,997,270 $ 75,642
r
(Continued)
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COUNTY OF HAWAII
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2005 `
(Concluded)
Debt Service Funds Total
Bond Nonmajor
Interest Redemption Governmental
Fund Fund Funds
Assets
r
Cash and cash equivalents $ 685,128 $ 14,689,594 $ 35,089,786
Investments - 3,189,438 w
Imprest fund - 2,450
Receivables:
Due from State of Hawaii - 78,173 .r
Due from federal government - 345,368
Due from other governmental funds - 134,131
Due from other nongovernmental funds - -
Trade, net of allowance for doubtful accounts - 929,444 r
Other - 641,546
- 2,128,662 I~
Total assets $ 685,128 $14,6
89,594 $ 40,410,336
Liabilities and Fund Balances
Liabilities:
Accounts payable $ - $ $ 1,360,060 M"
Due to other governmental funds 1,336,812
Deferred revenue - - 963,916
Accrued liabilities 72,964 260,000 380,635
Total liabilities 72,964 260,000 4,041,423
Fund balances:
Reserved for:
Encumbrances - - 8,320,558
Debt service 612,164 14,429,594 15,041,758
Unreserved: - - 13,006,597
Total fund balances 612,164 14,429,594 36,368,913
Total liabilities and fund balances $ 685,128 $ 14,689,594 $ 40,410,336
See accompanying independent auditors' report.
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COUNTY OF HAWAII .a
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Fiscal Year Ended June 30, 2005
rn
Special Revenue Funds
Solid Parking Vehicle
Highway Waste Cemetery Meter Disposal •
Fund Fund Fund Fund Fund r
Revenues
Fuel tax $ 7,580,740 $ $ $ $
Public utility franchise tax 6,016,890 - Bob
Licenses and permits 5,065,333 - 1,893,912
Intergovernmental 248,433 683,110 - ¦
Charges for services - 7,233,941 9,168 r
Investment earnings - - - -
Miscellaneous 313,309 30,647 8,250
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Total revenues 19,224,705 7,947,698 8,250 9,168 1,893,912
Expenditures OF
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Current:
Public safety 3,808,166 - - - - ¦P
Highways and streets 7,694,722 - -
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Sanitation - 15,646,379 - 1,165,562
Health, education and welfare - 244 - ¦
Culture and recreation - - - - - Ir
Pension and retirement contributions 1,043,377 450,224 - - 9,126
Employees' health insurance 618,151 280,115 - - 6,212 !
Miscellaneous 633,133 215,229 - - - rr
Debt service:
Principal - 572,299 - -
Interest - 70,430 - - -
Total expenditures 13,797,549 17,234,676 244 - 1,180,900 op
Excess (deficiency) of revenues sh
over expenditures 5,427,156 _(9,286,978) 8,006 9,168 713,012
Other Financing Sources (Uses)
Transfers in 221,102 10,332,212 - - - `
Increase in capital leases - 1,080,541
Transfers out (5,447,938) -
Total other financing sources (uses) (5,226,836) 11,412,753 - -
Net change in fund balances 200,320 2,125,775 8,006 9,168 713,012
Fund balances at beginning of year 8,089,058 857,465 42,325 88,644 818,278 ~r
Fund balances at end of year $ 8,289,378 $ 2,983,240 $ 50,331 $ 97,812 $1,531,290
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Special Revenue Funds
` Workforce Golf Geothermal Beauti- Park
Bikeway Investment Course Relocation fication Housing Dedication
Fund Act Fund Fund Rev.Fund Fund Agency Fund
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19,884 - 157,825 -
- 2,441,944 - - 11,211,566
r - 753,373 - -
- - 79,922 1,822
- 1,196 320,315 - 744,098
19,884 2,441,944 754,569 320,315 157,825 12,035,586 1,822
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3,861 76,400
2,441,944 - - - 12,128,870
- 775,141 - - -
- 110,411 - - 339,963
- 75,738 - - 127,709
- 11,413 - - -
3,861 2,441,944 972,703 - 76,400 12,596,542 -
16,023 - (218,134) 320,315 81,425 (560,956) 1,822
.r - - 161,804 - - 700,000 -
- 161,804 - 700,000 -
16,023 (56,330) 320,315 81,425 139,044 1,822
w 330,153 92,225 1,201,363 503,856 5,671,388 73,820
$ 346,176 $ $ 35,895 $ 1,521,678 $ 585,281 $ 5,810,432 $ 75,642
(Continued)
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COUNTY OF HAWAII
Nonmajor Governmental Funds r"
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Fiscal Year Ended June 30, 2005
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(Concluded)
Debt Service Funds Total
Bond Nonmajor
Interest Redemption Governmental sn
Fund Fund Funds
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Revenues
Fuel tax $ - $ - $ 7,580,740 FP
Public utility franchise tax - - 6,016,890 r
Licenses and permits - - 7,136,954
Intergovernmental - - 14,585,053
Charges for services - - 7,996,482 r
Investment earnings - - 81,744
Miscellaneous - - 1,417,815
Total revenues - 44,815,678
Expenditures
Current:
Public safety - - 3,808,166
Highways and streets - - 7,774,983
Sanitation - - 16,811,941
Health, education and welfare - - 14,571,058
Culture and recreation - - 775,141
Pension and retirement contributions - - 1,953,101
Employees' health insurance - - 1,107,925 Air
Miscellaneous - - 859,775 i
Debt service:
Principal - 11,876,896 12,449,195 I?
Interest 9,397,080 - 9,467,510 Yr
Total expenditures 9,397,080 11,876,896 69,578,795
Excess (deficiency) of revenues
over expenditures 9,397,080 (11,876,896) (24,763,117)
Other Financing Sources (Uses)
Transfers in 9,968,122 12,678,082 34,061,322
Increase in capital leases - - 1,080,541
Transfers out - - (5,447,938)
Total other financing sources (uses) 9,968,122 12,678,082 29,693,925 r
Net change in fund balances 571,042 801,186 4,930,808 m
Fund balances at beginning of year 41,122 13,628,408 31,438,105
Fund balances at end of year $ 612,164 $ 14,429,594 $ 36,368,913
See accompanying independent auditors' report.
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COUNTY OF HAWAII
Highway Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2005
Variance
Original Final Favorable
Budget Budget Actual (Unfavorable)
_ Revenues:
Taxes:
Fuel tax $7,132,148 $7,132,148 $ 7,580,740 $ 448,592
_ Public utility franchise tax 5,087,836 5,087,836 6,016,890 929,054
Total taxes 12,219,984 12,219,984 13,597,630 1,377,646
Licenses and permits - motor vehicle weight taxes 3,069,853 4,085,649 5,065,333 979,684
Intergovernmental 335,039 335,039 248,433 (86,606)
Charges for current services 110,000 110,000 183,153 73,153
Miscellaneous 47,226 47,226 130,156 82,930
Total revenues 15,782,102 16,797,898 19,224,705 2,426,807
Expenditures:
Public safety - traffic engineering 4,793,011 5,181,425 3,932,242 1,249,183
Highways and streets 7,289,108 8,327,564 7,607,592 719,972
Highways and streets - mass transit - 338,260 336,824 1,436
Pension and retirement contributions 1,115,287 1,168,045 1,043,377 124,668
Health fund 673,671 700,870 618,151 82,719
_ Miscellaneous 1,290,257 1,408,268 735,431 672,837
Total expenditures 15,161,334 17,124,432 14,273,617 2,850,815
Excess (deficiency)of revenues over expenditures 620,768 (326,534) 4,951,088 5,277,622
_ Other financing uses - transfers in (out) -
General Fund - 221,102 221,102 -
_ Capital Projects Fund (3,786,699) (5,447,938) (5,447,938)
Total other financing uses (3,786,699) (5,226,836) (5,226,836) -
Deficiency of revenues over expenditures
and other uses (3,165,931) (5,553,370) (275,748) 5,277,622
Fund balance at beginning of year 8,089,058 8,089,058 8,089,058 -
Fund balance at end of year $ 4,923,127 $2,535,688 $ 7,813,310 $ 5,277,622
r See accompanying independent auditors' report.
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COUNTY OF HAWAII
Solid Waste Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2005 w
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Variance
Original Final Favorable
Budget Budget Actual (Unfavorable)
Revenues:
Intergovernmental $ 763,000 $ 1,038,500 $ 1,036,100 $ (2,400)
Charges for services - tipping fees 6,402,331 6,402,331 7,233,941 831,610
Miscellaneous - 10,000 30,647 20,647
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Total revenues 7,165,331 7,450,831 8,300,688 849,857
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Expenditures:
s
Sanitation 16,028,237 16,705,473 15,679,572 1,025,901
Pension and retirement contributions 432,064 462,289 450,224 12,065 PP
Health fund 292,881 306,281 280,115 26,166 r
Miscellaneous 320,000 309,000 213,645 95,355
OR
Total expenditures 17,073,182 17,783,043 16,623,556 1,159,487 Ir
Deficiency of revenues over expenditures (9,907,851) (10,332,212) (8,322,868) 2,009,344
Other financing sources - transfers in - yr,
General Fund 9,907,851 10,332,212 10,332,212
Excess of revenues and other ft
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sources over expenditures - 2,009,344 2,009,344
Fund balance at beginning of year 857,465 857,465 857,465 - 1P
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Fund balance at end of year $ 857,465 $ 857,465 $ 2,866,809 $ 2,009,344
P
See accompanying independent auditors' report. rr
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COUNTY OF HAWAII
Cemetery Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance -
r Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2005
Original Variance
and Final Favorable
r Budget Actual (Unfavorable)
Revenues - miscellaneous - sale of cemetery plots $ 16,000 $ 8,250 $ (7,750)
Expenditures - health, education and welfare 16,000 244 15,756
Excess of revenues over expenditures - 8,006 8,006
Fund balance at beginning of year 42,325 42,325
Fund balance at end of year $ 42,325 $ 50,331 $ 8,006
See accompanying independent auditors' report.
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COUNTY OF HAWAII
Parking Meter Fund r
Schedule of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual (Budgetary Basis) r
For the Fiscal Year Ended June 30, 2005
r
Original Variance
and Final Favorable
Budget Actual (Unfavorable) r
Revenues- p
Charges for current services - highways and streets $ - $ 9,168 $ 9,168
Fund balance at beginning of year 88,644 88,644 - am
Fund balance at end of year $ 88,644 $ 97,812 $ 9,168 r.
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See accompanying independent auditors' report.
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COUNTY OF HAWAII
Vehicle Disposal Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
- For the Fiscal Year Ended June 30, 2005
Variance
Original Final Favorable
Budget Budget Actual (Unfavorable)
Revenues:
Licenses and permits - vehicle disposal fee $1,716,000 $ 1,716,000 $ 1,893,912 $ 177,912
Charges for services - towing charges 100 100 (100)
Miscellaneous 100 100 - (100)
Total revenues 1,716,200 1,716,200 1,893,912 177,712
Expenditures:
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Sanitation 1,703,100 1,700,700 1,250,436 450,264
Pension and retirement contributions 7,600 9,200 9,126 74
Health fund 5,500 6,300 6,212 88
Total expenditures 1,716,200 1,716,200 1,265,774 450,426
Excess of revenues over expenditures - 628,138 628,138
Fund balance at beginning of year 818,278 818,278 818,278
Fund balance at end of year $ 818,278 $ 818,278 $ 1,446,416 $ 628,138
See accompanying independent auditors' report.
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COUNTY OF HAWAII r
Bikeway Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2005
Original Variance _
and Final Favorable
Bud>?et Actual (Unfavorable]
Revenues - licenses and permits -
bicycle tax $ 35,000 $ 19,884 ($15,116) `
Expenditures - highways and streets 181,000 12,861 168,139 nw
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Excess (deficiency) of revenues over expenditures (146,000) 7,023 153,023
Fund balance at beginning of year 330,153 330,153 -
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Fund balance at end of year $184,153 $337,176 $153,023
or
See accompanying independent auditors' report, tr
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COUNTY OF HAWAII
Workforce Investment Act Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
- For the Fiscal Year Ended June 30, 2005
Variance
Original Final Favorable
Budget Budget Actual (Unfavorable)
w. Revenues - intergovernmental - federal grants $ - $ 1,780,964 $ 1,780,964 $
Expenditures - health, education & welfare - 1,780,964 1,780,964
Deficiency of revenues over expenditures - - -
Fund balance at beginning of year -
Fund balance (deficit) at end of year $ - $ $ $
See accompanying independent auditors' report.
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COUNTY OF HAWAII
Golf Course Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2005
r
Variance
Original Final Favorable
Budget Budget Actual (Unfavorable)
Revenues:
Charges for services $ 844,500 $ 844,500 $753,373 $ (91,127)
Miscellaneous - - 1,196 1,196
Total revenues 844,500 844,500 754,569 (89,931)
Expenditures: PP
Culture and recreation 755,097 784,097 730,881 53,216 tr
Pension and retirement contributions 117,207 117,207 110,411 6,796
Health fund 100,000 89,000 75,738 13,262 1P
Miscellaneous 34,000 16,000 11,791 4,209
Total expenditures 1,006,304 1,006,304 928,821 77,483
Deficiency of revenues over expenditures (161,804) (161,804) (174,252) (12,448) ¦o
Other financing sources: ¦
Transfers in - General Fund 161,804 161,804 161,804 16
Deficiency of revenues and other sources
over expenditures - - (12,448) (12,448) to
Fund balance at beginning of year 92,225 92,225 92,225
Fund balance at end of year $ 92,225 $ 92,225 $ 79,777 $ (12,448) y`
See accompanying independent auditors' report. lp
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COUNTY OF HAWAII
,r. Geothermal Relocation Revolving Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2005
Original Variance
and Final Favorable
Budget Actual (Unfavorable)
Revenues - miscellaneous - geothermal royalties $ 150,000 $ 320,315 $ 170,315
Expenditures - general government 150,000 150,000 -
Excess of revenues over expenditures - 170,315 170,315
r
Fund balance at beginning of year 1,201,363 1,201,363 -
Fund balance at end of year $ 1,201,363 $ 1,371,678 $ 170,315
Y.
See accompanying independent auditors' report.
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-97-
COUNTY OF HAWAII
Beautification Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2005
Variance
Original Final Favorable
Budget Budget Actual (Unfavorable)
s
Revenues - licenses and permits - highway
beautification $140,000 $140,000 $ 157,825 $ 17,825
Expenditures - highways and streets 215,000 215,000 65,963 149,037 w
so
Excess (deficiency) of revenues over expenditures (75,000) (75,000) 91,862 166,862
•
Fund balance at beginning of year 503,856 503,856 503,856 -
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Fund balance at end of year $428,856 $428,856 $ 595,718 $ 166,862
A
See accompanying independent auditors' report.
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-98-
COUNTY OF HAWAII
Hawaii County Housing Agency
Schedule of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual (Budgetary Basis)
For the Fiscal Year Ended June 30, 2005
n Variance
Original Final Favorable
Budget Budget Actual (Unfavorable)
Revenues:
Intergovernmental - Federal grants -
HUD - Voucher program $13,073,500 $13,073,500 $11,211,566 $ (1,861,934)
Interest earned 19,070 19,070 79,922 60,852
Resale of property - - 425,000 425,000
a Other - - 319,098 319,098
Total revenues 13,092,570 13,092,570 12,035,586 (1,056,984)
M Expenditures:
Health, education & welfare 12,746,398 12,747,744 11,835,806 911,938
Pension and retirement contributions 408,100 408,100 339,963 68,137
Health Fund 143,200 143,200 127,709 15,491
Miscellaneous 19,070 19,070 - 19,070
Total expenditures 13,316,768 13,318,114 12,303,478 1,014,636
Deficiency of revenues over expenditures (224,198) (225,544) (267,892) (42,348)
Other financing sources:
Transfers in - General Fund 700,000 700,000
Excess (deficiency) of revenues and other
sources over expenditures (224,198) (225,544) 432,108 657,652
Fund balance at beginning of year 5,671,388 5,671,388 5,671,388 -
Fund balance at end of year $ 5,447,190 $ 5,445,844 $ 6,103,496 $ 657,652
See accompanying independent auditors' report.
49
ar
-99-
COUNTY OF HAWAII
Park Dedication Fund "
Schedule of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual (Budgetary Basis) r
For the Fiscal Year Ended June 30, 2005
r
Variance
Original Final Favorable
Budget Budget Actual (Unfavorable) r
Revenues - interest $ - $ - $ 1,822 $ 1,822 w
r
Expenditures - culture and recreation - - - -
Excess of revenues over expenditures - - 1,822 1,822
Fund balance at beginning of year 73,820 73,820 73,820
Fund balance at end of year $73,820 $73,820 $75,642 $1,822 r
See accompanying independent auditors' report. !
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COUNTY OF HAWAII
Agency Funds
.u
Combining Balance Sheet
June 30, 2005
.o
Performance
State Improvement Improvement Improvement and
Weight District District District Refundable
Tax No. 17 No. 18 Revolving Deposits
r
Assets
Cash and cash equivalents $ - $ 740,446 $ 313,884 $ 351,319 $ 205,692
Due from other agency funds - - - - -
Other receivables - -
Restricted assets -
cash and cash equivalents - 637,000 - - -
Total assets $ $ 1,377,446 $ 313,884 $ 351,319 $ 205,692 r
Liabilities
Due to other agency funds $ $ - $ $ $ 2,672
Accrued liabilities 9,790
Customer advances and deposits 193,230
Assets held for the benefit of IF
improvement districts 1,377,446 313,884 351,319 - Mk
Total liabilities $ $ 1,377,446 $ 313,884 $ 351,319 $ 205,692
See accompanying independent auditors' report.
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Inc
-102-
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Non-Profit
Flexible Lapsed License Organ &
Payroll Spending Warrants Plates Tissue Educ.
' Clearance Account Fund Fund Fund Totals
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$1,307,077 $ 293,208 $ 41,813 $ (25) $ 25 $ 3,253,439
- - 3,116 25 3,141
2,918 27,120 - 30,038
as
- - - 637,000
$1,309,995 $ 293,208 $ 72,049 $ $ 25 $ 3,923,618
$ 444 $ - $ - $ $ 25 $ 3,141
1,309,551 293,208 72,049 - 1,684,598
- - - 193,230
- - 2,042,649
$1,309,995 $ 293,208 $ 72,049 $ $ 25 $ 3,923,618
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COUNTY OF HAWAII
Agency Funds
Combining Statement of Changes in Assets and Liabilities r¦
For the Fiscal Year Ended June 30, 2005 W
Balance Balance ,
July 1, June 30,
2004 Additions Deductions 2005
State Weight Tax Fund •
Assets
Ilr
Cash and cash equivalents $ $ 9,082,832 $ 9,082,832 $ r
Other receivables - -
$ $ 9,082,832 $ 9,082,832 $
Liabilities
Vouchers payable $ $ 9,082,831 $ 9,082,831 $
Warrants payable - -
Accrued liabilities - due to State of Hawaii 9,082,832 9,082,832
¦
Total liabilities $ - $ 18,165,663 $ 18,165,663 $ -
Improvement District No. 17
Assets
Cash and cash equivalents $ 779,250 $ 1,420,340 $ 1,459,144 $ 740,446
Restricted assets - cash and cash equiv. 637,000 - - 637,000
Total assets $ 1,416,250 $ 1,420,340 $ 1,459,144 $ 1,377,446
Liabilities
Vouchers payable $ - $ 1,490 $ 1,490 $ - rr
Assets held for the benefit !
of improvement districts 1,416,250 896,511 935,315 1,377,446
Total liabilities $ 1,416,250 $ 898,001 $ 936,805 $ 1,377,446
Improvement District No. 18 IF
i
Assets
Cash and cash equivalents $ - $ 665,982 $ 352,098 $ 313,884
Restricted assets - cash and cash equiv. - - - -
Total assets $ - $ 665,982 $ 352,098 $ 313,884 r.
Liabilities
Vouchers payable $ $ 349,002 $ 349,002 $ -
Assets held for the benefit
of improvement districts 665,982 352,098 313,884
Total liabilities $ $ 1,014,984 $ 701,100 $ 313,884
-104-
COUNTY OF HAWAII
Agency Funds
Combining Statement of Changes in Assets and Liabilities
.M For the Fiscal Year Ended June 30, 2005
Balance Balance
July 1, June 30,
2004 Additions Deductions 2005
Improvement District Revolving Fund
Assets
Cash and cash equivalents $ 342,852 $ 8,467 $ $ 351,319
r Investments - - -
Total assets $ 342,852 $ 8,467 $ $ 351,319
Liabilities
Assets held for the benefit
of improvement districts $ 342,852 $ 8,467 $ $ 351,319
Performance and Refundable
- Deposits Fund
Assets
Cash and cash equivalents $ 153,881 $ 331,738 $ 279,927 $ 205,692
Other Receivables 14,736 14,736 -
MM
Total assets $ 168,617 $ 331,738 $ 294,663 $ 205,692
Liabilities
Vouchers payable $ - $ 277,602 $ 277,602 $ -
Warrants payable 50 - 50 -
Due to other funds - 2,672 - 2,672
Accrued liabilities 1,835 9,790 1,835 9,790
Customer advances and deposits 166,732 312,680 286,182 193,230
Total liabilities $ 168,617 $ 602,744 $ 565,669 $ 205,692
Payroll Clearance Fund
Assets
Cash and cash equivalents $ 973,964 $122,429,413 $122,096,300 $ 1,307,077
Due from other funds - 103,365,580 103,365,580 -
Other receivables 2 7,116 4,200 2,918
Total assets $ 973,966 $225,802,109 $225,466,080 $ 1,309,995
r Liabilities
Vouchers payable $ - $ - $ - $ -
Payroll refunds payable - 1,939 1,939 -
rr Due to other funds 798 12,519 12,873 444
Accrued liabilities 973,168 19,071,766 18,735,383 1,309,551
Total liabilities $ 973,966 $ 19,086,224 $ 18,750,195 $ 1,309,995
a
-105-
COUNTY OF HAWAII
Agency Funds
Combining Statement of Changes in Assets and Liabilities
For the Fiscal Year Ended June 30, 2005
Balance Balance
July 1, June 30,
2004 Additions Deductions 2005
Flexible Spending Account
Assets
Cash and cash equivalents $ 256,113 $ 445,351 $ 408,256 $ 293,208
Liabilities
s
Accrued liabilities $ 256,113 $ 445,351 $ 408,256 $ 293,208 r
Lapsed Warrants Fund
Assets r.
Cash and cash equivalents $ 44,990 $ 7,648 $ 10,825 $ 41,813 1/
Due from other funds 798 9,966 7,648 3,116 or
Other receivables 6,850 20,270 - 27,120
Total assets $ 52,638 $ 37,884 $ 18,473 $ 72,049 MP
Liabilities IM
Vouchers payable $ - $ 10,825 $ 10,825 $ - ¦
Due to other funds - - - - r?
Accrued liabilities 52,638 38,675 19,264 72,049
Total liabilities $ 52,638 $ 49,500 $ 30,089 $ 72,049
it
Non-Profit License Plates Fund
IMP
Assets
Cash and cash equivalents $ $ 3,102 $ 3,127 $ (25)
Due from other funds 25 - 25 lA
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$ $ 3,127 $ 3,127 $ -
A
Liabilities
Vouchers payable $ $ 3,125 $ 3,125 $
Warrants payable - - a.
Due to non-profit agency 3,127 3,127
Total liabilities $ $ 6,252 $ 6,252 $
-106-
COUNTY OF HAWAII
Agency Funds
Combining Statement of Changes in Assets and Liabilities
For the Fiscal Year Ended June 30, 2005
Balance Balance
July 1, June 30,
2004 Additions Deductions 2005
a Organ and Tissue Education Fund
Assets
Cash and cash equivalents $ 58,025 $ 58,000 $ 25
Other receivables - - -
Total assets $ 58,025 $ 58,000 $ 25
Liabilities
Vouchers payable $ - $ 1,341 $ 1,341 $
,w Due to other funds - 25 - 25
Accrued liabilities - due to State of Hawaii - 58,025 58,025
Total liabilities $ - $ 59,391 $ 59,366 $ 25
Total - All Agency Funds
Assets
Cash and cash equivalents $ 2,551,050 $134,452,898 $133,750,509 $ 3,253,439
Investments - - - -
Due from other funds 798 103,375,571 103,373,228 3,141
Other receivables 21,588 27,386 18,936 30,038
Restricted assets - cash and cash equiv. 637,000 - - 637,000
Total assets $ 3,210,436 $237,855,855 $237,142,673 $ 3,923,618
Liabilities
Vouchers payable $ - $ 9,726,216 $ 9,726,216 $ -
Warrants payable 50 - 50 -
Payroll refunds payable - 1,939 1,939 -
Due to other funds 798 15,216 12,873 3,141
Due to non-profit agency - 3,127 3,127 -
Accrued liabilities 1,283,754 19,565,582 19,164,738 1,684,598
Accrued liabilities - due to State of Hawaii - 9,140,857 9,140,857 -
Customer advances and deposits 166,732 312,680 286,182 193,230
Assets held for the benefit
of improvement districts 1,759,102 1,570,960 1,287,413 2,042,649
Total liabilities $ 3,210,436 $ 40,336,577 $ 39,623,395 $ 3,923,618
M
See accompanying independent auditors' report.
- 107 -
COUNTY OF HAWAII
Private Purpose Trusts
Combining Statement of Private Purpose Trust Net Assets
June 30, 2005 `
Shippers' Total
Geothermal Wharf Private-
Asset Trust Purpose w
Assets Fund Fund Trusts r
Cash and cash equivalents $ 1,550,085 $ 1,636,633 $ 3,186,718
Investments - 974,418 974,418
Receivables 4,102 4,102
Total assets 1,550,085 2,615,153 4,165,238
IMr
Liabilities
Accrued liabilities $ - $ - $ -
Total liabilities - - -
Net Assets
Held in trust for other parties 1,550,085 2,615,153 4,165,238 r
Total net assets $ 1,550,085 $ 2,615,153 $ 4,165,238 no
r.
See accompanying independent auditors' report.
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-108-
COUNTY OF HAWAII
Private Purpose Trusts
Combining Statement of Changes in Private Purpose Trust Net Assets
For the Fiscal Year Ended June 30, 2005
Shippers' Total
• Geothermal Wharf Private-
Asset Trust Purpose
Fund Fund Trusts
Additions
Contributions:
r Puna Geothermal Venture $ 50,000 $ $ 50,000
Investment earnings:
Net decrease in fair value of investments - (22,307) (22,307)
¦ Dividends - 44,600 44,600
Interest 36,454 42,168 78,622
Total additions 86,454 64,461 150,915
r Deductions
Appraisal fees 1,902 - 1,902
i Grants awarded - 16,957 16,957
Total deductions 1,902 16,957 18,859
Change in net assets 84,552 47,504 132,056
Net assets - beginning of year 1,465,533 2,567,649 4,033,182
Net assets - end of year $ 1,550,085 $ 2,615,153 $ 4,165,238
r
See accompanying independent auditors' report.
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STATISTICAL SECTION
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(UNAUDITED)
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Table I
COUNTY OF HAWAII
Government-Wide Revenues
Last Four Fiscal Years
(Values in Thousands)
s
Operating Capital Non specific Interest and
Fiscal Charges for Grants and Grants and Grants and Investment
Year Services Contributions Contributions Taxes Contributions Income Other Total
a/
2002 $24,005 $27,346 $27,871 $110,720 $13,502 $3,587 $1,583 $208,614
2003 25,072 31,692 19,065 126,375 13,931 1,949 4,642 222,726
r
2004 29,491 33,471 9,669 138,122 15,251 1,738 4,825 232,567
2005 35,692 36,507 26,222 149,724 16,735 2,971 3,658 271,509
.r
Unaudited - see accompanying independent auditors' report.
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- 111 -
Table 2
COUNTY OF HAWAII "
Government-Wide Expenses by Function
Last Four Fiscal Years
(Values in Thousands)
M
2005 2004 2003 2002
Governmental activities:
General government $ 51,262 $ 40,085 $ 36,462 $ 37,796
Public safety 94,422 90,435 77,132 75,710 `
Highways and streets 20,857 17,563 15,513 22,627 00
Health, education and welfare 21,504 23,042 20,205 17,854
Culture and recreation 16,124 15,980 16,431 14,904
Sanitation 26,670 20,085 19,022 18,642 or
Interest on long-term debt 8,719 9,554 8,681 8,769
rn
Business-type activities:
Health, education and welfare 485 466 450 456
nw
Total $ 240,043 $ 217,210 $ 193,896 $ 196,758
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Unaudited -see accompanying independent auditors' report.
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- 112 - or
Chart I
COUNTY OF HAWAII
General Governmental Revenues and Expenditures Comparison
Last Ten Fiscal Years (In Thousands)
as
$250,000
0 Revenues
r `
B Expenditures #
$200,000
r • •
r \
F # A • \ • \
$150,000 ` \ # A \ ? \ •
$100,000 \ ° # \ \ • \
$50000 ; \ # ? # . . #
YY
~ ?o eo ^gao99 #9 0o ry O" pA ryoo ? Ary ryOo ry p~ 'Isp ry~p5
M. ?ga a6 ?9 y1
0
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Note: In fiscal year 2002, the Housing Agency and the Park Dedication Fund became special revenue funds.
Unaudited - see accompanying independent auditors' report.
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Chart 2
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COUNTY OF HAWAII
General Governmental Expenditures by Function
Last Ten Fiscal Years (In Thousands)
r
$250,000
0 Other
rr
D Debt service
O Capital outlay
¦ Pensions and retirement
a
9 Culture and recreation
0 Sanitation
® Highways and streets
+r $200,000 0Public safety
® General government
4
$150,000
rr , }
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$100,000-
$50,000-
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t
$0
A5
1* y.96 1990 x.99 cl~ 1 1A2 2ZO,ZAP op,
Note: In fiscal year 2002, the Housing Agency and Park Dedication fund became special revenue funds.
ail Unaudited - see accompanying independent auditors' report.
-115 -
Table 4
COUNTY OF HAWAII
General Governmental Revenues by Source*
Last Ten Fiscal Years r
(Values in Thousands)
Licenses Charges Interest
Fiscal Taxes and and Inter- for and no
Year Assessments Permits Governmental Services Penalties Other Total
1996 $101,755 $5,836 $33,656 $8,032 $4,692 $2,500 $156,471
1997 96,124 6,124 36,016 7,796 5,859 2,009 153,928
1998 97,332 6,351 38,893 8,885 5,881 1,756 159,098
1999 94,645 6,952 35,075 10,148 5,545 3,440 155,805
2000 93,324 7,261 32,572 11,215 5,282 1,883 151,537
2001 95,467 7,412 39,489 12,056 6,409 1,854 162,687
2002 110,235 7,780 44,915 11,689 3,801 2,757 181,177
2003 127,215 9,261 50,181 13,481 2,066 2,920 205,124
2004 140,126 11,840 52,080 14,467 1,806 2,919 223,238
2005 151,036 14,442 58,410 18,149 3,104 2,992 248,133
r
' Includes General, Special Revenue and Debt Service Funds. r
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Note: In fiscal year 2002, the Housing Agency and the Park Dedication Fund became special revenue funds.
ow
Unaudited - see accompanying independent auditors' report. r
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- 116 -
Chart 3
COUNTY OF HAWAII
General Governmental Revenues by Source
Last Ten Fiscal Years (In Thousands)
E
$250,000 f pother
® Interest and penalties
iE !
O Charges for services
1
4w 0 Intergovernmental
0Licenses and permits
I(
j ®Taxes I
$200,000 }
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ww ~ 3
}
i
$15o,o00 i
$t0o,oo0 I
3
3
3
rr ~ 3
$50,000
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t
tlr $0
96 9'1 49 g9 ~AO ~5~1 A'L p9 ~,~p~6
110 1 'I,OOv 'j,~1 20p2 .ZOO 1Y"
Note: In fiscal year 2002, the Housing Agency and Park Dedication Fund became special revenue funds.
Unaudited - see accompanying independent auditors report.
- 117 -
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Table 4a ,
COUNTY OF HAWAII r
General Governmental Tax Revenues by Source*
r
Last Ten Fiscal Years
(Values in Thousands)
Public
Real Service
Fiscal Property Company Fuel Franchise
Year Tax Tax Tax Tax Total
1996 $ 92,512 $ - $ 5,820 $ 3,423 $ 101,755
1997 86,490 - 5,783 3,851 96,124
1998 87,420 - 5,832 4,080 97,332
1999 84,792 - 5,900 3,953 94,645
2000 83,271 - 6,103 3,950 93,324
2001 84,240 - 6,450 4,777 95,467 r
2002 93,712 5,108 6,422 4,993 110,235 r
2003 109,991 5,064 7,343 4,817 127,215
2004 121,868 5,333 7,552 5,373 140,126 Alr
2005 131,087 6,351 7,581 6,017 151,036 r
IF
* Includes General, Special Revenue and Debt Service Funds.
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Note: The Public Service Company Tax began in fiscal year 2002.
Ar
Unaudited - see accompanying independent auditors' report.
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- 119 -
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Table 6
COUNTY OF HAWAII
Assessed and Estimated Actual Value of Taxable Real Property
Last Ten Fiscal Years
(Values in Thousands)
Ratio of
Real Property Total Assessed to
Fiscal Assessed Estimated Total Estimated
Year Value Actual Value Actual Value
1996 10,611,589 10,611,589 100%
1997 10,279,240 10,279,240 100%
1998 10,156,903 10,156,903 100%
1999 9,929,443 9,929,443 100%
2000 9,882,111 9,882,111 1000/0
r
2001 10,083,384 10,083,384 100%
2002 11,071,326 11,071,326 100% (ir
2003 11,690,371 11,690,371 100% a
2004 12,891,341 12,891,341 100%
2005 14,533,960 14,533,960 100% JR
Ir
Notes: There is no personal property tax in Hawaii.
Assessment ratios are uniform statewide.
Unaudited - see accompanying independent auditors' report. op
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- 124 -
Chart 4
+r
COUNTY OF HAWAII
Assessed Value of Real Property
Last Ten Years (In Thousands)
$16,000,000
~ ? Land
B Buildings
a
$14,000,000
+1r I
a
rr
$12,000,000-
$10,000,000-
$8,000,000-
$6,000,000 3 ~ ~ r
a i
r 3 )
$4,000,000 ~
i i
• i I
i
i
$2,000,000 3
i
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3 i
3
$0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Unaudited - see accompanying independent auditors report.
r
-I25-
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Table 8
COUNTY OF HAWAII
Principal Taxpayers
June 30, 2005
r
w
Percentage
2004 of Total
Assessed Assessed R
Taxpayer Business Valuation Valuation
BP Bishop Estate Trustees Land trust $448,641,200 2.3%
Liliuokalani Trust Estate Land trust 218,507,500 1.1%
Mauna Kea Development Corp. Developer/Hotels 201,862,600 1.1% r
Global Resort Partners Hotel 171,043,600 0.90/0 IF
Kaupulehu Makai Venture Developer/Hotel 159,249,800 0.8% a%
WB Manini'owali LLC Developer 128,253,000 0.7%
FHR (ML) Hotel Holdings LLC Hotel 120,000,000 0.6% OR
WB Kukio Resorts LLC Developer 113,874,600 0.6% ab
Mauna Lani Resort Inc. Developer/Hotel 99,337,000 0.5%
BRE/Waikoloa LLC Hotel 59,804,200 0.3% OF
to
$1,720,573,500 9.0%
R
to
Note: Gross valuation at January 1, 2004: $19,202,446,000
r?
Unaudited - see accompanying independent auditors' report.
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- 126 -
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Table 9
.r
COUNTY OF HAWAII
.r
Computation of Legal Debt Margin
June 30, 2005
+r
Total assessed value $14,533,959,794
a
Limitation as set by the Constitution of
the State of Hawaii (A) 2,180,093,969
Amount of debt applicable to debt limit: (B)
County general obligation bonds $196,815,993
State Revolving Fund loans 28,760,504
Other debt 1,045,451
226,621,948
Less:
s
Bonds maturing in current fiscal year 11,433,000
SRF loan principal maturing in current fiscal year 2,372,328
r Bonds reimbursable by Department of Water Supply 13,730,985
Bonds reimbursable by Improvement District No. 18 3,887,493
31,423,806
Total amount of debt applicable to debt limit 195,198,142
Legal debt margin $1,984,895,827
(A) The bonded debt limitation of the County of Hawaii is established at 15% of the
total assessed value of all county real property as established for tax purposes on the
last tax assessment rolls.
(B) The Constitution of the State of Hawaii, as amended in 1978, states that the debt
limitation is not applicable to indebtedness incurred under revenue bond statutes;
or by a public enterprise when the only security for such indebtedness is the
revenues of such enterprise; or of indebtedness incurred under special
s
improvement statutes when the security for such indebtedness is the properties
benefited or improved or the assessments thereon; or, under certain conditions,
to certain types of general obligation bonds issued by the County or State of Hawaii.
in
Unaudited - see accompanying independent auditors' report.
i
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- 127 -
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-128- .w
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Table I1
COUNTY OF HAWAII
r
Ratio of Annual Debt Service Expenditures
For General Obligation Bonded Debt
To Total General Governmental Expenditures
Last Ten Fiscal Years
s
Ratio of Debt
Total Total Service to General
Fiscal Debt General Governmental
Year Principal Interest Service Expenditures Expenditures
a 1996 $ 5,327,414 $ 6,067,082 $ 11,394,496 $140,225,931 8.1%
1997 5,984,439 7,597,939 13,582,378 153,420,338 8.9%
1998 6,422,996 7,724,699 14,147,695 158,376,171 8.9%
1999 7,793,319 7,481,465 15,274,784 156,703,788 9.7%
2000 8,688,267 7,693,992 16,382,259 156,081,429 10.5%
r 2001 8,903,342 8,259,317 17,162,659 165,470,877 10.4%
2002 9,390,749 8,311,406 17,702,155 185,140,709 9.6%
2003 10,976,887 8,332,183 19,309,070 194,621,907 9.9%
2004 11,606,621 9,119,626 20,726,247 209,166,968 9.9%
2005 11,876,896 9,397,080 21,273,976 233,424,113 9.1%
Unaudited - see accompanying independent auditors' report.
.r
r
i
1
do
-129-
i
Table 12
COUNTY OF HAWAII
Demographic Statistics
Last Ten Fiscal Years
Fiscal Per Capita School Unemployment
Year Population Income Enrollment Rate A #
i
1995 138,537 $ 18,521 28,188** 10.2%
1996 139,726 18,842 30,497** 9.90/0
#
1997 141,848 18,650 30,599 10.2% r
1998 143,135 19,648 30,715 9.6% ¦u
1999 142,390 20,324 30,926 8.7%
*r
2000 148,677 * 21,403 30,193 6.7%
2001 151,779 22,211 29,792 6.8% #
2002 154,854 22,901 29,785 5.7%
2003 158,735 23,500 29,483 4.6%
2004 162,975 N/A 29,675 3.8% #
ra
(A) Calendar year. #
Sources: * 2000 Census (all other population figures as estimated by
U.S. Census Bureau, Federal-State Cooperative Program for
Population Estimates).
Public school enrollment only.
r
Other data from County Department of Research and Development.
wr
Unaudited - see accompanying independent auditors' report. 130 -
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10
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r h ~O b W 0 h O N T O. ~ ttl
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131 -
Table 14
COUNTY OF HAWAII
r
Miscellaneous Statistical Data
w
June 30, 2005
Y
Date fast charter adopted June 1968
Form of government Mayor/Council
Area in square miles 4,028
Yr
Miles of streets (County only) 903
P
Number of street lights 9,017 ft
Fire protection: 1F
Number of stations 19
Number of fire fighters and officers
(exclusive of volunteer fire fighters) 360 A
Police protection:
Number of stations 8
Number of substations 13
Number of police officers 374 lr
County water service: ¦
Number of consumers 38,844 it
Average consumption in gallons per day 25,025,646
Miles of water lines 1,909 ap
Miles of sanitary sewers (County only) 53
Number of building permits issued:
Building permits 5,350 Yr
Electrical permits 4,750
Plumbing permits 3,888
Sign permits 63 w
Recreation and culture: iw
Number of parks 121
Number of gyms and recreation centers 38
Unaudited - see accompanying independent auditors' report.
op
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r
-132-
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