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SF1N ~9 '93 ©>~17PM MOODWS INVESTORS P.3iJ , - MCS SAY@SfQ1'S S@~C® Updare puhliahad 05/06/93 ~ ' HAWAII COUNTY, HAWAII UPDATE: General Obligation/Special Tax MOODY'S RATING: R CREDIT COMMENT Con*.inued tzx base and economic growth, together with satisfactory reserves, support the upper medium grade rating. Development, especially tourism-related development, has fueled double digit tax bane growth for half a decade. While this growth has supported financial cperations, the rapid pace of assessed valuation growth has also prompted tar-payer resistance, reflected in high levels of assessment appeals. Nevertheless tax collections have been satisfactory and the tax rate has been relatively arable. Due to the Y,i gh proportion of the tax base comprised of hotel, resort and other comme[~ci al development, debt burden appears moderate relative to national norms, However, in light of the number of services and capital needs funded by tk,e State, notably in health, education and justice, debt levels are actually relatively high. Per capita debt is about double the norm for comparably-:•ized counties. As the center of much o! state's productive agricultural. industry, the county has lelt the brunt of the difficulCies due .o agricul rural restructuring, especially the decline of the sugar industry. while the county has been attracting more affluent tourism development and hlgh quality hotels, which bodes well for future grewth and development on the island, the short-term impact of the transition away from agricultural dependence, has been relatively high unemployment, the highest poverty levels in the state and the lowest per capita and family income levels. ?he narrowl;' based economy, with a strong tourism dependence, has suffered during the current national recession, especially due to the dependence of Califcrnia visitors. Tourism levels have fallen since peaking in 1990, although Chu diversion of tourists from Kauai, due to the damage caused by Hurricane i[[i ki, has helped moderate the impact on tourism. Current development of the Kona-Keahole airport, including runway expansion to accommodate wide-body jets, offers the potential for future direct flights from Japan, which could radically transform the county's tourism industry. KEY FACTS Debt Hurden: 1'94 Median: I'' 1 2.28 Payout, Ten Years: 46.1! Debt per Cai:ita: 41, 337 Median: ('lJ 6796 Gonezal Fund Balance as 8 0! 10.96 Goneral 1?und Revenues, 1992: Vndesign•ited: 3.36 Sources of :ievenue, 1992, property Texas: 64.14 Expenditure, 1992, 9 14 Debt Serrice: Per Capita Cncome, 1989 513,169 County: ATTACHMENT B