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Home My WebLink AboutCOM 0021.000 1996-1998 ~Y OSN DONALD IKEDA ~~4'<~ CONSTANCE R. KIRIU Counry Clerk Li / Legtsfatne Audiror \.j. .Ir~~~'N'`I~, OFFICE OF `THE COLIJ~`FY CLERK County o, Hmucii ~ G' ~ Hcuwii County Buil,ling 'n ~ 25 AuPttni Strttt G7 f7 O Hib, Hcuwii 96720 C nt ~ '1. T 1 ` V ' ~1 December 5, 1996 z ~ t:, f-' Mr. James Y. Arakaki, Chairman ands' s Members of the County Council 25 Aupuni Street Hilo, Hawaii 96720 Dear Chairman Arakaki and Councilmembers: Pursuant to Section 10-13 of the Hawaii County Charter, I am transmitting the Financial Andit Poct Audit~Renort for the Fiscal Year Ended June 30. 1996. Representatives from Deloitte and Touche, LLP, will be present at the January 7, 1997, Finance Committee meeting to answer any questions you might have on the Report. Should you desire any further assistance from myself or Deloitte and Touche, please feel free to call me at Extension 8388. Sincerely, Connie Kiriu Legislative Auditor Enclosure CK/smy cc without enclosure: Deloitte and Touche Finance Director Harry Takahashi Dixie Kaetsu Lbmm Y4-p---~~" xer. riate l~ Q s`t~98"'" ~A:~ii~f"" - ~....',.9~'r+W"~~;i:',°?° .~m:_e^~*y~gyy' ~.,;,!'c;n.,7y..«n~^~'4".'~:`'k~"C'e,.-..¢-..w'tE ...~'.'~:;;»S wa.za~mr, V'; r c (JJ T ~ T_ _ C C ~ ~ ~ .J G. ~ ~i ,T ~..7 i + Y ~ f'^ C~ (T W COUNTY OF HAWAII OF y 6Y G~ ~ , i ar \~~~tlti~,~, , , • • - - • J ~?T~ ~ : Nw M;~~p~ qrE oF'H°' r Financial Audit Report for the Fiscal Year Ended r June 30,1996 rr FOREWORD This financial audit report is the result of the audit of the financial statements of the County of Hawaii, State of Hawaii, for the fiscal yeaz ended June 30, 1996. The audit was conducted by Deloitte 8c Touche t.[x, certified public accountants. The audit was performed in accordance with generally accepted auditing standazds 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 I, "Internal Accounting Control and Administrative Matters," includes the auditors' findings and recommendations based upon their evaluation of the adequacy and effectiveness of the County's internal accounting control and accounting procedures done in connection with their audit of the County's financial statements for the fiscal year ended Tune 30, 1996. 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 II, "Comprehensive Annual Financial Report" for the fiscal yeaz ended June 30, 1996, displays the financial statements and schedules of the County, the auditors' report as to the fairness of presentation of the financial statements and also includes statistical information. We wish to express our sincere appreciation for the excellent cooperation and assistance extended by the management and staff of the various departments during the audit. Constance R. Kiriu Legislative Auditor County of Hawaii COUNTY OF HAWAII FINANCIAL AUDIT REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 1996 Table of Contents Section pave I. INTERNAL ACCOUNTING CONTROL AND ADMINISTRATIVE MATTERS Independent Auditors' Report on the Internal Control Structure Based on the Audit of the Financial Statements 1-2 Current Year's Observations and Recommendations 3-6 Comments by the Affected Agencies 7-11 Status of Prior Years' Observations and Recommendations 12-13 Appendix 14-17 II. COMPREHENSIVE ANNUAL FINANCIAL REPORT Introductory Section 1 Financial Section 17 Statistical Section 119 ~ti&nY:. - . -5~","~"' . y. : '~~:+s~fawaaF:?N:?~`, _ . ~~rd a;.~1 ~^r~#:~,~ ..ps_ ~ , ' ~ , r^ COUNTY OF HAWAII FINANCIAL AUDIT REPORT FOR THE FISCAL YEAR ENDED JUNE 30,1996 SECTION I INTERNAL ACCOUNTING CONTROL AND ADMINISTRATIVE MATTERS r~- r- r- COUNTY OF HAWAII FINANCIAL AUDIT REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 1996 SECTION I INTERNAL ACCOUNTING CONTROL AND ADMINISTRATIVE MATTERS Table of Contents Independent Auditors' Report on the Internal Control Structure Based on the Audit of the Financial Statements 1-2 Current Year's Observations and Recommendations 3-6 Comments by the Affected Agencies 7-11 Status of Prior Yeazs' Observations and Recommendations 12-13 Appendix 14-17 Deloitte & Touche «P Suite 1200 Telephone:18081543-0700 1132 Bishop Street Facsimile: (808) 526-0225 Honolulu, Hawaii 96813-2870 INDEPENDENT AUDITORS' REPORT ON THE INTERNAL CONTROL STRUCTURE BASED ON THE AUDIT OF THE FINANCIAL STATEMENTS To the Members of the County Council of Hawaii County of Hawaii Hilo, Hawaii We have audited the general purpose financial stazements of the County of Hawaii, State of Hawaii, for the yeaz ended June 30, 1996, and have issued our report thereon dated October 25, 1996. We conducted our audit in accordance with generally accepted auditing standards and 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 general purpose financial statements are free of material misstatement. The management of the County is responsible for establishing and maintaining the intemal control structure. In fulfdling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of intemal control structure policies and procedures. The objectives of an intemal control structure are to provide management with reasonable, but not absolute, assurance that assets aze safeguazded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. In planning and performing our audit of the general purpose financial statements of the County for the year ended June 30, 1996, we obtained an understanding of the intemal control structure. With respect to the internal control stmcture, we obtained an understanding of the design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide an opinion on the internal control structure. Accordingly, we do not express such an opinion. DeloitteTouche Tohmatsu International -1- Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be material weaknesses under standards established by the American Institute of Certified Public Accountants. A material weakness is a condition in which the design or operation of one or more of the specific internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the general purpose financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control structure and its operation that we consider to be material weaknesses as defined above. We did note other administrative and operating matters. Our comments, arranged by department, are presented herewith. This report is intended for the information of the County Administration and the County Council. However,t/his report is a ma/tter of public record and its distribution is not limited. October 25, 1996 -2- CURRENT YEAR'S OBSERVATIONS AND RECOMMENDATIONS A. SEWER ACCOUNTS RECEIVABLES Observation: Collection of past due sewer accounts should be improved. Background: The following table summarizes past due sewer accounts receivable for the past four yeazs: 1988 X 1988 % 1994 % 190.9 % Bimonthly accounts $145,049 26% $154,151 31% $113,526 30% $ 86,911 33% Monthly accounts 56,635 10% 55,708 11% 79,672 2146 48,605 19% Collection status (over siz months past due) 351,718 64% 287,928 584'0 180,824 4946 125,895 48'?0 $ 553,402 100% $ 497,787 100% $ 374,022 100% $ 261,411 100% As illustrated above, collection status accounts have grown over the past four yeazs. The June 30, 1996 past due accounts represent about 20~ of fiscal 1996 sewer fund revenue of $2,723,000. A summary aging of the past due accounts at June 30, 1996 follows: Monthly Bimonthly Collactlon Status Totsl Over 30 days $ 43,062 $ 43,062 Over 60 days 8,482 $ 45,670 54,152 Over 90 days 4,609 4,609 Over 120 days 17,125 17,125 Over 180 days 80,810 $ 351,718 432,528 Penalties 482 1,444 1,926 Total $ 56,635 $145,049 $ 351,718 $ 553,402 Commercial accounts aze billed monthly and residential accounts are billed bimonthly. After three billing cycles (90 days for monthly accounts and 180 days for bimonthly accounts), past due accounts aze referred to either Corporation Counsel (balances exceeding $200) or an outside collection agency (balances less than $200). Such referred accounts aze called collection status accounts. This observation and recommendation has been repeated from last year. The Division has made little progress from last yeaz because of Division personnel turnover. The Division recently requested proposals to contract for collection services, however, proposal responses have not yet been received and/or evaluated. Also, the Division and the Corporation Counsel have begun to schedule meetings with lazger past due accounts. Recommendation: Pursue collection of past due sewer accounts, evaluate the effectiveness of collection procedures, and write off uncollectible balances. -3- B. SOLID WASTE ACCOUNTS RECEIVABLE Observation: Collection of past due landfill receivable accounts should be improved. Background: A summary aging of past due Solid Waste Division receivables at June 30, 1996 follows: Over 30 days $183,293 Over 60 days 108,487 Over 90 days 278,575 With Corporation Counsel 24,471 TOTAL $ 594,826 There appears to be no formal collection procedures for the Division. However, bills aze mailed within 10 days of month end, collection letters aze sent when accounts aze past due, and accounts over $500 and over six months outstanding are sent to the Corporation Counsel for further collection efforts. The past due accounts represent about 20°k of total fiscal 19961andfill revenue of $2,867,000. Also, 11 commercial accounts make up 84% of the balances over 90 days including accounts with the Corporation Counsel. We understand that some commercial accounts may intentionally wait until 90 to 120 days to pay, because: 1) they wait for payment from their customers, and 2) the County imposed 1096 penalty and denial of access takes effect after 120 days (see Hawaii County Code, Section 20- 47). Although 120 days past due appears to be a critical date, the aging does not supply that information. Recommendation: Formalize credit, billing and collection policies and procedures. Then, aggressively follow collection procedures. Investigate means of accelerating collections such as accepting payment by credit or debit cazds, offering eazly payment discounts, and strengthening the penalties for slow payment. Also, include an "over 120 days" category in the aging analysis. C. ADJUSTING COMPUTER SYSTEMS FOR THE YEAR 2000 Observation: The County has not assessed the effect of yeaz 2000 dates on its computer applications. Background: The impact of the yeaz 2000 on older computer systems is rapidly becoming a significant issue for business and governmental entities. The issue revolves azound the ability of operating systems and software to process the input of the yeaz 2000. Many systems, PC to mainframe, will not properly process transactions after the yeaz 1999. This is because a majority of existing programs see the yeaz 2000 as "00" and process data as if it was the yeaz 1900, or will not accept the entry at all. The County's custom developed -4- software, which is more than a few yeazs old, will likely incorrectly process entry of the yeaz 2000. This is also true of older packaged softwaze and operating systems. Examples of problems that may occur include: cannot cut or pay an invoice or paycheck, wrong records deleted/azchived, interest miscalculated, posting journal entries fails, etc. To fix these "bugs" may, or may not, be simple. But the magnitude of numerous small fixes can add up to a staggering quantity of man hours. The County has not begun to assess its systems and programs relative to processing the yeaz 2000. The assessment task is lazge and will take months. Once assessment is completed, the appropriate modifications or purchase of new hazdwaze and software follow. Large expenditures may be required to complete both assessment and modification of the County's systems and programs; especially if more programming staff and/or consulting help is necessary. Such expenditures will impact the budget. The systems to be reviewed should include the Property Tax Division's contracted arrangements with the City and County of Honolulu. Recommendation: Implement formal procedures to assess the County's computer systems' capability relating to rollforwazd into the yeaz 2000. This matter should be a high priority. D. DEPARTMENT OF PUBLIC WORKS -GRANT REIMBURSEMENT REQUESTS Observation: The Department of Public Works (DPW) has not submitted grant reimbursement requests on a timely basis. Background: During fiscal 1996, DPW had several reimbursable federal grants, passed through the State of Hawaii for construction and planning of highway projects. DPW can request reimbursement upon payment of qualifying expenditures. In practice, DPW has not consistently requested reimbursement on a timely basis. For example, as of October 25, 1996, DPW had not requested $459,170 of reimbursable costs related to the Alii Drive design project. The costs were incurred between September 1995 and July 1996, with 43% of the costs incurred during 1995. Untimely requests adversely affect the County's cash flow and investment earnings. Recommendation: Submit grant reimbursement requests as soon as qualifying payments exceed apre-determined level; such as $10,000. E. INTERNAL AUDIT FUNCTION Observation: The County should consider the benefits of an internal audit function. Background: An internal audit function is generally used throughout an organization to determine that departments have adequately implemented internal controls and have complied with the County's operational and fiscal requirements, as well as those imposed by outside agencies. -5- Examples of internal audit projects would include: audits of the cash functions of satellite finance department offices; and of the golf course, solid waste, cemetery and other special revenue funds. In addition to internal control compliance reviews, an internal auditor could perform special financial projects, such as: • Helping to resolve the receivables delinquency issues at the Wastewater and Solid Waste Divisions • Helping to resolve the issue of late filings for grant reimbursements • Helping the Director of Finance investigate potential revenue enhancement projects Recommendation: Evaluate the costs versus the benefits of establishing an internal audit function. -6- . ~,,.?,o.,w~ Doma Fay K. Kiyosak{ Stephen K. Yamashiro ~ CbteJ Enalncer Mayor Jiro A. Sumach •,il,•., Na,? ~~~t~tg ~~br~ii DEPARTMENT OF PUBLIC WORKS 25 Aupunl Street, Room 202 • Hilo, Hawaii 96720.4252 (808) 96l•8321 • Faz (BOB) 969.7138 November 18, 1996 T0: Constance R. Kiriu Legislative Auditor FROM: Peter Boucher Division Chief SUBJECT: Preliminary Draft Financial Audit Report for the County of Hawaii Fiscal Year Ended June 30, 1996 Thank you for the opportunity to comment on the Auditors report concerning Sewer Accounts Receivables. Recommendation: Pursue collection of past due sewer accounts, evaluate the effectiveness of collection procedures, and write off uncollectible balances. The Division submitted a request for proposal to contract services of collection from different private collection agencies. When the proposal responses are received, the Division will be given the opportunity to evaluate and choose an appropriate agency which to pursue collection efforts with. The Division has begun to make follow-up contact with the current collection agency to update the collection account status. Upon confirmation, the Division is able to write off receivable balances deemed uncollectible. The Division and Corporation Counsel have met with one of the largest collection accounts and a payment plan agreement is in process. The Division hopes to make more progress hereafter. Hopefully, personnel changes within the Division will decline. cc: ADM -7- SOLID WASTE DIVISION -DPW ` COUNTY OF HAWAII - 108 RAILROAD AVENUE - HILO, HAWAII 96720 _ ~ HILO OffICE (808) 961-8339 WAIMEA OFFICE (808) 885-3687 KONA OFFICE (808) 326-1180 ~iY~ MEMORANDUM Date: November 18, 1996 To: Constance R. Kiriu Le isl ive Auditor s----. From: a rence Ca as, Division Chief lid Waste ivision Re: Response to Financial Auditor Report Recommendations 1.) Formalize credit, billing and collection policies and procedures. Then, aggressively follow collection procedures. Solid Waste Accountant I is currently in the process of documenting the billing and collection policies and procedures. Current procedures include dunning messages on monthly statements, collection letters which accompany the statements at 60 and 90 days past due, and access denial and penalty assessments at 90 days past due (120 days from billing date). Notice was sent to all active customers that effective with the December 31, 1996 statements, penalty assessment will begin at 60 days past due and access may be denied. Purchasing division is processing a Request for Proposal for collection services for Solid Waste and Waste Water divisions. As soon as a collection service has been contracted, past due accounts will be sent to them for collection and reporting to credit bureau. 2.) Im~estigate means of accelerating collections such as accepting payment by credit or debit cards, offering early payment discounts, and strengthening the penalties for slow payment. The division is developing a procedure for accepting payments at the scalehouses, as was recommended in the prior year. Security and position description issues must still be addressed. We are consulting with Treasury Division regarding the possibility of accepting credit card charges, also. -g- Moving up the penalty assessment date, as indicated in item 1.), should accelerate collections. Additionally, the division has submitted a recommendation to change the wording of the ordinance which applies to billing and late fees. The proposed wording would more clearly define due dates and would also change from the current flat penalty charge to a finance charge which would be calculated on past due balances monthly. 3.) Include an "over 120 days" category in the aging analysis. As stated in item 1.), the timing of penalty assessment will be moved forward to occur at 60 days past due. This will eliminate the need for an "over 120 days" category in the aging analysis. cc DPW ADM nc -9- tV O. ~+o~M, !~.ti. q,.: a Otnphea K. Yesu Shiro 7 Herry q. Tskahrshi Mayor ~i, Oirnccor l1.II1ITif~J I11 ,~..'3`~IflI`~IiT DEPARTMENT OF FINANCE 25 qupurrl Street. Rana 115 Hilo. Hevsii 95720-4252 [505) 981-8234 Fex [5051 951-5245 November 20, 1996 TO: Constance Kiriu, Legislative Auditor FROM: Harry A. Takahashi, Finance Director SUBJ: Current Year's Observations and Recommendations This is in response to your November 8, 1996, memo providing us with the observations and recommendations of the external auditors. In particular, you have referred Item C, Adjusting Computer Systems For the Year 2000, and Item E, Internal Audit Function, for comments. Item C. Adjusting Computer Systems For The Year 2000 The County is aware of its aged equipment and the pending problem which the year 2000 may bring. In preparation of this event, we will be conducting an assessment of our applications software (e.g., payroll, accounting, billing, etc.) running on the Wang systems. We will also look at implications within the personal computer environment. Upon completion of this assessment, we will develop a course of action to avoid failures to any of our operating systems and software. Item E. Internal Audit Function We concur with the external auditors' recommendations regarding an evaluation of the costs versus the benefits of establishing an internal audit function. While a cost/benefit evaluation is necessary, a decision addressing details of an internal audit program needs to be made first. AS County government programs and services experience continuing growth and expansion, the need to insure adequate internal controls become increasingly important in the protection and safeguard of the public's assets and resources. In today's economic climate, the decision relating to the establishment of any new program needs to be weighed against available resources and other priorities. The County will come to a decision about an internal audit function during the year. -10- COUNTY OF HAWAII DEPARTMENT OF PUBLIC WORKS CHIEF ENGINEER'S OFFICE 25 AUPUNI STREET, ROOM 202 HILO HI 98720.4252 TEL: (808) 961-8321 FAX: (808) 981.8630 MEMORANDUM November 19, 1996 TO: Constance R. Kiriu, Legislefwe Auditor FROM: ~nna F Ki osaki, Chie n nee RE: PRELIMINARY DRAFT FINANCIAL AUDIT REPORT FOR THE COUNTY OF HAWAII FISCAL YEAR ENDED JUNE 30, 1996 Requests for grant reimbursements procedures will be set up to assure submittals are done on a more timely manner. Accountant IV, to be hired within the next month, shall be responsible for the reimbursement requests with assistance from the Accountant I. Instructions shall be given that reimbursement requests shall be compiled monthly and submitted for reimbursements at least quarterly. During construction of the project, reimbursements shall be made promptly after receiving progress payment requests from the contractor. -11- STATUS OF PRIOR YEARS' OBSERVATIONS AND RECOMMENDATIONS A. WASTEWATER DIVISION BILLING AND COLLECTIONS Observation: The billing and collection functions of the Wastewater Division could be improved by assigning sewer billing and collection responsibilities to the Department of Water Supply. Background: Billing deficiencies: Sixty-nine percent of the Wastewater Division revenues come from commercial accounts that are billed bimonthly. These billings, which average $265,000 for a bimonthly period, are sent out 45-60 days after the end of the service period. Bills have little chance of payment until they are sent out, and the delay increases the cash requirements for the operation of the Division. The delay between the end of the service period and the billing is caused by manpower limitations in processing cash receipts between billing dates. Collection deficiencies: Past due accounts over 120 days from billing have increased from $99,000 as of June 30, 1992 to $168,000 as of June 30, 1993, $256,000 as of June 30, 1994, $390,000 as of June 1995, and $352,000 as of June 30, 1996. The reasons for the increase in past due accounts include (a) a lack of accountability with regard to the collections function, and (b) a lack of significant penalties to customers for non-payment. The current processing of delinquent accounts consists of (a) non-payment notification after 45 days from the billing date, (b) bills being sent to collectors, usually after 105 days, and (c) finally, if the delinquent balances aze greater than $200, forwazding of bills to Corporation Counsel. Sewer bills aze based on the volume of water usage over a minimum service fee. If the Depaztment of Water Supply was responsible for sewer billing and collection, the threat of water shut-off would be a powerful incentive for prompt sewer bill payments. This practice is followed by the County of Maui and the City and County of Honolulu. Recommendation: The County Council should consider an ordinance requiring the Department of Water Supply to function as the billing and collecting agent for the County's sewer chazges. Current Status: The Administration has continued its efforts to negotiate with the Department of Water Supply to handle such billing and collection functions. Current Recommendation: Continue negotiations with the Department of Water Supply to handle such billing and collection functions. -12- B. SOLID WASTE ACCOUNTING Observation: Solid waste accounting and internal control procedures could be improved. Background: The following changes should be considered to improve accounting efficiency and internal controls over solid waste receipts: 1. Cash collections could be made at landfill sites to eliminate the need to bill for insignificant amounts, as well as for convenience to customers. 2. Credit checks could be made as part of the permitting process to reduce the probability of uncollectible amounts. Accounts with histories of unpaid balances could be restricted to a cash-only basis. 3. Permit compliance should be enforced or evaluated for effectiveness. At June 30, 1995, only 813 of 2,203 accounts have complied with permit regulations, yet all are allowed to use the landfill. 4. Receipts could be deposited on a more timely basis to reduce the likelihood of theft and to increase the earring potential of invested funds. Since inception of tipping fees and permits in December 1994, only 18 deposits have been made through June 30, 1995. Recommendation: Review the solid waste accounting procedures and consider implementing the above suggestions. Cunent Status: The County has implemented some of the suggestions from the prior yeaz comments (improvement on timeliness of deposits and permit compliance). Cunent Recommendation: Continue to review and improve the solid waste accounting procedures. C. ELECTRONIC DATA PROCESSING PLAN Observation: The "Long-Range Strategic Information System Plan" (The Plan) prepared in 1991 by the Department of Finance and an independent consultant has not been accepted by the County Council, and the Plan could be improved. Recommendation: Revise the Plan to include key elements of a long-range EDP plan so that it will be useful for decision making. DepartmenNs Response: With the change in the County administration and in the composition of the County Council, the Plan should be revised, incorporating new priorities and policies. This recommendation will be made to the incoming administration. Cunent Status: No change from prior years. Cunent Recommendation: Expedite the Plan. See Appendix for additional information on long-range systems planning. -13- APPENDIX LONG RANGE SYSTEMS PLANNING The need for an information systems plan was identified by the 1990 and 1991 audits. In 1991, a plan was prepared internally by the County's data processing depamnent. This plan was not accepted by the County Council and asole-source contract was given to an independent contractor to develop a systems plan for the County. A "Long-Range Strategic Information Systems Plan" (Plan) was prepared for the County in April 1992. The content of this plan is similaz to the plan prepared for the County of Maui. The Plan does not include all of the analyses necessary for the County of Hawaii to adequately plan its information systems. The systems plan should include the following (see Exhibit I): • Btulness Model -The purpose of a systems plan is to ensure that the administration allocates system resources and establishes priorities based upon countywide needs. This analysis identifies the organizational mission, objectives, and critical success factors for the County administration. Information systems development efforts should be tied to the County's strategic plans and objectives. Systems must deliver information where it is needed. Therefore, systems development planning must include planning for all areas of the County Administration. The County's Plan does not identify the objectives and critical success factors for the Cotutty Administration. • ~rnction Model -For information systems to support the needs of the County, a common understanding of the County's processes must be developed. The function model defines the administration's processes and how they relate to one another. By linking these processes to the objectives and critical success factors, the most important processes can be identified. By linking processes to organizational units, redundant business activities can be identified, and the interaction between organizational units can be determined. The function model is not the same as an organizational model. Organizational boundaries aze eliminated and only the functions of the County aze identified. The function model describes the activities performed, whereas an organizational model describes one way of organizing human resources to perform those actions. Because activities performed by the County aze shown only once in the function model, the data and systems to support these activities will only be created once. Redundant data and systems can be avoided and the systems supporting a function model will be much more stable than systems built according to an organization chart. This stability derives from the fact that what an organization does changes much less than how it is organized. Because the Function Model identifies how the County administration operates, it is the foundation for building future information systems. The County's Plan does not provide a function model for the County. -14- • Data Architecture -The data architecture is the blueprint for organizing the data needed to support the information requirements of the County. It uses the function model to consolidate and standardize the process by which data is organized and referenced throughout the County. In developing the function model, each process is analyzed to detennine the inforntadon needed to perform that process. Information requirements that are used frequently together are grouped into subject azeas. Subject areas are the ideal structures for logical database organization. The objective is to support the greatest number of processes with the smallest number of databases. The County's Plan does not provide a data architecture for the County. • Application Architecture -The application architecture defines the integrated, non-redundant set of automated information systems needed to support the County. It facilitates the coordination of a large number of system development projects and provides a basis for defining application development projects. The application architecture is derived from the processes contained in the function model. Each process that could be supported by automation results in the definition of an application system. The application architecture represents the target environment towazd which all future systems development can be directed. No application architecture is provided 6y the County's Plan. The Plan makes recommendations regarding individual applications. A functional listing of applications is provided to identify which applications may cross departmental boundaries. • Assessment o[ Eadsting Information Systems -The County maintains a significant investment in existing application systems and technology. An inventory and assessment of existing applications, in addition to an inventory of current projects and current databases and files, helps to deterndne the strengths and limitations of each. It provides the County with a baseline for future system improvements, including: A profile of existing automated applications systems and an assessment from both a technical and functional perspective. Identification of application systems that are currently funded and in process. Comparison of the current applications and projects to the desired application architecture to identify gaps and deficiencies. This comparison is called a gap analysis. Profile and assessment of existing technology components (computer systems and networks). Profile of the major databases and files. The County's Plan provides a listing of information systems. However, technical and functional assessment of these systems are not adequately provided. • Project Plan -For strategic planning purposes, the project plan provides the road map for implementation of new systems for the County. Each project must be defined in sufficient detail to allow its evaluation based on the criteria such as: Support for County objectives and critical success factors Resource constraints -15- Funding source Risk CoslBenefit The identified projects can then be prioritized into high, medium and low priority projects. Projects are not adequately defined or prioritized in the County's Plan. The Plan provides a listing of depanmenr and countywide computer objectives and priorities. The departmental list was prioritized by each depanmenr from its own perspective. However, the criteria for establishing their priorities is not explained. -16- Exhibit I County of Hawaii Administration Systems Plan Components What is our job? What are ovr micsion, goals tad eritleal success factors? BUSIn@S3 Model What are tba activities we do to accomplish ovr Mission, Goals, sad Crielcal Sucoass Paetors? Function Model Data Application Architecture Architecture What data do we What applications do we aced need to fuaetioal to support our activities? How should they be orgaaizad? How well do our ezistiag systems meet our naeds7 Assessment of Existing Systems -17- - COUNTY OF HAWAII FINANCIAL AUDTT REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 1996 SECTION II COMPREHENSIVE ANNUAL FINANCIAL REPORT COMPREHENSIVE ANNUAL FINANCIAL REPORT Fiscal Year Ended June 30,1996 _ ~Q~' 4 _ ~ ~~w o~~ ~ Nw M~ OF N COUNTY OF HAWAII - Hilo, Hawaii Stephen K. Yamashiro Mayor William G. Davis Managing Director Prepared by The Department of Finance - Harry A. Takahashi Director of Finance COUNTY OF HAWAII Comprehensive Annual Financial Report For the Fiscal Yeaz Ended June 30, 1996 Table of Contents Pa>:si INTRODUCTORY SECTION Letter of Transmittal l GFOA Certificate of Achievement 12 Organization Chart 13 List of Elected Officials 14 List of Principal Officials 15 FINANCIAL SECTION Independent Auditors' Report 17 Glossary of Certain Terns Used in Financial Statements 18 General Purpose Financial Statements: Combined Balance Sheet -All Fund Types and Account Groups and Discretely Presented Component Unit 20 Combined Statement of Revenues, Expenditures and Changes in Fund Balances -All Governmental Fund Types and Expendable Trust Funds 24 Combined Statement of Revenues, Expenditures, and Changes in Fund Balances -Non-GAAP Budgetary Basis -General and Special Revenue Fund Types 26 Combined Statement of Revenues, Expenses and Changes in Retained Earnings-Proprietary Fund Type and Discretely Presented Component Unit 28 Combined Statement of Cash Flows -Increase (Decrease) in Cash and Cash Equivalents -Proprietary Fund Type and Discretely Presented Component Unit 29 Notes to the Combined Financial Statements 3l Supplemental Information: General Fund: Balance Sheet 63 Statement of Revenues, Expenditures and Changes in Fund Balance 65 Schedule of Revenues, Expenditures and Changes in Fund Balance - Non-GAAP Budgetary Basis 66 FINANCIAL SECTION (Continued) Supplemental Infonnation (continued): Special Revenue Funds: Combining Balance Sheet 72 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 74 Combining Schedule of Revenues, Expenditures and Changes in Fund Balances -Non-GAAP Budgetary Basis 76 Highway Fund -Schedule of Revenues, Expenditures and Changes in Fund Balance -Non-GAAP Budgetary Basis 79 Parking Meter Fund -Schedule of Revenues, Expenditures and Changes in Fund Balance -Non-GAAP Budgetary Basis 80 Sewer Fund -Schedule of Revenues, Expenditures and Changes in Fund Balance -Non-GAAP Budgetary Basis 81 Bikeway Fund -Schedule of Revenues, Expenditures and Changes in Fund Balance -Non-GAAP Budgetary Basis 82 Cemetery Fund -Schedule of Revenues, Expenditures and Changes in Fund Balance -Non-GAAP Budgetary Basis 83 Vehicle Disposal Fund -Schedule of Revenues, Expenditures and Changes in Fund Balance -Non-GAAP Budgetary Basis 84 Solid Waste Fund -Schedule of Revenues, Expenditures and Changes in Fund Balance -Non-GAAP Budgetary Basis 85 Golf Course Fund -Schedule of Revenues, Expenditures and Changes in Fund Balance -Non-GAAP Budgetary Basis 86 Geothermal Royalty Fund -Schedule of Revenues, Expenditures and Changes in Fund Balance -Non-GAAP Budgetary Basis 87 Beautification Fund -Schedule of Revenues, Expenditures and Changes in Fund Balance -Non-GAAP Budgetary Basis 88 Debt Service Funds: Combining Balance Sheet 89 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 90 Capital Projects Funds: Combining Balance Sheet 91 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 92 Capital Projects Fund -Schedule of Appropriations, Expenditures and Encumbrances -Non-GAAP Budgetary Basis 93 FINANCIAL SECTION (Continued) Supplemental Information (continued): P.;sg@ Enterprise Funds: Combining Balance Sheet 99 Combining Statement of Revenues, Expenses and Changes in Retained Earnings 101 Combining Statement of Cash Flows 102 Trust and Agency Funds: Combining Balance Sheet l04 Expendable Trust Funds -Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Expendable Trust Funds 106 Hawaii County Housing Agency -Schedule of Revenues, Expenditures and Changes in Fund Balance -Non-GAAP Budgetary Basis 107 Agency Funds -Combining Statement of Changes in Assets and Liabilities 108 General Long-Term Debt Account Group: Schedule of General Long-Tern Debt 113 Schedule of Debt Service Requirements to Maturity for General Obligation Bonds - 114 General Fixed Assets Account Group: Schedule of General Fixed Assets by Source 115 Schedule of Changes in General Fixed Assets by Function 116 Schedule of General Fixed Assets by Function and Activity 117 STATISTICAL SECTION Table 1 -General Governmental Expenditures by Function 119 Table 2 -General Governmental Revenues by Source 120 Table 2a -General Governmental Tax Revenues by Source 121 Table 3 -Property Tax Levies and Collections 122 Table 4 -Assessed and Estimated Actual Value of Taxable Real Property 123 Table 5 -Real Property Assessed Values by Classification and Tax Rates 124 Table 6 -Principal Taxpayers 128 Table 7 -Computation of Legal Debt Margin 129 Table 8 -Ratio of Net Bonded Debt to Assessed Value and Net Bonded Debt Per Capita 130 STATISTICAL SECTION (Continued) Pa>'si Table 9 -Ratio of Annual Debt Service Expenditures for General Obligation Bonded Debt to Total General Governmental Expenditures 131 Table 10 -Demographic Statistics 132 Table 11 -Property Value, Construction and Bank Deposits 133 Table 12 -Miscellaneous Statistical Data 134 INTRODUCTORY SECTION oa'~'°~ ~I Ste hen K. Yaaa Shiro '~~.4~~.. P -.-r_~e.±= p Harry A. Takahashi Mayor v, Director r ~'1.IIlITif1,7 II~ ~~1M~ll~tt DEPARTMENT OF FINANCE 25 Aupuni Siraet. Room 119 Hilo. Havaii 98720-4252 L BOB1 991-8234 Fa: LB09) 981-9248 October 25, 1996 The Honorable Mayor and Members of the Council County of Hawaii 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, 1995 to June 30, 1996. This report was prepared by the County's Department of Finance. The accuracy of the financial statements and the completeness and fairness of their presentation are the responsibility of the County government. We believe the enclosed data are wmplete 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 and account groups of the County. All disclosures necessary to convey the maximtun understanding of the County's fmancial activities have been included. This report presents the fmancial position of the County of Hawaii at June 30, 1996 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 Hawaii's organization chart and lists of elected and principal officials. • The Financial Section contains the general purpose financial statements, related notes, the combining and individual fund and account group financial statements and schedules, and the independent auditors' report. • The Statistical Section includes selected financial and demographic information, generally presented on a multi-year basis. This report includes all funds and account groups 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 the County government. This component unit is included in the County's reporting entity because of its fmancial 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 infrastmcture; real property assessment and tax collection; and general administrative services. -1- 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, 4,038 square miles in size. It is twice as lazge 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. Hawaii County has an elected mayor and anine-member council. Economic Condition and Outlook While the economy of the County of Hawaii has not performed well overall the past few years, the worst may be over and the long-term potential for growth looks better than ever. C. Brewer and Co. announced that it plans to relocate its corporate headquarters from Honolulu to Hilo. The Research and Technology Park near the campus of the University of Hawaii at Hilo now has three astronomy research facilities as tenants, with three more planning to locate in the park, and Hilo's new Foreign Trade Zone has one tenant already. The 1995 unemployment rate of 10.2% decreased to 9.5% during the first six months of 1996. Gross business receipts for calendar yeaz 1995 were $2.6 billion, up 8.9%a from 1994. The city of Hilo on the east side of the island serves as the county seat and the financial center for the County. Hilo's infrastructure includes Hilo Harbor, a deep water port, and Hilo International Airport, which is capable of handling fully-loaded wide body aircraft. While the sunny west side of the island is growing more rapidly than the Hilo side, the east side is still home to the bulk of the County's population. The west side is more dependent on the visitor industry. It is home to a number of major hotels and resorts. Kona's Keahole Airport can accommodate direct flights from mainland and foreign markets. The Hawaii County Profiles supplement ro the September/October 1996 issue of First Hawaiian Bank's bimonthly newsletter, Fronomic Indicators, is the source for most of the economic statistics below. Tourism Added air service to Kona's Keahole Airport will benefit tourism in the County. Tn June 1996, United Airlines increased its daily flights from the U.S. mainland from one to two, and Japan Air Lines initiated three weekly direct flights from Tokyo. During the first six months of 1996, hotel occupancy was 64.9%a, the highest rate so faz this decade, compared to 60.4% for calendaz year 1995. The number offirst-class resorts on the upscale Kohala coast aze an attraction to affluent travelers. The Mauna Kea Beach Hotel reopened in December 1995 after $35 million in renovations. The former Ritz Carlton at Mauna Lani will reopen in the fall of 1996 as a Sheraton property after an $8 million face lift. The new Four Seasons Resort Hualalai is also scheduled for a fall 1996 opening. With the increase in occupancy, hotels have been hiring additional workers, which has helped displaced sugaz workers laid off when the plantations closed. -2- Construction Construction continued down the past year. The value of constroction put in place in calendaz year 1995 was up a small .2% to $222.2 million, still well below the 1991 peak of $354.3 million. The number of building permits issued in the first six months of 1996 was down 50.4% for residential permits and 36.7% for notvesidential permits from the same period in 1995. Agriculture Ka'u Agribusiness, the last remaining sugar plantation, shut down during the year. The County now is in a transition from plantation agriculture to smaller scale diversified operations. Many displaced sugar workers have been employed in other agricultural areas such as macadamia nuts, forestry, foliage, and vegetable crops. Major Initiatives For the Year During the year, the County focused on fiscal management, consolidation of County services, public works, public safety, and other issues affecting the quality of life in the County. Fiscal management -The County again ended the yeaz in excellent financial condition in spite of the private sector economic difficulties. The ongoing freeze on the hiring ofnon-essential workers, along with other fiscal constraints, has enabled the County to end the year with a record $19.3 million unreserved, undesignated fund balance in the general fund. Part of this surplus will be carried into future yeazs as a reserve. Services in West Hawaii -Most of the County agencies in West Hawaii were consolidated into a single facility at Hanama Place, to offer greater convenience to taxpayers and citizens. Public works -The County aggressively pursued federal ISTEA funds to assist in financing road paving, bridge replacements and seismic retrofits, and new traffic signal installations. Some of the most dangerous intersections in Hilo now have traffic signals to increase safety, thanks to federal funding. in the area of solid waste disposal, a fire cutting and disposal program was initiated, as well as vehicle battery disposal and glass recycling programs. The diversion grant program continues to encourage other recycling efforts as well. Public sr{J'ety -Through the Community Development Block Grant program, volunteer fire stations obtained two new fire engines, one mini-pumper, and one new station was constructed. The use of volunteer fire stations in coral areas to supplement regular County forces continues to grow, enabling country districts to have improved protection and lower fire insurance rates. The police drug abuse resistance education (D.A.R.E.) program reached 4,200 elementary and junior high school students during the year. In addition, a Team D.A.R.E. Summer Leadership Camp attracted 54 participants. Two D.A.R.E. officers were certified in the senior high curriculum, enabling the future expansion of the program into the high schools. -3- Community-Oriented Policing began in September, 1995, with five officers assigned to areas within Hilo, Kona and Puna. Four additional officers were assigned to the project in February, 1996. The philosophy of this program is to get citizens involved by creating partnerships between the police department and the community. Parks and recreation -Several park improvements were completed and placed in service during the yeaz. in Hilo, two new soccer fields and a go-cart track were dedicated. Drainage improvements at the Hilo Municipal Golf Course were completed, along with paving of the pazking lot and repaving cart paths. The Hilo Bayfront Park was created by closing off a section of roadway to make an area available for canoeing, jogging, and roller blading. The new Kona athletic fields were dedicated in March, 1996, and include a baseball diamond, soccer/football field, and two softball fields. The fields were constructed with assistance from the U.S. Army Corps of Engineers and the West Hawaii Youth Council, a volunteer community organization. In addition, a photovoltaic system was installed at the Kailua gym. For the future Hilo services -The County is in the process of acquiring a former retail site across the street from the existing Cotmty building. County agencies now scattered around town in rented space will be consolidated into the new facility, making access to County services easier for citizens. Performance contract -The County plans to enter into a performance contract to replace the aging light fixtures and bulbs as well as the air conditioning unit in the County building with modem, energy efficient ones. The improvements will be paid for by energy savings on the County's electric bill. If the project is successful, other County facilities will be converted in the future. Recreation -New Olympic swimming pools are planned for both Kailua in Kona and Pahoa in Puna. Construction on both facilities should begin in the new year. Financial Information 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 financial statements in confortniry 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 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. -4- Activities of the general fund, special revenue funds, and one expendable trust fund 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, one expendable trust fund, 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 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. General Government Functions The following is a summary of operations for the fiscal yeaz ended June 30, 1996, including the general fund, special revenue funds, and debt service fund. Revenues -Revenues in fiscal 1996 totaled $156,470,709, a 5.2% increase over the previous year. The amounts of revenues from the various sources and changes from last year follow: Increase Percent of Percent (Decrease) Increase Source Amount of Total From 1995 fDecreasel Taxes and assessments $101,754,989 65.0% $1,726,638 1.7% Licenses and permits 5,836,082 3.7 47,831 0.8 Intergovernmental 33,656,219 21.5 1,972,270 6.2 Charges for services 8,032,090 5.2 2,593,157 47.7 Fines and forfeitures 665,479 0.4 87,444 15.1 Interest and penalties 4,691,673 3.0 486,208 11.6 Miscellaneous 1.834.177 1.2 823.945 81.6 Total $156.470.709 100.0% $7.737.493 -5- Taxes 66.0% Licenses 3.7% Intergovemrr~errtal 21.5% Miscellaneous 1.2% Interest/penalties 3.0% Charges for SBIVi02S 5.2% Fnes/forfeitures .4% 1996 Revenues by Source Miscellaneous Interest & penalties Fines and torteitures Charges for services Intergovernmental Licenses 8 permits Taxes ° s $ ~ s ~ ~ ~ ~ s 01 sss ¦ 1 sss (S000) Comparison of Revenues by Source - FY 1995 and 1996 -6- The County's largest single source of revenues, taxes and assessments, showed a modest increase during the year and contributed 65.0% of the total revenues. Taxes and assessments are a combination of three distinct resources: real property, fuel, and franchise taxes. Real property tax revenues accounted for most of the increase during the year, $1.3 million over the prior fiscal year. Assessments are based on 1000 of fair market value. Tax rates remained unchanged from the prior yeaz. Charges for services increased by $2,593,157 to $8,032,090. Of this increase, over $2 million was due ro collection of tipping fees in the Solid Waste Fund for the first full year. Interest and penalties increased 11.6% ro $4,691,673 due to a high cash balance and stable interest rates during the yeaz. The 81.6% increase in miscellaneous revenues was caused by the receipt of geothermal royalties from the state ($348,000) and a refund from the State Public Employees Health Fund of a portion of the Health Fund's surplus ($370,000). Expenditures -Expenditures for general government purposes in the fiscal year ended June 30, 1996 totaled $140,225,931, a small increase of 0.2% over the preceding period. The amounts of expenditure by major functions and changes from last yeaz follow: Increase Percent of Percent (Decrease) Increase FLt1CtlOn Amrnmt of Total From 1995 (Decrease) Public safety $ 50,381,380 35.9% 346,493) (0.6%) General government 18,241,053 13.0 (447,257) (2.4) Highways and streets 6,236,555 4.5 (1,804,705) (22.4) Sanitation 10,450,716 7.5 676,116 6.9 Health, education, welfaze 5,210,548 3.7 228,557 4.6 Culture and recreation 11,084,536 7.9 587,477 5.6 Pension and retirement contributions 13,326,008 9.5 3,242,429 32.2 Health fund 8,251,004 5.9 631,037 8.3 Miscellaneous 3,241,040 2.3 (1,645,045) (33.7) Capital outlay 1,748,793 1.2 (128,519) (6.8) Debt service 12.054.298 8.6 (598.7011 (4.7) Total 140.225.931 $ 394.896 -7- Capkal outlay 1.2% Miscellaneous 2.3% Debt service 8.6% HeaRh fund 5.9°/ Pensions 9.5% Public Safety 35.9% Culture/rec 7. Genera govt. 13.0% HEW 3.7°° Sanitation 7.5% Highways 8 streets 4.5% 1996 Expenditures by Function Debt service Capttal outlay Misc Health fund Pension/retire Culture & recreation HEW Sanitation Highways 8 streets General govt Public safety ~ o $ c4i o ° RI c°+~ ~$~00~ O 1996 ¦ 1995 Comparison of Expenditures by Function - FY 1995 and 1996 -8- Expenditures for highways and streets returned to normal levels this year, after $2 million in expenditures for new buses incurred in the prior fiscal year. The expenditure for pension and retirement contributions increased $3,242,429 from 1995 for a 32.2% increase. The amount went up because the actuarially detemrined payment to the State of Hawaii Employees' Retirement System was $10,188,900, an increase of $3,862,300 from the prior year. Miscellaneous expenditures decreased 33.7%. Decreases in workers compensation costs ($488,000), payment of claims ($460,000), and disaster/emergency costs ($534,416) caused most of the decrease. General Fund Balance The unreserved and undesignated fund balance for the general fund amounted to $19.3 million at June 30, 1996. Portions of the fund balance are projected and anticipated as revenues to finance the ensuing fiscal yeaz 1997 budget. Enterprise Operations Kulaimano Elderly Housing Protect -The operating revenue of this fund totaled $243,390 during the fiscal year, a decrease of $14,359 from the prior year. Operating expenses were $184,775, up from $138,4241ast year. Interest paid on long-tens debt exceeded interest earned on investments by $46,904. Net income for this fiscal year was $11,305 Oull Ekahl Affordable Housing Protect -The operating revenue of this new fund was $54,864 during the fiscal year. After operating expenses of $46,874 and interest income of $304, net income for the year was $8,294. Component Unit - Department of Water Supply Water sales totaled $15,805,391, an increase of $2,501,150 over the prior year. Operating expenses of $17,791,489 are $787,217 higher than last year, resulting in an operating loss of $1,986,098. Nonoperating revenues (primarily interest earnings) net of nonoperating expenses (primarily interest expense) totaled $340,392, resulting in a net loss of $1,645,706. Pension Plan All full-time employees of the County participate in the Employees' Retirement System of the Slate of Hawaii, acost-sharing, multiple-employer public employee retirement system. Debt Administration The County issued general obligation bonds in the amount of $30 million in fiscal 1996. The bond issue was insured, and on that basis was assigned a rating of "AAA" by both Moody's and Standard and Poor's. On uninsured issues, the County has maintained its "A" rating from both companies. -9- An additional $4.787,500 in long-term borrowing has been authorized by the Council, but only $15,000 of this amount was issued by the end of the fiscal year. The County has drawn down on nine loans from the State Water Pollution Control Revolving Fund to fmance wastewater projects in Hilo and Kona. The cash which the County had borrowed at June 30, 1996 (net of repayments) totaled $23,016,167. The total debt outstanding at June 30, 1996 was $164,120,548 (including debt of the enterprise fund and the component unit). Under current State statutes, the County's general obligation bonded debt issuances are subject to a legal limitation of 15% of total assessed value of real property. As of June 30, 1996, the County's net general obligation bonded debt of $136,062,774 was well below the legal limit of $1,591,738,350. 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 4.92%. The County's policy is to minimize credit and market risks while maintaining a competitive yield on its portfolio. Accordingly, deposits were either insured by federal depository insurance or collateralized. All collateral on deposits was held for safe keeping with aCounty-designated agent. Risk Management The County maintains insurance coverage for privately owned police vehicles as well as for other purposes. The County is substantially self-insured for its vehicles as well as for all other perils including workers' compensation and general liability. Other Information /ndependent Audit The Hawaii County Charter requires an annual audit by independent certified public accountants. Deloitte & Touche LLP was selected by the County Council [o perform the audit. Employee Union Contracts County employees are members of seven different bargaining units. Three bargaining units have contracts which expired June 30, 1995. Binding arbitration decisions are expected soon for these units. Four bargaining units have contracts which expire June 30, 1997. Certl/Icate 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 yeaz ended June 30, 1995. The Certificate -10- of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government financial reports. In order [o be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized comprehensive annual financial report, whose contents conform to program standarts. Such CAFR must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe our current report continues to wnform to the Certificate of Achievement program requirements, and we are submitting it to GFOA. 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 departrnents. I am grateful for their help in preparing this report. I also thank the Mayor and the members of the County Council for their interest and support in assuring the continuing sound financial condition of the County of Hawaii. HARRY A.~TAKAHASHI Director of Finance -11- 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, 1995 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 standards in government accounting and financial reporting. „3~.Y~*"~µOA YN JJ ~ ~ President ~ ~xK~ ~ Executive Director -12- County of Hawaii Organization Chart County Electorate County Mayor Prosecuting Council Attorney County Clerk Office of the Mavor: Managing Director Safety Coordinator Departments & Agencies Departments under under direct supervision Agencies under commissions and of the Mayor and/or administrative supervision administrative supervision Managing Director: of the Mayor: of the Mayor: Corporation Counsel Civil Defense Civil Service Finance Office of Aging Police Planning Liquor Control Research & Development Housing & Community Public Works Development Parks & Recreation Water Supply Fire Department (semi-autonomous) Mass Transportation -13- County of Hawaii Elected Officials A~ministrawe Officers (Term: 1992-1996) Stephen K. Yamashiro Mayor Jay T. Kimura Prosecuting Attorney Coun y Council (Term: 1994-1996) Keiko Bonk-Abramson Chair Brian J. De Lima Vice Chair James Y. Arakaki Member Keola Childs Member Takashi Domingo Member Elroy Osorio Member James M. Rath Member John Ray Member Al Smith Member -14- Principal Officials June 30, 1996 County Clerk Barbara Bell Legislative Auditor Connie Kiriu Managing Director William G. Davis Deputy Managing Director Henry Cho Corporation Counsel Richazd Wurdeman Director of Finance Harry A. Takahashi Planning Director Virginia Goldstein Director of Personnel Michael R. Ben Director of Reseazch and Development Diane Quitiquit Chief of Police Wayne Carvalho Fire Chief Nelson Tsuji Chief Engineer Donna Fay K. Kiyosaki Director of Parks and Recreation George Yoshida Manager, Department of Water Supply Milton Pavao Civil Defense Administrator Harry Kim Duector of Liquor Control Janice A. Pakele Transit Operations Administrator Michael Cochran Executive on Aging William T. Takaba Assistant Administrator, Office of Housing and Community Development Edwin S. Taira Safety Coordinator Jay Sasan -15- This page intentionally left blank. -16- FINANCIAL SECTION Deloitte & Touche «P Suite 1200 Telephone: (808) 543-0700 1132 Bishop Street Facsimile: (808) 526-0225 Honolulu, Hawaii 96813-2870 INDEPENDENT AUDITORS' REPORT To the Members of the County Council County of Hawaii Hilo, Hawaii We have audited the accompanying general purpose financial statements of the County of Hawaii, State of Hawaii, as of June 30, 1996, and for the yeaz then ended, listed in the foregoing table of contents. These general purpose financial statements are the responsibility of the management of the County. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standads and Government Auditing Standards, issued by the Comptroller General of the United States. Those standazds require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and 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 opinion. In our opinion, such general purpose financial statements present fairly, in all material respects, the financial position of the County, at June 30, 1996, and the results of its operations and the cash flows of its proprietary fund type and of its discretely presented component unit for the yeaz then ended in conformity with generally accepted accounting principles. Our audit was conducted for the purpose of forming an opinion on the general purpose financial statements taken as a whole. The combining and individual fund and account group financial statements and schedules listed in the foregoing table of contents aze presented for purposes of additional analysis and are not a required part of the general purpose financial statements of the County. These financial statements and schedules are also the responsibility of the management of the County. Such additional information has been subjected to the auditing procedures applied in our audit of the general purpose financial statements and, in our opinion, is fairly presented in all material respects when considered in relation to the general purpose financial statements taken as a whole. The statistical section listed in the foregoing table of contents is presented for purposes of additional analysis and is not a required part of the general purpose financial statements of the County. This additional information is the responsibility of the management of the County. Such additional information has not been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, accordingly, we express no opinion on it. In accordance with Government Auditing Standards, we have also issued a report dated October 25, 1996 on our consideration of the County's internal control structure and a report dated October 25, 1996 on its compliance with laws and regulations. ~ G /o . ~C } / O ? e.C..C LLr~ October 25, 1996 DeloitteTouche Tehmatsu Itdernational -17 - GLOSSARY OF CERTAIN TERMS USED IN FINANCIAL STATEMENTS The following is a glossary of certain terms associated with financial statements: Fund - An independent fiscal and accounting entity with aself-balancing set of accounts recording cash and/or other resources together with all related liabilities, obligations, reserves and equities which are segregated for the purpose of carrying on specific activities or attaining certain objectives in acwrdance with special regulations, restrictions or limitations. Appropriations -Authorizations granted by a legislative body to make expenditures and ro incur obligations for specific purposes. An appropriation is usually limited in amount and as to the time when it may be expended. Encumbrances -Obligations in the form of purchase orders, contracts or other commitments which are chargeable to an appropriation and for which a part of the appropriation is reserved. Encumbrances cease to exist when the related expenditure is recorded. Unexpended Allotments -Reservations of capital project appropriations that are available to complete such projects in future fiscal periods. Expenditures -Cost of goods delivered or services rendered, whether paid or unpaid, including expenses and capital outlays. Expenditures are distinguished from encumbrances in that expenditures relate to goods delivered or services rendered whereas encumbrances represent commitments or obligations for goods ~ delivered or services ~ rendered and for which no actual liability has been incurred. Lapses - As applied to appropriations, the term denotes the automatic termination of an appropriation. Except for continuing or indeterminate appropriations, an appropriation is made for a certain period of time. At the end of this period, any unexpended or unencumbered balance thereof is returned to fund balance, unless otherwise provided by law. -18- GENERAL PURPOSE FINANCIAL STATEMENTS -19- COUNTY OF HAWAII Combined Balance Sheet All Fund Types and Account Groups and Discretely Presented Component Unit June 30, 1996 (With comparative totals for June 30. 19951 Proprietary Cmvemmental Fund Types Fund Type Special Debt Capital General Revenue Service Proiecfs Ente!rorise Aseate and Other Debits Cash and investments (note 4): Cash and cash equivalents $10,085,046 $9,323,187 $ 664,307 $1,842,421 $ 311,962 Investments 27,420,000 18,245,367 49,000,000 500,000 Impress and change funds 24,970 2,000 100 Receivables, net of allowance for doubtful accounts: Trade 1,720,705 11,057 Real property taxes 13,897,900 Due from other governments 2,868,311 138,006 2,954,284 Due from other funds (note 5) 1,688,177 59,595 202,495 Other 298,140 664,848 2,168 2,544 Inventories 1,578,775 Prepaid expenses 2,475 Restricted assets (note 4): Cash and cash equivalents 667,743 220,447 Investments - Property and rights held under deferted compensation plan Fixed assets, net of accumulated depreciation where applicable (note 6) 1,646,239 Deferred chazges Amountavailable in debt service funds Amount to be provided for retirement of general long-term debt - Total assets and other debits $57,861,319 $11,908,341 $18,909,674 $54,669,111 $2,694,824 See accompanying notes to combined financial statements. -20- Totals Fiduciary (Memorandum Component Totals Fund Types Account Groups Only) Unit (Memorandum Only) General Department Reporting Trust and Long-Term General Primary of Entity Aeencv pghl Fixed Assets ~'~vernment Water Supnly Tone 30. 1996 June 30. 1995 $8,617,092 $ $ $ 30,844,015 $ 149,912 $ 30,993,927 $ 41,439,334 1,096,737 96,262,104 15,010,401 111,272,505 62,200,072 100 27,170 8,624 35,794 33,564 1,731,762 2,187,773 3,919,535 3,632,213 13,897,900 13.897,900 15,452,375 31,018 5,991,616 5,991,616 10,600,466 3,340,083 5,290,350 5,290,350 4,000,493 81,065 1,048,765 211,711 1,260,476 863,099 1,578,775 409,874 1,988,649 1,702,675 2,475 7,518 9,993 19,047 1,400,000 2,288,190 2,288,190 3,226,995 12,404,810 12,404,810 17,638,396 22,354,503 22,354,503 22,354,503 19,560,240 263,928,452 265,574,691 132,622,993 398,197,684 377,581,568 4,342,502 4,342,502 3,569,298 18,351,883 18,351,883 18,351,883 17,391,922 162,968,131 - 162,968,131 162,968,131 134,914,988 $36,920,595 $181,320,014 $263,928,452 $628,212,330 $167,356,118 $795,568,448 $713,826,745 (Continued) -21- COUNTY OF HAWAII Combined Balance Sheet All Fund Types and Account Groups and Discretely Presented Component Unit June 30, 1996 jpVith romoazative totals for Tune 30.19951 Froprietazy Governmental Fund Types Fund Type Special Debt Capital n r 1 R v n, Service I3si~1s. 13nterorise 1 iabilitiec Enuity and Other Credits Liabilities: Warrants payable $ 2,799,323 $ 619,183 $ $ 1,645,258 $ 12,464 Accounts payable 1,245,011 605,150 1,065,756 1,904 Due [o other funds (note 5) 3,019,570 1,184,024 345 Due to federal government -arbitrage rebate 10,596 Accrued liabilities 239,044 7770 Customer advances and deposits Customer deposits payable from restricted assets 25,428 Deferred revenue (note 7) 15,683,580 1,720,705 352,852 502 Bonds payable (notes 10 and 17) Loans payable 1,182,387 Other general long-term debt (notes 8, 9, 10 and 15) Assets held for the benefit of improvement districts Other 3,342,626 631,725 - Deferred compensation benefits payable - - Totalliabilities 26,100,706 4,129,062 239,044 3,695,936 1,230,455 Equity and other credits: Investments in general fixed assets Conbibutedcapital (notes 11 and 17) 949,173 Retained earnings (note 13): Reserved 157,227 Unreserved 357,969 Fund balances (note 13): Reserved 9,252,104 2,686,387 18,670,630 37,185,696 Unreserved: Designated 3,171,165 942,510 3,351,386 Undesignated 19,337,344 4,150,382 - 10,436,093 Total equity and other credits 31,760,613 7,779,279 18,670,630 50,973,175 1,464,369 Total liabilities, equity and other credits $57,861,319 $11,908,341 $18,909,674 $54,669,111 $2,694,824 See accompanying notes to combined financial statements, _22_ (Concluded) Totals Fiduciary (Memorandum Component Totals Fund Types Account Groups Only) Unit (Memorandum Only) General Department Reporting Trust and Long-Term General Primary of Entity Aeencv j~l11 Fixed Asset Government Water Suooly June 30. 1996 June 30. 1995 $ 2,097,829 $ $ $ 7,174,057 $ 583,710 $ 7,757,767 $ 6,756,075 11,126 2,928,947 1,681,173 4,610,120 4,320,213 1,086,411 5,290,350 5,290,350 4,000,493 10,596 10,596 917,209 1,164,023 1,250,199 2,414,222 1,788,696 35,828 35,828 222,410 258,238 361,060 25,428 7,162,791 7,188,219 6,685,133 17,757,639 17,757,639 20,238,894 125,323,000 125,323,000 14,372,000 139,695,000 116,175,148 227,045 1,409,432 1,409,432 55,997,014 55,997,014 55,997,014 52,527,410 5,499,534 5,499,534 5,499,534 9,015,761 3,974,351 3,974,351 5,372,956 22,354,503 - 22,354,503 - 22,354,503 19,560,240 32,229,485 181,320,014 248,944,702 25,272,283 274,216,985 246,802,079 263,928,452 263,928,452 263,928,452 249,924,344 949,173 106,081,215 107,030,388 102,976,465 157,227 5,242,019 5,399,246 11,113,823 357,969 30,760,601 31,118,570 23,561,471 2,247,891 70,042,708 70,042,708 49,943,925 267,889 7,732,950 7,732,950 7,002,101 2,175,330 - 36,099,149 36,099,149 22,502,537 4,691,110 263,928,452 379,267,628 142,083,835 521,351,463 467,024,666 $36,920,595 $181,320,014 $263,928,452 $628,212,330 $167,356,118 $795,568,448 $713,826,745 - 23 - COUNTY OF HAWAII Combined Statement of Revenues, Expenditures and Changes in Fund Balances All Governmental Fund Types and Expendable Trust Funds For the Fiscal Yeaz Ended June 30, 1996 (~dith comparative totals for the fis~l yeaz ended June 30 19951 Governmental Fund Types Special Debt Capital General Revenue Service Projects Revenues: Taxes and assessments $92,512,151 $9,242,838 $ $ Licenses and permits 2,965,089 2,870,993 - Intergovernmental 33,114,056 542,163 2,035,355 Chazges for current services 1,549,577 6,482,513 Fines and forfeitures 665,479 Rents 37,554 - Interest and penalties 3,755,674 935,999 28,060 Miscellaneous 1,309,690 486,933 35,966 Total revenues 135,909,270 19,625,440 935,999 2,099,381 Expenditures: Current: General government 18,241,053 182,614 Public safety 47,829,723 2,551,657 2,795,928 Highways and streets 1,339,420 4,897,135 4,476,266 Sanitation 179,964 10,270,752 9,105,302 Health, education and welfare 5,204,915 5,633 Culture and recreation 10,416,082 668,454 2,237,350 Pension and retirement contributions 11,723,783 1,602,225 Health fund 7,526,698 724,306 Miscellaneous 2,787,037 454,003 18,946 Capital outlay 1,748,793 Debt service: Interest and fiscal chazges 2,412 50,764 6,067,081 Principal retirement 9,189 597,437 5,327,414 Total expenditures 107,009,069 21,822,366 11,394,495 18,816,406 Excess (deficiency) of revenues over expenditures 28,900,201 (2,196,926) (10,458,496) (16,717,025) Other fmancing sources (uses): Increase in capital lease obligation Sale of general fixed assets 34,547 Intergovemmentalloans 5,322,656 Proceeds from sale of bonds 29,913,152 Operating transfers in 935,999 7,854,315 12,655,987 2,725,853 Operating transfers out (20,579,213) (2,725,853) (988,673) Total other financing sources (uses) (19,608,667) 5,128,462 11;667,314 37,961,661 Excess of revenues and other sources over expenditures and other uses 9,291,534 2,931,536 1,208,818 21,244,636 Fund balances, beginning of year 22,204,347 4,847,743 17,461,812 30,486,356 Prior period adjustment (note 2) (757,817) Restated fund balance, beginning of year 22,204,347 4,847,743 17,461,812 29,728,539 Increase in reserve for inventories 264.732 Fund balances, end of year $31,760,613 $7,779,279 $18,670,630 $50,973,175 See accompanying notes [o combined financial statements. -24- Fiduciary Totals Fund Type (Memorandum Only) Expendable VLSI 14~ ]99~ $ $101,754,989 $100,028,351 5,836,082 5,788,251 9,195,991 44,887,565 44,413,224 8,032,090 5,438,933 665,479 578,035 37,554 38,151 173,699 4,893,432 4,455,877 71,488 1,904,077 1,485,329 9,441,178 168,011,268 162,226,151 18,423,667 18,688,310 53,177,308 51,845,954 10,712,821 15,168,418 19,556,018 15,592,847 9,313,875 14,524,423 13,433,574 13,321,886 12,230,582 13,326,008 10,083,579 8,251,004 7,619,967 3,259,986 5,124,977 2,043 1,750,836 1,877,312 482 6,120,739 6,348,328 3,558 5,937,598 6,304,671 9,319,958 168,362,294 164,318,519 121,220 (351,026) (2,092,368) 706,668 34,547 77,094 5,322,656 3,739,958 29,913,152 121,585 24,293,739 17,330,323 (24,293,739) (17,330,323) 121,585 35,270,355 4,523,720 242,805 34,919,329 2,431,352 4,448,305 79,448,563 76,914,210 (757,817) 4,448,305 78,690,746 76,914,210 264,732 103,001 $4,691,110 $113,874,807 $79,448,563 -25- COUNTY OF HAWAII Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Non-GAAP Budgetary Basis General and Special Revenue Fund Types For the Fiscal Yeaz Fnded June 30. 1996 General Fund Special Revenue Funds Variance - Variance - Favorable Favorable Budeet Actual (iJnfavorablel Budeet $g1pal (Unfavorable) Revenues: Taxes and assessments $88,940,854 $92,512,151 $ 3,571,297 $9,676,000 $9,591,031 ($84,969) Licenses and permits 3,318,622 2,965,090 (383,832) 3,266,800 2,870,993 (395,807) Intergovernmental 34,381,982 34,907,461 828,479 534,000 488,159 (45,841) Charges for current services 1,561,605 1,849,877 (12,028) 7,929,919 6,482,512 (1,447,407) Fines and forfeitures 786,000 665,479 (120,521) Rents 39,000 37,883 (1,447) Interest and penalties 2,700,000 3,690,621 990,621 Miscellaneous 2,582,316 3,018,011 432,695 51,800 138,739 86,939 Total revenues 134,310,379 139,342,943 5,032,564 21,488,819 19,571,434 (1,887,085) Expenditures: Current: General government 22,183,422 17,750,699 4,432,723 Public safety 53,212,909 48,488,312 4,724,597 3,093,970 2,917,956 176,014 Highways and streets 2,688,804 2,616,187 69,317 7,471,308 5,380,245 2,091,063 Sanitation (13,463) 13,463 13,363,114 12,228,705 1,134,409 Health, education and welfare 5,424,593 4,703,495 721,098 6,000 5,633 367 Culture and recreation 10,873,905 10,334,882 539,023 775,637 696,346 79,291 Pension/retiremen[contributions 11,828,678 11,723,783 101,892 1,852,489 1,602,225 250,264 Health fund 7,546,094 7,526,697 19,397 780,200 724,306 SS,894 Miscellaneous 4,265,688 2,405,264 1,860,424 1,578,861 446,733 1,132,128 Capital outlay 2,638,793 2,638,793 Total expenditures 120,686,883 108,174,649 12,481,934 28,921,579 24,002,149 4,919,430 Excess (deficiency) of revenues over expenditures 13,653,796 31,168,294 17,514,498 (7,463,060) (4,430,715) 3,032,345 Other financing sources (uses): Opem[ing transfers in 933,501 935,999 2,498 7,854,315 7,854,315 Operating Vansfers out (23,029,887) 122,248,487) 781,400 (2,912,690) (2,728,883) 186,837 Total other financing sources (uses) (22,096,386) (21,312,488) 783,898 4,941,625 5,128,462 186,837 Excess (deficiency) of revenues and other sources over expenditures and other uses (8,442,590) 9,888,806 18,298,396 (2,521,435) 697,747 3,219,182 Unbudgeted self-insurance activities (134,946) (134,946) Fundbalances, beginning of yeaz 22,204,347 22,204,347 4,847,743 4,847,743 Fund bahmces, end of yeaz $13,761,757 $31,925,207 $18,163,450 $2,326,308 $8,848,490 $3,219,182 See accompanying notes to combined financial statements -26- Totals (Memorandum Only) Variance - Favorable Bud¢et Q~1{~ (Unfavorablel $98,616,854 $102,103,182 $ 3,486,328 6,585,422 5,836,083 (749,339) 34,915,982 35,395,620 479,638 9,491,524 8,032,089 (1,459,435) 786,000 665,479 (120,521) 39,000 37,553 (1,447) 2,700,000 3,690,621 990,621 2,634,116 3,153,750 519,634 155,768,898 158,914,377 3,145,479 22,183,422 17,750,699 4,432,723 56,306,879 51,406,268 4,900,611 10,156,812 7,996,432 2,160,380 13,363,114 12,215,242 1,147,872 5,430,593 4,709,128 721,465 11,649,542 11,031,228 618,314 13,678,164 13,326,008 352,156 8,326,294 8,251,003 75,291 5,844,549 2,851,997 2,992,552 2,638,793 2,638,793 149,578,162 132,176,798 17,401,364 6,190,736 26,737,579 20,546,843 8,787,816 8,790,314 2,498 125,942,577) (24,974,340) 968,237 (17,154,761) (16,184,026) 970,735 (10,964,025) 10,553,553 21,517,578 27,052,090 27,052,090 - $16,088,065 $37,605,643 $21,517,578 -27- COUNTY OF HAWAII Combined Statement of Revenues, Expenses and Changes in Retained Earnings Proprietary Fund Type and Discretely Presented Component Unit For the Fiscal Yeaz Ended June 30, 1996 (With comparative totals for the ticcal ~ ended June 30 19951 Component Totals Unit (Memorandum Only) Department Reporting Enterprise of Water Entity Funds Sunoly 121~f 124 Operating revenues: Water sales $ $15,805,391 $15,805,391 $13,304,241 Rental receipts from tenants 132,982 132,982 77,587 Rental subsidy from federal government -HUD 158,719 158,719 ' 178,282 Miscellaneous 6,553 6,553 1,880 Total operating revenues 298,254 15,805,391 16,103,645 13,561,990 Operating expenses: Power and pumping 6,228,191 6,228,191 6,003,620 Utilities 14,413 14,413 11,567 Maintenance and repairs 50,233 2,360,314 2,410,547 1,670,810 Generaladministra[ive 103,888 2,044,423 2,148,311 2,594,748 Customers' accounting and collecting 914,198 914,198 891,630 Transmission and distribution 681,016 681,016 785,423 Purification 835,140 835,140 655,177 Source of supply 40,871 40,871 72,286 Lease expense 19,056 19,056 Depreciation 44,059 4,687,336 4,731,395 4,457,435 Total operating expenses 231,649 17,791,489 18,023,138 17,142,696 Operating income (loss) 66,605 (1,986,098) (1,919,493) (3,580,706) Nonoperating revenues (expenses): Interest income 35,551 1,289,237 1,324,788 1,458,483 Other revenue 111,752 111,752 134,204 Interest on long-term debt (82,151) (795,413) (877,564) (929,913) Other expenses (11,226) (11,226) (22,832) Loss on disposal of fixed assets (406) (253,958) (254,364) (31,363) Total nonopera[ing revenues (expenses) (47,006) 340,392 293,386 608,579 Net income (loss) 19,599 (1,645,706) (1,626,107) (2,972,127) Add depreciation on contributed utility plant 3,468,629 3,468,629 3,362,819 Increase in retained earnings 19,599 1,822,923 1,842,522 390,692 Retained earnings, beginning of yeaz 495,597 34,179,697 34,675,294 34,284,602 Retained earnings, end of yeaz $515,196 $36,002,620 $36,517,816 $34,675,294 See accompanying notes to combined financial statements. _28_ COUNTY OF HAWAII Combined Statement of Cash Flows Increase (Decrease) in Cash and Cash Equivalents Proprietary Fund Type and Discretely Presented Component Unit For the Fiscal Year Ended June 30, 1996 R'Jit_h comparative toLS for the fic~al year ender! June 30. 19951 Component Totals Unit (Memorandum Only) Department Reporting Enterprise of Water Entity Funds Supplv ]22St 122 Cash flows from operating activities: Cash received from customers $ $15,076,275 $15,076,275 $13,060,818 Cash received from tenants 152,558 152,558 78,908 Cash received from federal government -HUD 158,719 158,719 178,282 Cash payments to suppliers for goods and services (180,990) (8,505,244) (8,686,234) (7,284,186) Cash payments to employees for services (3,998,170) (3,998,170) (4,303,579) Net cash provided by operating activities 130,287 2,572,861 2,703,148 1,730,243 Cash flows from capital and related financing activities: Principal paid on long-term debt (11,761) (829,500) (841,261) (478,445) Interest paid on long-term debt (82,151) (794,428) (876,579) (926,390) Proceeds from sale of fixed assets 20,055 Acquisition and construction of capital assets (8,790) (6,121,237) (6,130,027) (4,880,086) Capital contributions 34,000 1,241,890 1,275,890 (357,274) Net cash used for capital and related financing activities (68,702) (6,503,275) (6,571,977) (6,622,140) Cash flows from investing acfivities: Purchase of investments (1,500,000) (77,660,896) (79,160,896) (96,095,350) Proceeds from sale and maturities of investments 1,500,000 80,302,785 81,802,785 99,199,375 Interest on investments 33,951 1,275,343 1,309,294 1,435,646 Net cash provided by (used in) investing activities 33,951 3,917,232 3,951,183 4,539,671 Net increase (decrease) in cash and cash equivalents 95,536 (13,182) 82,354 (352,226) Cash and cash equivalents at beginning of year 436,973 171,718 608,691 960,917 Cash and cash equivalents at end of year $532,509 $ 158,536 $ 691,045 $ 608,691 (Continued) -29- COUNTY OF HAWAII (Concluded) Combined Statement of Cash Flows Increase (Decrease) in Cash and Cash Equivalents Proprietary Fund Type and Discretely Presented Component Unit For [he Fiscal Yeaz Ended June 30, 1996 Qyit~gLnparad a rnralc for the ficca! veer ended June 30 19951 Component Totals Unit (Memorandum Only) Department Reporting Enterprise of Water Entity Funds Suooly 1996 1225 Reconciliation of operating income to net cash provided by operating activities: Operating income (loss) $ 66,605 ($1,986,098) ($1,919,493) ($3,580,706) Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation 44,059 4,687,336 4,731,395 4,457,435 Provision for uncollectible accounts 154,000 154,000 4,000 Increase in accounts receivable (3,688) (719,793) (723,481) (146,111) (Increase) decrease in prepaid expenses (20) 9,074 9,054 15,911 Increase in other receivables (945) (945) Increase in inventory (21,242) (21,242) (6,994) Increase in tenant security deposits 17,562 17,562 304 Increase (decrease) in unearned rent 94 94 (6) Increase (decrease) in warrants payable (485) (160,642) (161,127) 137,988 Increase (decrease)in accounts payable (665) 796,819 796,154 393,338 Increase (decrease) in other liabilities 7,770 (186,593) (178,823) 455,084 Total adjustments 63,682 4,558,959 4,622,641 5,310,949 Net cash provided by operating activities $130,287 $2,572,861 $2,703,148 $1,730,243 Noncash capital activities: During the fiscal years ended June 30, 1996 and 1995, a component unit of [he reporting entity, the Depazunent of Water Supply, received infrastructure property costing $2,274,156 and $3,946,677, respectively, as contributions in aid of construction. See accompanying notes to combined financial statements. -30- COUNTY OF HAWAt~ Notes to the Combined Financial Statements June 30, 1996 The accounting policies of the County of Hawaii (County) conform to generally accepted accounting principles as applicable to local govemmental units. The following notes to the 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" (the Statement). No organizations, activitles or functions that meet the criteria in the Statement for inclusion in the reporting entity are excluded from the general purpose financial statements. Primary Government The County of Hawaii operates under the Mayor-Council form of government under a charter which became effecfive on January 2, 1969, and was amended in 1979, 1982, and 1990. The County's operations are organized by the following functions: general govemment; 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 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 govemments nor any school districts, special districts, authorities or public corporations with overlapping authority. In the Statement, component units are defined as legally separate organizations for which the elected officials of the primary govemment are financially accountable. "Financial accountability" lithe level of accountability that exists if a primary govemment appoints a voting majority of an organization's governing board and is either able to impose its will on that organizaflon or there is a potential for the organization to provide specific financial benefits to, or impose specific fmancial burdens on, the primary government. A primary govenunent 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 fmancial support to, the organization; or (3) The primary government is obligated in some manner for the debt of the organization. As required by generally accepted accounting principles as set forth in the Statement, these general purpose financial statements present the County of Hawaii (the primary government) -31- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1996 and its one component unit, the Deparhent 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 combined financial statements includes the financial data of the Department of Water Supply (Department), a semiautonomous 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 froth 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's Charter. Although the County does not have the authority to approve or modify the Deparhnent's operational and capital budgets, the County has assisted the Department by issuing bonds which are general obligations of the County on the Departrnent's behalf Because the County is obligated to repay these bonds if the Department does not make payment, the County is considered to be financially acwuntable for the debts of the Department. See Note 17 for required note disclosures for the Department. Complete financial statements of the Department can be obtained from the Department of Water Supply, 25 Aupuni Street, Hilo, Hawaii 96720. Fund Accounting The accounts of the County are organized on the basis of funds and account groups, each of which is wnsidered to be a sepazate accounting entity. The operations of each fund are acwunted for with a separate set ofself-balancing accounts which comprise its assets, liabilities, equity, revenues and expenditures (or expenses). Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain functions or activities. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which the resources are to be spent and the means by which spending activities are controlled. The various funds are grouped by type in the financial statements. The County has the following fund types and account groups: Governmental Fund Types -Governmental funds are those through which most governmental functions of the County are financed. The acquisition, use and balances of the County's expendable financial resources and the related liabilities (except those accounted for in proprietary funds) are accounted for through governmental funds. The measurement focus follows the flow of current financial resources concept. The following aze the County's governmental fund types: -32- COUNTY OF HAWAli Notes to the Combined Financial Statements June 30, 1996 General Fund -The general fund is the general operaflng fund of the County. It is used to account for all financial resources except those required ro be accounted for in other funds. Special Revenue Funds -Special revenue funds are used to account for the proceeds of specific revenue sources (other than expendable tmsts or major capital projects) that are legally restricted [o expenditures for specified purposes. Debt Service Funds -Debt service funds are used to account for the accumulation of resources for, and the payment of, general long-term debt principal, interest and related costs. Capital Projects Funds -Capital projects funds are used to acwunt 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 mist funds) when separate project centers are needed to control costs. Capital outlay for relatively minor general government assets or for projects that do not need separate project centers to control costs are financed directly from operating funds (general, special revenue and some expendable trust funds). Proprietary Fund Type - A proprietary fund is used to account for the Counry's ongoing organizations and activities which are similar to those often found in the private sector. The measurement focus follows the flow of economic resources concept. The proprietary funds of the County and its discretely presented component unit have elected to apply all applicable GASB pronouncements, as well as Financial Accounting Standards Board (PASS) pronouncements and Accounting Principles Board opinions issued on or before November 30, 1989, unless those pronouncements or opinions conflict with or contradict GASB pronouncements. The proprietary funds of the County and its discretely presented component unit will not apply FASB Statements and Interpretations issued after November 30, 1989. The following is the County's proprietary fund type: Enterprise Fund -Enterprise funds aze used to account for operations (a) that are financed and operated in a manner similaz to private business enterprises -where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be fmanced or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred and/or net income is appropriate for capital maintenance, public policy, management control, accountability or other purposes. -33- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1996 Fiduciary Fund Types -Fiduciary funds are used to account for assets held by the County in a trustee capacity or as an agent for individuals, private orgarrizations, other governmental units and/or other funds. The following is the County's fiduciary fund type: Trust and Agency Funds -Expendable trust funds are accounted for and reported similarly to governmental funds because the measurement Focus follows the flow of current financial resources concept. Agency funds are custodial (assets equal liabilities); thus, accounting for them does not involve measurement of results of operations. Account Groups -Account groups are used to establish accounting control and accountability for the County's general long-term debt and general fixed assets. Account groups are not funds and accordingly, do not reflect available financial resources and related liabilities. The following are the County's account groups: General Long-Term Debt Account Group -This account group is established to account for all long-teen liabilities that will be financed from governmental funds. Long-term liabilities of the enterprise funds are accounted for in those funds. General Fixed Assets Account Group -This acwunt group is established to account for all fixed assets of the County, other than those accounted for in the enterprise funds. Basis of Accounting Basis of accounting refers to the period in which revenues and expenditures (or expenses) are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. The modified accrual basis of accounting is followed by the County's governmental and fiduciary fund types. Under the modified accrual basis of accounting, revenues are recorded when susceptible to accmal (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 to be used to pay liabilities of the current period. Licenses and permits, charges for services, fines, forfeits and penalties and other revenues are recorded as revenues when received in cash because they are generally not measurable until actually received. Real property taxes levied for the current year and State Revolving Fund loan proceeds are considered available when collected. 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 -34- COUNTY OF HAWAi. Notes to the Combined Financial Statements June 30, 1996 are essentially two types of these revenues. In one, moneys 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, moneys aze 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 deferred revenue on its combined balance sheet (Note 7). Deferred revenues arise when a 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 deferred 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 included in the general long-term debt account group and 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. The proprietary fund type utilizes the accrual basis of accounting. Revenues are recognized when earned and expenses are recognized when the related obligation is incurred. Encumbrances The general, special revenue, capital projects and expendable trust funds 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 yeaz. 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. -35- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1996 Cash and Investments Cash and cash equivalents include cash on hand, amounts in demand deposits and short- term investments with a maturity date within three months of the date acquired by the County. Investments include time deposits at financial institutions and bank repurchase agreements with an initial maturity exceeding three months, which are stated at cost which approximates market value (see Note 4). Deferred wmpensation fund assets representing investments in mutual funds are stated at market value. Real Property Taxes The County's real property taxes aze 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. Accordingly, real property taxes receivable as of June 30 are delinquent and are reported as deferred revenue. Each delinquent installment bears interest at 1% per month and penalties of up to 10% percent of the amount due. Assessments are based on 100%0 of estimated fair market values. Reai property tax revenue is recorded when it becomes available. Available means collected within the current period unless the amounts expected to be collected soon thereafter (within 60 days) are material or aze to be used to pay liabilities of the current period. No such amounts are included in real property tax revenues for the fiscal year ended June 30, 1996. Inventories Inventories consist of materials and supplies and are stated at average cost and aze reported as expenditures at the time of purchase (purchase method). 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, 1996 of $244,875 is reflected as a reserve of general fund balance. Fixed Assets Fixed assets acquired for general governmental purposes are recorded as expenditures in the fund financing the purchase and are capitalized at cost in the general fixed assets account -36- COUNTY OF HAWAr. Notes to the Combined Financial Statements June 30, 1996 group. Gifts or contributions of fixed assets are recorded at their estimated fair market value on the date contributed. No depreciation has been provided for general fixed assets. Fixed assets consisting of certain improvements (other than buildings), including roads, bridges, curbs and gutters, streets and sidewalks, drainage systems and lighting systems, have not been capitalized. Such assets normally are immovable and of value only to the County; therefore, the purpose of stewardship for capital expenditures is satisfied without recording these assets. Depreciation is recorded in one enterprise fund, the Kulaimano Elderly Housing Project. It is computed using the straight-line method over the estimated useful lives of the assets: Buildings 50 years Furnishings and equipment 5 to ]0 years Ground and site improvements 20 to 50 years Long-term Obligations The County reports long-term debt of governmental funds at face value in the general long- term debt account group. Certain other governmental fund obligations not expected to be financed with current available resources are also reported in the general long-term debt account group. Long-term debt and other obligations financed by the enterprise fund are reported as liabilities in the funds. Compensated Absences Employees earn vacation credit at the rate of one and three-quarters working days for each month of service. Up to ninety days of vacation leave credits can be accumulated per 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 hour of overtime worked. There is no statutory limit to the amount of compensatory time off an employee can accumulate. Both compensatory time off and vacation credits are converted 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 general long-term debt account group along with the estimated liability for FICA taxes on those amounts. All accumulated unpaid vacation and compensatory time off at June 30, 1996 is expected to be liquidated with future expendable resources. _3'7_ COUNTY OF HAWAII Notes to the Combined Financial Statements June 30,1996 Sick leave accumulates without limit. Sick leave can be taken only in the event of illness and is not convertible to pay upon termination of employment. Accumulated sick leave at June 30, 1996 totaled $35,427,369 for the primary government. Leases Leases transferring substantially all of the risks and benefits of ownership are recorded as capital leases; other leases are operating leases. Capital leases are recorded as fixed asset additions at their estimated fair market value at the inception of the lease and 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 The County's contribution to the State of Hawaii Employees' Retirement System is based upon actuarial computation and includes current service costs and amortization of prior service costs over a period of twenty-two years from July 1, 1994. The County's policy is to fund pension costs accrued. The County is required by State statute to fund the actuarially determined pension contribution requirement annually. Reporting Change GASB Statement No. 10, Accounting. na_ d Repg~.I1E for Risk Financing and Related Inc ~ n A r c c, requires that the General Fund or an internal service fund be used to account for risk financing activities if a single fund is used. Accordingly, the Self-Insurance Fund, an expendable trust fund, is reported within the General Fund in the current fiscal year. Prior year statements have been restated for comparability. This change did not have any effect on the expenditures of the General Fund. Totals Colunms Included on the wmbined financial statements are totals columns, marked "memorandum only;' that are presented only for informational purposes. Adjustments to eliminate interfund transactions have not been recorded in arriving at such amounts and the totals are not intended to fairly present the financial position or results of operations of the County taken as a whole, Additionally, the 1995 totals presented in the totals columns are intended to provide a summarized comparison with comparable 1996 amounts and aze not intended to present all information necessary for a fair presentation of financial position and results of operations in accordance with generally accepted accounting principles. Certain 1995 amounts have been reclassified to conform to classifications adopted in 1996. _3g_ COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1996 2. PRIOR PERIOD ADJUSTMENT The County receives low-interest loans from the State Water Pollution Control Revolving Fund (SRF) to finance mandated wastewater projects. These projects are accounted for in the Capital Projects Fund. In previous yeazs, these loans were treated the same as intergovernmental grants for the purpose of revenue recognition, which meant that revenues were recorded when project expenditures were made. At the beginning of the current fiscal year, this method was changed whereby loan proceeds are recognized as revenue (as an other financing source) at the flme of receipt from the SRF, when they are now considered to become both measurable and available. This change in accounting method had the effect of decreasing the fund balance of the Capital Projects Fund at the beginning of the yeaz by $757,817, and is reflected as a prior period adjustment in the Combined Statement of Revenues, Expenditures and Changes in Fund Balance -All Governmental Fund Types and Expendable Trust Funds. 3. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY Annual Budget The County follows these procedures in establishing the budgetary data reflected in the financial statements: • On or before March 1, the Mayor submits to the County Council proposed operating and capital projects budgets for the fiscal year commencing the following July 1. The operating budget includes proposed expenditures for the general fund, special revenue funds, and one expendable trust fund (the Hawaii County Housing Agency), and the means of fmancing them. A project-length budget is submitted to the County Council for the capital projects fund. • The Mayor submits to the County Council amendments to the proposed operating and capital budgets within ten working days after the close of the State legislature, but not later than May 5. • 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 after May 5. On or before June 30, the budgets aze adopted by the County Council. While budget information is detailed [o the object code level, the legal level of budgetary control is the department level because the Mayor can transfer funds from any unencumbered appropriation to another within a department or agency without Council approval. During the year, the budget may be amended by action of the Council, except -39- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1996 appropriations required bylaw and appropriations for debt service which may not be decreased or deleted. Supplemental appropriations were made during the 1995-96 fiscal year to recognize revenue from sources not lrnown at budget time and to establish the authorization for such funds to be expended. Such supplemental appropriations totaled $9.7 million in the General Fund and $2.1 million in the Special Revenue Funds. • 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 expenditures that are not encumbered lapse at the end of two fiscal yeazs following the fiscal year that the appropriation was made. • Formal budgetary integration is employed as a management control device during the year for the general fund, special revenue funds, one expendable trust fund (the Hawaii County Housing Agency), and the capital projects fund. Fonnal budgetary integration is not employed for debt service funds because effective budgetary control is alternatively achieved through general obligation bond indenture provisions. The budgetary basis of accounting for revenues and expenditures for the general, special revenue, expendable trust and capital projects funds differs from generally accepted accounting principles (GAAP basis). On the budgetary basis (non-GAAP budgetary basis), intergovernmental revenues are recognized when awarded by the granting agency, encumbrances and unexpended allotments are treated as expenditures, acwunts payable are not accmed, and all leases are treated as operating leases. Budgetary comparisons presented in this report are on this budgetary basis. In preparing statements on the basis of GAAP, accounts payable are accrued and treated as a reduction of encumbrances for balance sheet presentation. Budget to GAAP Reconciliation The following is a summary of the adjustments necessary to convert from the GAAP basis to the non-GAAP budgetary basis for the fiscal year ended June 30, 1996: -40- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1996 General Special Revenue EYlld EYIIdS Ending fund balance - GAAP basis $31,760,613 $7,779,279 Encumbrance adjustments: Beginning encumbrances and unexpended allotments 7,856,280 815,629 Ending encumbrances and unexpended allotments (7,428,454) (2,686,387) Ending accounts payable in excess of encumbered amount (361,031) Increase in reserve for inventory of materials and supplies (264,732) (Increase) decrease in petty cash 1.500 (2.000) Ending fund balance -Non-GAAP budgetary basis 31 92 07 545.490 4. DEPOSITS AND INVESTMENTS Bank time certificates of deposit (TCDs) and repurchase agreements (repos) with initial maturities under three months are wnsidered cash and cash equivalents for purposes of balance sheet classification and the statement of cash flows, while TCDs and repos with inital maturities exceeding three months are considered investments. However, for purposes of the disclosures required by Govemment Accounting Standards Boazd Statement No. 3, all bank TCDs are considered deposits and all repos are considered investments. Cash and cash equivalents of $33,159,375 and investments of $96,262,104 aze included in the accompanying combined balance sheet. The following schedule shows the balance sheet captions and the related breakdown for purposes of GASB Statement No. 3 disclosures. GASB Statement No. 3 Balane h t antion: T°ta1 Deposits rny tmen s Cash and cash equivalents $ 30,844,013 $ 3,341,061 $ 27,302,954 Restricted assets: Cesh and cash equivalents 2,288,190 888,190 1,400,IX10 Impress and change funds 27.[70 Total cash and cash equivalenLe 33,139,373 Investments 96362.104 10.370.000 85.892.104 Tout cash, cash equivalenu and investments 129,421,479 1,ess impress and change funds @7.1701 Claac~cations per GASB 8utement No. 3 5129.394.309 314399.231 3114.395.038 -41- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1996 The County maintains a cash and investment pool that is used by the following funds: General Fund, Special Revenue Funds, one Capital Projects Fund, and two Agency Funds - State Weight Tax and Payroll Clearance. The following summarizes this pool at June 30, 1996: General Fund -actual $37,324,858 Payroll Clearance Fund -overdraft (1.047.501) General Fund - as reported 36,277,357 Special Revenue Funds 9,323,187 Capital Projects Funds 49,780,762 State Weigh[Tax 437.858 Total pooled cash and investments $95.819.164 The cash overdraft in the Payroll Clearance Fund is shown on the balance sheet for that fund as a liability due to the General Fund, and as a receivable from the Payroll Clearance Fund for the General Fund. Interest earned is credited to the General Fund unless otherwise designated by statute. Deposits At June 30, 1996, the carrying amount of the County's deposits was $14,799,251 (including $888,190 reported in restricted assets) and the bank balance was $14,858,032. Of the bank balance, $1,100,000 was covered by federal depository insurance; $13,490,368 was covered by collateral held by the County's agent, the State of Hawaii, in the County's name in accordance with State statutes; and $261,194 held by paying agents and $6,470 held by a management agent was uncollateralized. Investments The Hawaii Revised Statutes authorize the County to invest in obligations of the U.S. Treasury, agencies and instrumentalities, time certificates of deposit, bank repurchase agreements and bonds of any improvement district of any county of the State, provided the investments are due to mature not more than three years from the date of investment. Investments are classified into three categories of credit risk: (1) insured or registered, or securities held by the County or its agent in the County's name; or (2) uninsured and unregistered, with securities held by the counterparty's trust department or agent in the County's name; or (3) uninsured and unregistered, with securities held by the counterparty in the County's name, or by the counterparty's trust department or agent but not in the County's name. -42- COUNTY OF HAWAI, Notes to the Combined Financial Statements June 30, 1996 At June 30, 1996, the investment balances held for the County at banks and by the deferred compensation plan administrator were as follows: Carrying Market A.Bi 9u_tn yBlll@ Category 1: Bank repurchase agreements $103,408,445 $103,408,445 1978 Sinking Fund repurchase agreements 11.186.613 11.186.613 114,595,058 114,595,058 Uncategorized: Investment in deferred compensation mutual fund 22.354.503 22.354.503 Totalinvestmenis 5136.949.561 $136.949.561 The 1978 Sinking Fund was established to service principal and interest payments of certain public improvement bonds of the County as maturities become due. The funds in the 1978 Sinking Fund are invested in three-year repurchase agreements with certain regulated financial institutions and are collateralized by U.S. Treasury notes with a martcet value of approximately $12,080,640 at June 30, 1996. A repurchase agreement is an agreement in which a govetrunental entity transfers cash to abroker-dealer or fmancial institution; the broker-dealer or the financial institution transfers securities to the entity and promises to repay the cash plus interest in exchange for the same securities. Restricted Cash Restricted cash includes funds the County has deposited in an escrow account. This escrow account, with a balance of $667,743 at June 30, 1996, is an account where the County deposits its shaze of the cost of the Alenaio Stream Flood Control Projec[. The Army Corps of Engineers is authorized ro draw on these funds as needed during the course of the construction project. Tenan[ security deposits received by the County for the Kulaimano Elderly Housing Project and the Ouli Ekahi Affordable Housing Project which are refundable or restricted as to use are recorded as a restricted asset. Such funds amounted to $8,367 and $16,953 respectively at June 30, 1996. Restricted amounts set aside by the Kulaimano Elderly Housing Project under its loan agreement with the Farmers Home Administration totaled $157,227 at June 30, 1996. 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 reserve was $37,900 at June 30, 1996. The Improvement District No. 17 Fund has $1,400,000 set aside as a bond reserve to comply with the requirements of its bond issue for Kaloko Subdivision. - 43 - COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1996 5. INTERFUND RECEIVABLES AND PAYABLES At June 30, 1996, interfund receivables and payables comprised the following: Due from Due to Other Funds Other Funds General Fund $1.688.177 $3.019.570 Special Revenue Funds: Highway Fund 916 743,149 Parking Meter Fund 11,938 Sewer Fund 168,102 Solid Waste Fund 58,679 201,952 Golf Course Fund 55,781 Beautification Fund 3,102 59.595 1.184.024 Capital Projects Funds: Capital Projects Fund 202.495 345 Trust and Agency Funds: Hawaii County Housing Agency 38,117 Performance & Deposit Fund 310 Payroll Clearance Fund 3.340.083 1.047.984 3.340.083 1.086.411 Total $5.290.350 $5.290,350 6. FIXED ASSETS A summary of changes in the general fixed assets account group follows: Balance Balance July 1, Retire- Tune 30, j19~ i i rtier tsi Land $ 13,145,260 $ 2,116,225 $ $ 15,261,485 Buildings and structures 10'7,630,343 5,820,626 4,802,747 108,648,222 Machinery and equipment 38,420,059 3,331,131 1,218,192 40,532,998 Construction in progress 90.728.682 8.757.065 99.485.747 Total 5249.924.344 $20.025.047 $6.020-939 R 6 9 8 4 -44- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1996 The above summary includes fixed assets of the Hawaii County Housing Agency, an expendable trust fund, in the amount of $5,201,148. The following summarizes the enterprise fund's fixed assets at June 30, 1996: Land $ 753,877 Buildings 1,136,008 Furnishings and equipment 85,516 Ground and site improvements 261,000 Less: accumulated depreciation (590.162) Net fixed assets $1.646.239 7. DEFERRED REVENUE Deferred revenue at June 30, 1996 is comprised of the following: Special Capital General Revenue Projects Proprietary Flllld Fem. Fund ElaIls! Total Realproperrytaxes $14,133,623 $ $ $ $14,133,623 Liquor revenue 161,340 161,340 Sewer revenue 922,150 922,150 Tipping fee revenue 798,555 798,555 Intergovernmental 1,388,617 352,852 1,741,469 Unearned rental 502 502 Total 815,683.580 1.720.705 $352.g52 ~Q~ $17.757.639 8. LEASES The County leases machinery and equipment under noncancellable leases expiring at various dates through July 1998 which meet the criteria for capitalization. The leases are financed from special revenue fund and expendable trust fund resources. Accordingly, the estimated value of the leased machinery and equipment at the inception of the capital leases, amounting to $2,698,880, and the related present value of the remaining obligations under the capital leases amounting to $377,248 at June 30, 1996 aze included in the general fixed asset and general long-tens debt acwunt groups, respecfively. - 45 - COUNTY OF HAWAlt Notes to the Combined Financial Statements June 30, 1996 The County also leases land, office facilities and other equipment under noncancellable operating leases expiring through July 2020. Expenditures for such leases were $696,802 for the year ended June 30, 1996. The future minimum obligations under capital and operating leases as of June 30, 1996 are as follows: Capital Operating Year Ending June 30: 1997 $ 85,524 $ 491,361 1998 161,268 412,624 1999 158,911 413,242 2000 400,384 2001 383,526 Thereafter 310.901 Total minimum lease payments 405,703 X2.412.038 Less amount representing interest (28.455) Obligations under capital leases 5377.248 9. SOLID WASTE LANDFILL CLOSURE AND POSTCLOSURE CARE COSTS Hilo Landfill The County owns and operates a landfill located in the city of Hilo. State and federal laws will require the County to monitor and maintain the site for thirty years after the facility is closed. Although the closure and postclosure care costs will be paid only 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 general long-term debt account group. The amount recognized each yeaz is based on the landfill capacity used as of the balance sheet date. At June 30, 1996, the County is recognizing a liability of $12,575,000, based on the use of 89% of the estimated capacity of the landfill. During the year ended June 30, 1996, $137,463 was spent on closure of the landfill. The remaining $1,885,10 in estimated cost of closure and postclosure care will be recognized as the remaining estimated capacity is used. These amounts aze based on what it would cost to perform the required closure and postclosure Gaze in 1996. The County expects to close the landfill in December, 1997. Actual costs at that time may be higher due to inflation, Changes in technology, or changes in regulations. Federal regulations require owners and operators of landfills to demonstrate financial assurance for the costs of closure, postclosure care, and corrective action for known releases associated with their facilities. The Environmental Protection Agency is developing final rules related to financial assurance mechanisms, including a local government financial test. -46- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1996 The compliance date for this fmancial assurance is Apri19, 1997. Under the proposed rules, the County will be able to self insure for closure, postclosure and corrective action for up to 4330 of annual revenues. The County estimates that this is adequate to cover its full liability for the Hilo and Kealakehe landfills. Kealakeke In October, 1993, the County closed its Kealakehe landfill in Kona. Under state and federal requirements, the County will have [o monitor and maintain this site for ten years from the closure date. The full estimated cost of closure and postclosure care if it were all performed in 1996 is $6,750,000. Actual costs may be higher due to inflation, changes in technology, or changes in regulations. Through June 30, 1996, $5,860,000 was spent on closure and postclosure care of the landfill. The remaining estimated liability, $890,000, is included in the general long-term debt account group. The County plans to demonstrate financial assurance for postclosure care and remediation through self insurance as explained in the paragraph above. Puuanahulu in May, 1993, the County contracted with a private company to construct and operate a new landfill on County land a[ 1'uuanahulu in West Hawaii. As a part of the contract, the private company assumes full responsibility and liability for closing the landfill and for maintenance and monitoring of the landfill for the required period of time after closure. Under the terms of the contract, the County has no responsibility for remediation, closure or postclosure care. Accordingly, no liability is included in the County's financial statements. This contract has been challenged in court by a public employee union. The County has prevailed in court decisions, but the matter is now on appeal to the Hawaii Supreme Court. The County expects to prevail there as well. 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 both primary government and component unit activities (Note 17). The following is a summary of general obligation bond transactions reported in the general long-term debt account group for the County for the fiscal year ended June 30, 1996: Bonds payable, July 1, 1995 $ 99,779,500 Bonds issued 30,015,000 Bonds retired (4.471.500) Bonds payable, June 30, 1996 X125.323.000 -47- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1996 General obligation bonds payable reported in the general long-term debt account group at June 30, 1996 aze comprised of the following individual issues: Public improvement and/or refunding bonds: 1977 Series A at 5%, due through 2012 $ 338,000 1978 Refunding at 5.0% to 6.5%, due through 2007 23,215,000 1989 Refunding at 6.2% to 6.95%, due through 2004 3,155,000 1993 Refunding & PI at 2.5% to 5.6%, due through 2013 68,600,000 1996 Series A at 4.5% to 5.5%, due through 2016 30,000,000 1996 Series B at 4.5% through 2016 15.000 Total general government S 125.323.000 Annual debt service requirements to maturity for the above general obligation bonds, including interest payments of $68,074,236 are as follows: Fiscal Year General Long-Term Fndine June 30 i)ehr Acwunt Grouo 1997 $ 11,475,256 1998 11,435,466 1999 12,470,129 2000 12,444,499 2001 12,409,090 T~re~r 133.162.796 Total $193.397.236 Bonds Authorized The Council of the County has authorized the issuance of $4 million in general obligation bonds to the Rural Development, U. S. Department of Agriculture, to assist in financing the purchase of land and facilities to expand and centralize County operations in Hilo. These bonds have not been issued yet. The 1996 Series B general obligation bonds are to be sold to the Farmers' Home Administration in the total principal amount of $787,500 to finance a wastewater collector system. Of this amount authorized, $772,500 remains unissued. Refunded Bonds The County has issued three series of Public Improvement Refunding Bonds in 1978, 1989 and 1993. The proceeds from each of the series were irrevocably deposited in separate -48- COUNTY OF HAWAli Notes to the Combined Financial Statements June 30, 1996 refunding trusts. These trusts were set up to retire certain public improvement bonds of the County as maturities become due. It is anticipated that the amounts deposited with the refunding tnrstees, together with interest earnings thereon, are sufficient to meet all principal and interest payments on the general obligation bonds defeased by the issues as such payments become due. All of the bonds defeased by the 1989 issue have been retired, and the 1989 Refunding Trust was closed during the fiscal yeaz. The balances in the two remaining trusts at June 30, 1996, consisting of assets, investments and cash, are as follows: 1978 Refunding Tmst $ 536,506 1993 Refunding Trust 35.194.049 Total $35.730.555 The assets of these trust accounts and the liability for the defeased bonds aze not included in the County's financial statements. At June 30, 1996, $34,585,000 of outstanding general obligation bonds are considered defeased. 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-term loans and other fmancial assistance to the four counties in the state to finance construction of wastewater projects. The County has twelve projects approved for funding with these loans. The schedule below shows the County's SRF transactions for the fiscal year ended June 30, 1996: Loans Approved Loan Balance Loan Balance Authorized 91t143t!]1 6/30/95 Additions Retirements 6/30/96 Hilo WWTP $12,724,311 $11,808,673 $ ($481,993) $11,326,680 Waiakea Mill 1,300,000 1,254,031 (47,578) 1,206,453 Waiakea Hslots 459,321 426,268 (17,399) 408,869 Ainako A&B 2,374,600 1,806,714 172,528 (107,767) 1,871,475 Kalanianaole 1,499,944 1,397,939 1,397,939 Alii Drive A&B 3,210,243 2,020,994 596,933 (153,370) 2,464,557 Alii Drive C&D 3,780,000 2,128,136 2,128,136 Alii Drive E&F 2,300,000 WaiahaBay 3,697,893 1,012,120 1,012,120 Kealakehe 1,300,071 1,247,741 (47,803) 1,199,938 Holualoa Bay 3,500,000 Disappear. Sands 2.000.000 - $38.146.383 $5.307.656 ($855.9101 $23.016.167 -49- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1996 Repayment of the loans begins either one year after the wnstruction cutoff date or one year after the notice to proceed is given for the construction project. Debt service to maturity, including interest payments of $7,065,851, is given below for the nine projects with repayment schedules set. Year ending June 30: 1997 $ 2,147,566 1998 2,147,566 1999 2,147,566 2000 2,147,566 2001 1,900,803 Thereafter 19.590.951 Total ~34.4$2.~ Other Long-term Debt The following is a summary of other general long-term debt transactions for the fiscal year ended June 30, 1996: Balance Deductions Balance 7/1/95 Additions & Payments 6/30/96 Compensated absences $13,587,698 $ 330,151 $ $13,917,849 Es[. claims & judgments 5,005,346 2,838,117 (2,622,713) 5,220,750 Capital lease obligations 1,109,945 (732,697) 377,248 Landfill closure costs 14.260.000 66 57 (1.460.3571 13.465.000 Total ~ (54.815.7671 $32.980"847 Fund Balances -Debt Service Funds The fund balance in the debt service funds at June 30, 1996 includes $18,351,883 which is available for principal payments on general obligation funds and $318,747 which is set aside for the payment of interest on the bonds. Enterprise Fund Debt The Kulaimano Elderly Housing Project is indebted to the U.S. Department of Agriculture, Fanners Home Administration on two notes payable with balances aggregating $1,182,387 at June 30, 1996. The notes, which mature in September 2029, are repayable in monthly 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 9%, such rate is reduced to 7% for as long as the Project has a U.S. Department of Housing -50- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1996 and Urban Development Section 8 Housing Assistance Payment contract in effect for all or part of the units within the Project. Special Assessment Bonds The County has outstanding special assessment bonds for one improvement district. In 1991, the County issued $14 million of special assessment bonds for Improvement District No. 17, Kaloko Subdivision, to finance a roadway and water system. The bonds mature annually through 2011 and bear interest at 9.5%. Improvement District Number 16 bonds were issued in 1986, and were serial bonds due through 2006 at interest rates between 8% and 12%. The last outstanding bonds for this district were called for payment before maturity on January 1, 1996. Total special assessment bonds payable were $13,050,000 at June 30, 1996. 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 required, administer foreclosure proceedings. Accordingly, these bonds are not reflected on the County's £mancial statements. The following is a summary of special assessment bond transactions for the year ended June 30, 1996: I.D. 16 I.D. 17 aau Ag Lots Kaloko Subd. Balance, June 30, 1995 $3,915,000 $13,395,000 Deductions -maturities (225,000) (345,000) Deductions -bonds called before maturity (3.690.0001 Balance, June 30, 1996 ~ 513.050.000 The following is a summary of the annual maturities including interest of $12,228,400 for special assessment bonds: -51- COUNTY OF HAWAll Notes to the Combined Financial Statements June 30, 1996 Year ending June 30: 1997 $ 1,601,700 1998 1,598,937 1999 1,597,613 2000 1,592,487 2001 1,593,088 Thereafter 17.294.575 Total $25.278.400 11. CONTRIBUTED CAPITAL Contributed capital of $411,296 in the Kulaimano Elderly Housing Project represents contributions from private and government sources at the inception of the project. There were no changes to contributed capital for this project during the current year. Contributed capital of $537,877 in the Ouli Ekahi Affordable Housing Project at June 30, 1996, represents cash contributions received from developers that were used to purchase the land where the project is located and to establish a reserve fund. 12. SEGMENT INFORMATION -ENTERPRISE FUNDS The County maintains two enterprise funds. The Kulaimano Elderly Housing Project (KEHP) provides low-income rental housing for senior citizens. The Ouli Ekahi Affordable Housing Project (OEAHP), which commenced operations during the year, provides affordable single-family rental housing to qualifying tenants. Selected segment information for the year ended June 30, 1996, is as follows: OEAHP Total Operating revenues $243,390 $54,864 $298,254 Depreciation 44,059 44,059 Operating income 58,615 7,990 66,605 Net income 11,305 8,294 19,599 Current capital contributions 537,877 537,877 Net change infixed assets 4,437 503,877 508,314 Net working capital 789,487 4,502 793,989 Total assets 2,123,148 571,676 2,694,824 Long-tertnloan payable 1,182,387 1,182,387 Total equity 918,198 546,171 1,464,369 -52- COUNTY OF HAWAII Notes to the Combined Financial Statements Tune 30, 1996 13. FUND EQUITY Designated Fund Balance A designation of unreserved fund balance indicates tentative plans for the use of current financial resources in the future. Fund balances designated at June 30, 1996 are composed of the following: General Fund: Imprest and change funds $ 24,970 Drug enforcement 32,354 Special duty police program 99,788 Computer equipment 1,664,890 County Council projects 121,474 Claims and judgments 1.227.689 Total general fund $3,171,165 Special Revenue Funds: Imprest and change funds 2,000 Equipment replacement 899,031 County Council projects 40,479 Future project 1.000 Total special revenue funds 942,510 Capital Projects Funds: Street and road repairs 2,464,031 SRF (wastewater) projects 887.355 Total capital projects funds 3,351,386 Trust and Agency Funds: Affordable housing 267.889 Total designated fund balance 57.732.950 Reserved Fund Balance Reserved fund balance represents that portion of fund balance that is either not available for appropriation or is legally segregated for a specific future use. Fund balances reserved at June 30, 1996 are composed of the following: -53- COUNTY OF HAWAxx Notes to the Combined Financial Statements June 30, 1996 Special Ikbt Capital Trust and General Revenue Service Projects Agency E46Q 1~ Y719Q F9nd F99~ 1.4191 Reserved for: Encumbrances 57,428,454 $2,686,387 $ $13,206,936 $2,247,891 $25,569,668 Unexpended allotments 23,978,760 23,978,760 Inventories 1,578,775 1,578,775 Debt urvice 18,670,630 18,670,630 Liquor control 244.875 - 244.875 Total reserved fund balance 9 104 S2"686"387 $18.670.630 ~ 7S Imo, 8~ $2.247.89 +~7.Q.Q~sZQ$ Reserved Retained Earnings The Kulaimano Elderly Housing Project reports retained earnings reserved for debt service in the amount of $157,227. 14. COMMITMENTS AND CONTINGENCIES Contractual commitments for capital projects, expenses, and supplies at June 30, 1996, except in the enterprise funds, are reflected in the fmancial statements as fund balance reserved for encumbrances. Contractual commitments for the enterprise funds were immaterial. 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 the grant. In the opinion of management of the County, disallowed costs, if any, would not be material. Numerous claims and lawsuits have been filed against the County in the normal course of its operations. A liability for probable losses is included in the general long-term debt acwunt group (see note 15). Although the outcome of the various claims and lawsuits is not presently deternlinable, in the opinion of the County's attorneys, the resolution of such matters will no[ have a material adverse affect on the financial condition of the County. 15. RISK MANAGEMENT The County is exposed to various risks of losses related to torts; thefr 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 insurance on selected structures, medical malpractice insurance for emergency medical technicians, general liability insurance for water safety officers, aviation liability for helicopter operations, and no-fault insurance coverage for privately owned police vehicles. -54- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1996 The County is substantially self-insured for its vehicles as well as for all other perils including workers' compensation and general liability. The County currently reports all of its risk management activities in its general fund except for workers' compensation, which is paid by the fund that employed the injured worker. Liabilities are reported when it is probable that a loss has occurred and the amount of that loss can be reasonable estimated. These losses include an estimate of claims that have been incurred but not reported (IBNR). Claim liabilities are determined by a combination of case-by-case review of all claims and the application of historical experience to outstanding claims. The liability for claims and judgments is reported in the general long-term debt account group because it is not expected to be liquidated with expendable financial resources. At June 30, 1996, the amount of this liability was $5,220,750. This is the County's best estimate based on available information. Changes in the reported liability since June 30, 1994 are given below. General Workers' Total Liability Corr~sation Liability Balance, June 30, 1994 $1,714,350 $4,572,000 $6,286,350 Incurred claims (including IBNR) 361,593 2,462,801 2,824,394 Claim payments (1.134.043) (2.971.3551 (4.105.3981 Balance, June 30, 1995 $941,900 $4,063,446 $5,005,346 Incurred claims (including IBNR)* 23,911 3,014,206 3,038,117 Claim payments (501.561) 1 1 ~ (2.822.713) Balance, June 30, 1996 ~ $5.220.750 *Net of new claims liability and old claims resolved at less than previous estimate. 16. EMPLOYEE BENEFIT PLANS Pension Plan All full-time employees of the County of Hawaii participate in the Employees' Retirement System of the State of Hawaii (System), acost-sharing, multiple-employer public employee retirement system. The System regards the County of Hawaii including its component unit as one employer. Therefore separate information for the primary govemment 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. The County's payroll for employees covered by the plan for the year ended June 30, 1996 was $65,791,942. The payroll for all of the County's employees for the year was $68,380,522. -55- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1996 The actuarially detemtined employer's contribution paid by the County for the yeaz ended June 30, 1996 was $10,188,900. Contributions from employees in the contributory plan was $3,948,948. These contributions represented 15.5% and 6.0% of covered payroll, respectively. The County's 1996 contribution represented 3.5% of total contributions required of all participating entities. All of the County's full-time employees are eligible to participate in the System. The System is composed 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 automatically become members of the noncontributory plan. Both plans provide death and disability benefits and a cost of living increase. Benefits are established by State statute. In the contributory plan, employees may elect normal retirement at age 55 with 5 years of credited service or elect eazly retirement at any age with 25 years of credited service. Such employees are entitled to retirement benefits, payable monthly for life, of 2% of their average final salary, as defined, for each year of credited service, Benefits fully vest on reaching five yeazs of service; retirement benefits are actuarially reduced for early retirement. Covered contributory plan employees are required by State statute to contribute 7.8% of their salary to the plan; the County is required by State statute to contribute the remaining amounts necessary to pay contributory plan benefits when due. In the noncontributory plan, employees may elect nommal 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 1-1/4% 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 actuarially reduced for early retirement. The County is required by State statute to contribute all amounts necessary to pay noncontributory plan benefits when due. There were no changes in actuarial assumptions, benefit provisions, actuarial funding method, or other significant factors during the fiscal year ended June 30, 1996. The "pension benefit obligation" is a standardized disclosure measure of the present value of pension benefits, adjusted for the effects of projected salary increases and step-rate benefits, estimated to be payable in the future as a result of employee service to date. The measure, which is the actuarial present value of credited projected benefits, is intended to help users assess the System's funding status on agoing-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among public employee retirement systems and employers. The System does not make separate measurements of assets and pension benefit obligations for individual employers. The pension benefit obligation at June 30, 1995 (the latest date available) for the System as a whole, determined through an actuarial valuation performed as of that date, was -56- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1996 $7.4 billion. The System's net assets available for benefits on that date (valued at market) were $5.6 billion, leaving an unfunded pension benefit obligation of $1.8 billion. Ten-yeaz historical trend information showing the System's progress in accumulating sufficient assets to pay benefits when due is presented in the System's annual reports. Subsequent Events The 1996 state legislative session amended the state statutes to reduce the actuarial salary increase assumption from 6.5% to 4.0% retroactive ro June, 1994, and extending it to June 30, 2000. This change will have the effect of reducing the County's employer wntributions for the fiscal year ending June 30, 1997, by $2,923,400. An eazly retirement incentive measure that was enacted in an effort to reduce the state and counties' payroll costs will increase the employer contributions to the System. Additional County funding required by this measure will be $480,700 per annum for five years beginning in the fiscal year ending June 30, 1998. Post-Retirement Benefits In addition to providing the pension benefits described above, the County is required by State statute to contribute ro the Hawaii Public Employees Health Fund (Health Fund), 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 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 who retire with less than ten years of credited service, the County was required by statute in the year ended June 30, 1996 to pay half of the monthly premium cost of the above plans. Currently, the County has 988 former employees who have retired with at least ten years of credited service and are receiving the full benefit. An additional six employees have retired with less than ten yeazs of service and have half of their medical premiums paid by the County. For each retiree and retiree's spouse eligible for Medicare, the County also pays $42.50 per month as reimbursement of their Medicare premiums. 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 fiscal year 1996, the County's contribution to the Health Fund for retired employees totaled $4.1 million. -57- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1996 Deferred Compensation Plan County employees are permitted to participate in a deferred compensation plan of the State of Hawaii, adopted pursuant to Internal Revenue Code (IRC) section 457. The plan permits 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. Such deferred compensation amounts are accounted for in an agency fund. Plan assets are reported at fair market value. All amounts of compensation deferred tinder the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property, or rights are (until paid or made available to the employee or beneficiary) solely the property and rights of the Cotmty of Hawaii, subject only to the claims of the County's general creditors. Participants' rights under the plan are equal to those of general creditors of the County in an amount equal to the fair mazket value of the defen•ed amount for each participant. The County believes that it is unlikely that i[ will use the plan assets to satisfy the claims of general creditors in the future. It is the opinion of the Corporation Counsel that the County has no liability for losses under the plan, but does have the duty of due caze that would be required of an ordinary prudent investor. 17. COMPONENT UNIT DISCLOSURES Cash and Investments For purposes of the statement of cash flows, the Department of Water Supply (the Deparment) considers all highly liquid investments with an initial maturity of three months or less to be cash equivalents. However, for the required GASB Statement No. 3 disclosures, all repurchase agreements regardless of initial maturity are considered investments. The amount of $149,912 shown on the balance sheet as cash and cash equivalents consists of cash on hand (deposit in transit) of $97,174 and balance in the checking account of $52,738. Deposits At June 30, 1996, the carrying amount of the Department's deposits was $52,738 and the bank balance was $52,738. This entire amount was covered by collateral held by the County's agent, the State of Hawaii, in the County's name in accordance with State statutes. Investments The Department is allowed to invest in the same types of insWments as the primary government (see Note 4). Investments are classified into three categories of credit -58- COUNTY OF HAWAl. Notes to the Combined Financial Statements June 30, 1996 risk: (1) insured or registered, or securities held by the County or its agent in the Counry's name; or (2) uninsured and unregistered, with securities held by the counterparty's tmst department or agent in the County's name; or (3) uninsured and unregistered, with securities held by the counterparty in the County's name, or by the counterparty's trust department or agent but not in the County's name. At lone 30, 1996, the Department had investments of $27,415,211 (carrying amount which equals market value) in bank repurchase agreements, which was all in risk category 1. This investment amount includes cash received by the Department of Water Supply which is refundable or restricted as to use, and is recorded as a restricted asset. Such funds amounted to $12,404,810 at June 30, 1996. Fixed Assets The Department of Water Supply began operations as of January 1, 1950. At that date, the utility plant in service was transferred to the Deparonent of Water Supply from the County at the cost of the utility plant assets acquired by the County for its water system from lanuary 1, 1924 to December 31, 1949, less accumulated depreciation. Acquisitions prior to 1924 and acquisitions by gifr 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. Constmction costs include amounts for contract work, engineering supervision and other direct and indirect costs. Depreciation on the Department of Water Supply 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 30 to 67 years Machinery and equipment 5 to 20 years Water systems 25 to 50 years Depreciation expense on assets acquired with contributions in aid of construction is charged to contributed capital. The fixed assets of the Depa~trnent at June 30, 1996 were: Utility plant in service $181,003,815 Less: accumulated depreciation (56.243.848) 124,759,967 Construction in progress 7.863.026 Net fixed assets 5132.622.993 -59- COUNTY OF HAWAll Notes to the Combined Financial Statements June 30, 1996 Long-term Debt The County has issued general obligation bonds on behalf of the Department of Water Supply. 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 records these bonds as a liability. General obligation bonds payable issued on behalf of the Departrnent at June 30, 1996 are comprised of the following individual issues: Public improvement bonds: 1981 Series A at 5.0%, due through 2016 $ 577,000 1993 Series A at 3.8% to 5.6%, due through 2013 2,441,!!! Total public improvement bonds 10,217,000 Public improvement refunding bonds: 1989 Series at 6.2% to 6.95%, due through 2004 4.155.500 Total Department of Water Supply X14.372.000 Annual debt service requirements to maturity for these general obligation bonds, including interest payments of $6,978,734, are as follows: Fiscal Year Departttrent of En ing,Tune 30 Water Sunoly 1997 $ 1,640,915 1998 1,611,585 1999 1,582,977 2000 1,549,718 2001 1,519,541 Thereafter 13.445,998 Total $21.350.734 -60- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1996 Contributed Capital The following is a summary of contributed capital of the Deparment for the fiscal year ended June 30, 1996: Balance Balance July 1, June 30, 112 Additions Deductions 1996 >~partment of Water Sunolv: Contributed by County of Hawaii S 1.132.683 S S S 1.132.683 Contributions in aid of constmction: Federal government 4,928,589 30,000 4,958,589 State of Hawaii 52,127,702 2,138,882 1,699,183 52,567,401 County of Hawaii 3,767,935 4,223,924 2,850 7,989,009 Non-govemment 83.502.928 2.409.462 115.560 85.796.830 Total contributions in aid of construction 144,327,154 8,802,268 1,817,593 151,311,829 Less: accumulated amortization (42.894.6681 (3.580.954) (112.3251 (46.363.2971 Ne[ contributions in aid of constmction 101.432.486 5.221.314 1.705.268 104.948532 Contribu[edcapital $102.565.169 $5.221.314 ~1.705.26g yR106.081.215 Capital of $1,132,683 contributed by the County to the Deparment of Water Supply represents utility plant in service transferred from the County to the Department at its inception on January 1, 1950. Commitments and Contingent Liabilities Claims and judgments - The Department is self-insured for workers' compensation and other perils. The liability at June 30, 1996 for workers' compensation claims of $155,000 was estimated based on a combination of case-by-case review and the application of historical experience. -61- This page intentionally left blank. -62- GENERAL FUND The General Fund accounts #or all financial resources except those required to be accounted for in another fund. COUNTY OF HAWAII General Fund Balance Sheet, June 30, 1996 >i~i h o arative r~talc for June 30. 19951 A;iS~IS Cash and investments: Cash and cash equivalents $10,085,046 $11,826,887 Investments 27,420,000 17,550,000 Impress and change funds 24,970 26,470 Total cash and investments 37,530,016 29,403,357 Receivables: Real propeRy [axes Delinquent 11,300,311 11,867,700 Litigated claims 2,597,589 3,584,675 Total real property taxes 13,897,900 15,452,375 Due from other governments: State of Hawaii 1,344,858 1,407,148 Federal Government 1,523,453 1,297,366 Total due from other governments 2,868,311 2,704,514 Due from other funds 1,688,177 834,688 Other 298,140 362,982 Total receivables 18,752,528 19,354,559 Inventories 1,578,775 1,314,043 Restricted cash and cash equivalents with escrow agents 706.669 Total assets $57,861,319 $50,778,628 (Continued) -63- COUNTY OF HAWAII (Concluded) General Fund Balance Sheet, June 30, 1996 (With comoara[ive totals for June 30. 19951 124Sx 122 Liabilities and Fund Balance Liabilities; Warrants payable $ 2,799,323 $ 2,443,658 Accounts payable 1,245,011 994,200 Due to other funds 3,019,570 2,712,522 Due to IRS - azbitrage rebate 10,596 Deferred revenue: Real property tax revenue 14,133,623 15,633,900 Liquor control revenue 161,340 150,000 JMergovernmental revenue 1,388,617 1,650,660 Total deferred revenue 15,683,580 17,434,560 G~~ 3,342,626 4,989,341 Total liabilities 26,100,706 28,574,281 Fund balance: Reserved for: Encumbrances 7,428,454 7,856,280 Grants 35,036 Inventories 1,578,775 1,314,043 Liquor control 244,875 97,636 Total reserved fund balance 9,252,104 9,302,995 Unreserved: Designated for: Impress and change funds 24,970 26,470 Dmg enforcement 32,354 Special duty police program 99,788 Computer equipment -police and county clerk 1,664,890 County council projects 121,474 Claims andjudgements 1,227,689 1,362,636 Undesignated 19,337,344 11,512,246 Total fund balance 31,760,613 22,204,347 Total liabilities and fund balance $57,861,319 $50,778,628 -64- COUNTY OF HAWAII General Fund Statement of Revenues, Expenditures and Changes in Fund Balance For the Fiscal Year Ended June 30, 1996 (With comparative totals fnr the fiscal veaz ended Tune 30- 19951 1425 124 Revenues: Taxes and assessments $92,512,151 $91,200,034 Licenses and permits 2,965,089 2,994,104 Intergovernmental 33,114,056 31,301,292 Chazges for current services 1,549,577 1,612,822 Fines and forfeitures 665,479 578,035 Rents 37,554 38,151 Interest and penalties 3,755,674 3,343,425 Miscellaneous 1,309,690 927,184 Total revenues 135,909,270 131,995,047 Expenditures: Current: General government 18,241,053 18,688,310 Public Safety 47,829,723 48,742,685 Highways and streets 1,339,420 3,367,634 Sanitation 179,964 5,924,259 Health, education and welfare 5,204,915 4,977,150 Culture and recreation 10,416,082 10,497,059 Pension and retirement contribution 11,723,783 9,158,004 Health Fund 7,526,698 7,110,563 Miscellaneous 2,787,037 4,300,558 Capital outlay 1,748,793 1,877,312 Debt service: Interest and finance chazges 2,412 103,093 Principal retirement 9,189 969,228 Total expenditures 107,009,069 115,715,855 Excess of revenues overexpendi[ures 28,900,201 16,279,192 Other financing sources (uses): Increase in capital lease obligations 706,668 Sale of general fixed assets 34,547 77,094 Operating transfers in 935,999 947,187 Operating transfers out (20,579,213) (13,911,583) Total financing sources (uses) (19,608,667) (12,180,634) Excess of revenues and other sources over expenditures and other uses 9,291,534 4,098,558 Fund balance, beginning of yeaz 22,204,347 18,002,788 Increase in reserve for inventories 264,732 103,001 Fund balance, end of year $31,760,613 $22,204,347 -65- COUNTY OF HAWAII General Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Non-GAAPBndgetary Basis For the Ficcal Ye r Fnded J me 90 1996 Variance Favorable Bud¢et ,Actual (Unfavorable) Revenues: Taxes and assessments -real prol~rty $88,940,854 $92,512,151 $ 3,571,297 Licenses and permits: Nonbusiness licenses and permits 2,041,322 2,011,607 (29,715) Business licenses 1,000,300 708,286 (292,014) Street use 277,000 245,197 (31,803) Total licenses and permits 3,318,622 2,965,090 (353,532) Intergovemmental: Federal: Programs for the aged 1,152,308 903,241 (249,067) Community development block grants 2,257,000 2,257,000 Civildefense 119,302 101,378 (17,924) Law enforcement 1,023,633 945,837 (77,796) Other 2,374,234 2,232,962 (141,272) Total Federal 6,926,477 6,440,418 (486,059) Stale: State General Fund -Act 185, SLH 1990 14,775,000 17,192,155 2,417,155 Emergency medical services 7,214,594 6,991,367 (223,227) Other 4,397,521 3,386,152 (1,011,369) Support programs 1,068,390 897,369 (171,021) Total State 27,455,505 28,467,043 1,011,538 Total intergovernmental revenue 34,381,982 34,907,461 525,479 Chazges for current services: General government 778,915 816,711 37,796 Culture and recreation 343,890 308,859 (35,031) Highways and streets 424,000 409,922 (14,078) Public safety 14,800 14,085 (715) Total charges for current services 1,561,605 1,549,577 (12,028) Fines and forfeitures 786,000 665,479 (120,521) Rents 39,000 37,553 (1,447) (Continued) -66- COUNTY OF HAWAII (Continued) General Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Non-GAAPBndgetary Basis For the Fiscal Year Ended Tune 30. 1996 Variance Favorable Budeet Actual (Unfavorable) Revenues (continued): Interest and penalties 2,700,000 3,690,621 990,621 Miscellaneous 2,582,316 3,015,011 432,695 Total revenues 134,310,379 139,342,943 5,032,564 Expenditures: Curren[: General government: Finance 5,177,578 4,501,513 676,065 Automotive equipment 2,006,230 1,710,457 295,773 General government building 2,645,662 2,460,475 185,187 Legislative 2,227,664 1,438,071 789,593 Law 2,360,106 1,871,756 488,350 Planning and caning 1,890,231 1,142,758 747,473 Research and development 1,595,732 1,397,670 198,062 Mayor's office 891,282 734,175 157,107 Engineering 1,108,628 889,751 218,877 Personnel services 1,098,670 670,909 427,761 Chief engineer 774,072 600,024 174,048 Elections 407,567 333,140 74,427 Total general government 22,183,422 17,750,699 4,432,723 Public safety: Police department 29,096,532 26,066,077 3,030,455 Fire department 15,992,242 15,282,858 709,384 Prosecuting attorney 4,347,631 3,659,983 687,648 Protective inspection 1,492,564 1,394,501 98,063 Liquor control 813,812 698,818 114,994 Flood control 159,531 151,123 8,408 Civil defense agency 466,693 408,318 58,375 Humane Society 571,409 571,409 Safety coordinator 272,495 255,225 17,270 Total public safety 53,212,909 48,488,312 4,724,597 Highways and streets: Mass transit 2,685,504 2,616,187 69,317 Sanitation (13,463) 13,463 (Continued) -67- COUNTY OF HAWAII (Continued) General Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Non-GAAPButigetary Basis For the Fisca! Year Ended June 30. 1996 Variance Favorable Bud¢et Actual (Unfavorable) Expenditures (continued): Current (continued): Health, education and welfare: Office of Aging 1,478,204 1,157,179 321,025 Elderly Activities 2,440,552 2,154,181 286,371 Education 325,000 230,862 94,138 Social programs 900,000 900,000 Cemeteries 174,769 164,853 9,916 Physical examination 106,068 96,420 9,648 Total health, education and welfare 5,424,593 4,703,495 721,098 Culture and recreation: Community music 165,230 149,580 15,650 Organized recreation: Maintenance 4,939,535 4,756,110 183,425 Recreation 1,324,121 1,308,801 15,320 Aquatics 1,771,941 1,592,953 178,988 Hoolulu Pazk complex 700,068 687,285 12,783 Municipal golf course (386) 386 Administration 469,670 444,375 25,295 Children's zoo 617,966 599,376 18,590 Summer fun 323,542 281,814 41,728 Culture and arts 108,437 100,487 7,950 Elderly activities administration 453,395 414,487 38,908 Total culture and recreation 10,873,905 10,334,882 539,023 Pension and retirement contributions 11,825,675 11,723,783 101,892 Health fund 7,546,094 7,526,697 19,397 Miscellaneous 4,265,688 2,405,264 1,860,424 Total current 118,017,790 105,535,856 12,481,934 Capital Outlay -Community Development Block grants (HUD) 1989 Low-moderate housing (36,757) (36,757) 1990 Assistance for homeless (74,000) (74,000) 1990 Piihonua production well 140,529 140,529 1990 HOVE fire truck (7) (7) ° 1990 Pepeekeo fire Wck (29,765) (29,765) 1991Low-moderatehousing (10,376) (10,376) 1991 Mobile multi-service center van 15,682 15,682 1991 Hale Kokua rehab program (105,000) (105,000) 1991 Planning/admiMfair housing (5,306) (5,306) 1992 Removal of architectural barriers 6,032 6,032 1992 Planning/admin/fav housing (6,032) (6,032) (Continued) -68- COUNTY OF HAWAII (Continued) General Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Non-GAAP Budgetary Basis ~ the Fiscal Year EndP~t June 30 1996 Variance Favorable Budgie[ Actual (Unfavorable) Expenditures (continued): Capital Outlay -Community Development Black grants (HUD) 1993 Section 202 elderly housing project 19,642 19,642 1993 Hate Halawai removal of arch barriers (19,642) (19,642) 1994 Ka'u police station 150,000 150,000 1994 Paradise Park fire wck (29,765) (29,765) 1994PIanning/admin/fairhousing (15,235) (15,235) 1995 Central Fire Station rehab 20,000 20,000 1995 Removal of architectural barriers 1,062,000 1,062,000 1995 Hamakua housing camp water 350,000 350,000 1995 Brantley Center roof 100,000 100,000 1995 Hilo Main Street program 30,000 30,000 1995 Nanawale community ball field 100,000 100,000 1995 Keaau community/senior center 235,000 235,000 1995 Pepeekeo volunteer fire station 60,000 60,000 1995 Planning/admiMfair housing 300,000 300,000 Total Community Development Block Grants (HUD) 2,257,000 2,257,000 HOME Program - 1993 381,793 381,793 Total capital outlay 2,638,793 2,638,793 Total expenditures 120,656,583 108,174,649 12,481,934 Excess of revenues over expenditures 13,653,796 31,168,294 17,514,498 Other financing sources (uses): Operating transfers in: 1978 Sinking Fund 933,501 935,999 2,498 Total operating transfers in 933,501 935,999 2,498 Operating transfers out: Sewer Fund 800,410 800,410 Solid Waste Fund 6,683,362 6,683,362 Golf Course Fund 281,543 281,543 Housing Agency Fund 121,585 121,585 Highway Fund 89,000 89,000 Debt Service Fund 15,053,987 14,272,587 781,400 Total operating transfers out 23,029,887 22,248,487 781,400 Total other financing sources (uses) (22,096,386) (21,312,488) 783,898 (Continued) -69- COUNTY OF HAWAII (Concluded) General Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Non-GAAPBndgetary Basis For the Fiscal Year Ended June 30. 1996 Variance Favorable Budeet Actual (Unfavorable) Excess (deficiency) of budgeted revenues and other sources over budgeted expenditures and other uses: (8,442,590) 9,855,806 18,298,396 Unbudge[ed self-insurance expenditures ($200,000), net of related interest revenue ($65,054) (134,946) (134,946) Fund balance, beginning of yeaz 22,204,347 22,204,347 Fund balance, end of yeaz $ 13,761,757 $31,925,207 $18,163,450 -70- 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. 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. SE WER FUND -Used to account for costs of operating the County's various sewerage systems. Financing is provided by charges to users for sewer services. BIKE WAY FUND -Used to accumulate moneys for the construction of bikeways within the County. Financing is provided by bicycle license 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. - 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 collected with motor vehicle registrations. 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. 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. GEOTHERMAL ROYALTY FUND -Used to accumulate the Count}~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. This page intentionally left blank. -71- COUNTY OF HAWAII Special Revenue Funds Combining Balance Sheet at June 30, 1996 [With comnarafive totals for June 30 19951 Pazking Vehicle Highway Meter Sewer Bikeway Cemetery Disposal Fled Fund FJmd Euad Fund Fund BSS1i1S Cash and cash equivalents $3,971,921 $114,586 $1,973,403 $ 2,165 $9,800 $622,595 Imprest fund Receivables: Waste disposal chazges receivable 922,150 IntergovemmentaL Due from State govemment 33,082 Due from Federal govemment 50,924 Total due from other governments 33,082 50,924 Due from other funds 916 Other receivables 574,245 36,765 Total receivables 608,243 958,915 50,924 Total assets $4,580,164 $114,586 $2,932,318 $53,089 $9,800 $622,595 i 'ab+lities and Fund Balances Liabilities: Warrants payable $ 154,965 $ 22 $ 39,715 $30,000 $ $ 20,206 Accounts payable 27,657 66 69,117 94,363 Due to other funds 743,149 11,938 168,102 3,102 Deferred revenue 922,150 Total liabilities 925,771 12,026 1,199,084 30,000 117,671 Fund balances: Reserved for encumbrances 1,596,973 45,089 276,286 11,975 Unreserved: Designated for equipment replacement 899,031 Designated for council projects 40,479 Designated for imprest fund Designated for future project 1,000 Total designated fund balance 41,479 899,031 Undesignated 2,015,941 57,471 557,917 23,089 9,800 492,949 Total fund balances 3,654,393 102,560 1,733,234 23,089 9,800 504,924 Total liabilities and fund balances $4,580,164 $114,586 $2,932,318 $53,089 $9,800 $622,595 _72_ Solid Golf Geothermal Beauti- Totals Waste Course Royalty fication EuIId FJl!!d Euad EyLd 1228E ~ $1,976,896 $164,508 $348,193 $139,120 $9,323,187 $6,768,542 2,000 2,000 798,555 1,720,705 2,002,864 54,000 87,082 166 50,924 34,445 54,000 - 138,006 34,611 58,679 59,595 49,224 4,614 664,848 222,564 960,458 4,614 - 2,583,154 2,260,039 $2,937,354 $171,122 $348,193 $139,120 $11,908,341 $9,028,581 $ 366,706 $ 5,549 $ $ 2,020 $ 619,183 $ 247,681 410,813 2,403 731 605,150 1,139,738 201,952 55,781 1,184,024 790,555 798,555 - 1,720,705 2,002,864 1,778,026 63,733 2,751 4,129,062 4,180,838 727,448 25,892 2,724 2,686,387 815,629 899,031 448,221 40,479 2,000 2,000 1,000 1,000 2,000 942,510 449,221 431,880 79,497 348,193 133,645 4,150,382 3,582,893 1,159,328 107,389 348,193 136,369 7,779,279 4,847,743 $2,937,354 $171,122 $348,193 $139,120 $11,908,341 $9,028,581 - 73 - COUNTY OF HAWAII Special Revenue Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances For the Fiscal Year Ended June 30, 1996 ni ith omnarative totals for the fiscal year ended June 30. 19951 Parking Vehicle Highway Meter Sewer Bikeway Cemetery Disposal FIIp~ F'sllLd Fund Eun~ Fund Fltod Revenues: Taxes $ 9,242,838 $ $ $ $ $ Licenses and permits 2,302,349 19,224 439,488 Intergovernmental 260,159 66,004 Chazges for cttrrent services 120,162 131,596 2,722,958 89 Misceltaneous 48,268 9,140 9,700 30 Total revenues 11,973,776 131,596 2,732,098 85,228 9,700 439,607 Expenditures: Current: Public safety 2,407,629 144,028 Highways and streets 4,748,657 86,564 Sanitation 2,694,229 286,538 Health, education & welfaze 5,633 Culture and recreation Pension and retirement contributions 860,794 20,540 299,074 5,823 Health fund 390,492 8,702 116,645 1,179 Miscellaneous 302,405 87,911 Debt service: Interest charges Principal repayment Total expenditures 8,715,610 173,270 3,197,859 86,564 293,540 Excess (deficiency) of revenues over expenditures 3,258,166 4( 1,674) (465,761) (1,336) 9,700 146,067 Other financing sources (uses): Operating transfers in: General Fund 89,000 800,410 Operating transfers out: Public Improvement Bond Fund (2,513,163) 212,690 Total other financing sources (uses) (2,424,163) 800,410 212,690 Excess (deficiency) of revenues and other sources over expenditures and other uses 834,003 (41,674) 334,649 (1,336) (202,990) 146,067 Fund balances, beginning of year 2,820,390 144,234 1,398,585 24,425 212,790 358,857 Fund balances, end of year $ 3,654,393 $102,560 $1,733,234 $23,089 $9,800 $504,924 _7q_ Solid Golf Geothermal Beau[i- Totals Waste Course Royalty t"ication Fund Sued Fund Fsmd ]49~ 122 $ $ $ $ $ 9,242,838 $ 8,828,317 109,932 2,870,993 2,794,147 216,000 542,163 382,657 2,867,205 640,503 6,482,513 3,826,111 71,602 - 348,193 486,933 44,897 3,154,807 640,503 348,193 109,932 19,625,440 15,876,129 2,551,657 1,985,188 61,914 4,897,135 4,673,626 7,289,985 10,270,752 3,850,341 5,633 4,841 668,454 668,454 314,260 101,734 1,602,225 925,575 162,979 44,309 724,306 509,404 63,527 160 454,003 785,527 50,764 50,764 597,437 597,437 8,478,952 814,657 61,914 21,822,366 12,734,502 (5,324,145) (174,154) 348,193 48,018 (2,196,926) 3,141,627 6,683,362 281,543 7,854,315 909,131 (2,725,853) (2,423,826) 6,683,362 281,543 5,128,462 (1,514,695) 1,359,217 107,389 348,193 48,018 2,931,536 1,626,932 (199,889) 88,351 4,847,743 3,220,811 $1,159,328 $107,389 $348,193 $ 136,369 $7,779,279 $4,847,743 -75- COUNTY OF HAWAII Special Revenue Funds Combining Schedule of Revenues, Expenditures and Changes in Fund Balances - Non-GAAPBndgetary Basis For the Fiscal Year Ended June 30. 1996 Parking Meter Highway Fund Fund Sewer Fund Bud¢et Actual Bud¢et Actual Budget Actual Revenues: Taxes $9,676,000 $9,242,838 $ $ $ $ Licenses and permits 2,700,000 2,302,350 Intergovernmental 306,000 260,159 Charges for current services 200,000 120,162 148,500 131,595 3,766,139 2,722,959 Miscellaneous 51,200 48,267 100 9,140 Total revenues 12,933,200 11,973,776 148,500 131,595 3,766,239 2,732,099 Expenditures: Current: Public safety 2,882,497 2,729,127 211,473 188,829 Highways and streets 7,329,308 5,318,396 Sanitation 3,595,342 2,903,528 Health, education & welfare 6,000 5.633 Culture and recreation Pension and retvement contributions 1,035,825 860,794 20,540 20,540 321,378 299,074 Health fund 391,700 390,492 8,705 8,702 117,938 116,645 Miscellaneous 791,615 305,238 1,782 631,991 77,808 Total expenditures 12,436,945 9,609,680 242,500 218,071 4,666,649 3,397,055 Excess (deficiency) of revenues over expenditures 496,255 2,364,096 (94,000) 8( 6,476) 900,410 (664,956) Other financing sources (uses): Operating transfers in 89,000 89,000 800,410 800,410 Operating transfers out (2,700,000 (2,513,163) Total other financing sotrces (uses) (2,611,000) 2,424,163 800,410 800,410 Excess (deficiency) of revenues and other sources aver expenditures and other uses (2,114,745) (60,067) (94,000) (86,476) (100,000) 135,454 Fund balance, beginning of year 2,820,390 2,820,390 144,234 144,234 1,398,585 1,398,585 Fund balance, end of year $705,645 $2,760,323 $50,234 $57,758 $1,298,585 $1,534,039 -76- Bikeway Fund Cemetery Fund Vehicle Disposal Fund Solid Waste Fund Golf Course Fund $udYa! Actual Aslttal Bud¢et Actual Bud¢et A~lual Budeet A~ 18,000 19,224 436,800 439,488 12,000 12,000 216,000 216,000 500 88 3,137,150 2,867,205 677,630 640,503 9,700 500 30 71,602 30,000 31,224 9,700 437,800 439,606 3,353,150 3,154,807 677,630 640,503 30,000 30.000 429,020 298,679 9,338,752 9,026,498 775,637 696,346 6,540 5,823 364,875 314,260 103,331 101,734 1,240 1,179 206,000 162,979 54,617 44,309 1,000 126,885 63,527 25,588 160 30,000 30,000 437,800 305,681 10,036,512 9,567,264 959,173 842,549 1,224 9,700 133,925 (6,683,362) 6,4( 12,457) 28( 1,543) 20( 2,046) 6,683,362 6,683,362 281,543 281,543 21( 2,690) 212,690 212,690 21( 2,690) 6,683,362 6,683,362 281,543 281,543 1,224 (212,690) (202,990) 133,925 270,905 79,497 24,425 24,425 212,790 212,790 358,857 358,857 (199,889) 19( 9,889) $24,425 $25,649 $100 $9,800 $358,857 $492,782 $189_ $71,016 $ $79,497 (Continued) _77_ COUNTY OF HAWAII Special Revenue Funds Combining Schedule of Revenues, Expenditures and Changes in Fund Balances - Non-GAAPBndgetary Basis For th Fiscal Year Pnde~ Jane 30 1996 (Concluded) Total Special Revenue Funds Geothermal Variance Royalty Fund Beau[if"ication Fund Favorable Bud¢et @~(pa( Bud¢et Actual Budeet Actual lUnfavorablel Revenues: Taxes $ $348,193 $ $ $9,676,000 $9,591,031 $ (84,969) Licenses and permits 112,000 109,931 3,266,800 2,870,993 (395,807) Intergovernmental 534,000 488,159 (45,841) Chazges for current services 7,929,919 6,482,512 (1,447,407) Miscellaneous 51,800 138,739 86,939 Total revenues 348,193 112,000 109,931 21,458,519 19,571,434 (1,887,085) Expenditures: Curren[: Public safety 3,093,970 2,917,956 176,014 Highways and streets 112,000 31,849 7,471,308 5,380,245 2,091,063 Sanitation 13,363,114 12,228,705 1,134,409 Health, education & welfare 6,000 5,633 367 Culture and recreation 775,637 696,346 79,291 Pension and retirement contributions 1,852,489 1,602,225 250,264 Health fund 780,200 724,306 55,894 Miscellaneous 1,578,861 446,733 1,132,128 Total expenditures 112,000 31,849 28,921,579 24,002,149 4,919,430 Excess (deficiency) of revenues over expenditures 348,193 78,082 (7,463,060) (4,430,715) 3,032,345 Other financing sotuces (uses): Operating transfers in 7,854,315 7,854,315 Operating transfers out (2,912,690) (2,725,853) 186,837 Total other financing sources (uses) 4,941,625 5,128,462 186,837 Excess (deficiency) of revenues and other sources over expenditures and other uses 348,193 78,082 (2,521,435) 697,747 3,219,182 Fund balance, beginning of year 88,351 88,351 4,847,743 4,847,743 Fund balance, end of yeaz $ $348,193 $ 88,351 $166,433 $2,326,308 $5,545,490 $3,219,182 _7g_ COUNTY OF HAWAII Highway Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Non-GAAP Budgetary Basis For the Fiscal Year Ended lone 30. 1996 Variance Favorable Budeet Actual (Unfavorable) Revenues: Taxes: Fuel tax $ 6,200,000 $ 5,819,694 ($380,306) Public utility franchise tax 3,476,000 3,423,144 (52,856) Total taxes 9,676,000 9,242,838 (433,162) Licenses and permits -motor vehicle weight taxes 2,700,000 2,302,350 (397,650) Intergovernmental 306,000 260,159 (45,841) Chazges for current services 200,000 120,162 (79,838) Miscellaneous 51,200 48,267 (2,933) Total revenues 12,933,200 11,973,776 (959,424) Expenditures: Public safety -traffic engineering 2,882,497 2,729,127 153,370 Highways and streets 7,329,308 5,318,396 2,010,912 Health, education & welfare 6,000 5,633 367 Pension and retvement contributions 1,035,825 860,794 175,031 Health fund 391,700 390,492 1,208 Miscellaneous 791,615 305,238 486,377 Total expenditures 12,436,945 9,609,680 2,827,265 Excess (deficiency) of revenues over expenditures 496,255 2,364,096 1,867,841 Other financing uses - Operating transfers in -General Fund 89,000 89,000 Operating transfers out - Capital Projects Fund (2,700,000) (2,513,163) 186,837 Total other financing uses (2,611,000) (2,424,163) 186,837 Excess (deficiency) of revenues and other sources over expenditures and other uses (2,114,745) (60,067) 2,054,678 Fund balance, beginning of year 2,820,390 2,820,390 Fund balance, end of year $ 705,645 $ 2,760,323 $2,054,678 -79- COUNTY OF HAWAII Parking Meter Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Non-GAAP Budgetary Basis For the Fiscal Yeaz Ended June 30. 1996 Variance Favorable Budeet Actual (Unfavorable) Revenues: Chazges for current services - highways and streets $148,500 $131,595 $1( 6,905) Total revenues 148,500 131,595 1( 6,905) Expenditures: Public safety - pazking 211,473 188,829 22,644 Pension and retirement contributions 20,540 20,540 0 Health fund 8,705 8,702 3 Miscellaneous 1,782 1,782 Total expenditures 242,500 218,071 24,429 Excess (deficiency) of revenues over expenditures (94,000) (86,476) 7,524 Fund balance, beginning of year 144,234 144,234 Fund balance, end of yeaz $50,234 $57,758 $7,524 -80- COUNTY OF HAWAII Sewer Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Non-GAAPBudge(ary Basis For the Fiscal Year Ended June 30. 1996 Variance Favorable Budeet Actual (Unfavorable) Revenues: Chazges for currentservices -sewer fees $3,766,139 $2,722,959 ($1,043,180) Miscellaneous 100 9,140 9,040 Total revenues 3,766,239 2,732,099 (1,034,140) Expenditures: Sanitation 3,595,342 2,903,528 691,814 Pension and retirement contributions 321,378 299,074 22,304 Health fund 117,938 116,645 1,293 Miscellaneous 631,991 77,808 554,183 Total expenditures 4,666,649 3,397,055 1,269,594 Excess (deficiency) of revenues over expenditures (900,410) (664,956) 235,454 O[her financing sources - Operating transfers in -General Fund 800,410 800,410 Total other financing sources 800,410 800,410 - Excess (deficiency) of revenues and other sources over expenditures and other uses (100,000) 135,454 235,454 Fund balance, beginning of year 1,398,585 1,398,585 Fund balance, end of yeaz $1,298,585 $1,534,039 $235,454 -81- COUNTY OF HAWAII Bikeway Fund Schedule of Revenues, Expenditures and Changes in Fund Bahmce - Non-GAAPBndgetary Basis For the Fiscal Yeaz Ended Tune 30. 1996 Variance Favorable Budeet Actual (Unfavorable) Revenues: Licenses and permits -bicycle tax $18,000 $19,224 $ 1,224 In[ergovemmental 12,000 12,000 Total revenues 30,000 31,224 1,224 Expenditures -highways and streets 30,000 30,000 Excess (deficiency) of revenues over expenditures 1,224 1,224 Fund balance, beginning of year 24,425 24,425 Fund balance, end of year $ 24,425 $25,649 $1,224 _g2_ COUNTY OF HAWAII Cemetery Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Non-GAAPBndgetary Basis For the Fisc?1 Year Ended June 30.1996 Variance Favorable Bud¢et Actual (Unfavorable) Revenues -miscellaneous -sale of cemetery plots $ $ 9,700 $9,700 Other financing uses - Operating transfers out -Capital Projects Fund (212,690) (212,690) Deficiency of revenues over other uses (212,690) (202,990) 9,700 Fund balance, beginning of yeaz 212,790 212,790 - Fund balance, end of year $100 $9,800 $9,700 -83- COUNTY OF HAWAII Vehicle Disposal Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Non-GAAPBudgecary Basis For [he Ficeal Year Ended June 30 1996 Variance Favorable Budget Actual (Unfavorable) Revenues: Licenses and permits -vehicle disposal fee $436,800 $439,488 $ 2,688 Chazges for services -towing charges 500 88 (412) Miscellaneous 500 30 (470) Total revenues 437,800 439,606 1,806 Expenditures: Sanitation 429,020 298,679 130,341 Pension and retvemen[ contributions 6,540 5,823 717 Health fund 1,240 1,179 61 Miscellaneous 1,000 1,000 Total expenditures 437,800 305,681 132,119 Excess (deficiency) of revenues over expenditures 133,925 133,925 Fund balance, beginning of year 358,857 358,857 Fund balance, end of year $358,857 $492,782 $133,925 -84- COUNTY OF HAWAII Solid Waste Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Non-GAAPBndgetary Basis For th Fi cal Year ~d ~ J me 30 1996 Variance Favorable Budeet Actual (~Jnfavorablel Revenues: Chazges for services -tipping fees $3,137,150 $2,867,205 ($269,945) Intergovernmental 216,000 216,000 Miscellaneous 71,602 71,602 Total revenues 3,353,150 3,154,807 (198,343) Expenditures: Sanitation 9,338,752 9,026,498 312,254 Pension and retirement contributions 364,875 314,260 50,615 Health fund 206,000 162,979 43,021 Miscellaneous 126,885 63,527 63,358 Total expenditures 10,036,512 9,567,264 469,248 Excess (deficiency) of revenues over expenditures (6,683,362) (6,412,457) 270,905 Other financing sources - Operating transfers in -General Fund 6,683,362 6,683,362 - Excess (deficiency) of revenues and other sources over expenditures 270,905 270,905 Fund balance, beginning of yeaz (199,889) (199,889) - Fund balance, end of year ($199,889) $ 71,016 $270,905 -85- COUNTY OF HAWAII Golf Course Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Non-GAAPBndgetary Basis For the Fiscal Yeaz Ended June 30. 1996 Variance Favorable Budget Actual fUnfavorablel Revenues: Chazges for services $677,630 $640,503 ($37,127) Total revenues 677,630 640,503 (37,127) Expenditures: Culture and recreation 775,637 696,346 79,291 Pension and retirement contributions 103,331 101,734 1,597 Health fund 54,617 44,309 10,308 Miscellaneous 25,588 160 25,428 Total expenditures 959,173 842,549 116,624 Excess (deficiency) of revenues over expenditures (281,543) (202,046) 79,497 Other financing sources - Opera[ing Transfers in -General Fund 281,543 281,543 Excess (deficiency) of revenues and other sources over expenditures 79,497 79,497 Fund balance, beginning of year Fund balance, end of yeaz $ $ 79,497 $79,497 -86- COUNTY OF HAWAII Geothermal Royalty Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Non-GAAPBndgetary Basis For the Fiscal Year Hnded June 30 1996 Variance Favorable Bud¢el A fiJnfavorablel Revenues -miscellaneous -geothermal royalties $ $348,193 $348,193 Fund balance, beginning of yeaz - Fund balance, end of yeaz $ - $348,193 $348,193 _g~_ COUNTY OF HAWAII Beautification Fund Schedule of Revenues, Expenditures and Changes in Fund Bahmce - Non-GAAPBudgetgry Basis For [he Fiscal Year Ended )une 30 1996 Variance Favorable Budget Actual fUnfavorablel Revenues: Licenses and permits -highway beautification $112,000 $109,931 ($2,069) Total revenues 112,000 109,931 (2,069) Expenditures: Highways and streets 112,000 31,849 80,151 Total expenditures 112,000 31,849 80,151 Excess(deficiency) ofrevenues over expenditures 78,082 78,082 Fund balance, beginning of year 88,351 88,351 - Fund balance, end of yeaz $ 88,351 $ 166,433 $78,082 _gg_ 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 1978 Sinking Fund and for payment of general obligation bonds. Moneys required to retire the bonds and service the Sinking Fund are transferred from the General Fund one year in advance of maturity. 1978 SINKING FUND -Used to accumulate moneys for a sinking fund for the - 1978 Series general obligation bonds. Contributions to the Sinking Fund, which are determined by the bond ordinance, are transferred from the Bond Redemption Fund on established due dates. COUNTY OF HAWAII Debt Service Funds Combining Balance Sheet at June 30, 1996 [With comparative tot2ls for June 30. 19951 General Obligation Bonds Bond 1978 Totals Interest Redemption Sinking FYO.d Eu[!d FWId 142 1925 8S&G1S Cash and investments: Cash and cash equivalents $344,987 $ 319,320 $ $ 664,307 $ 326,474 Investments 107,504 6,951,250 11,186,613 18,245,367 17,326,940 Total assets $452,491 $7,270,570 $11,186,613 $18,909,674 $17,653,414 Liabilities and Fund Bat_ances Liabilities: Warrants payable $ $ $ $ $ 91.469 Accrued interest payable 133,744 133,744 100,133 Bonds payable 105,300 105,300 Fund balances: Reserved for debt service - ' redemption of bonds and interest thereon 318,747 7,165,270 11,186,613 18,670,630 17,461,812 Total liabilities and fund balances $452,491 $7,270,570 $11,186,613 $18,909,674 $17,653,414 -89- COUNTY OF HAWAII Debt Service Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances For the Fiscal Yeaz Ended June 30, 1996 (~'lith comnarative to atc for the ficc~l yes ended Jane 30 19951 General Obligation Bonds Bond 1978 Totals Interest Redemption Sinking Euo~ ~ Fwd 1445 1" Revenues -interest $ $ $ 935,999 $ 935,999 $ 934,212 Expenditures: Interest charges 6,067,081 6,067,081 6,245,235 Principal retirement 5,327,414 5,327,414 5,335,443 Total expenditures 6,067,081 5,327,414 11,394,495 11,580,678 Excess (deficiency) of revenue over expenditures (6,067,081) (5,327,414) 935,999 (10,458,496) (10,646,466) Other financing sources (uses): Operating transfers in - General Fund 6,368,612 6,234,702 12,603,314 12,081,519 Interest Fund 52,673 52,673 47,727 Operating transfers out - General Fund (935,999) (935,999) (934,212) Bond Redemption Fund (52,674) (52,674) (47,727) Total other financing sources (uses) 6,315,938 6,287,375 (935,999) 11,667,314 11,147,307 Excess (deficiency) of revenues and other sources over expenditures and other uses 248,857 959,961 1,208,818 500,841 Fund balances, beginning of year 69,890 6,205,309 11,186,613 17,461,812 16,960,971 Fund balances, end of year $ 318,747 $7,165,270 $11,186,613 $18,670,630 $17,461,812 -90- CAPTTAL PROJECTS FUNDS 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. - IMPROVEMENT DISTRICT NO. 16 -Used to account for the costs of construction of improvements in Improvement District No. 16, Keaau Agricultural Lots Subdivision. The improvements were financed with the ` proceeds of the sale of special assessment bonds. IMPROVEMENT DISTRICT NO. 17 -Used to account for the costs of construction of improvements in Improvement District No. 17, Kaloko Subdivision. The improvements were financed with the proceeds of the sale of special assessment bonds. COUNTY OF HAWAII Capital Projects Funds Combining Balance Sheet at June 30, 1996 (With romoaraNve mLa for Lune 30 19951 Capital Improvement Improvement Totals Projects District District Fylld No. 16 No. 17 1225 122 BSS~tS Cash and investments: Cash and cash equivalents $ 780,762 $211,772 $849,887 $ 1,842,421 $10,726,193 Investments 49,000,000 - 49,000,000 14,000,000 Total cash and investments 49,780,762 211,772 849,887 50,842,421 24,726,193 Receivables: Due from other govemments - Sta[e of Hawaii: Constmction grants 1,655,772 1,655,772 2,228,428 State Revolving Fund loans 841,275 Federal Government 1,298,512 1,298,512 4,642,582 Total due from other governments 2,954,284 2,954,284 7,712,285 Due from other funds 202,495 202,495 184,381 Private contributions receivable 2,015 2,015 Otherreceivables 153 - - 153 Totalreceivables 3,158,947 - 3,158,947 7,896,666 Restricted cash and cash equivalents 667,743 667,743 383,615 Total assets $53,607,452 $211,772 $849,887 $54,669,111 $33,006,474 Liabilities and Fund Balances Liabilities: Warrants payable $ 1,644,187 $ $ 1,071 $ 1,645,258 $ 187,868 Accounts payable 1,065,756 1,065,756 1,147,573 Due to other funds 345 345 Deferred intergovernmental revenue 352,852 352,852 801,062 Other 631,725 631,725 383,615 Total liabilities 3,694,865 1,071 3,695,936 2,520,118 Fund balances: Reserved for: Encumbrances 13,155,036 51,900 13,206,936 3,937,099 Unexpended allotments 22,971,143 211,772 795,845 23,978,760 16,219,916 Total reserved fund balance 36,126,179 211,772 847,745 37,185,696 20,157,015 Unreserved: Designated for road repairs 2,464,031 2,464,031 4,928,712 Designated for SRF projects 887,355 887,355 Undesignated 10,435,022 1,071 10,436,093 5,400,629 Total fund balances 49,912,587 211,772 848,816 50,973,175 30,486,356 Total liabilities and fund balances $53,607,452 $211,772 $849,887 $54,669,111 $33,006,474 -91- COUNTY OF HAWAII Capital Projects Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances For the Fiscal Yeaz Ended June 30, 1996 (With corr~arative totals for the fisc~t ygar ended Lune 30. 1995) Capital Improvement Improvement Totals Projects District District FJlod I~Io. 16 Lis. iZ 1225 124 Revenues: Intergovernmental $ 2,035,355 $ $ $ 2,035,355 $ 4,850,138 Interest earned 28,060 28.060 Miscellaneous -developers' contributions 35,966 - 35,966 430,536 Total revenues 2,099,381 - - 2,099,381 5,280,674 Expenditures: General government 182,614 182,614 Public safety 2,795,928 2,795,928 1,118,081 Highways and streets 4,281,838 194,428 4,476,266 7,127,158 Sanitation 9,105,302 9,105,302 5,818,247 Cultrue and recreation 2,237,350 2,237,350 1,733,523 Miscellaneous - 18,946 18,946 38,892 Total expenditures 18,603,032 18,946 194,428 18,816,406 15,835,901 Deficiency of revenues over expenditures (16,503,651) (18,946) (194,428) (16,717,025) (10,555,227) Other financing sources: State Revolving Fund (SRF) loans 5,307,656 5,307,656 3,739,958 Federal loan 15,000 15,000 Proceeds from sale of bonds 29,913,152 29,913,152 Operating transfers in: General Fund 730,000 Cemetery Fund 212,690 212,690 HighwayFund 2,513,163 2,513,163 2,423,826 Total other financing sources 37,961,661 37,961,661 6,893,784 Excess (deficiency) of revenues and other sources over expenditures and other uses 21,458,010 (18,946) (194,428) 21,244,636 (3,661,443) Fund balances, beginning of year 29,212,394 230,718 1,043,244 30,486,356 34,147,799 Prior period adjustment -previously accrued SRF loans received in current fiscal year (757,817) (757,817) Fundbalances, beginning of year (restated) 28,454,577 230,718 1,043,244 29,728,539 34,147,799 Fund balances, end of year $49,912,587 $211,772 $848,816 $50,973,175 $30,486,356 -92- Capital Projects Fund Schedule of Appropriations, Expenditures and Encumbrances - Non-GAAPBudgstary Basis For the Fi~AI Ye~* Eraded June 30 1996 Authorizations 1993 Encumbrances Lapsed Proiecl Tide FpL Aooroodetiona fypl Fxpendimres Fnrn+m6rancea J3HIB0S.43 Public Safety: Fire: Parediae Pack Volunteer Fire Station S 16,341 $ $ 16,341 $ 10,920 $ 4,930 $ 491 IIPP Volunteer Fire Station Wa[er 1,000,000 1,000,000 1,000,000 Fire Maintenance Shop Extension 167,000 167,000 23,334 143,666 Weikoloa Firc Station 1,100,000 1,100,000 6,700 1,093,300 Keauhou Fire/Fanergency Station 1,461,000 1,461,000 676 1,460,324 Waimea/Centml Firc Station Retrofit 62,500 62,30D 62,500 Laupahcehoe Firc Staton Extension 1,823 L823 1,823 - Total Fire 18.164 3,790,500 3,808,664 20,119 3,644,388 144.157 Police: Public Safety Building Phase 3 500,000 500,000 428,1x10 72,000 Police Air Dua Removal 500,000 500,000 500,000 Islandwide Communication Tower Replacement 315,000 315,000 315,000 Kona Police Sutton Gas Pump 3,387 3,387 - 5.387 Total Police 505.387 815.000 1.320,387 428,000 820,387 72,000 Flood Control: Alenaio Stream Flood Control 2299,642 2,299,642 2,220,867 78,773 Palai S[ream Interceptor 300.000 300.000 300.000 Maneolana Place Drainage 250,000 230,000 250,000 Kukuau-Kapiolani Drainage 230,000 250,000 723 249,277 Mauna Iho Drainage Improvements 155,000 135,000 133,000 Lalil Strea Drainage 160,000 160,000 38,908 121,092 Nonh Kona Drainage Improvements 100.000 ]00,000 ]00,000 East Hawaii Drywall Improvements 100,000 100,000 20,030 79,930 WealliaweiiDrywalllmprovements 100.000 IW,WO 100,000 - Total Flood Control 2,299.642 1,413,000 3.714,642 2,280,548 1,355.319 78,773 Total Public Safety 2,823,193 6.020,300 8,643,693 2.728,667 3,820.094 294,932 Highways and Streets: Old Volcano Road/Volcano Village 173,000 175,000 130,351 44,649 Puna Road Lnprovements -Federal Funds 851,677 851,677 623,943 227,734 FASC 132/ Lava Tree to Kapoho 216,341 216,341 143,712 70,829 Puns Highway Safety Improvements 27,400 20,000 47,400 38,230 9,000 150 Puna Emergency Access Road 55,000 55,000 37,454 17,346 PunaHighwaylCrafEc Division Projects 191,600 191,600 103,403 88,197 OIdVolcanoRoad 300,000 300,000 263,302 34,698 South Kopua Rwd 200.000 200,000 200,000 Puna Highway/Craffic Division Projects 105,583 ]03,385 103,385 South Kopua Road 100,000 100,000 100.000 OIdVolcanaRoad-Private 8,060 8,060 8,060 Kawailani Street-Kilauea Avenue Tic Signal 44,277 44,277 44,277 Kawailani Street Improvements -Federal funds 16,975 16,975 16,975 Iwalani Street Resurfacing -Federal funds 23,419 23,419 23,419 (Continued) -93- Capital Projects Fund Schedule of Appropriations, Expenditures and Encumbrances - Non-GAAPBudgetsry Basis For Lhe Fiscal YeAr Ended June 30 1996 (Continued) Authorisations 1993 Encumbrancer Lapsed Proiecl Title Forwarded Aoorooriations Total ]acendimres Encumhmnces J).Olaa£FE Highways and Streets, continued: Kawailani Street-Kilaues Avenue Traffic Signal -Fed 597,732 597,732 597,732 Mmono StreU-Kekuanaoa Street Signals (8,528 18,528 1,667 16,381 480 Kekuanaoa/Manono Traffic Signal 79,249 79,249 1,281 77,968 Akolea Road Improvemenm -Federal Funds 8,670 8,670 (73,912) 82,582 Hilo Road hmprovements -Fedeml Funds 1,098,438 1,098,438 60,186 1,038,252 Puueo Drainage 3,495 3,495 3,495 - Haihai/Ainaole Traffic Signal 150,000 (150,000) Kamana, Lei, Lanihuli Streets 141,250 141,250 141,250 Kinaole/Olona to Kilauea and Ponahawai to Mohouli 54,059 54,059 53,365 694 South Hilo Highway Safety 365,543 365,543 295,598 56,443 13,502 Haihei Street/Ainaole Tnffc Signal 35,000 (35,000) MohouliEztenaion-Federal Funds 3,586,900 3,586,900 3,586,900 MohouliExtension-County Funds 763,100 763,100 109,963 653,137 Hilo Road Improvements Phase 2 -Federal Funds 1,039,188 1,460,812 2,500,000 8,639 2,491,361 Hilo Road Improvemenu Phase 2 -Cowry Funds 220,812 220,812 22,800 198,012 Somh Hilo Highwey/I'mftic Division Projects 528,800 528,800 74,086 454,714 Hilo Roads Phue II 435,700 435,700 435,700 - Kinney Heights Subdivision 92,000 92,000 68,869 15,811 7,320 Olulani S[reet 110,000 110,000 107,308 2,692 Kaumana Drive Wall/Guardmil 65,000 65,000 65,000 HaaheoSchoolSidewalks 300,000 300,000 18,287 281,713 KomohanaBridgeRepair 150,000 150,0110 34,800 115,200 Mohouli Shoulder Repair 50,000 50,000 44,904 3,096 Komohana-Mohouli Traffic Signal -Federal Funds 550,000 550,000 ]0 549,990 Ainaola-Haihai Tic Signal -Fedeml Funds 250,000 250,000 100,436 149,564 South Hilo Highway/1'raffic Division Projecu 273,832 273,832 273,832 Lanikaula-Manono Tic Signal -County Funds 250,000 250,000 250,000 Lanikaula-Manono Traffic Signal -Federal Funds 365,000 365,000 565,000 Komohana Bridgc -Federal Funds 240.000 240.000 240,000 Kaahakini Bridge -Fedeml Funds 588,000 588,000 588,000 Reeds laland Bridge -Fedeml Funds 2,016,000 2,016,000 2,016,000 Hamakua Road Upgrade 500,000 500,000 500,000 North Hilo Highway/rmffic Division Projects 82,400 82,400 336 82,064 Hamakua Highway/traffic Division Projects 231,600 231,600 46,373 185,227 North Hilo Highway/r'mffic Division Projects 24,472 24,472 24,472 Hamakua Highway/1'mffic Division Projects 86,868 86,868 86,868 Kalopa/Mamalahoa Bridge -Fedeml Funds 840,000 840,000 840,000 Opea/Mamalahoe Bridge-Fedeml Funds 564,000 364,000 564,000 Waikaalulu/Mamalahoa Bridge -Fedeml Funds 840,000 840,000 840,000 Hamakua Wooden Bridges and Road Repaim 71,330 71,350 71,350 WaipioValleyRoad 251,794 251,794 9,975 241,819 Kalopa Bypass/Sand Gulch 12,879 12.879 12,879 Kukuihaele Bridge Repair 6,223 6,223 6,223 Mamalahoe/WaimeaTown 1,000.000 1,000,000 361,561 618,439 North Kohala Highway/I-mffic Division Projects 33,961 33,961 33,961 WaikoloaRoadSafetyhnprovements-Federal Funds 103,687 103,687 27,103 76,584 South Kohala Highway Safety 43,385 43,583 2,166 41,419 Waikolaa School Sidewalks 150,000 150,000 119,022 30,978 Nonh Kohala Highway/I'raftic Division Projects 114,400 114,400 113,768 632 (Continued) -94- Capital Projects Fund Schedule of Appropriations, Expenditures and Encumbrances - Non-GAAPBadgetary Basis Fot the Fisc 1 Y r Fnd d J the 30 1996 (Continued) AuNOrizationr 1993 P.ncumbmnces lapsed Forwarded Aoorootis[ians Total FxcendiRres Fn rmh nce )lgiap~g $pjem TiOe Highways and Streets, continued: South Kohala Highway/rnftic Division Projects 200,400 200,400 170,329 30,071 - Alii Drive Design and Archeological Smdy- Fedeml funds 2,087,674 2,087,674 478,837 1,608,817 Atli Highway, Private Funds 449,063 449,063 133,332 313,733 KonaRoad Improvements -Federal Funds 1,041,304 1,041,304 3,481 1,038,023 Kuakini/Palani Roed - Hualalai 230,000 230,000 174,344 33,436 South Kona Highway Safety 22,677 22,677 19,482 3,193 Kaloko/Mamalahoa Hwy -Private Funds 48,000 48,000 48,000 Napoopoo/Mamalehoa Hwy -Private Funds 161,230 161,230 161,230 KuakinilPelani Road - Hualalai 150,000 150,000 130,000 Mamalahoa/llolualoa-Keauhou 500,000 500,000 500,000 Alii Dsive Shoreline Protection 97,000 97,000 97,000 Kona Road Improvements -County Funds 16,140 16,140 16,140 KonaRoad Improvements -Federal 38,860 58,860 1,448 57,412 North Kona Highwey/1'reffic Division Projects 137,200 137,200 137,200 Mamelahoa~-Ioluloa - Keauhou 350,000 330,000 326,115 23,883 South Kona Highwaylrreffic Division Projects 244,400 244,400 14,899 229,301 Kuakini Highway Improvementa 200.000 200,000 200.000 Palani Rosd Sidewalks 150,000 150,000 150,000 South Kona Highway/1'~c Division Projecu 106,767 106,767 106,767 Ka'u Highway Safety Improvements 9,516 9,516 374 9,142 Ka'u Highway/Creffic Division Projects 50,000 50,000 50,000 Ka'u Highwey/1'~c Diviaion Projects 67,300 67,300 67,300 Islandwide Drywall Drainage 50,000 50,000 50,000 HandicapBarrierRemoval 95,085 95,085 93,450 1,635 Islandwide I)rywell Drainage 100,000 100,000 1,847 98,153 Circle Island Highway/1'raffic Division Projects 100,000 100,000 30,150 69,850 Bridge Inspection, Maintenance, Repair 740,000 740,000 101,274 638,726 Project Advance/Survey Per Diem 10,000 10,000 982 9,018 Seismic Bridge Retrofit -Federal 252,000 232,000 232,000 Bridge Inspection/Appraisal -Federal Funds 44.715 - 44,715 1,114 43.601 - Total Highways and Streets 13,956,305 17,010,109 30,966,414 4,407,658 25,469.187 L089,569 Sanitation and Waste Disposal: Solid Waste Disposal: Hilo Landfill Closure 443,424 445,424 137,463 38,563 269,398 Fast Hawaii MRF 15,000 15,000 9,773 5,227 Keaau Transfer Station 25,000 25,000 6,179 18,819 2 West Hawaii Lan~ll 4.000 4,000 4,000 West Hawaii Landfill 480 480 12 468 Kailas landfill Closure 1,517,679 1,317,679 1,318,882 115,503 83,294 Keauhou Ttaoafer Station 50,000 600.000 650,000 35.132 19.614 595.254 Total Solid Waste Disposal 2,017,583 640.000 2.657,583 1,511.441 197,726 948,416 Sewers: Hilo Ocean Oulfall-Federal funds 15,927 15,927 13,927 HiloWas[eweterSystem 35,990 35,990 2,358 33,632 (Continued) -95- Capital Projects Fund Schedule of Appropriations, Expendittues and Encumbrances - Non-GAAPBudgatary Basis For the Fiscal Year Ended June 30- 1996 (Continued) Authoriutions 1995 Encumbrances Lapsed Pmiect Title Forwarded AoorQpriations Total EypendiNres Fn mb n s ]laja,p~3 Sanitation and Waste Disposal, continued: Sewers, continued: Hilo Sewer Treatment Plant 4,875 4,875 4,875 Hila WeslewarerTrcatment Plant-Federal funds 180,983 180,983 180,983 Waiakea MiII Pond Sewer 1,220 1,220 1,220 Hilo Wastewater Trcahnent Plant II -EPA 26,794 26,794 26,794 Old Waiakea Mill Sewer-State 28,758 28,738 28,758 Kalanianaole Collector 30,856 30,856 29,313 1,543 KamehamehaAvenueSewerRehabilitation 236,450 236,450 18,185 218,265 Hilo STP Dartoliah~Rehab 700.000 700,000 700`000 Papaikou Collector Sewer 600,000 600,000 160,374 212,824 226,802 Banyan Drive SPS Rehab 250,000 250,000 250,000 Waiakea Mill Pond Sewer 90,000 90,000 90,000 AinakolntercepmrSewerA&8 675,892 675,892 230,300 127,044 318,548 Hilo WasrewaterTreatment Plant 38,933 38,933 19,746 I9,I87 PaukaaCollectorSewer 300,000 300,000 83,125 216,873 Kaumana Gardens Sewer 300,000 300,000 300,000 Houselou Collector Sewer 300,000 300,000 76,562 223,438 KalanianaoleWastewaterCollecfor Sewer-SRF 1,463,433 1,463,433 1,247,204 216,229 Papeikou Collector System 2,362,500 (787,500) 1,575,000 I,375,1K10 Kamehemeha Avenue Sewer 1,500,000 1,500,000 1,500,01x) Papaikou Calleaor System - FHI. 787,500 787,500 787,500 Honokaa Facilities Plan Loan Payback 105,000 105,000 105,000 Kealakehe Wastewater Treaunen[Plant 130,886 130,886 2,883 128,003 KealakeheWeatewarerTreatmentPlan[-Fedeml Funds 605,151 605,151 605,151 Kealakehe Effluent Disposal 98,052 98,052 1,913 96,139 Old Kona Airport Sewer 166,413 166,413 2,161 164,232 Old Kona Airport Sewer pumping Station and Force Main-Federel funds 930,004 930,004 930,004 Old Kona Airport Sewer pttmping Station & FM -Stet 267 267 267 Old Kona Airport Sewer Pumping Station & Farce Ma 74,160 74,160 74,160 Alii Drive/Waiaha Pump Station 312,259 312,259 195,036 117,223 Waiaha Bay SPS - SRF 3,697,893 3,697,893 1,594,969 1,874,855 228,069 Alii Drive Interceptor Sewer- A&B - SRF 458,432 458,452 3,942 113,772 340,738 Kealakehe Wastewater Treatment Plant Expansion 458,509 458,509 149,544 308,965 Alii DRive Inrenxptor Sewer - C&D - SRF 3,780,000 3,780,000 2,777,538 1,002,462 Kealakehe Sewage Effluent Disposal 500,000 500,000 101,315 398,685 Alii Drive Interceptor Sewer - E&F - SRF 2,300,000 2,300,000 36,593 2,263,407 Holualoa Bay SPS 3,500,000 3,500,000 3,300,000 Disappearing Sands SPS 2,000,000 2.000,000 2,000,000 SewerFacilityRehabilitation 85,000 85,000 83,1xx) Alii Drive Sewer Projects 774,238 - 774,238 381,886 392,352 Total Sewers 19,233,895 9.885,000 29,118,895 7,384.107 19,665,73b 2,069,032 Total Sanitation and Waste Disposal 21,251,478 10,525.000 31,776.478 8,895.548 19,863,482 3,017,448 Nlture and Recreation: Shipman Park Expansion and Improvements 4,836 4,836 3,627 1,209 Puna Swimming Pool 500,000 500,000 1,360 498,440 (Continued) -96- Capital Projects Fund Schedule of Appropriations, Expenditilres and Encumbrances - Non-GAAPBodgetary Basis For the Ficc>L Year Ended June 30 1996 (continues) Authoriutions 1993 Encumbrences Lapsed PmieM Title Forwarded Aoorooria[ions Total Fxoendimres Fn_r~mbn~cr. Balances Culture and Recreation, continued: Puna-Pahoe Swimming Pool 1,500,000 1,300,000 212,383 1,287,617 Puna Perks 210,000 210,000 210,000 Pahoa Swimming Pool 14,500 14,500 13,744 736 PahoaSwimming Pool 1,500,000 1,500,000 12,486 1,487,514 Puna Parka -County Bonds 139,000 159,000 (179,442) 338,442 Puna Parka 1,000 338,442 339,442 338,442 1,000 Hawaiian Beaches Park Tennis Courts 2.000 2,000 2,000 laesc Hale Beach Pads improvements 10,342 10,342 10,342 Papaikou Recreation Facility 3978 3,978 5.978 Panuwa Zoo Veterinary Facility 55,560 55,560 55,560 PalaceTheater 107 107 t07 Kulaimano Community Complex 46,145 46,145 46,145 OnekahakahaSewer/Park Improvements 398,141 398,141 290,816 54,994 52,33( Council DISIrICl4 Perk Improvements 39,000 39,000 9,873 29,125 Kawamoto Swim Sodium 160,000 160,000 30,800 129,200 Kawamoto Swim Stadium Roof 250,000 250,000 230,000 Council Diatria 2 Park Improvements 25,000 25,000 9,900 15,100 Hilo Municipal Golf Course 1,000,000 1,000,000 903.333 96,467 Hilo Municipal GoU Course 250,000 250,000 230.000 Panaewa Equestrian Center 200.000 200.000 200.000 Community Theater 400,000 400,000 400.000 WaiekeawaenaPlayground 40,000 40,000 40,000 Lsupahoehoe Boat Ramp 100,000 100,000 100,000 Distrito 1 Parka & Recreation Improvements 34,300 34,300 13,794 20,506 Honokaa Rodeo Arena Improvement 80,000 80,000 80,000 North/SouN Kobala Facility Improvements 9,207 83,997 93.204 9,428 23,656 60,120 Council Diatricl 9 Park Improvements 50,000 200,000 250,000 250,000 Kailue Playground Park 7,378 7,378 7,378 Kailua Multipurpose Athletic Fields 228,611 228,611 228,611 HillcrestParkRestroom 1,246 1,246 1,246 Kona Gym Showers/Lockers 250,000 250,OOD 250,000 Kailua Cence Club Restrooms, Halau Storage 5,448 3,448 5,414 34 Kvlua Tot-Lot Park 915 915 913 Puuanahulu Shoot Range 1,5110 1,500 1,500 Old Kona Airpon SoccerBaseball Fields 200.000 200,000 200,000 Hookena Pask Water Tank 10,000 10,000 10,000 Old Kona Airport Swimming Pool 32,300 32,500 32,500 North Kona PooUOld Airport Park 1.197 1,197 1.197 Mauka Kona Recreational Facilities 38,000 38,000 6.380 31,620 Honaunau Rodeo Arena Improvements 4,366 4,366 4,366 - District 7 Miscellaneous Pads Facilities 6,822 6,822 726 6,096 Diatria 8 Miscellaneous Pask Facilities 10,490 10,490 7,050 3,440 Kailua Playground Park 17,742 17,742 17,742 Disappearing Sands/Pahoehce/Kahaluu Parks - Prrvatt 280,536 280.336 280,336 Kona Swuuming Pool 1.000.000 1.000.000 1.000.000 KailuaPerkEquipment-Private 50,000 50,000 50,000 Kona Swimming Pool 2.000.000 2.000.000 2.000.000 District 8 Park Mprovements 50,907 30.907 49,615 1,292 KonaSwimming Pool 500,000 500,000 300.000 (Continued) _g~_ Capital Projects Fund Schedule of Appropriations, Expenditures and Encumbrances - Non-GAAPBudgatary Basis For the Fiscal Year* Ended June 30- 1996 (Concluded) Authorizadona 1993 Encumbrances Lapsed Project Title Forwarded BQyL9priations TyJgj ~tvndi + < Encumbrances $9iEatC4 Culture and Recreation, continued: HOVE Ballpadt 123 123 125 Pahale Park/Community Center Improvements 4,351 4,331 4,106 245 HOVE Park Pavilion/Coilets 7,144 7,144 7,144 KahukuPadr/tIOVE 41,676 41,676 31,876 9,800 Naalehu Rodeo Bleachers 27,204 27,204 27,178 26 Handicap Barrier Removal 40,214 40,214 13,100 27,114 Total Culture and Recreation 2.318,081 10,167,846 12,485,927 2,489,636 9339,977 656,314 Miscellaneous: Puna Geothermal Research Facility Improvements 163,827 163,827 163,827 County Offices - Acquisilion/Renovation 6,750,000 6,730,000 24,077 6,725,923 Countywide ADA Compliance 300,000 500.000 500,000 East/WestHawaiiOffceRenovation 4,000,000 4,000,000 136,793 3,863,207 Kona Services Center 4,628,400 (4,628,400) - Real Property Extension 8.303 - 8.303 8,303 Total Miscellaneous 4,800.330 6,621,600 11,422,130 160,870 11,097,433 163,827 Toul CapitalProjects Fund $45,149,587 $50,345,055 $95.494,642 $18,682,379 $71,590,173 $5,222,090 PROPRIETARY FUNDS ENTERPRISE FUNDS KULAIMANO ELDERLY HOUSING PROJECT -Used to account for the operation of a housing project for low income elderly persons located north of F~ Hilo. Revenues are from rents collected and federal rent subsidies. _ OULI EKAHI AFFORDABLE HOUSING PROJECT -Used to account for the operation of a 33-unit single-family affordable housing project located in Waimea. Revenues are from rents collected. COUNTY OF HAWAII Enterprise Funds Combining Balance Sheet at June 30, 1996 ryyit_h comoa~tive tota~c for June 30 1995) Kulaimano Ouli Ekahi Totals Elderly Affordable Housing Froiect Hoesine I'roiect 12Q{~ j22~ ASSCJS Current assets: Cash and cash equivalents $305,492 $ 6,470 $311,962 $ 276,362 Investments 500,000 500,000 500,000 Imprest fund 50 50 100 50 Accounts receivable 5,810 5,247 11,057 7,369 Interest receivable 1,365 234 1,599 Otherreceivable 945 945 Prepaidexpenses 2,475 2,475 2,455 Total cturent assets 815,192 12,946 828,138 786,236 Restricted assets (cash and cash equivalents): Tenant security deposits 8,367 16,953 25,320 7,866 Debt service reserve 157,227 157,227 152,695 Operating reserve 37,900 37,900 Total restricted assets (cash and cash equiv.) 165,594 54,853 220,447 160,561 Fixed assets: Land 250,000 503,877 753,877 250,000 Buildings 1,136,008 1,136,008 1,136,008 Accumulated depreciation -buildings (412,440) (412,440) (387,825) Furnishings and equipment 85,516 85,516 81,079 Accumulated depreciation -furnishings and equipmen (56,480) (56,480) (48,561) Grounds and site improvements 261,000 261,000 261,000 Accumulated depreciation -grounds and site 0 improvements (121,242) (121,242) (113,665) Fixed assets (net of accumulated depreciation) 1,142,362 503,877 1,646,239 1,178,036 Total assets $2,123,148 $571,676 $2,694,824 $2,124,833 (Continued) -99- COUNTY OF HAWAII Enterprise Funds Combining Balance Sheet at June 30, 1996 (Wit_h comp~rar;., to a c for J me 0. 1995) (Concluded) Kulalmano Ouli Ekahi Totals Elderly Affordable 1-ro~sine Proiect uoy~nE Proie~ dQQ¢ 122 Liabilities and ennity Current liabilities: Warrants payable $ 11,860 $ 604 $ 12,464 $ 12,949 Accounts payable 1,904 1,904 2,569 Unearned rental income 432 70 502 408 Due to developer 7,770 7,770 Notes payable -current 11,509 11,509 10,659 Total current liabilities 25,705 8,444 34,149 26,585 Curren[ liabilities payable from restricted assets: Tenant security deposits payable 8,367 17,061 25,428 7,866 Total current liabilities payable from restricted assets 8,367 17,061 25,428 7,866 Noncurrent liabilities: Notes payable 1,170,878 1,170,878 1,183,489 Total noncurrent liabilities 1,170,878 1,170,878 1,183,489 Totalliabili[ies 1,204,950 25,505 1,230,455 1,217,940 Equity: Contributed capital: Developers 250,500 537,877 788,377 250,500 Intergovernmental 160,796 160,796 160,796 Total contributed capital 411,296 537,877 949,173 411,296 Retained earnings: Reserved for deb[ service 157,227 157,227 152,695 Unreserved 349,675 8,294 357,969 342,902 Total retained earnings 506,902 8,294 515,196 495,597 Total equity 918,198 546,171 1,464,369 906,893 Total liabilities and equity $2,123,148 $571,676 $2,694,824 $2,124,833 -100- COUNTY OF HAWAII Enterprise Funds Combining Statement of Revenues, Expenses and Changes in Retained Earnings For the fiscal year ended June 30, 1996 (With comoarative toLc far the fiscat ves ended June 30 19951 Kulaimano Ouli Elcahi Totals Elderly Affordable Housingl'roiect Housing]?roiec[ ~2Q¢ 122E Operating revenues: Rental receipts from tenants $ 81,613 $51,369 $132,982 $ 77,587 Rental subsidy from federal government -HUD 158,719 158,719 178,282 Laundry receipts 3,017 3,017 1,880 Miscellaneous 41 3,495 3,536 Total operating revenues 243,390 54,864 298,254 257,749 Operating expenses: Utilities 11,819 2,594 14,413 11,567 Maintenance and repairs 50,183 50 50,233 19,019 General and administration 78,714 25,174 103,888 63,552 Lease expense 19,056 19,056 Depreciation 44,059 44,059 44,286 Total operating expenses 184,775 46,874 231,649 138,424 Operating income 58,615 7,990 66,605 119,325 Nonoperating revenues (expenses): Interest income 35,247 304 35,551 27,874 Interest expense on long-term debt (82,151) (82,151) (83,968) Loss on disposal of assets (406) (406) (425) Total nonoperating revenues (expenses) (47,310) 304 (47,006) (56,519) Net income 11,305 8,294 19,599 62,806 Retained earnings, beginning of year 495,597 495,597 432,791 Retained earnings, end of yeaz $506,902 $8,294 $515,196 $495,597 - 101 - COUNTY OF HAWAII Enterprise Funds Combining Statement of Cash Flows For the Fiscal Yeaz Ended June 30, 1996 (With comna*ative [otatc for the fiscal vea_r ended Tune 30. 1995) Kulaimano Ouli Elcahi Totals Elderly Affordable Housing Proiect Housing Proiect 124St 1224 Cash flows from operating activities: Cash received from tenants $ 86,755 $65,803 $152,558 $ 78,908 Cash received from federal government -HUD 158,719 158,719 178,282 Cash payments to suppliers for goods and services (142,490) (38,500) (180,990) (94,458) Net cash provided by operating activities 102,984 27,303 130,287 162,732 Cash flows from capital and related financing activities: Principal paid on long-term deb[ (11,761) (11,761) (9,945) Interest paid on long-term debt (82,151) (82,151) (83,968) Acquisition and construction of capital assets (8,790) (8,790) (10,598) Capital contributions - 34,000 34,000 - Net cash used for capital and related financing activities (102,702) 34,000 (68,702) (104,511) Cash flows from investing activities: Purchase of investments (1,500,000) (1,500,000) (1,000,000) Proceeds from sale and maturities of investments 1,500,000 1,500,000 500,000 Interest on investments 33,881 70 33,951 28,960 Net cash provided by (used in) investing activities 33,881 70 33,951 (471,040) Net increase (decrease) in cash and cash equivalents 34,163 61,373 95,536 (412,819) Cash and cash equivalents at beginning of yeaz 436,973 - 436,973 849,792 Cash and cash equivalents a[ end of yeaz $471,136 $61,373 $532,509 $436,973 Reconciliation of operating income to net cash provided by operating activities: Operating income (loss) $ 58,615 $ 7,990 $ 66,605 $119,325 Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation 44,059 44,059 44,286 Decrease (increase) in accounts receivable 1,559 (5,247) (3,688) (857) Increase in prepaid expenses (20) (20) (998) Increase in o[herreceivables (945) (945) Increase in tenant security deposits 501 17,061 17,562 304 Increase in unearned rent ?A 70 94 (6) Increase (decrease)in warrants payable (1,089) 604 (485) 1,280 Decrease in accounts payable (665) (665) (502) Increase (decrease) in other liabilities 7,770 7,770 (100) Total adjustments 44,369 19,313 63,682 43,407 Net cash provided by operating activities $102,984 $27,303 $130,287 $162,732 - 102 - -g,+~i'F..~+f., }k?,nt r:.• ~p~ppg*;a.yp wa,.i ; rc*r~,__M^ a. .'wr+s^-^ TRUST AND AGENCY FUNDS r EXPENDABLE TRUST FUNDS r PARK DEDICATION FUND -Used to account for moneys deposited with the County by subdivider to provide land for parks and playgrounds in subdivisions. HAWAII COUNTY HOUSING AGENCY -Used to account for Federal and County moneys used m provide public housing assistance within the County. GEOTHERMAL ASSET FUND -Used to account for funds received from geothermal developers to mitigabe the effects of geothermal energy development. AGENCY FUNDS STATE WEIGHT TAX FUND -Used to account for the collation and payment to the State of rrwtor vehide weight taxes collected by the County on behalf of the State. IMPROVEMENT DISTRICT NOS. 16 AND 17 -Used to account far the collection of aaseserr~ib and related Interest from property owr~'s in improvement districts for finandng the payments of spedal assessment bond interest and principal. Proceeds from such bonds are used to finance the construction of improvements and are accounted for in the capital projects funds. IMPROVEMENT DISTRICT REVOLVING FUND -Used to accumulate any surplus balance of an improvement district after final payment ~ all bonds. Such moneys aze available to makeup F defidendes to other improvement disMcts. IMPROVEMENT DISTRICT BOND AND INTEREST REDEMPTION FUND -Used to account _ for debt service on special assessment bonds. PERFORMANCE AND REFUNDABLE DEPOSITS FUND -Used to account for miscellaneous deposits left with the County. PAYROLL CLEARANCE FUND -Used to account for the payment of County payroll with crwr~eya transferred from the respective departments. DEFERRED COMPENSATIONFUND -Used to account for assets and liabilities of the County's deferred compensation plan. This page intentionally left blank. -103- COUNTY OF HAWAII Trust and Agency Funds Combining Balance Sheet, June 30, 1996 (With comparative to als for June 30 19951 Expendable Trust Funds Hawaii County State Improvement Improvement Pazk Housing Geothermal Weight District District Dedication tlyencv Asset Tax No. 16 No. 17 Assets Cash and investments: Cash and cash equivalents $ $4,238,599 $ $437,858 $1,402,552 $2,460,618 Investments 114,049 746,184 Imprestfund 100 Total cash and investments 114,049 4,238,699 746,184 437,858 1,402,552 2,460,618 Receivables: Due from federal government 31,015 Due from other funds Other 81,065 Total receivables 112,080 Restricted assets -cash & cash equiv. 1,400,000 Property and rights held under deferred compensation plan Total assets $114,049 $4,350,779 $746,184 $437,858 $1,402,552 $3,860,618 i.ia ilities and FAUity Liabilities: Warrants payable $ $ 234,046 $ $ $ $ Accounts payable 11,126 Due to other funds 38,117 Loan payable 227,045 Other liabilities 9,568 $437,858 140 Advances and deposits Assets held for [he benefit of improvement districts 1,402,412 3,860,618 Deferred compensation benefits payable Totalliabili[ies 519,902 437,858 1,402,552 3,860,618 Fund balances: Reserved for encumbrances 2,247,891 Unreserved: Designated for affordable housing 267,889 Undesignated 114,049 1,315,097 746,184 Total equity 114,049 3,830,877 746,184 Total liabilities and equity $114,049 $4,350,779 $746,184 $437,858 $1,402,552 $3,860,618 - 104 - A enc Funds mprovement District Performance Improvement Bond and and Totals District Interest Refundable Payroll Deferred Revolvin¢ R. edemntion Deposits l ran Comcensation 1942 $ $37,409 $40,056 $ $ $8,617,092 $11,350,102 236,504 1,096,737 990,477 _ - 100 100 236,504 37,409 40,056 9,713,929 12,340,679 31,015 149,056 3,340,083 3,340,083 2,981,424 81,065 79,736 3,340,083 3,452,163 3,210,216 1,400,000 1,976,150 22,354,503 22,354,503 19,560,240 $236,504 $37,409 $40,056 $3,340,083 $22,354,503 $36,920,595 $37,087,285 $ $ $ 3,918 $1,859,865 $ $ 2,097,829 $ 3,028,098 11,126 151,779 310 1,047,984 1,086,411 497,416 227,045 37,409 432,234 917,209 175,596 35,828 35,828 210,090 236,504 5,499,534 9,015,761 - 22,354,503 22,354,503 19,560,240 236,504 37,409 40,056 3,340,083 22,354,503 32,229,485 32,638,980 2,247,891 2,206,474 267,889 235,062 _ 2,175,330 2,006,769 4,691,110 4,448,305 $236,504 $37,409 $40,056 $3,340,083 $22,354,503 $36,920,595 $37,087,285 -105- COUNTY OF HAWAII Expendable Trust Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances For the Fiscal Yeaz Faded June 30, 1996 j}yj[h comparative tof?tc for Lhe fiscal yPa* ended June 30 19951 Hawaii County Totals Park Housing Geothermal Dedication Aeencv i°~.SSgl 122E 122 Revenues: Intergovernmental $ $9,195,991 $ $9,195,991 $7,879,137 Interest 6,193 129,068 38,438 173,699 178,240 Miscellaneous: Donations 20,304 50,000 70,304 81,360 Other 1,184 1,184 1,352 Total revenues 6,193 9,346,547 88,438 9,441,178 8,140,089 Expenditures: Current: Health, education and welfare 9,313,875 9,313,875 8,451,583 Capital outlay 2.043 2.043 Debt service: Interest chazges 482 482 Principal retirement 3,558 3,558 Total expenditures 2,043 9,317,915 9,319,958 8,451,583 Excess (deficiency) of revenues over expenditures 4,150 28,632 88,438 121,220 (311,494) Other financing sources (uses): Operating transfers in -General Fund 121,585 121,585 190,933 Operating transfers out -General Fund (12,975) Total other financing sources (uses) 121,585 121,585 177,958 Excess (deficiency) of revenues and other financing sources over expenditures 4,150 150,217 88,438 242,805 (133,536) Fund balances, beginning of year 109,899 3,680,660 657,746 4,448,305 4,581,841 Fund balances, end of year $114,049 $3,830,877 $746,184 $4,691,110 $4,448,305 - 106 - COUNTY OF HAWAII Hawaii County Housing Agency Schedule of Revenues, Expenditures and Changes in Fund Balance - Non-GAAPBndgetary Basis Fnr the FicCa1 Year pndea Lune 30. 1996 Variance Favorable Budeet Actual (Unfavorable) Revenues: Intergovernmental: Federal grants: Housing preservation grant $ 100,000 $ 100,000 $ HUD -Housing assistance 6,023,300 6,060,047 36,747 HUD -Voucher program 2,785,750 1,994,986 (790,764) Total intergovernmental 8,909,050 8,155,033 (754,017) Interest earned 11,090 129,068 117,978 Private contributions 20,304 20,304 Other 1,184 1,184 Total revenues 8,920,140 8,305,589 (614,551) Expenditures: Health, education & welfare 9,557,950 8,321,095 1,236,855 Total expendittres 9,SS7,950 8,321,095 1,236,855 Excess (deficiency) of revenues over expenditures (637,810) (15,506) 622,304 Operating transfer in -General Fund 121,585 121,585 - Excess (deficiency) of revenues and operating transfers overexpendi[ures (516,225) 106,079 622,304 Fund balance, beginning of yeaz 3,680,660 3,680,660 Fund balance, end of yeaz -budgetary basis $3,164,435 3,786,739 $622,304 Adjustments to conform with generally accepted principals: Encumbrances, beginning of yeaz (2,203,753) Encumbrances, end of yeaz 2,247,891 Fund balance, end of year - GAAP basis $3,830,877 - 107 - COUNTY OF HAWAII Agency Funds Combining Statement of Changes in Assets and Liabilities For the Fic ~1 Ye~• 1?nde~ June 30 1996 Balance Balance July 1, June 30, ~9~ 'i n Deductions 122¢ State Weight Tax Fund A c c Cash and cash equivalents $ 461,484 $ 5,376,177 $5,399,803 $ 437,858 Liabilities Warrants payable $ 461,484 $ 4,938,319 $5,399,803 $ Other liabilities -due to State of Hawaii - 5.376,177 4,938,319 437,858 Total liabilities $ 461,484 $10,314,496 $10,338,122 $ 437,858 Improvement District No. 16 eccP~c Cash and cash equivalents $4,547,888 $1,054,674 $4,200,010 $1,402,552 Restricted assets -cash and cash equiv. 576,150 - 576,150 - Total assets $5,124,038 $1,054,674 $4,776,160 $1,402,552 Liabilities Warrants payable $ $4,200,010 $4,200,010 $ Other liabilities 200 100 160 140 Assets held for the benefit of improvement districts 5,123,838 478,424 4,199,850 1,402,412 Total liabilities $5,124,038 $4,678,534 $8,400,020 $1,402,552 Improvement District No. 17 Assets Cash and cash equivalents $2,268,091 $1,794,855 $1,602,328 $2,460,618 Restricted assets -cash and cash equiv. 1,400,000 1,400,000 Total assets $3,668,091 $1,794,855 $1,602,328 $3,860,618 iabiliti c Assets held for the benefit of improvement districts $3,668,091 $1,794,855 1,602,328 $3,860,618 (Continued) -108- COUNTY OF HAWAII Agency Funds Combining Statement of Changes in Assets and Liabilities For the Fiscal Ye~~ Fnde~ June 30. 1996 Balance Balance July 1, June 30, c~c Additions Deductions Improvement District Revolving Fund Assets Cash and cash equivalents $ $ 12,672 $ 12,672 $ Investments 223,832 236,504 223,832 236,504 Total assets $ 223,832 $ 249,176 $ 236,504 $ 236,504 Liabilities Assets held for the benefit of improvement districts $ 223,832 $ 12,672 $ $ 236,504 Improvement District Bond and Interest Redemption Fund Assets Cash and cash equivalents $175,396 $5,800,275 $5,938,262 $37,409 Liabilities Other liabilities -debt service on special assessment bonds $175,396 $5,800,275 $5,938,262 $37,409 Performance and Refundable Deposits Fund A Cash and cash equivalents $ 211,272 $150,744 $321,960 $ 40,056 Liabilities Warrants payable $ 1,082 $324,796 $321,960 $ 3,918 Due to other funds 100 310 100 310 Advances and deposits 210,090 150,745 325,007 35,828 Total liabilities $ 211,272 $475,851 $647,067 $ 40,056 (Continued) -109- COUNTY OF HAWAII Agency Funds Combining Statement of Changes in Assets and Liabilities Far [he Fiscal Year Ended June 30 1996 Balance Balance July 1, June 30, ~9~ Additions Deductions .1225 Payroll Clearance Fund Acre e Cash and cash equivalents $ $ 66,181,264 $ 66,181,264 $ Due from other funds 2,981,424 66,529,237 66,170,578 3,340,083 Total assets $2,981,424 $132,710,501 $132,351,842 $3,340,083 i "i Warrants payable $2,519,586 $66,108,281 $66,768,002 $1,859,865 Due to other funds 461,838 1,047,984 461,838 1,047,984 Other liabilities 1,558,083 1,125,849 432,234 Total liabilities $2,981,424 $68,714,348 $68,355,689 $3,340,083 Deferred Compensation Fund Assets Property and rights held under deferred compensation plan $19,560,240 $12,006,366 $9,212,103 $22,354,503 Liabilities Deferred compensation benefits payable $19,560,240 $12,006,366 $9,212,103 $22,354,503 (Continued) - 110 - COUNTY OF HAWAII Agency Funds Combining Statement of Changes in Assets and Liabilities For the Fi al Y ~ Fnd d J me 30. 1996 Balance Balance July 1, June 30, Additions Deductions ~QQ¢ Total -All Agency Funds ASSgts Cash and cash equivalents $ 7,664,131 $ 80,370,661 $ 83,656,299 $ 4,378,493 Investments 223,832 236,504 223,832 236,504 Due from other funds 2,981,424 66,529,237 66,170,578 3,340,083 Restricted assets -cash 1,976,150 576,150 1,400,000 Property and rights held under deferred compensation plan 19,560,240 12,006,366 9,212,103 22,354,503 Total assets $32,405,777 $159,142,768 $159,838,962 $31,709,583 i ili i Warrants payable $ 2,982,152 $ 75,571,406 $ 76,689,775 $ 1,863,783 Due to other funds 461,938 1,048,294 461,938 1,048,294 Other 175,596 12,734,635 12,002,590 907,641 Advances and deposits 210,090 150,745 325,007 35,828 Assets held for [he benefit of improvement Districts 9,015,761 2,285,951 5,802,178 5,499,534 Deferred compensation benefits payable 19,560,240 12,006,366 9,212,103 22,354,503 Total liabilities $32,405,777 $103,797,397 $104,493,591 $31,709,583 -I11- This page intentionally left blank. - 112 - GENERAL LONG-TERM DEBT ACCOUNT GROUP This account group accounts for the long-term debt of the Primary Government except that related to the Enterprise Fund. COUNTY OF HAWAII General Long-Term Debt Account Group Schedule of General Long-Term Deb[, June 30, 1996 With o nararive Amauntc for June 30 1995 124 .124 Amount Available and to be Provided For Lhe Payment of C~nera! Long-Term Debt Amount available in Debt Service Funds $ 18,351,883 $ 17,391,922 Amounts to be provided for general long-term debt: General obligation bonds 108,610,387 83,291,887 Stale Revolving Fund loans 21,376,897 17,660,112 Accrued compensated absences 13,917,849 13,587,698 Estimated claims and judgments 5,220,750 5,005,346 Capital lease obligations 377,248 1,1179,945 Landfill closure and postclosure care costs 13,465,000 14,260,000 Total amounts to be provided for general long-term debt 162,968,131 134,914,988 Total $181,320,014 $152,306,910 C'.P~Pral t one-Term Debt Payable General obligation bonds payable: 1977 Series A, public improvement bonds $ 338,000 $ 352,000 1978 Series, refunding bonds 23,215,000 24,650,000 1989 Series, refunding bonds 3,155,000 3,607,500 1993 Series, refunding and public improvement bonds 68,600,000 71,170,000 1996 Series A, public improvement bonds 30,000,000 1996 Series B, public improvement bonds 15,000 Total general obligation bonds payable 125,323,000 99,779,500 Other general long-term debt: State Revolving Fund loans 23,016,167 18,564,421 Accrued compensated absences 13,917,849 13,587,698 Estimated claims and judgments 5,220,750 5,005,346 Capital lease obligations 377,248 1,109,945 Landfill closure and postclosure care costs 13,465,000 14,260,000 Total other general long-term debt 55,997,014 52,527,410 Total $181,320,014 $152,306,910 - 113 - COUNTY OF HAWAII General Long-Term Debt Account Group Schedule of Debt Service Requirements to Maturity for General Obligation Bonds June 30.1996 Total Bonds Bonds Fiscal Outstanding year at Ended Beginning Total June 30 of Year Principal Interest $gquirements 1997 125,323,000 4,671,500 6,803,756 11,475,256 1998 120,651,500 4,867,500 6,567,966 11,435,466 1999 115,784,000 6,156,000 6,314,129 12,470,129 2000 109,628,000 6,462,000 5,982,499 12,444,499 2001 103,166,000 6,782,000 5,627,090 12,409,090 2002 96,384,000 7,133,000 5,248,796 12,381,796 2003 89,251,000 7,489,000 4,858,283 12,347,283 2004 81,762,000 7,415,000 4,461,374 11,876,374 2005 74,347,000 7,821,000 4,056,200 11,877,200 2006 66,526,000 8,272,000 3,624,635 11,896,635 2007 58,254,000 8,713,000 3,160,871 11,873,871 2008 49,541,000 6,200,000 2,668,227 8,868,227 2009 43,341,000 6,541,000 2,338,868 8,879,868 2010 36,800,000 6,882,000 1,987,197 8,869,197 2011 29,918,000 7,258,000 1,615,350 8,873,350 2012 22,660,000 7,655,000 1,220,470 8,875,470 2013 15,005,000 8,040,000 801,945 8,841,945 2014 6,965,000 2,205,000 362,180 2,567,180 2015 4,760,000 2,320,000 247,520 2,567,520 2016 2,440,000 2,440,000 126,880 2,566,880 $125,323,000 $68,074,236 $193,397,236 -114- " GENERAL FIXED ASSETS ACCOUNT GROUP This account group accounts for all fixed assets of the Primary Government other than those recorded in the Enterprise Fund. COUNTY OF HAWAII General Fixed Assets Account Group Schedule of General Fixed Assets by Source, June 30, 1996 With Comparative AmoenL for June 30 1995 12252 122 General fixed assets: Land $ 15,261,485 $ 13,145,260 Buildings and structures 108,648,222 107,630,343 Machinery and equipment 40,532,998 38,420,059 Construction in progress 99,485,747 90,728,682 Total $263,928,452 $249,924,344 Investment in general fixed assets by source: Capital Projects Funds: General obligation bonds $ 58,300,284 $ 52,376,298 Federal grants 73,313,720 66,061,265 Slate grants 31,962,798 28,621,815 General Fund revenues 25,919,876 24,411,039 General Fund -Federal revenue 4,460,474 4,429,826 General Fund -State revenue 968,060 747,122 Special Revenue Funds revenues 5,675,235 5,342,342 Contributions 1,730,656 6,228,319 Assets acquired prior to 1979 (sources undetermined) 61,597,349 61,706,318 Total $263,928,452 $249,924,344 - 115 - COUNTY OF HAWAII General Fixed Assets Account Group Schedule of Changes in General Fixed Assets by Function For the Ficcal Year Ended June 30. 1996 Balance Balance June 30, June 30, ~ Additions Deductions ]228 General government $ 13,128,832 $ 1,403,069 $ 287,687 $ 14,244,214 Public safety 33,409,354 1,259,154 251,405 34,417,103 Highways and streets 7,628,741 1,054,228 170,981 8,511,988 Sanitation 35,748,069 1,725,815 323,393 37,150,491 Water 4,562,086 4,562,086 Health, education and welfare 5,262,110 497,617 238,556 5,521,171 Culture and recreation 50,631,428 5,300,015 182,889 55,748,554 Educational facilities 8,590,797 2,108 8,588,689 Housing and community development 234,245 28,084 1,834 260,495 Construction in progress 90,728,682 8,757,065 99,485,747 Total $249,924,344 $20,025,047 $6,020,939 $263,928,452 - 116 - COUNTY OF HAWAII General Fixed Assets Account Group Schedule of General Fixed Assets by Function and Activity June 30. 1996 Buildings Machinery and and j,8pd ~ ~uiyment Total General govemment: General govemment buildings $ 448,075 $ 5,684,877 $ $ 6,132,952 Mayor soffice 3,459,666 3,459,666 County clerk 207,835 207,835 Finance 1,346,997 1,346,997 Corporation Counsel 116,601 116,601 Prosecuting attorney 768,755 768,755 Planning 225,279 225,279 Personnel services 80,503 80,503 Research and development 47,623 47,623 Public works 1,858,003 1,858,003 Total general government 448,075 5,684,877 8,111,262 14,244,214 Public safety: Public safety buildings 1,711,375 15,739,170 17,450,545 Police 6,498,491 6,498,491 Fire 9,690,896 9,690,896 Liquor 130,048 130,048 Civil defense - 647,123 647,123 Total public safety 1,711,375 15,739,170 16,966,558 34,417,103 Highways and streets 1,821,218 1,944,578 4,746,192 8,511,988 Sanitation 449,169 30,387,036 6,314,286 37,150,491 Health, education and welfare 1,019,340 4,412,155 89,676 5,521,171 Culture and recreation 9,784,879 41,919,146 4,044,529 55,748,554 Educational facilities 27,429 8,561,260 8,588,689 Housing and community development 260,495 260,495 Total general fined assets allocated to functions and activities $15,261,485 $108,648,222 $40,532,998 164,442,705 Construction in progress 99,485,747 Total general fixed assets $263,928,452 - 117 - This page intentionally left blank. - 118 - STATISTICAL SECTION (UNAUDTTED) ~ N o`"o n h o ~ ~ ~ ~j M v1 N 7 O Ow ~ fNy, 7 O. Vi c+i O+ O ppp~~~ l~ ~ ~ O~ M V' O N~ 7 M O~ l~ O G ~ ~ oD oo O~ O~ O ~ NN.. e~ ono, m~ o v ~ oo a; o v~ e~ e M O 7 V1 O M M Vl .n-i n O~ ^p, N I~ R~ T O V ~ Ono n C. N d9 N M 7 U W ra o .dp ~~p ~ r ~ a ~ o o c~Nn. L a to ~ M N ~L ~O O .M. 'O ~ A. p; C o ° N~ a v~ n oo n v-, W ~ ~ ~ .o e v~ a e vNiw g~ v o ~ W u: ~ U~ e~ n o0 0~ o o F d .7 C o E ~no~~~N~a w m o rn r vi cnv v ~ v O G fJ M M 7 V1 ~O ~O O~ O~ O L Vi O N ~ 3 ~ c a°o- onow M rn~ N d f i ~ ~ ~n ~n v~ ~o vi ~ ~n oo ~o A ~ ~ ~ d x ~~~yyy ~0 0 0o n oo ~ oo ~n oo O O vN'1w ~ W b R~ h~ > N a ~ N N M c~'1 7? 7~~ N Q~ l~ N pN~ h 00 V1 W ~ O n n W O N b ~ b C~ O O b h oO o0 .r y 69 p N 4~ p p~ ~ c~ ~ 00 00 W ~ O~ O~ O\ O~ O~ T 7 O~ U ~ O~ ^ ~ O~ O~ T w - 119 - Table 2 COUNTY OF HAWAII General Governmental Revenues by Source* Las[ Ten Fiscal Yeazs (Values in Thousands) Licenses Chazges Interest Fiscal Taxes and and Inter- for and ]'gar A c e men c Permits Governmental Services n i Other Total 1987 $46,027 $3,730 $13,948 $2,411 $3,198 $2,743 $72,057 1988 47,101 3,897 13,592 2,455 3,119 2,857 73,021 1989 51,677 4,364 14,977 2,642 3,361 2,171 79,192 1990 58,653 4,928 24,559 3,281 3,742 1,902 97,065 1991 66,632 5,496 22,451 3,290 6,223 1,543 105,635 1992 75,774 5,331 27,188 3,576 4,150 2,613 118,632 1993 86,964 4,941 26,617 4,555 3,039 3,995 130,111 1994 97,893 5,107 28,581 4,983 3,068 1,676 141,308 1995 100,028 5,788 31,684 5,439 4,205 1,588 148,732 1996 101,755 5,836 33,656 8,032 4,692 2,500 156,471 * Includes General, Special Revenue and Deb[ Service Funds. - 120 - Table 2a COUNTY OF HAWAII General Governmental Tax Revenues by Source* Last Ten Fiscal Years (Values in Thousands) Real Fiscal Property Fuel Franchise Y~€aI ~ ~ Tax Total 1987 $42,035 $2,372 $1,620 $46,027 1988 42,803 2,647 1,651 47,101 1989 45,394 4,562 1,721 51,677 1990 51,652 5,101 1,900 58,653 1991 59,132 5,269 2,231 66,632 1992 67,922 5,321 2,531 75,774 1993 79,000 5,349 2,615 86,964 1994 89,538 5,504 2,851 97,893 1995 91,200 5,613 3,215 100,028 1996 92,512 5,820 3,423 101,755 " Includes General, Special Revenue and Deb[ Service Funds. - 121 - 09 W C C O d 5 °p. ~ y 8E SQ SE b~° flQ 6~ 6~° BS S° 8E V G n r W ~p V V1 O .~i .~-i H p'AE-.a p" ~ ~ N N °r4 ~ o ~ C y ry O Or a 7 0 T h M ~ y~ O ~ l~ ~O vi l~ tai N N t~ C '1°~i O l~ M ai~0 VO~I ~ VNl' O V 0~0w = y ~ N M N N M 00 OA u.. y O ~ bQ ~ S° b~° S° B° BQ 6~° S° F~ V ~ o o~~ g a a rn o M U a. m rn a ~ o ~o vi ~n a C ~ rn o rn~ v o Q U ~ v v h~~~ oho rn a Q' C r M r O n N ~ x ~ t~ N O N O~ b~~~ O h w ~1 ,x ~ Oi 0a}0 00 N 0~y0• O~ ~D O Y C~ N~ eT n~/1 O O~-~ W a ~ q F~ MfA N N N N N N V ~D V x ] F a O ~ j a~~i ~ BE s° S° b'~ s° s° s° sQ s° ~ a o a rn rn a a c rn oOOO o. rn P• N O 7 ~Op~ ~ ~~~D}} O_0 M M V~ b M P~ V O l~ 000 Q\ ~ ~ M V1 M P M 00 O. O v1 M Vl y N ~O l~ n M 00 00 ~„y 00 M ar O;, ~ 00 O\ M O ~O V W O N 00 ~D V1 ~O ~ h r MfA V VV 'cf ~/1 ~D 00 W o0 .--i h ~O 00 ~ ~ M 0p0~ ~ h ~O ~O M M M M O y o o b W ^Ni' vi ~G O. vi ~ F v~j, n a v c^ Oin M 0~0 0~0 W pO~ O~ pN~ a a ~ G~i Q\ D\ P ~ 0` O~ a\ ~ 'w - 122 - Table 4 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 ~ Value Actual Value Actual Value 1987 $ 4,416,615 $ 4,416,615 100% 1988 4,591,893 4,591,893 ]00°k 1989 4,859,334 4,859,334 100% 1990 5,515,928 5,515,928 100% 1991 6,299,590 6,299,590 100% 1992 7,323,123 7,323,123 100% 1993 9,220,304 9,220,304 100% 1994 10,812,347 10,812,347 100% 1995 10,618,892 10,618,892 100°k 1996 10,611,589 10,611,589 100% Notes: There is no personal property tax in Hawaii. 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O O O O O S O~ ~ O O S O O O O V 51Yyi ooocooooc~ 0000ooooov F O. N W v~ ~L) M O V1 ~ M ~ pOp~~ l~ vl ~ ~ 00 O~ ~ p ~ C ~ ~ ~ ~ ~ ~ VMi O M N O ~ t ' ~ j, [O~o ul l ~ Ow v'~ 7 ~ ~y VNi O vg's N ~ ~ O P ~ a~~ ~ n tN~t can 7 O p~~ a n OOi F rl V"1 V M N N 000 Np M v1 V M N O N O 7 N N ~ fA Vl N .-r z N '43 O O 0 0 0 0 0 0 Vl 0 0 0 0 0 0 0 0 ~/1 y) h Vt Vl vl V1 vI V1 ~ h Vl v'i V'~ vl v1 Vt V1 V fA 00 00 00 OD 00 00 00 00 ~ 0G 00 00 OD 00 00 00 00 V ~ F a ~ ~ u. ~ n 000 ~ O a~0 .N+ O N~ n oM0 V N r~'t a 0 0 W~ M ~ o ~G7 rn tY ~ <+y v ~ ~o, vl ~o 0o c~ vl oo cn v t~ vivo ~ 7 ~ .y r N W o~0 vii T ~ ~ ~ ~ ~ O ~ ~ ~ ~ ~ ~ .Nr ~ F o ~ rnv M.• >zaa ~ ~ E w ~ ~ o a~ bp[ ~ .n0.' $ ~ a E ~ $ ~ ~ ~ o ~ ~ E b ? ~ o y d ~ o, .E ~ :3 E~ C a E o..E ~ E c c E c a o o 'a eo 0 o a o o eo 0 0 ~ E~QxUSQUx E:7<]CU~QUx > w ~ ~ z -127- Table 6 COUNTY OF HAWAII Principal Taxpayers June 30, 1996 Percentage 1995 of Total Assessed Assessed Taxnaver BB ~siness Valuation Valuation Mauna Lani Resort Inc. Developer $172,571,800 1.4% South Kohala Resort Corp. Developer 162,898,000 1.3% Global Resort Partners Hotel 155,046,800 1.2% B. P. Bishop Pstate Land Trust 153,015,900 1.2% Waikoloa Development Corp. Developer 80,765,000 0.6% Kona Village Associates Developer 77,254,100 0.6% Mauna Lani Bay Hotel, Inc. Hotel 76,419,800 0.6% Waikoloa Land & Cattle Corp. Developer 75,835,000 0.6% Mauna Kea Beach Hotel Corp Hotel 68,821,400 0.5% ONKD (Ritz Cazlton Hotel) Hotel 66,258,300 0.5% $1,088,886,100 8.6% No[e: Gross valuation at January 1, 1995: $12,730,479,056 -128- Table 7 COUNTY OF HAWAII Computation of Legal Debt Margin June 30,1996 Total assessed value $10,611,588,618 Limitation as set by the Constitution of the State of Hawaii (A) 1,591,738,293 Amount of debt applicable [o deb[ limit: (B) County general obligation bonds $139,695,000 State Revolving Fund loans 23,016,167 Othet debt 1,409,381 164,120,548 Less: Bonds maturing in curtent fiscal year 5,526,000 SRF loan principal maturing in current fiscal yeaz 1,159,102 Bonds reimbursable by DWS 13,527,500 Fro rata shaze of 1978 Sinking Fund 7,845,172 28,057,774 Total amount of debt applicable to deb[ limit 136,062,774 Legal debt margin $1,455,675,519 (A) The bonded debt limitation of the County of Hawaii is established at 15% of [he 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 [he deb[ 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 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. - 129 - ~ N ~n 00 v~ ~O M a ~ ~..~a 8~z F ~ ~ ~ ~ ~ v t~ ~o ~o a~ oo t~ z ~ ~ a z~~ 6 A w ~ ~ 6'e 6~° N ~ 8£ bE 8° ~ B4 U oba y ~ ~0 0 G. r .y~ p y 'd .r M l~ l~ ~ G ~ m~~~ n W m~ ~ O O p N w p .o Z c ~ ~l ~ r! ~1 N c C ~ ~ vl h W oM0 T~ O O m ~ V ~ pGO' N p ~ 4 G ~ N z ~ N y a+ p 04 ~ .E ~ c y U w V ~ ~ 7 ~o ~ ~S ~aO C cFy~ yp ~ h 00 ~ .~-i h ~ M ~ ~ R '/N 1~.p ~.J r. G V~1 00 ~ t~1 O~ l~ 00 0~0 V~'i \O ~ C ES N O ~ CJ ~ vI W M 7 ~ H. 'rA ~ ~ O C N ~ v~j h V~1 Ob0 OMO ~ O O can ~ ~ ~ te~~ +.d O W ~ L y z ~ ~ a iMi N ~ ~ o ~ rn oOOO E ~ ~ C ~ rn~~ a N°~ m 'n° a g ~ m 83 V v~ 00 v1 N c? N 00 ~D ~D ,gyp C vI 7 R V1 ~O l~ O~ O O O o0. y ,`y 'a C ~ o ~ C E c z ~ ~y~ °°=a ° 0oo=8oSoSa 9~ ~ ~ o v ~n rn v v~ ~n v~ ~ ~ ~ fi y $ o0 to H~ a w s x 0~0 W 0~0 T O~ N pMp~~ ~ ~ ~ .x ~ .tea T T T ~ ~ Q~ O~ Q~ O~ a ~ U 'u: -130- Table 9 COUNTY OF HAWAII Ratio of Annual Debt Service Expenditures For General Obligation Bonded Debt To Total General Governmental Expenditures Last Ten Fiscal Years Ratio of Debt Total Total Service to General Fiscal Debt General Governmental 1~3C 1'rincinal Interest Service Exnendi[ures ~7yc enditures 1987 $1,690,000 $4,983,021 $ 6,673,021 $ 69,941,770 10% 1988 2,120,000 4,850,366 6,970,366 74,383,408 9% 1989 2,967,000 4,899,844 7,866,844 79,578,807 10%a 1990 3,022,000 5,083,110 8,105,110 85,213,673 10% 1991 2,681,000 6,324,606 9,005,6116 102,457,902 9% 1992 3,026,000 6,137,804 9,163,804 115,070,212 8% 1993 3,992,000 5,936,363 9,928,363 123,140,556 8% 1994 4,923,187 6,459,361 11,382,548 134,984,061 8% 1995 5,335,443 6,245,235 11,580,678 139,831,035 8% 1996 5,327,414 6,067,082 11,394,496 140,225,931 8% - 131 - Table 10 COUNTY OF HAWAII Demographic Statistics Last Ten Fiscal Years Fiscal Per Capita School Unemployment ~ Population Income Enrollment Rate !Al 1986 111,800 $11,973 23,783 7.5% 1987 114,400 12,520 24,509 5.8% 1988 117,500 13,462 25,179 4.9% 1989 122,300 14,989 25,923 3.9% 1990 120,317 * 16,728 26,745 3.6% 1991 126,400 16,520 27,834 4.2% 1992 130,500 16,846 28,587 7.7% 1993 133,100 17,573 29,433 7.3% 1994 135,500 17,798 30,164 9.6% 1995 137,500 N/A 28,188** 9.4% (A) Calendaz year. Sources: * 1990 Census (all other population figures as estimated by State Department of Planning and Economic Development). Public school enrollment only. Other data from County Depaztmen[ of Research and Development. - 132 - 8 8 8 8¢ a a a H ~ h M ern m o rn PO ~ ~ ~o r o0 00 A p ~ p M b 0~ 0~ ONOw O a ~ ~ b a ~ O oM0 ~r tJ N M M M C ~ O U V1 00 h M D\ N 00 00 00 aD O. M h O V1 ~/1 00 M ~O o ~G V W K n 0 0 0 DD O N N M M eel N ~ a z .y A C M b M~ 00 V O M B ~O E x ~ O ~ c~+1 M ~ r v~'~ ~ ~ ~ h ~ O C1 fA O ~.Q ~ C ~ ~ p pp U S U ~ p Y' ~ ~ ~ ~ ? E O = w a. ~ M rn o ~Mp b pp~ v~ c .r C G ~ a 7 7 Vl V h ul O Vl 7 d C F U ~ O ~ U a ~ ~ ~ d o°'o a ~ ~ rn c L U .a a a K °7 ~ o0 0o y fA vi ~O ~D Do 0o a` .N~i N ~ ~ ~ ~ W py ~ r Oro n M~ N T vNi ~ N Li. 7 00 V1 N N V1 ~ N h M Ri c~ ~ n i l~ O O. N O. t+i l~ O 4~ T '7 h b~ b N GN n~ T L ~ M M M V ~ h 00 00 00 Q O C O ~ ~ epW~~ T thn ONO ~ ONr N ~Np ppN ~ y t M O oo ~D 7 o< O O~ ~ ~ ~ q M .r. ~ N r O W .M-i ~ ~ b~O u~ E 8~ r oo vNi h i; a ~ ~ ~ ~ N N M~ M M ~ ~p PG O ° ~D h 00 ~ O N M~ h O QD 00 00 00 T D` D\ a O~ G\ .fir T a ~ D` ~ ~ ~ O~ ~ O y M -133- Table 12 COUNTY OF HAWAII Miscellaneous Statistical Data June 30, 1996 Dale fu•st charter adopted June 1968 Form of government Mayor/Council Area in square miles 4,038 Miles of streets (County only) 967 Number of street lights 7,589 Fire protection: Number of stations 17 Number of fire fighters and officers (exclusive of volunteer fire fighters) 305 Police protection: Number of staflons 8 Number of substations 4 Number of police officers 353 County water service: Number of consumers 33,094 Average consumption in gallons per day 22,913,422 Miles of water lines 1,070 Miles of sanitary sewers (County only) 60 Number of building permits issued: Building permits 2,829 Electrical permits 2,532 Plumbing permits 1.809 Sign permits 77 Recreation and culture: Number of parks 118 Number of gyms and recreation centers 38 - 134 -