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Home My WebLink AboutCOM 0922.000 2016-2018Valerie T. Poindexter � Bonnie S. Nims, CGAP JNSvfUF h Legislative Auditor Chair &Presiding Officer e �o,. ;:=r. \ qg� Council District 1 Business Address 120 Pauahi St. T'9TF,OF•4P,� Suite 309 Hilo, Hawaii 96720 CzzunfV laf (Pu fu i' l- OFFICE OF THE LEGISLATIVE AUDITOR 25 Aupuni Street Hilo, Hawai `i 96720 * (808) 961-8386 * Fax (808) 961-8905 website: http.llhawaiieounh. ov e-mail. publiclao(aiicoarnh-.�ov May 1, 2018 C:) TO: Valerie T. Poindexter, Chairperson , -- And Members of the County Council — '"'.. C:)-< n FROM: Bonnie S. Nims �. Legislative Auditor RE: Post -Audit Reports for Fiscal Year Ending June 30, 2017 This letter transmits for your review, deliberation, and acceptance, the Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2017, as prepared by the County of Hawaii Department of Finance. Pursuant to the 2012 Hawaii County Charter, Section 10-13, Post -audit, which requires the county council to provide at least once every year for an independent audit of the accounts and other evidences of financial transactions of the county and of every county agency and executive agency and performed by a certified public accountant or firm of certified public accountants who have no personal interest, direct or indirect, in the fiscal affairs of the county or of any of its agencies or executive agencies. N&K CPAs Inc. will be present at the Hawaii County Council Finance Committee meeting on May 21, 2018 for a short presentation and to answer any questions you may have. Appropriate department head(s) or their representative(s) will also be asked to attend the meeting. In the meantime, please feel free to contact met at 961-8490 should you require further information. Enclosures cc w/o enclosures: N&K CPAs Inc Department of Finance 9A� Comm. No. BSN/Ihs Ref. To: F(-, Ref. Date MAY Q 1 t' Hawai 'i County is an Equal Opportunity Provider and Employer Evil ff -r # ,r. • r r • n by The Department of Finance Collins f Director of Finance Page INTRODUCTORY SECTION Letter of Transmittal I GFOA Certificate of Achievement 8 Organization Chart 9 List of Elected Officials 10 List of Principal Officials I I Report of Independent Auditors 13 Management's Discussion and Analysis 16 Basic Financial Statements: Government -wide Financial Statements: Statement of Net Position 28 Statement of Activities 30 Fund Financial Statements: Balance Sheet - Governmental Funds 32 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 33 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 34 Reconciliation of the Change in Fund Balances of Governmental Funds to the Statement of Activities 36 Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) - General Fund 38 Statement of Net Position - Proprietary Funds 42 Statement of Revenues, Expenses, and Changes in Fund Net Position - Proprietary Funds 43 Statement of Cash Flows - Proprietary Funds 44 Statement of Fiduciary Net Position - Fiduciary Funds 45 Statement of Changes in Fiduciary Net Position - Fiduciary Funds 46 Notes to the Basic Financial Statements 47 Required Supplementary Information 103 FINANCIAL SECTION (Continued) 139 Table 2 - Changes in Net Position Pa Combining and Individual Nonmajor Fund Statements and Schedules: 142 Combining Balance Sheet - Nonmajor Governmental Funds 110 Combining Statement of Revenues, Expenditures, and Changes in Fund 144 Balances - Nonmajor Governmental Funds 114 Schedules of Revenues, Expenditures, and Changes in Fund Balances - 149 Budget and Actual (Budgetary Basis): 150 Highway Fund 117 Sewer Fund 118 Solid Waste Fund 119 Cemetery Fund 120 Parking Meter Fund 121 Vehicle Disposal Fund 122 Bikeway Fund 123 Workforce Investment Act Fund 124 Golf Course Fund 125 Geothermal Relocation and Community Benefits Fund 126 Beautification Fund 127 Hawaii County Housing Agency 128 Park Dedication Fund 129 Combining Statement of Agency Funds Net Position - Agency Funds 130 Combining Statement of Changes in Assets and Liabilities - Agency Funds 132 Combining Statement of Private Purpose Trust Net Position - Private Purpose Trusts 136 Combining Statement of Changes in Net Position - Private Purpose Trusts 137 Table I - Net Position by Component 139 Table 2 - Changes in Net Position 140 Table 3 - Fund Balances, Governmental Funds 142 Table 4 - Changes in Fund Balance, Governmental Funds 143 Table 5 - Real Property Assessed Values by Classification and Tax Rates 144 Table 6 - Principal Taxpayers 148 Table 7 - Property Tax Levies and Collections 149 Table 8 - Ratios of Outstanding Debt by Type 150 Table 9 - Ratios of General Bonded Debt Outstanding 151 Table 10 - Legal Debt Margin Information 152 Table I I - Demographic and Economic Statistics 153 Table 12 - Principal Employers, County of Hawaii 154 Table 13 - Full -Time Equivalent County Government Employees by Function 155 Table 14 - Operating Indicators by Function 156 Table 15 - Capital Asset Statistics by Functions 157 INTRODUCTORY SECTION M County of Hawai"i $7 Finance Department 25 Aupuni Street, Suite 2103 o Hilo, Hawai'i96711 (808)961-8234 * Fax(808)961-8569 The Honorable Mayor and Members of the Council County of Hawaii 25 Aupuni Street Hilo, Hawaii 96720 W - I PIRI State of Hawai'i (the County), for the fiscal year July 1, 2016 to June 30, 2017. 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 complete and accurate in all material resjtects and are -MCorted in a manner designed to %resent fairlip the financial #i osition and results of operations of the various funds of the County. All disclosures necessary to convey the maximum understanding of the County's financial activities have been included. Management's discussion and analysis is also included to aid users of the financial statements. This report presents the financial position of the County of Hawaii at June 30, 2017 and results of operations for the fiscal year then ended. The report is divided into three sections: 10 The Introductory Section includes this transmittal letter, a Certificate of Achievement for Excellence in Financial Reporting, the County of Hawai'i's organization chart and lists of elected and principal officials. The Financial Section contains management's discussion and analysis, the basic financial statements, related notes, the combining and individual fund budgetary financial statements, and the independent auditors' report. the County government, This component unit is included in the County's reporting entity because of its financial relationship with the County. - I - La Deanna S. Sako Director Nancy Crawford Dep 4ty Director County of Hawai"i $7 Finance Department 25 Aupuni Street, Suite 2103 o Hilo, Hawai'i96711 (808)961-8234 * Fax(808)961-8569 The Honorable Mayor and Members of the Council County of Hawaii 25 Aupuni Street Hilo, Hawaii 96720 W - I PIRI State of Hawai'i (the County), for the fiscal year July 1, 2016 to June 30, 2017. 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 complete and accurate in all material resjtects and are -MCorted in a manner designed to %resent fairlip the financial #i osition and results of operations of the various funds of the County. All disclosures necessary to convey the maximum understanding of the County's financial activities have been included. Management's discussion and analysis is also included to aid users of the financial statements. This report presents the financial position of the County of Hawaii at June 30, 2017 and results of operations for the fiscal year then ended. The report is divided into three sections: 10 The Introductory Section includes this transmittal letter, a Certificate of Achievement for Excellence in Financial Reporting, the County of Hawai'i's organization chart and lists of elected and principal officials. The Financial Section contains management's discussion and analysis, the basic financial statements, related notes, the combining and individual fund budgetary financial statements, and the independent auditors' report. the County government, This component unit is included in the County's reporting entity because of its financial relationship with the County. - I - The County provides a full range of municipal services. These include police and fire protectio'71 emergency medical care; public prosecutor; culture and recreation; sanitation; social services; water; planning and zoning; construction and maintenance of highways, streets and infrastructure; real property assessment and tax collection; and general administrative services. However, the County does not provide such other traditional services as public education, hospitals and courts, These services are provided by the State government. The County consists of the island of Hawai'i, 4,028 square miles in size. It is twice as large as 's the combined area of all the other inhabited islands in the Hawaiian Archipelago. Since there i overlapping debt. The County has an elected mayor and a nine -member council. � 2 - The $75 million improvements at the Kona International Airport include a centralized security area, a six -lane passenger screening checkpoint building and new restrooms, The expansion i� anticipated to be completed by February 2019. Major Initiatives UU37=11 "71 MAN 0w; MmmWffl,") I OT WS - R, and to improve responses and services to the community, such as 1) an online training and records management system, which is training software that allows all personnel to complete ,fidactic based training directly from the stations' computers and maintain training records, 2) a riew Computer Aided Dispatch (CAD) software and Emergency Dispatch Center Console upgrades to provide the most current CAD service and, 3) the implementation *.n the W,epartment's intranet which enables direct sharing of critical information amongst personnel within the department. Public Works — Over the past fiscal year the Department of Public Works (DPW) completed majM r projects in our community including: The Kapi'olani Steet project, valued at $14.1 million, was completed in August, 2016. The extension provides an alternate emergency evacuation route and improves traffic flow on Kilauea Avenue, Kino'ole Street, and the surrounding streets, The project involved the construction of concrete curbs, gutters and sidewalks; drainage improvements, utility installation, and relocation; traffic signals at two intersections and a concrete bridge across Waifikea Stream. The Mdmalahoa Highway Bypass Road and Nap6'opo'o Road Intersection Improvement project, valued at $30 million, was completed in November, 2016. This project involved the construction of a two-lane roadway from Haleki'i Street 2.2 miles to the vicinity of the Nap6'opo'o Road/Mamalahoa Highway intersection, The project included two travel lanes, paved shoulders, and traffic signals at the Nap6'opo'o intersection, driveway tie-ins, water utilities, and drainage improvements, The b ass road mitigates traffic cqn V',�. e rt i an such congested areas as Honalo, Kainaliu and Konawaena schools. The Komohana Street Reconstruction (Waidnuenue Avenue to K5k5au Street), valued at $4,6 million, was completed in May 2017. The project involved the reconstruction of approximately 4000 feet of roadway, traffic signal upgrades, pavement striping, and replacing utility valves and boxes. The project was completed in May 2017. all 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 conformity with generally accepted accounting principles. The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits I equires estimates and judgments by management. The County maintains budgetary controls to ensure that legal provisions of the annual budget are complied with and that those expenditures do not exceed budgeted amounts. Activities of the general fund and special revenue funds are included in the annual appropriated operating budget. Project -length financial plans are adopted for the capital projects fund. Budgetary control is established at the department level. Formal budgetary integration is employed as a management control device for the general fund, special revenue funds, and the capital projects fund. Budgetary control for the debt service fund is achieved through general obligation bond indenture provisions. The basis of accounting used for the budgets of the general and special revenue funds differs from generally accepted accounting principles, Intergovernmental revenues are recognized when awarded by the granting agency, encumbrances and unexpended allotments are treated as 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 included in the various fund balance categories based on whether the resources are restricted, committed or assigned 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, Significant Accounting Policies The County has implemented Governmental Accounting Standards Board Statement No. 14, Financial Reporting Entity (GASB Statement No. 14), Statement No. 39, Determining Wnhethe Certain Organizations Are Component Units (GASB Statement No. 3 9) and Statement No. 6 1, The Financial Reporting Entity.- Omnibus an amendment of GASB Statements No. 14 and 34 (GASB Statement No. 61). All organizations, activities or functions that meet the criteria in GASB Statement No. 14, No. 39 and No. 61 for inclusion in the reporting entity are included i the County's basic financial statements. For further discussion on other significant I accounting policies, refer to the notes to the basic financial statements. -5 - AcknoWedgments The preparation of this report was made possible by the efficient and dedicated services of the entire staff of the Department of Finance and fiscal personnel in other departments. I am grateful for their help in preparing this report. I also thank the Mayor and the members of the County Council for their interest and support in assuring the continuing sound financial condition of the County of Hawai'i. -7- uJ • i'ili'i i.i •, non V w0 Financial]Certificate of Achievemen ifor Excellenc in n .r i 4 11tMOMMITAPFUMMI Financial Report for the -d r Executive Director/CEO IM County of Hawaii ,, ,rganization Char) County Council ayor County Legislative Clerk Auditor Prosecuting Attorney of M Office gf Mana Eement. Managing Director Departments under Agencies under Departments under direct supervision of the direct supervision of the commissions and Managing Director: Managing Director: administrative supervision of the Mayor: Corporation Counsel Civil Defense Human Resources Finance Office of Aging Police Planning Mass Transit Liquor Control Environmental Management Office of Housing & Fire Research & Development Community Development Water Supply Public Works (semi -autonomous) Parks & Recreation Information Technology Administrative Officers (Term: 2016-2020) Harry Kim Mayor Mitchell Roth Prosecuting Attorney Cgply Council (Term: 2016-2018) Valerie Poindexter Chair Karen Eoff Vice Chair Aaron S.Y. Chung Member Maile "Medeiros" David Member Dru Mamo K Member Susan L. K. Leeloy Member Eileen O'Hara Member Herbert M. Richards, III Member Jennifer Ruggles Member Wz3HMM= ufl�� County Clerk Stewart Maeda Legislative Auditor Bonnie Nims Managing Director Wilfred Okabe Deputy Managing Director Barbara Kossow Corporation Counsel Joseph Kamelamela Director of Finance Collins Tomei Planning Director Michael Yee Director of Personnel Sharon Kamahele-Toriano Director of Research and Development Diane Ley Chief of Police Paul Ferreira Fire Chief Darren Rosario Director of Public Works Frank Demarco Director of Environmental Management William Kucharski Parks and Recreation Director Charmaine Kamaka Manager -Chief Engineer, Department of Water Supply Keith Okamoto Civil Defense Administrator Talmadge Magno Director of Liquor Control Gerald Takase Mass Transit Administrator Tiffany Kai Executive on Aging Christian Alameda Administrator, Office of Housing and Community Development Neil Gyotoku Director of Information Technology Julie Ung FINANCIAL SECTION To the Chair and Members of the County Council County of Hawai'i AMERICAN SAVINGS BANK TOWER 1001 BISHOP STREET, SUITE 1700 HONOLULU, HAWAII 96813-3696 T (808) 524-2255 F (808) 523-2090 We have audited the accompanying financial statements of the governmental activities, the business -type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the County of Hawai'i, State of Hawal'i (County), as of and for the fiscal year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the County's basic financial statements as listed in the tabl- •x- oxte _F =11M W111014,114TIN nance of in�e includes the design, implementation, and maintenance of internal control relevant to t whether due to fraud or error. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Govemment Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement, An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor I I 11-7X-741 IIMWE I 1107UW1 EPIC management, as well as evaluating the overall financial statement presentation of the financial statements. N&K CPAs, lnc, ACCOUNTANTS I CONSULTANTS ITAITT17,lff,77M basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the •• activities, the business -type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the County of Hawai'i, State of Hawai'i, as of June 30, 2017, and the respective changes in financial position and, where applicable, cash flows thereof and the budgetary comparison for the general fund for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis • Matter Adoption • New Accounting Principles As discussed in Note 1 (page 61) to the financial statements, the County adopted new accounting '4160T., �Uk4 to the employees of state and local governmental employers as well as extending the approach to accounting and financial reporting for pensions that were not within the scope of GASB Statement No, 68, Accounting and Financial Reporting for Pensions. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information .......... . ICK CPAs, Inc. ACCOUNTANTS I CONSULTANTS agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the County's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the County's internal control over financial reporting and compliance. We prenensive 77nnuarTmanclaf =po The assets of the County exceeded its liabilities at the end of the fiscal year by $436.0 million (net position). This amount includes a negative balance of $470.7 million in unrestricted net position, a decrease of $82.3 million from the prior year, which is explained in the sections below. As of the close of tile current fiscal year, the County's governmental funds reported combined ending fund balances of $161.5 million, a decrease of $30.4 million from the prior year, Approximately 44 percent of this total amount, $70.4 million, is available for spending at the County's discretion (unrestricted fund balance), At the end of the current fiscal year, unrestricted fund balance for the general fund was $27.1 million, or 9 percent of total general fund expenditures, financial statements, This report also contains both required and other supplementary informatiF n in addition to the basic financial statements themselves. 3 of the County's finances, in a manner similar to a private -sector business, The statement of net position presents information on all of the County's assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net %osition map serve as a useful indicator of whether or not the financial (woon of the Coun[W is improving or deteriorating. The statement of activities presents information showing how the County's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and wuenses are reforted in this statement for some items that will onlki result in cash flows in future fiscal periods, such as revenues pertaining to uncollected taxes and expenses pertaining to earned but unused vacation and sick leave. Both of the government -wide financial statements distinguish functions of the County that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities of the County include public safety, highways and streets, health, education and welfare, culture and recreation, sanitation and general government. The business -type activities of the County include rental housing for senior citizens and families. Fund Financial Statements The fund financial statements are designed to report information about groupings of related activities or objectives. The County, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements, All of the funds of the County can be divided into the following three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements — i.e., most of the County's basic services are reported in governmental funds. These statements, however, focus on (1) how cash and other financial assets can readily be converted to available resources and (2) the balances left at year-end that are available for spendinY. Such information may be useful in determining what financial resources are ?vailable in the near future to finance the County's programs. !NEW. 10MUM 11011-11"1411W W11 111101,11 Y11FITS ITIM STIMUL 1111411111UL111111 &UTC11111JOHLUI dcLITILI I ft I WWI_ I financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental funds balance sheet and the governmental funds statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds 9nd governmental activities. The County maintains several individual governmental funds organized according to their type (general, special revenue, debt service, and capital projects). Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures, and changes in fund balances for the general fund and capital projects fund, which are considered to be major funds. Data from the remaining governmental funds are combined into a single, aggregated presentation. Individual fund data for each of the non -major governmental funds is provided in the form of combining statements elsewhere in this report. The County adopts an annual appropriated budget for its general fund and special revenue funds. A budgetary comparison statement has been provided for these funds to demonstrate compliance with this budget. The budgetary comparison statement for the general fund is located in the basic financial statements, whereas the budgetary comparison schedules for the nonmajor special revenue funds are presented elsewhere in this report. Proprietary funds. Proprietary funds are generally used to account for services for which the County charges outside customers, Proprietary funds provide the same type of information as shown in the government -wide financial statements, only in more detail. The County maintains only one type of proprietary funds, enterprise funds. Enterprise funds irl" il'3� A MIA i 'i I 111,101111111 NOWN1111111F. IN WO MINUMMOMb"410 r- W I I V I H Qn" Mtfaftz a toxwor-Ign I # of I d it Va M C WMA to SM # 14 a to I 114, IMBI I I a W I I 130=0170 Iwo 111yll Condensed Statement of Net Position June 30, 2017 and 2016 outstanding 1,291,082,705 994,872,052 Primary Government 1,014,014 1,292,007,354 995,886,066 Governmental Activities 18,825,301 53,737,158 Total 56,533 48,912,145 53,793,691 NIL-4 1,339,908,006 1,048,609,210 1,011,493 MiLlll 1,340,919,499 ZQL7 tggtated jQl 7 221 D17 tate reL Assets: S 495,606,500 $ 1,546,815 Of Resources: 14,250,500 __18,166,919 -- Current and other assets $ 234,095,834 S 263,573,114 1,109,367 S 1,093,403 $ 235,205,201 $ 264,666,517 Capital assets, net 1,301,647,095 1,233,637,293 1,448,941 1,495,053 1,303 096 036 235,132,346 Total assets 1,535,742,929 ...1,497,210,407 2,558,308 2,588,456 1,53 8,301,237 1,499,798,863 Deferred Outflows 1,077,846,676 Of Resources: 252,872,831 75 172,222 252,_ 872,831 75,17_ 2,222 Total Assets and Deferred Outflows of Resources 1,788,615,760 1,572,382,629 2,558,308 2,588,456 1,791,174,068 1,574,971,085 outstanding 1,291,082,705 994,872,052 924,649 1,014,014 1,292,007,354 995,886,066 Other liabilities 18,825,301 53,737,158 86,844 56,533 48,912,145 53,793,691 Total liabilities 1,339,908,006 1,048,609,210 1,011,493 1,070,547 1,340,919,499 1,049,679,757 Deferred Inflows _(EI,934,491) 022,523 L_ 1,036,870 (EL747,7641 897,62�1) (j� Total net position $ 434,457,254 S 495,606,500 $ 1,546,815 Of Resources: 14,250,500 __18,166,919 -- 14.,250,500 28,166,919 Total Liabilities and Deferred Inflows Of Resources 1,354,158,506 1,076,776,129 1,011,493 1,070,547 1,355,169,999 1,077,846,676 Net position: Net investment in capital assets 835,787,961 824,846,090 524,292 481,039 836,312,253 825,327,129 Restricted 70,439,580 74,694,901 — 70,439,580 74,694,901 Unrestricted (471,770,287) _(EI,934,491) 022,523 L_ 1,036,870 (EL747,7641 897,62�1) (j� Total net position $ 434,457,254 S 495,606,500 $ 1,546,815 S 1,517,909 $436,004,069 .1417,124,411 IMM Condensed Statements of Activities For the Fiscal Years Deded June 30,2017 and 2016 Revenues: Program revenues: Charges for services Operating grants and contributions Capital grants and contributions General revenues: Property taxes Other taxes Grants and contributions, unrestricted Investment earnings Other Expenses: General government Public safety Highways and streets Health, education and welfare Culture and recreation Sanitation Interest on long-term debt Total expenses Increase (Decrease) in net position (61,149,246) 37,016,379 28,906 48,878 (61,120,340) 37,065,257 Net position at beginning of year 495,606,500 472,181,912 1,517,909 1,469,031 497,124,409 473,650,943 Cumulative effect of accounting change - (13,591,791) - - (13,591,791) Net position at beginning of year, as restated 495,606,500 458,590,121 1,517,909 1,469,031 497,124,409 460,059,152 Net position at end of year S 434,457,254 S 495,606,500 $ 1,546,815 $ 1,517,909 $ 436,004,069 $ 497,124,409 W_116HIMEM ON A_A r J"M jv"ppxm I JWJ to decreases in highways and streets projects, and was offset by a $20.5 million increase in property taxes. The increase in property taxes was due to increases in the value of net taxable real property, of which the most notable was an $832.7 million increase in the residential classes that represented an I I percent increase from the prior year. Primary Government Governmental Activities Business -type Activities Total 2Q17 ML -M ZQ17 MiLk 2 1 ZUb--al re tate fated $ 49,289,344 S 46,706,482 $ 469,082 $ 457,842 $ 49,758,426 $ 47,164,324 52,897,945 47,234,458 132,435 133,932 53,030,380 47,368,390 14,784,692 60,230,846 - - 14,784,692 60,230,846 268,869,322 248,353,113 268,869,322 248,353,113 24,662,766 26,739,088 24,662,766 26,739,088 19,810,090 19,557,513 19,810,090 19,557,513 661,184 316,593 1,243 1,912 662,427 318,505 7,092,071 12,081,055 - - 7,092,071 12,081,055 _743_8,067,414 46_1,219,148 6-02,760 5-93,686 -43-8,670,174 4_61,812,834 72,836,020 65,064,440 - 72,836,020 65,064,440 229,507,091 187,160,903 229,507,091 187,160,903 51,368,841 45,255,305 51,368,841 45,255,305 40,299,077 39,722,480 573,854 544,808 40,872,931 40,267,288 35,213,973 27,315,451 35,213,973 27,315,451 56,605,864 48,521,434 56,605,864 48,521,434 13,385,794 11,162,756 13,385,794 11,162,756 _4_99,_216,660 4_24,202,769 5-73,854 5-44,808 499,790,514 --72-4,747,577 Increase (Decrease) in net position (61,149,246) 37,016,379 28,906 48,878 (61,120,340) 37,065,257 Net position at beginning of year 495,606,500 472,181,912 1,517,909 1,469,031 497,124,409 473,650,943 Cumulative effect of accounting change - (13,591,791) - - (13,591,791) Net position at beginning of year, as restated 495,606,500 458,590,121 1,517,909 1,469,031 497,124,409 460,059,152 Net position at end of year S 434,457,254 S 495,606,500 $ 1,546,815 $ 1,517,909 $ 436,004,069 $ 497,124,409 W_116HIMEM ON A_A r J"M jv"ppxm I JWJ to decreases in highways and streets projects, and was offset by a $20.5 million increase in property taxes. The increase in property taxes was due to increases in the value of net taxable real property, of which the most notable was an $832.7 million increase in the residential classes that represented an I I percent increase from the prior year. followed by general government (15 percent) and sanitation (11 percent). General revenues su as property and other taxes are not shown by program, but are effectively used to support program activities countywide. For governmental activities overall, without regard to program property taxes are the largest single source of funds (61 percent), followed by capital grants an contributions (12 percent) and charges for services (I I percent). Expenses and Program Revenues — Governmental Activities Year Ended June 30, 2017 1 $250,000,000 $200,000,0D0 $150,000,000 $100,000,000 $50,000,000 go Revenue by Source — Governmental Activities Year Ended June 30, 2017 41:1 11-1 06' ``CI Revenue by Source — Governmental Activities Year Ended June 30, 2017 versus an increase of $48,878 in the prior year. Expenses for health, education and welfare account for all of the $573,854 of expenses which represents a 5 percent increase from the prior year. Charges for services were $469,082, operating grants and contributions were $132,435 and investment earnings were $1,243, which were all comparable to the prior year, finance -related legal requirements. Governnientalfunds. The focus of the County's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the County's financing requirements. In particular, unrestricted fund balance may fiscal year. As of the end of the current fiscal year, the County's governmental funds reported combined ending fund balances of $161.5 million, a decrease of $30.4 million (16 percent) in comparison with prior year. Approximately 44 percent of this total amount ($70.4 million) constitutes unrestricted fund balance, The unrestricted portion of the fund balance is comprised of (1) $533 million in committed fund balance and (2) $17.1 million in assigned fund balance. The remainder of the fund balance is divided between $5.6 million in nonspendable fund balance for inventory and $85.5 million in restricted fund balance. Approximately 64 percent of the total restricted fund balance is due to restrictions relating to highways, streets and abandoned vehicles ($28.3 million) and debt service ($26.8 million). The general fund is the chief operating fund of the County. At the end of the current fiscal year, unrestricted fund balance of the general fund was $27, 1 million, while total fund balance ,tecreased to $473 million. As a measure of the general fund's liquidity, it may be useful to compare both unrestricted fund balance and total fund balance to total fund expenditures. Unrestricted fund balance reyeresents 9 yercent *-f total, -,eneral fund e balance represents 16 percent of that same amount. year as compared to an increase of $1.7 million in the prior year. Key factors in this decrease ($7,8 million) over last year's increase are as follows: A positive increase of $17.5 million (7 percent) in real property tax revenues and $3.2 million (6 percent) in intergovernmental revenues, As explained previously, the increase in real property tax revenues is due to a slight increase in the value of net taxable real property as evidenced in the accompanying statistical tables. The positive impact of the increase in revenues was offset by increases of $17.3 million (6 percent) in expenditures. $7.5 million of the total increase in expenditures is due to increases in salaries and wages from the prior year and $7,9 million in associated employee benefits. The fund balance of the County's capital projects fund decreased by $24.3 million (34 percent) during the current fiscal year. The decrease is primarily due to the fact that the $105A million of expenditures for various construction projects were only partially offset by the issuance of $8.1 million in SRF loans and $59.8 million in BANs. The debt service funds consist of the Bond Redemption Fund and the Interest Fund. These fun& have combined total fund balances of $26.8 million, all of which is restricted for the payment of debt service. The net increase in the combined fund balances during the current year in the debt service funds was $3.3 million (I percent). Proprietaryfunds. The County's proprietary funds provide the same type of information fbi.M,4� in the government -wide financial statements, but in more detail. year amounted to $575,54 1, and $446,982 for the Ouli Ekahi Affordable Housing Project (Ouli Ekahi). The total net position for Kulaimano decreased by $26,177 and the net position for Ouli Ekahi increased by $55,083, Other factors concerning the finances of these two funds have already been addressed in the discussion of the County's business -type activities. 715311; 111 111 lid This is primarily due to the following factors: * The negative variance of $10.3 million in revenues is comprised mostly of $1.9 million from real property and public service company taxes, $5.2 million in intergovernmental revenues for both the federal and state grants and $1.7 million in total charges for services. * $6.5 million of the unspent appropriations is related to salaries and wages and tile various countywide expenditure accounts relating to salaries and wages, The variance is due primarily to unfilled vacancies and continued efforts by each department to control payroll costs during the budget year due to the tough economic conditions facing the County. The following functions are responsible for the majority of the variance: public safety ($3.5 million) and general government ($2.1 million). * $3.8 million is due to lower than anticipated payments needing to be made in retirement related payments, With each department increasing efforts to control costs, overtime was also closely monitored and the corresponding pension expenditures were not incurred. * $1.2 million is due to the fact that the increase in health premiums for employees' was lower than originally anticipated. Capital assets. The County's investment in capital assets for its governmental and business-ty-p; activities as of June 30, 2017 amounts to $1.3 billion (net of accumulated depreciation). This investment in capital assets includes land and improvements, buildings and improvements, equipment, casements, and infrastructure assets, which consists of primarily roads and bridges. The total increase in the County's investment in capital assets for the current fiscal year was 6 percent. Major capital asset events during the current fiscal year included the following: a Construction continued on the Hokulia Bypass; construction in progress as of tile end of tile current fiscal year had reached $25.1 million with $7.2 million coming from the current fiscal year; the project was transferred to Infrastructure. 0 Construction continued on the Mass Transit agency baseyard and maintenance facility; construction in progress as of the end of the current fiscal year had reached $9.8 million with $5.8 million coming from the current fiscal year. 0 Construction continued on the Pahoa Park expansion project; construction in progress as of the end of the current fiscal year had reached $24.4 million with $3.8 million of it coming, from the current fiscal year; project was transferred to Buildings, 0 Construction continued on the Hilo Municipal Golf Course new clubhouse project; construction in progress as of the end of the current fiscal year had reached $18.4 million with $8.7 million coming from the current fiscal year; the project was transferred to Buildings. 0 Construction continued on the Waimea District Park phase 1; construction in progress as of the end of the current fiscal year had reached $19,5 million with $11.8 coming from the current fiscal year; project was transferred to Buildings. 0 Construction continued on the H6naunau Rodeo Arena Improvements; construction in progress as of the current fiscal year had reached $4.9 million with $3.1 million coming from the current fiscal year; the project was transferred to Buildings, a Construction continued on the Haihai Fire Station; construction in progress as of the end of the current fiscal year had reached $9.2 million with $6.9 million coming from the current fiscal year, 0 Construction continued on the Kuawa Soccer Field Development Project; construction in progress as of the current fiscal year had reached $3.4 million with $2.9 million coming from the current fiscal year. 0 Construction continued on the Kukuihaele Park Improvements; construction in progress as of the current fiscal year had reached $3.9 million with $3.7 million coming from the current fiscal year. 0 Construction continued on the Mauna Kea Recreation Area Improvements; construction in progress as of the current fiscal year had reached $10.2 million with $7.8 million coming from the current fiscal year. 0 Construction continued on the Kealakehe Wastewater Treatment Plant; construction in progress as of the current fiscal year had reached $14,8 million with $4.1 million coming from the current fiscal year; project was transferred to Buildings. 0 Construction began on the Kawailani Street Improvements ('Iwalani to Pohakulani); construction in progress as of the end of the current fiscal year had reached $3.2 million. 0 $1.2 million of dedicated roads were received by the County in the current fiscal year. Capital Assets (net of depreciation) it Tc P, Mi. 2 $ 17 ?_Uj;L2ftL�, Additional information on the County's capital assets can be found in note 6 to the basic financial statements. Long-term debt. Long-term debt is primarily comprised of bonds of $338.5 million, State Revolving Fund loans of $32.6 million and Bond Anticipation Notes of $59.8 million. At the end of the current fiscal year, the County had total bonded debt outstanding of $338,5 million. This entire amount was comprised of general obligation bonds which are backed by the full faith and credit of the County. The County's total bonded debt decreased by $18.1 million (5 percent) during the current fiscal year due to the regularly scheduled principal payments. At the end of the fiscal year, the County held an "AA+" rating from Fitch and an "Aa2" rating from Moody's for general obligation debt. State statutes limit the amount of general obligation debt the County may issue up to 15 percent of the total assessed value of all county real property as established for tax purposes on the last tax assessment rolls. The current debt limitation for the County is $4.3 billion, which is in excess of the County's outstanding general obligation debt. Currently the County's outstanding debt represents 9 percent of our debt limitation. Additional information on the County's long-term debt can be found in note 10 to the basic financial statements. The unemployment rate for the County for the current fiscal year is at approximately 34 percent, which represents a percentage point decline from last year's rate for the same period of 4.0 percent, a two percent decline from two years ago and an even larger decline from the high of 11.0 percent in 2011, 0 The number of domestic and international visitors to the County for the current fiscal year was approximately 1.65 million, with an approximately 9 percent increase from tile previous year's count of 1.51 million, For tile most part, the County is less dependent on tourism than the other islands in the State, but the Kona airport terminal modernization project is budgeted at $60-70 million. Primary Government Governmental Activities _Business -type Activities Total 2017 2016 2017 2M 2_Q 17 201 Land and improvements $ 239,187,891 $ 233,498,340 $ 753,877 $ 753,877 $ 239,941,768 $ 234,252,217 Infrastructure assets 328,917,985 307,227,977 - - 328,917,985 307,227,977 Ground and site improvements - - 57,893 62,240 57,893 62,240 Buildings and improvements 597,987,986 504,617,544 610,498 646,540 598,598,484 505264,084 Easements 4,244,255 4,170,517 - - 4,244,255 4,170,517 Equipment 60,190,776 59,910,752 26,673 32,396 60,217,449 59,943,148 Construction work in progress 71,118,202 124,212,163 _1 -T-1,495,053 71,118,202 124,212,163 Total $1,233,637,293 1,44-8,941 $1,303,096,036 $1,235,132,346 Additional information on the County's capital assets can be found in note 6 to the basic financial statements. Long-term debt. Long-term debt is primarily comprised of bonds of $338.5 million, State Revolving Fund loans of $32.6 million and Bond Anticipation Notes of $59.8 million. At the end of the current fiscal year, the County had total bonded debt outstanding of $338,5 million. This entire amount was comprised of general obligation bonds which are backed by the full faith and credit of the County. The County's total bonded debt decreased by $18.1 million (5 percent) during the current fiscal year due to the regularly scheduled principal payments. At the end of the fiscal year, the County held an "AA+" rating from Fitch and an "Aa2" rating from Moody's for general obligation debt. State statutes limit the amount of general obligation debt the County may issue up to 15 percent of the total assessed value of all county real property as established for tax purposes on the last tax assessment rolls. The current debt limitation for the County is $4.3 billion, which is in excess of the County's outstanding general obligation debt. Currently the County's outstanding debt represents 9 percent of our debt limitation. Additional information on the County's long-term debt can be found in note 10 to the basic financial statements. The unemployment rate for the County for the current fiscal year is at approximately 34 percent, which represents a percentage point decline from last year's rate for the same period of 4.0 percent, a two percent decline from two years ago and an even larger decline from the high of 11.0 percent in 2011, 0 The number of domestic and international visitors to the County for the current fiscal year was approximately 1.65 million, with an approximately 9 percent increase from tile previous year's count of 1.51 million, For tile most part, the County is less dependent on tourism than the other islands in the State, but the Kona airport terminal modernization project is budgeted at $60-70 million. BASIC FINANCIAL STATEMENl I COUNTY OF HAWAII Statement of Net Position Assets Current assets: Cash and cash equivalents (notes 3 and 14) Restricted cash and cash equivalents (note 3) Investments (note 3) Restricted investments (note 3) Receivables, net (note 4) Receivable from improvement district (notes 4 and 10) Internal balances (note 5) Inventories Prepaid expenses Real estate held for sale Other Total current assets Investments (note 3) Restricted investments (note 3) Restricted cash and cash equivalents (note 3 and 14) Receivable from improvement district, excluding current portion (notes 4 and 10) Capital assets (notes 6, 8 and 14): Utility plant in service, net Infrastructure assets, net Ground and site improvements, net Buildings and improvements, net Equipment, net Easements, net Preliminary survey and investigation charges Construction work in progress Land and improvements Total capital assets, net Total noncurrent assets Total assets Deferred Outflows of Resourcesu Deferred loss on refnding Deferred outflow related to pensions (notes 13 and 14) Total deferred outflows of resources Total Assets and Deferred Outflows of Resources MEME Primary Government _Eovernmental Business -type Component Activities Activities Total Unit $ 72,208,295 $ 790,911 $ 72,999,206 $ 24,522,616 31,638,458 41,350 31,679,808 - 3,761,249 3,761 „249 199,994 3,961,243 5,000,000 53,691,590 - 53,691,590 - 47,712,126 4,027 47,716,153 7,931,767 99,189 - 99,189 - 1,350 (1,350) - - 5,561,433 - 5,561,433 1,540,784 - 1,791 1,791 207,196 402,551 - 402,551 - 669,391 - 669,391 - 215,745,632 1,036,723 216,782,355 39,202,363 10,673,703 - 10,673,703 20,000,000 5,578,253 - 5,578,253 - - 72,644 72,644 888,225 2,098,246 2,098,246 MOM 328,917,985 - 328,917,985 - 57,893 57,893 - 597,987,986 610,498 598,598,484 - 60,190,776 26,673 60,217,449 - 4,244,255 - 4,244,255 - ® 5,337,002 71,118,202 - 71,118,202 29,979,075 239,187,891753,877 239,941,768 4,898,583 1,301,647,095 1,448,941 1,303,096,036 300,890,633 ,997,297 L1,3 19 1,521,585 1,321,518,882 321,778,858 1,535,742,929 2,558,308 1,538,301,237 360,981,221 7,444,852 - 7,444,852 - _145,427,979 - 245,427,979 11,855,347 252!872,831 - 252,872,831 11,855,347 1,788,615,760 2,558,308 1,791,174,068 372,836,568 (Continued) IMM COUNTY OF HAWAII Statement of Net Position June 30, 2017 12M=41 1 FITTMT�T, �� Deferred inflows related to pensions (notes 13 and 14) Primary Government 12,583,038 Governmental Business -type 1,667,462 Component 1,667 462 Activities Activities Total Unit Liabilities 2,525,446 Total Liabilities and Deferred Current liabilities: Inflows of Resources 11354,158,506 1,011,493 Accounts payable and accrued liabilities $ 24,540,365 $ 75,057 $ 24,615,422 S 3,638,562 Accrued payroll 10,021,844 - 10,021,844 1,352,376 Advance collections - intergovernmental 4,692,131 660 4,692,791 - Interest due on long-term debt 5,603,828 11,127 5,614,955 690,864 Bonds and loans payable, current portion net - Debt service (note 10) 26,805,689 - (notes 10 and 14) 88,273,136 94,434 88,367,570 3,964,472 Compensated absences, current portion (note 10) 9,813,735 - 9,813,735 555,054 Claims and judgments, current portion - Other 1,939,641 (notes 10, 12 and 14) 2,923,529 - 2,923,529 130,417 Capital leases, current portion (notes 8 and 10) 1,989,281 - 1,989,281 - Landfill costs payable, current portion LS248,898,221 See accompanying notes to the basic financial statements (notes 9 and 10) 195,405 - 195,405 - Customers' deposits - - 165,350 Other 10,831,898 10 831,898 - Total current liabilities 158,885 52 ,I 181278 , 159,06§ 30 _,4 _j 0,497095 Noncurrent liabilities: Bonds and loans payable, net (notes 10 and 14) 395,733,065 830,215 396,563,280 61,583,439 Compensated absences (note 10) 29,672,167 - 29,672,167 1,126,928 Claims and judgments (notes 10, 12 and 14) 11,512,164 11,512,164 452,583 Capital leases (notes 8 and 10) 4,576,299 4,576,299 - Landfill costs payable (notes 9 and 10) 29,327,595 29,327,595 - Unearned revenue, noncurrent - - 1,583,953 Customers' deposits - 16,921,289 Net pension liability (notes 13 and 14) 619,275,868 619,275,868 29,247,607 Other (note 13) 90,925,696 - 90,925,696 - Total noncurrent liabilities 1,181,022,854 —830,215 1,181,853,069 110,915,799 Total liabilities 1,339 908,006 1,011,493 1,340,919,499 121,412,894 FITTMT�T, �� Deferred inflows related to pensions (notes 13 and 14) 12,583,038 12,583,038 2,442,214 Deferred inflows - other 1,667,462 1,667 462 83,232 Total Deferred Inflows of Resources 14,250,500 14,250,500 2,525,446 Total Liabilities and Deferred Inflows of Resources 11354,158,506 1,011,493 1,355,169,999 123,938,340 Net Position Net investment in capital assets 835,787,961 524,292 836,312,253 236,230,947 Restricted for: Capital projects 18,928,452 - 18,928,452 - Debt service (note 10) 26,805,689 - 26,805,689 - Highways, streets and abandoned vehicles 8,079,232 - 8,079,232 - Public access open space 14,686,566 14,686,566 - Other 1,939,641 1,939,641 - Unrestricted _(411,770,287) _1,022,523 _27Q,747,764 12,667,281 Total net position $ 434,457,254 1 1,546,815 $ 436,004,069 LS248,898,221 See accompanying notes to the basic financial statements -29- COUNTY OF HAWAII Statement of Activities For the Fiscal Year Ended June 30, 2017 General revenues: Taxes: Property taxes, levied for general purposes Public service company taxes Public utility franchise taxes Fuel taxes Grants and contributions not restricted to specific programs Investment earnings Other Total general revenues Change in net position Net position, beginning of year, as previously stated Cumulative effect of accounting change Prior period adjustment Net position, beginning of year, as restated Net position, end of year See accompanying notes to the basic financial statements, ProRrarn Revenues Operating Capital Charges for Grants and Grants and FuncjjgHjTrAjMM !"WCnses Services �ontrihutions Contriutiojns Primary government: Governmental activities: General government S 72,836,020 $ 2,791,430 S 2,291,764 $ 7,331,999 Public safety 229,507,091 5,739,064 25,504,660 - Hi hways Highways and streets 51,368,841 16,712,641 1,143,412 5,879,014 Health, education and welfare 40,299,077 1,305,662 23,175,661 - Culture and recreation 35,213,973 1,844,380 380,140 511,410 Sanitation 56,605,864 20,896,167 402,308 1,062,269 Interest on long-term debt 13,385,794 Total governmental activities 499,216,660 49,289,344 52,897,945 14,784,692 Business -type activities: Health, education and welfare 573,854 469,082 132,435 - Total primary government $ 499,790,514 $ 49,758,426 � 53,030,380 S 14,784,692 Component unit: Water (note 14) $ 55,802,437 S 47,146,550 $ $ 9,310,212 General revenues: Taxes: Property taxes, levied for general purposes Public service company taxes Public utility franchise taxes Fuel taxes Grants and contributions not restricted to specific programs Investment earnings Other Total general revenues Change in net position Net position, beginning of year, as previously stated Cumulative effect of accounting change Prior period adjustment Net position, beginning of year, as restated Net position, end of year See accompanying notes to the basic financial statements, Net (Expense) Revenue and Changes in Net Position Primary Government Governmental Business -type Component Ac- w V ie _Activim* TQLat Unit - -- $ (60,420,827) $ - $ (60,420,827) $ (198,263,367) - (198,263,367) - (27,633,774) - (27,633,774) - (15,817,754) - (15,817,754) - (32,478,043) - (32,478,043) - (34,245,120) - (34,245,120) - (13,385,79D ---- —(13—,385—,794) (382,244,679) - (382,244,679) 27,663 27,663 _244,679) 27,66312�2217,016� — _ 654,325 268,869,322 - 268,869,322 8,423,340 - 8,423,340 7,950,750 - 7,950,750 8,288,676 8,288,676 19,810,090 - 19,810,090 - 661,184 1,243 662,427 428,771 __.LI�92,071 - 7,092,071 - 321.,095,433 1,243 321,096,676 428,771 (61,149,246) 28,906 (61,120,340) 1,083,096 510I032,175 1,517,909 511,550,084 247,783,630 (14,425,675) - (14,425,675) (417,718) 449,220 .... 495606,500 1,517,909 497,124,409 247,815,132 434,457,254 $ 1,546,815 $436,004,069 248,898,228 Assets Cash and cash equivalents (note 3) Investments (note 3) Receivables, net (note 4) Due from other governmental funds (note 5) Due from other nongovernmental funds (note 5) Receivables from other governments (note 4) Inventories Real estate held for sale Other Total assets Liabilities, Deferred Inflows and Fund Balances Liabilities: Accounts payable Accrued payroll Due to other governmental funds (note 5) Advance collections -intergovernmental Other Total liabilities Deferred Inflows of Resourccs: Unavailable revenue (note 7) Fund balances: Non5pendable: Inventory Restricted for: Debt service (note 10) Highways, streets and abandoned vehicles Public access open space Other Committed to: Budget stabilization Disaster and emergencies Lower Puna area Rental assistance and subsidy Sanitation Self insurance Highways, streets and abandoned vehicles Parks and recreational projects Zoning change impact mitigation (fair share) Other Assigned to: Subsequent year's budget Other Total fund balances Total liabilities, deferred inflows, and fund balances See accompanying notes to the basic financial statements. COUNTY OF HAWAII Governmental Funds Balance Sheet June 30, 2017 Bond Other Total Capital Redemption Governmental Governmental General E12jects Fund Funds Funds S 22,415,846 $ 23,085,974 $ 10,118,703 S 48,226,230 S 103,846,753 24,677,293 34,694,844 14,272,000 60,658 73,704,795 23,028,721 790,665 - 2,496,666 26,316,052 1,907,254 940,274 389,994 3,237,522 - - 1,350 1,350 13,586,271 5,813,197 1,996,606 21,396,074 5,561,433 - - 5,561,433 - 402,551 402,551 404,803 264,588 L.UMMAI 669,391 U121WIL =J31.221 S 5,835,106 $ 14,446,264 S 4,258,995 S 24,540,365 8,746,199 - 1,275,645 10,021,844 541,460 478,843 2,217,219 3,237,522 901,294 3,540,569 250,268 4,692,131 3,114,421 348,004 185,000 319,708 3,967,133 19 1-38480 jLL1 3.680 — — — i 8 5 0_QQ21 8-35 46.458.995 24 69-6 M, _-2-12-6-3E 27,222,567 5,561,433 - 5,561,433 - 24,205,703 2,599,986 26,805,689 20,209,784 8,079,232 28,289,016 14,686,566 - - 14,686,566 425,488 13,789,028 1,514,153 15,728,669 6,231,235 - - 6,231,235 5,777,352 5,777,352 4,087,297 4,087,297 1,219,449 1,219,449 16,474,899 16,474,899 1,311,907 - - 1,311,907 1,192,820 - 8,721,604 9,914,424 2,312,652 - 88,426 2,401,078 - 3,795,198 - - 3,795,198 693,503 1,202,272 - 205,378 2,101,153 11,668,006 - - - 11,668,006 1,391,468 4,009,520 - 5,400,988 COUNTY OF HAWAII Reconciliation of the Governmental Funds .Balance Sheet to the Statement of Net Position June 30, 2017 Total fund balances n governmental funds 161,454,359 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and therefore are not reporled in the funds. These assets consist of: Land and improvements 239,187,891 Infrastructure assets, net 328,917,985 Buildings and improvements, net 597,987,986 Equipment, net 60,190,776 Easements, net 4,244,255 Construction work in progress 71,118,202 Total capital assets, net (15,542,639) Deferred amounts on refunding and pension deferred are not reported in the governmental fund statements r from improvement district (481,808,766) Interest due on long-term debt (5,603,828) Capital leases (6,565,580) Compensated absences (39,485,902) Claims and judgments (14,435,693) Landfill costs payable (29,523,000) Pollution remediation (15,542,639) Other Postemployment Benefit Obligation (OPER) (82,247,822) Net pension obligation (619,275,868 Total long-term liabilities Deferred amounts related to pension are reported a reportedare riot tal fund state See accompanying notes to the basic financial statements. 99 M f. NOWNIAM, COUNTY OF HAWAII Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances For the Fiscal Year Ended June 30, 2017 Expenditures Current General government Public safety Highways and streets Health, education and welfare Culture and recreation Sanitation Pension and retirement contributions (note 13) Employees' health insurance Other postemployment benefits Other Debt service: Principal Interest Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures 39,678,100 1,141,202 Bond Other Total 136,162,496 2,779,964 Capital Redemption Governmental Governmental 22,853,246 General __Erojects Fund Funds Funds Revenues 37,586,518 38,671,469 38,440,865 5,277,117 Property taxes $266,517,397 $ $ 32,146,661 $266,517,397 Public service company taxes 8,423,340 2,424,887 1,414,468 8,423,340 Fuel taxes - 22,031,791 8,288,676 8,288,676 Public utility franchise taxes - - - 7,950,750 7,950,750 Licenses and permits 8,607,841 14,323,738 22,931,579 Intergovernmental 53,304,066 4,137,353 21,778,885 79,220,304 Charges for services 4,016,376 - - 17,691,787 21,708,163 Investment earnings 682,414 (54,058) - 3,846 632,202 Other 2,562,990 5,112,451 - 4,115,316 11,790,757 Total revenues 344,114,424 9,195,746 - 74,152,998 427,463,168 Expenditures Current General government Public safety Highways and streets Health, education and welfare Culture and recreation Sanitation Pension and retirement contributions (note 13) Employees' health insurance Other postemployment benefits Other Debt service: Principal Interest Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures 39,678,100 1,141,202 40,819,302 128,710,633 7,451,863 136,162,496 2,779,964 17,549,162 20,329,126 7,681,600 22,853,246 30,534,846 20,131,837 1,063,973 21,195,810 1,084,951 37,586,518 38,671,469 38,440,865 5,277,117 43,717,982 29,741,108 2,405,553 32,146,661 11,495,000 11,495,000 2,424,887 1,414,468 3,839,355 1,484,566 19,911,790 635,435 22,031,791 91,229 17,197,798 17,289,027 5,680,863 105,428,028 - - 111,108,891 289,425,603 105,428,028 19,911,790 114576,335 529,341,756 COUNTY OF HAWAII Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances For the Fiscal Year Ended June 30, 2017 Other Financing Sources (Uses) Sale of assets State Revolving Fund loans (note 10) Issuance of Bond Anticipation Notes Transfers in (note 5) Transfers out (note 5) Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Decrease in reserve for inventories Fund balances at end of year MMMMMI Bond Other Total Capital Redemption Governmental Governmental General Projects Fund Funds _ Funds $ 20,851 $ $ - 5 - S 20,851 2,309,039 - 1,460,364 3,769,403 - 8,129,534 - - 8,129,534 - 59,800,000 - - 59,800,000 - 3,997,524 23,730,661 39,135,706 66,863,891 _jg,911,06J6 - -952,82J5 630l) _Lq (60,5$1,176} 71,927,058 23,730,661 36,643,245 71,719,788 (5,892,355) (24,305,224) 3,818,871 (3,780,092) (30,158,800) 53,852,258 70,816,498 20,386,832 46,770,516 191,826,104 212,945) - - - 12,945) _ _ _ (L__ $ 47,746,958 $ 46,511,274 S 24,205,703 $42,990,424 $161,454,359 TrIMMIUR M= COUNTY OF HAWAII to the Statement of Activities For the Fiscal Year Ended June 30, 2017 Net change in fund balances - total governmental funds Amounts reported for governmental activities in the statement of activities are different because: Capital outlays are reported as expenditures in governmental funds. However, in the statement of activities, the cost of capital assets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are: Capital outlay 109,612,683 Dedicated and contributed property 4,239,151 Depreciation expense and loss on disposals (45,842,032 Excess of capital outlay over depreciation expense 68,009,802 Borrowings provide current financial resources to governmental funds; however, issuing debt increases long-term liabilities in the statement of net position. In the current period, assets financed through: Bond anticipation notes (59,800,000) State Revolving Fund loans (8,129,534) Capital leases _�3,769,403) Total debt proceeds (71,698,937) funds, but the repayment reduces long-term liabilities in the statement of net position. In the current year, these amounts consist of: Bond principal retirement 17,979,082 State Revolving Fund loan repayments/forgiveness 2,967,508 Capital lease payments 2J20,001 Total long-term debt repayment 23,066,591 Because some revenues will not be collected for several months after the County's fiscal year end, they are not considered "available" revenues and are "deferred" in the governmental funds. Unearned revenues increased by this amount this year, 2,467,004 situ "1 -1 WW financial resources and therefore are not reported as expenditures in governmental funds. These activities are: OMOPU MT I I (net of intergovernmental transfer to reduce liability) Increase in compensated absences Increase in claims and judgments Increase in landfill closure/postclosure care costs Decrease in pollution remediation costs Amortization of premium from bond issuance Amortization of deferred loss on refunding Net decrease in accrued interest II MMZx,� MEW, (5,237,965) (1,578,097) (576,197) (6,890,000) 871,471 4,331,131 (762,997) 436,884 __(43,216,191) COUNTY OF HAWAII General Fund Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 2017 MIMME Actual Variance Original Final (Budgetary Positive _BudtSL_ Pudget_Bsis�e _ S�L �tivc Revenues: Taxes and assessments: Property taxes $ 266,500,000 $ 266,500,000 $ 266,517,397 $ 17,397 Public service company taxes 10,340,000 10,340,000 8,423,340 916,660 Total taxes and assessments 276,840,000 276,840,000 74,94(,7L7899,26J3 Licenses and permits: Nonbusiness licenses and permits 3,835,624 3,835,624 3,630,757 (204,867) Business licenses 2,133,433 2,133,433 1,934,489 (198,944) Street use 2,905,000 2,905,000 3,042,595 137,595 Total licenses and permits 8,874,057 8,874,057 8,607,841 (266,216) Intergovernmental: Federal: Programs for the aged 2,280,336 2,280,336 1,383,990 (896,346) Community development block grants - 2,500,000 2,500,000 Law enforcement 3,378,117 3,809,914 1,714,111 (2,095,803) Other 3,031,636 4,628,129 4,683,475 55,346 Total federal 8,690,089 13,218,379 10,281,576 936,803 State: State General Fund - Act 185, SLH 1990 19,158,000 19,158,000 19,158,000 - Emergency medical services 14,358,592 15,667,628 16,536,274 868,646 Other 6,779,412 8,361,575 5,249,197j 12,37J8 Total State 40,296,004 43,187,203 40,943,471 __(Z,243,73J2 Total intergovernmental revenue 48,986,093 56,405,582 _51,225 047 180,535 Charges for services: General government 5,553,907 5,553,907 4,153,855 (1,400,052) Culture and recreation 1,451,400 1,491,400 1,258,808 (232,592) Flighways and streets 1,264,000 1,264,000 1,210,281 (53,719) Public safety 111,368 111,368 116,115 4,747 Total charges for services 8,380,675 8,420,675 6,739,059 L!168l,61J6 Fines and forfeitures 2,069,500 2,069,500 1,21L,045 __(858,455} Rents 207,500 207,500 208,652 1,152 MIMME COUNTY OF HAWAII General Fund Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 2017 ME= N&A, Actual Variance Original Final (Budgetary Positive Bud et .. Budget Basis) (Ne ative) Revenues (continued): Interest and penalties S 800,000 S 800,000 S 654,579 (145,421 Miscellaneous 5 , 174,43 3 5,274,433 5,016,183 Total revenues 351,332,258 358,891,747 348 603,1438,60J4 Expenditures: Current: General government: Finance 12,359,293 12,359,293 10,454,350 1,904,943 General government building 5,334,997 5,281,550 4,693,345 588,205 Legislative 4,261,915 3,452,215 3,206,920 245,295 Automotive equipment 4,720,717 4,720,717 3,912,183 808,534 Law 2,729,370 2,729,370 2,410,627 318,743 Research and development 3,565,557 3,766,758 3,106,152 660,606 Planning and zoning 3,923,315 3,923,315 3,620,608 302,707 Mayor's office 1,581,838 1,741,838 1,674,214 67,624 Engineering 1,673,406 1,673,406 1,335,557 337,849 Information technology 2,590,390 2,590,390 2,484,190 106,200 Human resources 2,006,658 2,006,658 1,741,145 265,513 Public works administration 1,737,538 1,790,485 1,693,319 97,166 Elections 1,058,525 1,058,525 881,796 176,729 Legislative auditor 757,084 757,084 578,907 178,177 Total general government 48,300,603 47,851,604 41,793,313 6,058,291 Public safety: Police department 65,098,683 65,314,785 60,278,989 5,035,796 Fire department 47,215,247 50,149,225 48,363,288 1,785,937 Prosecuting attorney 9,213,045 9,891,075 8,168,304 1,722,771 Protective inspection 3,429,595 3,454,595 2,985,601 468,994 Liquor control 2,123,128 2,286,645 2,068,447 218,198 Flood control 330,000 330,000 245,260 84,740 Civil defense agency 1,417,473 1,617,473 1,419,315 198,158 Animal control 2,081,625 2,081,625 2,081,625 -- Total public safety 130,908,796 135,125,423 125,610,829 9,514,594 Highways and streets: Mass transit 5,510,898 5,519,398 4,352,382 1,167,016 ME= N&A, COUNTY OF HAWAII General Fund Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 2017 2= sm Actual Variance Original Final (Budgetary Positive Budget_ Budget_ Basis) _(Negative) Expenditures (continued): Current (continued): Health, education and welfare: Elderly activities $ 3,848,900 S 3,889,118 $ 3,222,318 S 666,800 Office of aging 2,900,343 3,909,603 3,009,860 899,743 Education 58,500 58,500 30,276 28,224 Social programs 1,500,000 1,500,000 1,468,750 31,250 Cemeteries 403,322 403,322 373,241 30,081 Physical examination 133,826 133,826 133,825 1 Total health, education and welfare 8,844,891 9,894,369 8,238,270 1,656,099 Culture and recreation: Community music 283,210 283,210 198,157 85,053 Organized recreation: Maintenance 9,928,290 10,058,372 9,589,792 468,580 Recreation 3,013,150 3,045,216 2,722,601 322,615 Aquatics 2,496,791 2,496,791 2,161,183 335,608 Hoolulu park complex 1,035,811 1,030,811 978,248 52,563 Administration 2,030,972 2,231,051 2,068,885 162,166 Children's zoo 787,084 787,084 741,316 45,768 Summer/Intersession 508,098 514,099 363,378 150,721 Culture and arts 315,277 332,104 306,241 25,863 Elderly activities administration 626,254 698,832 646,304 52,528 Total culture and recreation 21,024,937 21,477,570 19,776,105 1,701,465 Sanitation: Environmental management 1,179,769 1,179,769 1,051,099 128,670 Pension and retirement contributions 41,281,132 41,281,132 37,505,237 3,775,895 Employees' health insurance 31,000,000 31,000,000 29,717,016 1,282,984 Other postemployment benefits 11,495,000 11,495,000 11,495,000 - Other 4,603,500 4,238,550 2,631,967 1,606,583 Total current 304,149,526 309,062,815 282,171,218 26,891,597 2= sm COUNTY OF HAWAII General Fund 2,750,000 Statement of Revenues, Expenditures, and Changes in Fund Balance - $ 125,211 Budget and Actual (Budgetary Basis) 100,000 For the Fiscal Year Ended June 30, 2017 100,000 (Concluded) Actual Variance Original Final (Budgetary Positive Bud et . --12AEet Basis) (Negative) Expenditures (continued): Capital Outlay: Community Development Block grants (HUD) HOME Program Other Total capital outlay Total expenditures Excess of revenues over expenditures Other financing sources (uses): Transfers out: Housing Fund Solid Waste Fund Sewer Fund Golf Course Fund Capital Project Fund Highway Fund Disaster/Emergency Fund Public Access, Open Space, and Natural Resources Preservation Fund Public Access, Open Space, and Natural Resources Preservation Maintenance Fund Budget Stabilization Fund Debt Service Fund Total transfers out Total other financing uses Excess (deficiency) of revenues and other sources over (under) expenditures and other uses Fund balance at beginning of year Fund balance at end of year See accompanying notes to the basic financial statements. S 150,000 2,750,000 S 2,624,789 $ 125,211 100,000 100,000 - 100,000 j45,560 45,568 250,000 2,850,000 2,579,221 270,779, 304,399,526 311,912,815 284,750,439 27,162,376 46,932,732 46,978,932 63,852,704 16,873,772 (1,810,896) (1,822,396) (1,572,396) 250,000 (18,679,575) (18,679,575) (18,679,575) - (2,120,785) (2,120,785) (2,120,785) - (477,519) (477,519) (477,519) - (44,700) (44,700) - (10,000) (10,000) - (250,000) (250,000) (250,000) - (5,330,000) (5,406,000) (5,330,348) 75,652 (666,250) (675,750) (666,293) 9,457 (250,000) (250,000) (250,000) - (43,858,131 (A1858,13Jl (43,85$,13 1) - (73,443,156) (73,594,856 259,74J7 335,109 _C71,443,156 594,856 (73,259,747) 335,109 (26,510,424) (26,615,924) (9,407,043) 17,208,881 53,852,258 53,852,258 53,852,258 - $ 27,341,834 S 27,236,334 $ 44,445,215 $ 17,208,881 COUNTY OF HAWAII Proprietary Funds Statement of Net Position June 30, 2017 Assets Cur -rent assets: Cash and cash equivalents (note 3) Restricted cash and cash equivalents (note 3) Investments (note 3) Imprest fund (note 3) Receivables, net (note 4) Prepaid expenses Total current assets Noncurrent assets: Restricted cash and cash equivalents (note 3) Capital assets (note 6): Land and site improvements Buildings and equipment Less accumulated depreciation Total capital assets Total noncurrent assets Total assets Liabilities Current liabilities: Accounts payable Internal Balances (note 5) Security deposits payable from restricted assets Deferred revenue Interest payable Notes payable, current portion (note 10) Total current liabilities Noncurrent liabilities: Notes payable (note 10) Total liabilities Net Position Net investment in capital assets Unrestricted UMMMMM= See accornpanying notes to the basic financial statements. Business -type Activities® 29,487 ,e Fund,- Ente!!!!! rise Funds Kulaimano Ouli Ekahi Elderly Affordable Housing Housing Enect Project Total S 391,881 $ 398,880 $ 790,761 11,863 29,487 41,350 199,994 - 199,994 50 100 ISO 127 3,900 4,027 1,791 - 1,791 605,706 432,367 1,038,073 72,644 72,644 511,000 515,727 1,026,727 1,243,908 487,229 1,731,137 _L1,232, L 18J �6,005 308923 __._j LL 121,990 926,951 1,448,941 521,990 999,595 1,521,585 1,127,696 1,431,962 2,559,658 5,424 29,720 35,144 1,350 - 1,350 11,863 28,050 39,913 401 259 660 11,127 - 11,127 59,251 35,183 94,434 89,416 93,212 182,628 592,496 237,719 830,215 6 81 �91 2 330,931 1,012,843 (129,757) 654,049 524,292 575,541 446,982 1,022,523 S 445,784 1,101,031 $ 1,546,815 COUNTY OF HAWAII Proprietary Funds Statement of Revenues, Expenses, and Changes in Fund Net Position For the Fiscal Year Ended June 30, 2017 Operating revenues: Rental receipts from tenants Rental subsidy from federal government - HUD Laundry receipts Other Total operating revenues Operating expenses: LIfifities General and administration Maintenance and repairs Depreciation (note 6) Total operating expenses Operating income Nonoperating revenues (expenses): Investment income Interest expense Total nonoperating revenues (expenses) Change in net position Net position, beginning of year Net position, end of year See accompanying notes to the basic financial statements, Business -type Activities - Enterprise Funds Kulaimano Ouli Ekahi Elderly Affordable Housing 11ousing Project E!qject Total S 121,995 $ 333,540 $ 455,535 132,435 132,435 3,284 - 3,284 - 574 9,689 10,263 258,288 343,229 601,517 34,570 54,779 89,349 126,713 109,403 236,116 53,505 106,754 160,259 35,687 17,228 52,915 250,475 288,164 538,639 7,813 55,065 62,878 1,225 18 1,243 35,215 -(35,2'15 _1.33,99J0 18 SI3,972 (26,177) 55,083 28,906 471,961 1,045,948 1,517,909 S 445,784 S 1,101,031 $ 1,546,815 COUNTY OF HAWAII Proprietary Funds Statement of Cash Flows For the Fiscal Year Ended June 30, 2017 See accompanying notes to the basic financial statements Business -type Activities - Enterprise Funds Kulaimano Ouli Ekahi Elderly Affordable Housing Housing EIRLect EE9ject Total Cash Flows from Operating Activities Receipts from tenants $ 125,904 $ 344,244 $ 470,148 Receipts from federal government - HUD 132,435 132,435 Payments to suppliers for goods and services (213,544) 243,023) 6 (±L,567 ... j Net cash provided by operating activities 44,795 101,221 146,016 Cash Flows from Capital and Related Financing Activities Principal paid on notes payable (56,061) (33,304) (89,365) Interest paid on notes payable (36,279) (36,279) Purchase of capital assets (5,960) L84J3 ±6,803) Net cash used in capital and related Financing activities (98,300 (L4,l4J7 (132,447) Cash Flows from Investing Activities Proceeds from maturities of investments 200,000 200,000 Purchase of investments (200,000) (200,000) Interest on investments 1.267 18 1,285 Net cash provided by investing activities 1,267 18 -1,285 Net increase (decrease) in cash and cash equivalents (52,238) 67,092 14,854 Cash and cash equivalents at beginning of year (including restricted cash and cash equivalents) 456,032 434,019 890,051 Cash and cash equivalents at end of year (including restricted cash and cash equivalents) $ 403,794 $ 501,111 $ 904,905 Reconciliation of Operating Income to Net Cash Provided by Operating Activities Operating income $ 7,813 $ 55,065 $ 62,878 Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation expense 35,687 17,228 52,915 Change in assets and liabilities: Receivables, net (116) (959) (1,075) Prepaid expenses (77) (77) Accounts and other payables 1,241 30,570 31,811 Deferred revenue 247 (68J3 4 _L3 Net cash provided by operating activities $1 44,795 $ .. 101,221 $ 146,016 Supplemental disclosure of cash flow information - Interest paid $ 36,279 $ $ 36,279 Noncash investing, capital and financing activities: Net decrease in fair value of investments (6) $ (6) See accompanying notes to the basic financial statements COUNTY OF HAWAII MHMM�� Statement of Fiduciary Net Position June 30, 2017 Liabilities Due to other agency funds 3,623 Accrued liabilities 3,199,643 Advances payable 381,679 Assets held for the benefit of improvement districts 1,132,906 Total liabilities 4,717,851 Net Position Held in trust for other parties 4,778,336 Total net position 4,778,336 See accompanying notes to the basic financial statements Private - Purpose Agency Trusts Funds Assets Cash and cash equivalents (note 3) $ 1,688,045 $ 3,843,924 Investments (note 3) 3,090,291 420,930 Receivables: Due from other agency funds - 3,623 Other receivables 449,374 Total receivables - 452.997 Total assets 4,778,336 4,717,851 Liabilities Due to other agency funds 3,623 Accrued liabilities 3,199,643 Advances payable 381,679 Assets held for the benefit of improvement districts 1,132,906 Total liabilities 4,717,851 Net Position Held in trust for other parties 4,778,336 Total net position 4,778,336 See accompanying notes to the basic financial statements COUNTY OF HAWAII Fiduciary Funds Statement of Changes in Fiduciary Net Position For the Fiscal Year Ended June 30, 2017 See accompanying notes to the basic financial statements Private - Purpose Trusts Additions Contributions: Puna Geothermal Venture $ 50,000 Investment earnings: Net increase in fair value of investments 59,624 Dividends and interest 53,869 Total additions 163,493 Deductions Claims Consultant 1,526 Grant payments 125,794 Investment Fees 13,144 Total deductions 140,464 Change in net position 23,029 Net position, beginning of year 4,755,307 Net position, end of year $ 4,778,336 See accompanying notes to the basic financial statements accounting principles (GAAP) as applicable to local governmental units. The following notes to Fk-nV_Q& Report (CAFR). VAL, arg IF 'Morgatsmillml Prinzary Goveninjent The County operates under the Mayor -Council form of government under a charter that became effective on January 2, 1969, and was amended in 1979, 1982, 1990 and 2000. The County's operations are organized by the following functions: general government; public safety; highways and streets; sanitation; health, education and welfare; culture and recreation; pension and retirement contributions; health fund; miscellaneous; capital outlay; and debt service. The State of Hawai'i (the State) assumes full responsibility for several major functions usually performed by local governments, including education, welfare, health and judicial functions. There are no separate city, county or township governments nor any school districts, special districts, authorities or public corporations with overlapping authority, GASB Statement No. 14, as arnended, defines component units as legally separate organizations for which the elected officials of the primary government are financially accountable or for which the primary government may determine, through exercise of amfagruma'sr J# nrlo-e r -d at, un(V t the financial accountability criteria is necessary in order to prevent the reporting entity's financial statements from being misleading. "Financial accountability" is the level of accountability that exists if a primary government appoints a voting majority of an organization's governing board or if the organization is fiscally dependent on the primary government and is either able to impose its will on that organization or there is a potential for on, the primary government. A primary government has the ability to impose its will on an organization if it can significantly influence the programs, projects, activities or level of services performed or provided by the organization. An organization has a financial benefit or HIM MM1110111011 I I I I or.) I I a InL01 u I I,% I V-10 Bit I is # As required by GAAP as set forth in GASB Statement No. 14, No. 3 9 and No. 6 1, these basic financial statements present the County of Hawai'i (tile primary government) and its component unit, the Department of Water Supply (tile Department). This component unit is included in the County's rei)ortinLy entitv because of its financial relationshit) with the Countv, by the County Council. The Department is granted corporate powers by state statute and the County Charter. Although the County does not have the authority to approve or modify the Department's operational and capital budgets, the County has issued bonds on the Department's behalf that are general obligations of the County. Because tile County is obligated to repay these bonds in the event of default by the Department, the County is financially accountable for the debts of the Department. See Note 14 for component unit disclosures for the Department. Complete financial statements of the Department can be obtained from the Department of Water Supply, 345 Kekfiana6'a Street, Suite 20, Hilo, Hawai'i 96720. 10.0fa-stTirl". The government -wide statement of activities reflects both the gross and net costs per functional category (general government, public safety, highways and streets, etc.) which are otherwise being supported by general government revenues (property taxes, certain intergovernmental revenues, etc.). The statement of activities reduces gross expenses (including depreciation) by related program revenues, operating and capital grants. The program revenues must be directly associated with the function (general government, public safety, highways and streets, etc.) or a business -type activity. The operating grants include column reflects capital -specific grants. The net cost (by function or business -type activity) is normally covered by general revenues. KR M 62:�:41 � The governmental funds in the fund financial statements are presented using the current financial resource focus and modified accrual basis of accounting. This is the manner in which these funds are normally budgeted. This presentation is deemed most appropriate to (a) demonstrate legal and covenant compliance, (b) demonstrate the source and use of liquid resources, and (c) demonstrate how tile County's actual experience conforms to the budget fiscal plan. Since the governmental fund statements are presented using a different measurement focus and basis of accounting than the government -wide statements' governmental activities column, a reconciliation is presented on tile page following each statement, which briefly explains the adjustments necessary to transform the fund based financial statements into the governmental activities column of the government -wide presentation. The County's fiduciary filrids are presented in the fund financial statements by type (private purpose and agency). Since by definition these assets are being held for the benefit of a third party (private parties, state government, etc.) and cannot be used to address activities or obligations of the government, these funds are not incorporated into the government -wide state.ttetts, Goveritniew-ivide andfundfinancial statements — The government -wide financial statements (i.e., the statement of net position and tile statement of activities) report information on all of the nonfiduciary activities of the primary government and its component unit. The effect of interfund activity has been removed from these statements during tile process of incorporating fund data but interfund services provided and used have not been eliminated in the process of consolidation. Governmental activities, which non-nally are supported by taxes and intergovernmental revenues, are reported separately from business - type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include (a) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not included among program revenues are reported instead as general revenues, MORWO 1000 0111140109 ERION61"M it 11000 I a- - �__ 0 r" 9 .11 1 reported as separate columns in the fund financial statements. Activities infunds - The financial transactions of the County are recorded in individual funds. Each fund is accounted for by providing a separate set of self -balancing accounts that comprises its assets, deferred outflows of resources, liabilities, deferred inflows of resources, reserves, fund equity, revenues and expenditures/expenses. The various funds are reported by generic classification within the financial statements, GASB Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis -Jbi- State and Local Govei-nnients, sets forth minimum criteria (percentage of the assets, deferred outflows of resources, liabties, deferred inflows of resources, revenues or expenditures/expenses of either fund category or the governmental and enterprise combined) for the determination of major funds. The nonmajor funds are combined in a column in the fund financial statements and detailed in the combining section. General Fund - The general fund is tile general operating fund of the County. It is uN&4 to account for all activities of the general government, except those required to be accounted for in other funds. and general and special revenue fund revenues. The capital projects fund is used to account for financial resources to be used for the acquisition or construction of major general government capital facilities and infrastructure (other than those financed by proprietary funds and trust funds) when separate project centers are needed to control costs. Bond Redeniption Fund -Used to accumulate moneys for the payment of general obligation bonds. Moneys required to retire the bonds are transferred from the General Fund one year in advance of maturity, 11111 ii J 111 11 X-M-7r7r,Vr#-7MFr1Y-/.T 7M77—g,' —1-i � _1." -1 "7r-'T=?CJ*n ord"TF= housing project for low-income senior citizens located north of Hilo. I I g I I I &OJ r44 4 a Inw. I r! 14 a I a I L Private -Purpose Trust Funds — Used to account for funds received from geothermal developers to mitigate the effects of geothen-nal energy development. Also used to account for investment income on funds received from im ort businesses at t e nort 01 • State Weight Tax Fund • Improvement District No. 18 Fund • Improvement District No. 19 Fund • Improvement District Revolving Fund • Performance and Refundable Deposits Fund • Payroll Clearance Fund • Flexible Spending Account • Lapsed Warrants Fund • Non -Profit License Plates Fund • Organ and Tissue Education Fund • Business Improvement District I -Kailua , regdj'IEJC�� IPLI RaMs tw ME Liming 17 Me MeasurCHIC01 101# 1141 1 MCI r"as RP I lot T 4*�,74w-iwat?-t--i� #�.-,]#-X.-51,,fV-W-C-Qry-�,,t-Lt-tl&��t fund financial statements are presented on an accrual basis of accounting. The governmental funds in the fund financial statements are presented on a modified accrual basis. related obligation is incurred. Mod�fled Accrual Basis - Revenues are recorded when susceptible to accrual (that is, both measurable and available), "Measurable" means the amounts are deter -minable. "Available" means the amounts are collectible within the current period or soon enough thereafter (one year for intergovernmental revenues) to be used to pay liabilities of the current period. In applying the susceptible to accrual concept to intergovernmental revenues, the legal and contractual requirements of the numerous individual programs are used as guidance. There are essentially two types of these revenues. In one, monies must be expended on the specific purpose or project before any amounts will be paid to the County; therefore, revenues are recognized based upon the expenditures recorded. Most construction grants and many *perating grants fall into this category, In the other, monies are virtually unrestricted as to L *urpose 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 inflow of resources in its fund financial statements (see Note 7). Deferred inflows of resources arise when potential revenue does not meet both the "measurable" and "available" criteria for recognition in the current period. In subsequent periods when both revenuere_c�ition criteria are met, the deferred inflow is removed from the fund financial statements and revenue is recognized. Expenditures are recognized under the modified accrual basis of accounting in the accounting period in which the fund liability is incurred. Exceptions to this general rule include: (a) accumulated compensated absences and claims and judgments which are recognized as expenditures when paid; (b) liabilities related to municipal solid waste landfill closure and postclosure care costs; (c) principal and interest on general long-term debt which are recognized as expenditures when due; and (d) liabilities relating to pollution remediation . The County applies all applicable GASB pronouncements, including the adoption of GASB State e t o. 62, Codi cation ofAccounh I n and Financial R t' G 'd i Zua��=nce �Contaii�ied MUM "R Wf Encumbrances I Ir"M111111 - a 1 11 W, 11 1 1 - 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 included in the respective fund balance categories as appropriate and do not constitute expenditures or liabilities because the commitments will be honored during the subsequent year. COUNTY OF HAWAI'l Notes to the Basic Financial Statemeni June 30, 2017 Cash and Investments Cash and cash equivalents include cash on hand, amounts in demand deposits and savings accounts, and short-term investments with a maturity date of three months or less from the date acquired by the County. Roth categories of investments are stated at fair value (see Note 3). Valuations of investments, in government sponsored enterprises such as Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mae) are based on quoted market rates. Valuations of certificates of deposits are based on cost, which approximate fair value, as they almost invariably are held to maturity. Investments also consist of equity securities in the fiduciary fund financial statements. These investments are stated at fair value based on closing quoted prices. interest at I o per month and penalties of up to 10% of the amount due. Assessments are based on 100% of estimated fair market values prior to the application of exemptions or preferential assessments, The County provides real property tax abatement under five programs — Enterprise Zone, Historic Residential Dedication, Low and Moderate Income Housing, Agricultural Use Programs, and Solar Water Heater Credit: Enterprise Zone Exemption - Section 19-89.3 of the Hawai'i County Code provides buildings or other like structures which are built as a result of new construction by a qualified business within an enterprise zone to be exempt except for the minimum tax from real property taxes for a period of three years. The purpose of this program is to stimulate business and industrial of the Hawai'i County Code and section 208E, Hawaii Revised Statutes. Historic Residential Dedication Exemption —Section 19-89.1 of the Hawai'i County Code and Rule 36 of the Rules and Re I tions ofthe Director of Finance Drovides an exeMDtion to =2 Notes to the Basic Financial Statements owner certifies the current level of taxation is a material factor which threatens the continued existence of the historic status. This dedication is for a minimum period of ten years, automatically renewable indefinitely, Cancellation of the dedication by either the owner or the Director of Finance may only be rnade upon five years' written advance notice and no earlier than the end of the fifth tax year, Any person who becomes an owner of die dedicated real property shall be subject to the restrictions and retroactive tax assessment provisions. If the dedication is approved, tile exemption based upon the dedication shall be effective July I of the tax year following the approval of the dedication, The dedicated exempt property or subject to roll back taxes, including penalty and interest. Lo;v and Moderate -Income Housing Evemption — Section 19-87 of the Hawai'i County Code and Rule 37 of the Rules and Regulations of the Director of Finance provides an exemption for a housing project which is owned and operated by a nonprofit or limited distribution mortgagor or by a qualified entity from taxation. Must participate in long-term housing project that have regulatory agreements mandating rent levels, occupancy of the project is limited to the elderl handica . ed, low or moderate income families, Applicants must submit an application form along with a copy of the recorded regulatory agreement. The exemption is equal to 100% of the assessed value for the portion of the real property that is dedicated as low- and moderate -income rentals, If the entire property is dedicated, then the net taxable is zero but the property is still subject to the minimum tax per Section 19-90(e) of the Hawai'i County Code. The exemption shall continue so long as the rental housing project is owned and operated by a nonprofit or limited mortgagor, If the rental units do not comply with the regulatory conditions, the property would be subject to roll back taxes, including penalty and interest. Non Dedicated Agricultural Use Assessment — Section 19-57 of the Hawai'i County Code and Rule 34 of the Rules and Regulations of the Director of Finance reduces assessments to encourage local agricultural production as well as the preservation of agricultural lands that could otherwise be further developed, by valuing these lands at the at two times tile dedicate agricultural use value as opposed to the market value, Unlike the Dedicated Agricultural Use program, the zoning for this program must be agricultural. An application form must be filed aw property, Upon review and approval, the application is effective as of January I for the following tax year, Renewal of the application shall be in such form and at such time as requested by the director. Valuation consideration is given to the type of agricultural activity. Any breach to the terms of would result in an immediate rollback calculation of current plus two yeas taxes plus penalties and interest. WE MMUM=1 bridges, curbs and gutters, streets and sidewalks, drainage systems, lighting systems, and similar items, are rev e__ -t, I n� orted in the a%licabl governmental or business Re activities cc urn in the government -wide financial statements. Capital assets are defined by the County as assets with an initial, individual cost of more than $1,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed, Donated capital assets are recorded at acquisition value if available or if not, at estimated fair market value at the date of donation. materially extend the life of the asset are not capitalized. included as part of the capitalized value of the assets constructed, Capital assets of the primary government and enterprise fund are depreciated using the straight-line method over the following estimated useful lives of the assets: Assets Years Infrastructure 20 to 100 years Buildings and improvements 50 to 100 years Ground and site improvements 20 to 50 years Equipment 5 to 40 years Easements Dependent on terms of easement agreement Va"M .07METOM—MMUTT's ITY FUSTIFUces represeni "itilsirrip 111TI + . I I , C period and will not be recognized as an outflow of resources (expense or expenditure) until that time. The County has two items that qualifies for reporting in this category, The County reports the deferred loss on refunding and deferred outflow related to pensions as a deferred outflow of resources in its statement of net position. iaxes, fees and other non-exchange -transac,ti..ons received in the current fiscal year for the ensuing, fiscal e nows of resources. These amounts are deferred FOUNMINVIRTWOMY", M The County reports long-term debt of governmental funds at face value on the government - wide statement of net position. Certain other governmental fund obligations not expected to be financed with current available resources are also reported on the government -wide statement of net position, Long-term debt and other obligations financed by the proprietary funX s are reported as liabilities in those funds. Compensated Absences Employees earn vacation credit at the rate of one and three-quarter working days for each month of service. Up to ninety days of vacation leave credits can be accumulated per employee. In addition, employees who work overtime can elect to take compensatory time o 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 o an employee can accumulate. Both compensatory time off and vacation credits are converte to pay upon termination of employment. A liability for these amounts is reported in the governmental funds only if they have matured for example, as a result of employee resignations and retirements. All vacation and compensatory time off pay is accrued in the government -wide statement of net position alon with the estimated liability for social security and Medicare taxes and employers' retirement contributions on those amounts. 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; therefore there is no related liability. However, a County employee who retires or leaves government service in good standing with 60 days or more of unused sick leave is entitled to additional service credit in the Employees' Retirement System of the State of Hawaii. Accumulated sick leave at June 30, 2017 totaled $77,165,000 for the primary government. Leases transferring substantially all of the risks and benefits of ownership are recorded as capital leases; other leases are operating leases (see Note 8). Capital leases are recorded as I Uri ri "11 additions to and deductions from ERS's fiduciary net position have been determined on the same basis as they are reported by ERS. For this purpose, benefit payments (including &--�M43 w4m= 1-4m 2ad the benefit terms. Investments are reported at fair value. Revenues and expenses are distinguished between operating and nonoperating items for the proprietary funds. Operating revenues generally result from providing services in connection with the proprietary funds' principal ongoing operations. The principal operating revenues of the proprietary funds are fees charged to residents for rent and rental subsidies received from the federal government. Operating expenses include the costs associated with providing housing for tenants, such as utilities, le?se reyt, aid- imiitex9ace ?jid re?airs; ai-Laihuistrative ey.7,esses; a -M deprecia"-f, o% capital assets. All revenues and expenses not meeting these definitions are reported as nonoperating revenues and expenses. M MM 8-0MIM= The preparation of the basic financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, deferred outflows of resources, liabilities, and deferred inflows of resources, as well as disclosure of contingent assets and liabilities at the date of the financial statements, and the the reporting period. Actual results could differ from those estimates. When both restricted and unrestricted fund balances are available for use, it is the County's �,olicy to use restricted fund balance first, then unrestricted fund balance. Furthermore, committed fund balances are reduced first, followed by assigned amounts, and then , _g j jbij ey.g 1 r r *urn,#.Re.-; ficr w�iclf awowtts iv avv of MMEMM= -IL19VW- 4URYDN must be kept intact. The County has inventory included in their nonspendable fund balance. Restricted Fund Balance — Constraints placed on the use of these resources are either I osed bv creditors (sucV as t.tiouah debt cou-waqfts grantors. contri�= I". gmmgff� or other governments or are imposed by law (under the Hawai'i Revised Statutes or County of Hawai'i Charter). for specific purposes as a result of constraints imposed by the County Council via ordinances and the County Code and can only be undone via the same manner. The committed fund balance of the General Fund includes the portion of fund balance committed to budget stabilization. The budget stabilization portion is authorized under County Code §2-219 to §2-223 and additions are made via the County budget or subsequent budget amendments. The fund balance may only be used when there is a reduction in budgeted revenue and the director of finance determines that such use is necessary to prevent a reduction in the level of public services. Assi ed Fund Balance —Assigned fund balances are amounts that are c lie MA ltnassigned Fund Balance — This is the residual classification of the General Fund. The General Fund is the only fund that could potentially report a positive unassigned fund balance. 11M) I IMMOM 11,12,03,119 1101101MIA viel-111141 I a if &I ML, I I un I wo no I I I r.!&14 d I New Accounting Pronouncements In June 2015, GASB issued Statement No. 73,Accounting and Financial Reportingfor Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68. The objectives of this Statement include imv,,rovin , the usefulness of information for decisions made b1i the variom users of the general purpose external financial reports of governments whose employees — 111 1111 1,;;,!!!! 111 V 11111 0 M I oil M "t 11MUCI MWIT-31003-MMWIMIMMIL�- 11 = I Kmm- �M I I I gKwel I I I IVA I I I Im ra I L-741 I VW44 a 111- 1 In June 2015, GASB issued Statement No. 74, Financial Refrtingfor Postemployment Benefit Plans Other Than Pension Plans. The objective of this Statement is to improve the usefulness of information about postemployment benefits other than pensions (other �*Sr' iAclvfe,f ix tke gener%Lyv-**se exterA,91 fix,?;kriQ1 re-1)*As of state and local governmental OPEB plans for making decisions and assessing accountability. The requirements of this Statement are effective for the County for periods beginning after June 15, 2016 and did not have an impact on the County's financials for the year ending June 30, 2017. In June 2015, GASB issued Statement No. 75,Accounting and Financial Reportingfor Posteniployinent Benefits Other Than Pensions. The primary objective of this Statement is to improve accounting and financial reporting by state and local governments for postemployment benefits other than pensions (other postemployment benefits or OPEB). Th,; requirements of this Statement are effective for the County for periods beginning after June 15, 2017. The County has not yet detertnined the effect this Statement will have on its financial statements. In December 2015, GASB issued Statement No. 78, Pensions Provided through Certain Multiple-Einployer Defined Benefit Pension Plans. The objective of this Statement is to address a practice issue regarding, the scox,)e and aw , ghcabihty of Statement No. 68, Accounting andFinancial Reportingfor Pensions. The requirements of this Statement are effective for reporting periods beginning after December 15, 2015 and did not have an impact on the County's financials for the year ending June 30, 2017. In January 2016, GASB issued Statement No. 80, Blending Requirementsfor Certain Component Units. The objective of this Statement is to improve financial reporting by clarifying the financial statement presentation requirements for certain component units. The requirements of this Statement are effective for reporting periods beginning after June 15, In March 2016, GASB issued Statement No. 8 1, Irrevocable Split -Interest Agreements. The objective of this Statement is to improve accounting and financial reporting for irrevocable split -interest agreement by providing recognition and measurement guidance for situations in which a government is a beneficiary of the agreement. The requirements of this Statement are effective for financial statements for periods beginning after December 15, 2016 and did not have an impact on the County's financials for the year ending June 30, 2017. In March 2016, GASB issued Statement No. 82, Pension Issues. The objective of this Statement is to improve consistency in the application of pension accounting and financial reporting requirements by addressing certain issues that have been raised with respect to previously issued Statements. The requirements of this Statement are effective for reporting EM Notes to the Basic Financial Statements P 1711ifliii HIPLIVIlb III MIMI U11 G111PYUJUI b PCIINVIIII I1U,FI11LJ Ib 111VUbLI-Vt US U1 d ItULIZ; 41.11cr Man 1.11c; employer's most recent fiscal year-end is effective in the first reporting period in which the measurement date of the pension liability is on or after June 15, 2017. The County implemented these requirements as of and for the fiscal year ended June 30, 2017. In November 2016, GAS13 issued Statement No. 83, Cenain Asset Retirement Obligations. 7,k*ut asset retirement obligations (AROs), The requirements of this Statement are effective for reporting periods beginning after June 15, 2018. The County has not yet determined the effect this Statement will have on its financial statements. In January 2017, GAS13 issued Statement No. 84, Fiduciary Activities. The principal objective of this Statement is to enhance the consistency and comparability fiduciary activity reporting by state and local governments. The requirements of this Statement are effective for reporting periods beginning after December 15, 2018, The County has not yet determined the effect this Statement will have on its financial statements. In March 2017, GASB issued Statement No. 85, Omnibus 2017. The objective of this Statement is to improve consistency in accounting and financial reporting by addressing practice issues that have been identified during implementation and application of certain GASB Statements. The requirements of this Statement are effective for reporting periods beginning after June 15, 2017. Tile County has not yet determined the effect this Statement will have on its financial statements. In May 2017, GASB issued Statement No. 86, Cenain Debt Extinguishment Issues. The ,14 WRK certain debt extinguishments and to enhance the decision -usefulness of that information. The requirements of this Statement are effective for reporting periods beginning after June 15, 2017. The County has not yet determined the effect this Statement will have on its financial statemetts. , # I The County and Department have adopted certain requirements of GASB Statement No. 82, Pension Issues an amendment of GASB Statements No, 67, No, 68, and No. 73 (GAS13S 82), which are effective for reporting periods beginning after June 15, 2016. The adoption of . . . . . . . . . . . . N MW MUM 1161104AIMI I I I I MKO Igor, lag F# Wq RVILM1411 "MM that they have not been expended or encumbered. Appropriations for capital 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, and Capital Projects Fund. Formal -Imi"W" I Iwo -, Elm COUNTY OF HAWAVI Notes to the Basic Financial Statements 1191MMMM The accompanying statement of revenues, expenditures and changes in fund balances — budget and actual (budgetary basis) for the General Fund presents a comparison of the legally adopted budget with actual data on a budgetary basis. Accounting principles zpplied for purposes of developing data on a budgetary basis differ significantly from those used to present financial statements in conformity with GAAP. On the budgetary basis, inter vernmental revenue are reco nized when awardid bi the iraiti _jcv_ we - gj ig Ppr -my-, are not accrued, and all leases are treated as operating leases, In preparing the financial statements on a GAAP basis, accounts payable are accrued and treated as a reduction of encumbrances for balance sheet presentation. Ending fund balance — GAAP basis $47,746,958 Encumbrance adjustments: Beginning encumbrances and unexpended allotments 3,291,302 Ending encumbrances and unexpended allotments (1,203,398) Other adjustments (5.38M47) Ending fund balance — Non -GAAP budgetary basis 44A45.215 3. CASH AND INVESTMENTS The Director of Finance is responsible for the safekeeping of all monies paid to the County. The Director of Finance invests any monies of the County which in the Director's judgment are in excess of the amounts necessary for meeting the day-to-day operating needs of the County. Under Section 46-50 of the Hawai'i Revised Statutes, legally authorized investments include obligations of or guaranteed by the U.S. government, obligations of the State, federally insured savings and checking accounts, time certificates of deposit, and repurchase agreements with federally insured financial institutions. fx-sa various financial institutions. Bank deposits are under the custody of the Director of Finance. For financial statement reporting purposes, cash and short-term investments consist of cash and money market accounts, Cash and short-term investments also include repurchase agreements, certificates of deposit, and government sponsored securities with original maturities of three months or less. ,n, I - 411101 t T-aeyosi casn, Mile ce ica eposit, ano money market accounts) as of June 30, 2017 was $162,729,005 for the primary government and $5,784,904 for the fiduciary funds. Information relating to bank balance, insurance and collateral of cash deposits is determined on a county -wide basis. Total bank balances of deposits for tile primary government and fiduciary funds amounted to $177,731,495 at June 30, 2017. Of that amount, $177,322,265 represents bank balances covered by federal deposit insurance or by collateral held by the County's fiscal agents in the name of the County. The remaining bank balances of $409,230 represent deposits held by a management agent and were uncollateralized. Accordingly, these deposits were exposed to custodial credit risk. Custodial credit risk is the risk that in tile event of a bank failure, the County's deposits may not be returned to it. For checking and savings accounts, time certificates of deposit, and repurchase agreements, the County requires, in accordance with State statutes, that the depository banks pledge collateral based on tile available bank balances for the protection of the funds deposited. All securities pledged as collateral are held by the County's fiscal agents in the name of the County. The County also requires that no more than 60% of the County's total funds available for deposit may be deposited in any one financial institution, in accordance with State statutes. MTN 70M� funds. The County's investments of funds not required for immediate payments are predominately comprised of government sponsored securities (equivalent to the rating in U.S. Treasuries, re!��ase &W� I www4moraiin k W,.I* hold equity securities. The framework for measuring fair value provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives tile highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1) and the lowest priority to unobservable inputs (level 3). The three levels of the fair value hierarchy are described as follows: Level I — Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that a government can access at the measurement date, An active market is a market in which transactions for the asset orifiabbility takeiJace w th suffieRvit freauetcv 111MV *r liability. Level 2 inputs include: MW * Quoted prices for identical assets or liabilities in markets that are not active, * Inputs other than quoted prices that are observable for the asset or liability, * Inputs that are derived principally from or corroborated by observable markel data by correlation or other means. Government sponsored securities of $17,638,965 and certificates of deposits of $58,230,282: Valued using quoted prices for identical or similar assets in markets that are not active (Level 2). Equity securities of $1,546,763: Valued using quoted prices in active markets for identical assets or liabilities that a government can access at the measurement date (Level _MM77wl Certificates of deposit Government sponsored securities Investments — Private -Purpose Trus'" Government sponsored securitie Equity securities I Investments — Agency Funds: Certificates of deposit Government sponsored securities .......... MaturibL(LinXears] Fair Value Less than 1 1 —5 $ 252,935 167,995 $ 42030 iI 0 1 1 QW -ROM 16111111161IM"O' 1 01,1011111101- 1111 6111CIIIIIICHL UJIL FLI K; &C, and repurchase agreements. These investments are either insured by the FDIC, secured by collateral or carry a credit rating equivalent to U.S. Treasuries. am COUNTY OF HAWAII [Votes to the Basic Financial Statements June 30, 2017 Cash in the Hawaii County Housing Agency is restricted to providing public housing assistance and amounted to $1,885,925. The restricted cash and investments in the General Fund was comprised of cash restricted to costs incurred to administer the liquor commission and cash restricted to the acquisition and maintenance of lands or property entitlements for public outdoor recreation and education. Such amounts totaled $425,488 and $14,876,589, respectively. Tenant security deposits received by the County for the Kula'imano Elderly Housing Project and the Ouli Ekahi Affordable Housing Project are recorded as restricted assets. Such funds amounted to $11,863 and $29,487, respectively, at June 30, 2017. An operating reserve fund was established by the Ouli Ekahi Affordable Housing Project pursuant to an agreement with the Hawai'i Housing Finance and Development Corporation, who are the holders of tire project's note. This restricted reserve amounted to $72,644 at June 30,2017. INA Sewer Solid waste Capital projects Intergovernmental Gross receivables Less: allowance for uncollectibles Vet totaLreceiva General Fund $25,670,969 Capital Other Projects Governmental Fund Funds Total $ — $ -- $25,670,969 790,665 13,586,271 5 813 197 39,257,240 6,603,862 -(2AA2 248 - 1,975,876 1,975,8 1,339,556 1,339,5m. -- 790,6 1,996.606 ,I 21-396012 5,312,038 51,173,1 the govemment-wide statement of net position as a receivable (see Note 10). M3MM-EM= I". Enterprise Fund.q Accounts receivable: Rent $11,733 Other 701 Gross receivables 12,434 Less: allowance for uncollectibles —IL407 Net total receivables L=AM2 I". ! ► 4 . 4 r 4 `kl "1 Receivable :1" .I L, 14 r i r r x i Payable Fund Amount Capital projects fund $ 478,843 Other governmental funds 1,428.411 1,907,254 General fund 338,999 Other governmental funds 601,275 940,274 General fund 202,461 Other governmental funds 187,533 Enterprise r• r, r ,. 6. r *rrr •x 4 r;r r payment between fundsmade. Transfers for the fiscal year ended June 30, 2017 consisted of the following: Transfers out: Other General Governmental Fund Funds Total Transfers in: Capital Projects Fund $ 44,699 $3,952,825 $ 3,997,524 Bond redemption fund 23,730,661 -- 23,730,661 Other governmental funds 394135,706 -.- U.2= 39.135,706 $ 863°$91 r � r r • * � +r' !N 6. CAPITAL ASSETS Capital asset activity for the year ended June 30, 2017 for the County was as follows: Balance Balance July 1, Retirements/ June 30, 2016 Additions 'Transfers 2017 Governmental activities: Capital assets not being depreciated: Land and improvements $ 233,498,340 $ 5,689,551 $ -- $ 239,187,891 Easements 4,170,517 56,541 -® 4,227,058 Construction work in progress 124,2131,63 95.642x05 X148.736,0191 71.118,202 Total capital assets not being depreciated 361.881 020 101.388„150 148 736 019 314.533 15i Capital assets being depreciated: Buildings and improvements 610,381,599 103,966,870 (304,439) 714,044,030 Equipment 152,329,637 10,369,924 (7,089,789) 155,609,772 Easements 439,300 17,197 -- 456,497 Infrastructure 572,990x504 46.845„712 619.836,216 Total capital assets being depreciated 1,336,141,040161,199,703 (7,394,2281 1 489 946,515 Less accumulated depreciation for: Buildings and improvements (105,764,055) (10,399,070) 107,081 (116,056,044) Equipment (92,418,885) (9,455,080) 6,454,969 (95,418,996) Easements (439,300) -- -- (439,300) Infrastructure 1265,762*527)X25.155„7041 - x(290.918,2311 Total accumulated depreciation 1464,384,7671 (4,009 54i 6.562 050 f.502,832x71i Total capital assets being depreciated, net 871"756x,273 116.189,840 (832.1781 9 7 113,944 Governmental activities capital assets, net 3,63 X93 X49 ) 1 .64 ,095 COUNTY OF HAWAII Notes to the Basic Financial Statements Balance Retirements/ June 30, Additions "transfers 2017 $ $ $ �753 877 1,593,187 272,850 6,803 --(2-629) 137,950 6,803 --Q-629 2,003,987 (36,042) Balance (4,347) July 1, I2 526 2016 Business -type activities: 3,629 (1,308 ,923 Capital assets not being depreciated: Land $ 753 �877 Capital assets being depreciated: Buildings and improvements 1,593,187 Ground and site improvements 272,850 Equipment 1�34776 Total capital assets being depreciated 2 �00O 813 Less accumulated depreciation for: Buildings and improvements (946,647) Ground and site improvements (210,610) Equipment (102 380,) Total accumulated Depreciation (1,259.637) Total capital assets being depreciated, net 741 176 Business -type activities capital assets, net SIM= Balance Retirements/ June 30, Additions "transfers 2017 $ $ $ �753 877 1,593,187 272,850 6,803 --(2-629) 137,950 6,803 --Q-629 2,003,987 (36,042) (982,689) (4,347) (214,957) I2 526 �3629 _(,LLI.277) _J522_915 3,629 (1,308 ,923 =1=4�kj �W $ MT-ZMI" Depreciation expense was charged to functions/programs of the primary government as follows: Redemption Governmental Governmental activities: Fund Funds General government $ 2,893,703 Public safety 4,489,032 Highways and streets 27,064,560 Sanitation 5,803,169 Health, education and welfare 2,074,356 Culture and recreation _2,685.034 Total depreciation expense — governmental activities $UMQU-5A Business -type activities: Kula'imano Elderly Housing Project $35,687 Ouli Ekahi Affordable Housing Project 17,228 Total depreciation expense — business -type activities=U12J1_ 7. DEFERRED INFLOW OF RESOURCES Deferred inflow of resources consists of the following at June 30, 2017: Governmental activities: Real property taxes Sewer revenue Housing revenue Solid waste revenue Total presented in fund financial statements Add deferred inflows of resources related to pensions Less adjustments for accrual of revenues Total government - wide financial staternents Capital General Projects Fund Fund $ 24,505,648 $ 190,535 24,696,183 Bond Other Total Redemption Governmental Governmental Fund Funds Funds $ $ $ 24,505,648 - 190,535 1,235,896 1,235,896 29,718 29,718 12,583,038 12,583,038 (23,028,721)-- 25J55 �105 JZJZ6,384) _(L — —I-- - W„250-5 dates through February 2022. These capital leases are financed from the resources of various The County also leases land, office facilities and other equipment under noncancellable operating leases expiring through August 2045. Expenditures for such operating leases were $1,941,297 for the fiscal year ended June 30, 2017. Tile future minimum payments under capital and operating leases o¢June 3D,20l7are uo Hilo LaitdJ711 The County owns and operates a landfill located in the city of Hilo. State and federal laws require the County to place covers on certain landfill sites and to monitor and maintain the sites for thirty years after the facility is closed. Although the closure and postclosure care costs will be paid near and after the date that the landfill stops accepting waste, the County recognizes a portion of the closure and postclosure care costs in each operating period. The liability for these costs is included in the govemment-wide statement of net position, The amount recognized each year is based on the landfill capacity used as of the Capital Operating Leases Leases Year Ending June 3O: 2018 $2,106,484 $1.734,554 2019 1,819,727 738`079 2020 1,513,150 611,071 2021 1,146,408 484,670 2022 236,936 374'651 2023-2027 — 710,256 2028-2032 — 32'480 2033-2037 — 900 2038-2042 — gOO 2043-2047 _— ____-570 Total minimum lease payments �,��2,705 SMS. III Less amount representing interest _CZjljI 2 5) Obligations under capital leases Hilo LaitdJ711 The County owns and operates a landfill located in the city of Hilo. State and federal laws require the County to place covers on certain landfill sites and to monitor and maintain the sites for thirty years after the facility is closed. Although the closure and postclosure care costs will be paid near and after the date that the landfill stops accepting waste, the County recognizes a portion of the closure and postclosure care costs in each operating period. The liability for these costs is included in the govemment-wide statement of net position, The amount recognized each year is based on the landfill capacity used as of the UMMEMIM statement of net position date, At June 30, 2017, the County recognized a liability of $21,321,000, based on the use of 95% of the estimated capacity of the landfill. During the fiscal year ended June 30, 2017, there was $215,000 in expenditures incurred for the closure of the landfill. The remaining $1,194,000 in estimated cost of closure and postclosure care will be recognized as the remaining estimated capacity is used. The estimated remaining useful life of the landfill is approximately one year. These amounts are based on what it would cost to perform the required closure and postclosure care in 2017. Actual costs at that time may be higher due to inflation, changes in technology, or changes in regulations. Lat-].Wat"�q A&-t-Vort1w g*41�u available engineer's calculation. The volumes going into the landfill do not account for decomposition, settlement, and corrosion; therefore the estimates are revised when new engineering calculations, based on aerial photos and surveys, are available. The County's permit to operate the landfill expired October 9, 1998. The County filed for an extension which was approved by the State until permitted capacity is reached. In accordance I @A company to retain the overall management as well as perform all construction work on the landfill cells. Under the terrns of the contract, the County has no responsibility for remediation closure or Aostclosure care. Accordingj�o a i j for this landfill is included -no-� in the County's financial statements. um�� FinancialAssurance For fiscal year 2017, the County has provided for financial resources that will be available to provide for closure, postclosure care and remediation or containment of environmental hazards at the above landfills, except Pu'uanahulu. The Environmental Protection Agency's financial assurance rules include a local government financial test consisting of a financial component, a public notice component, and a recordkeeping component. Local governments are required to satisfy each of the three components to pass the annual test. Management believes that the County has satisfied each of the components of the local government financial assurance requirements. AT ZTIM r Jose I sarrage facu neTTMEMI 7 Kealakelle Transfer Stations, State law requires tile County to perform necessary closure activities, including, but not limited to, the removal of all remaining solid waste and performing appropriate site assessments and remedial activities. The estimated liability ($15,542,639) for the remediation costs associated with these closures is included in the County's financial statements and is based on closure plans prepared by a science and engineering consultant contracted by the County, and the current value of costs expected to be incurred. Tile liability could change over time due to inflation or deflation, changes in technology, or changes in laws and regulations governing the remediation effort. Zmmm��,-= -H.-M-n-H The 2010 Series B bonds were issued as bonds designated as "Recovery Zone Economic Development Bonds" under the American Recovery and Reinvestment Act of 2009. The Wk4voxv�i'4.0 ;t2 the interest payable on the Series B bonds. The following is a summary of general obligation bond transactions reported in the County for tile fiscal year ended June 30, 2017: COUNTY OF HAWAII 9MMERIM Jill I ligplipplipi lll�� ,111CHL API IML PlUbILIU11 UL JLHIC, )V, 4v 1 dic CV1111plibvt 'W1 LIIC lujiv - te individual issues: Public improvement (Pl) and/or refunding bonds: Bonds Issue Bond Balance $ 4,055,000 Bond Balance Due Within 4,950,000 Authorized Amount _20- Lull Ilk IMIl (s Retirements une 30_2017 L- Qnc car 2006 Series A $ 25,000,000 S 1,180,000 S f5 1,180,000) 16,020,000 $ 2007 Series A 85,000,000 7,920,000 (3,865,000) 4,055,000 4,055,000 2007 Series B 20,820,000 7,250,000 (2,300,000) 4,950,000 2,415.000 2007 Series C 10,787,388 6,473,085 (968,517) 5,504,568 1,007,649 2008 Series A 50,000,000 6,835,000 (2,160,000) 4,675.000 2,280,000 2010 Series A 26,493,750 5,448,750 (1,271,250) 4,177.500 1,335M0 2010 Series B 18.506,250 16,878,750 (858,750) 16,020,000 896,250 2013 Series A 58,509,892 53,092,192 (2,003,939) 51,088,253 2J015,749 2013 Series B 21,010,000 17,515,000 (1,860,000) 15,655,000 1,950,000 2013 Series C 18,470,000 16,950,000 (1,585,000) 15,365,000 1,655,000 2013 P1 Series A 1,169,000 1,147,782 (21,801) 1,125,981 22,401 2016 Series A 99,620,000 99,620,000 99,620,000 -- 2016 2016 Series B 13,497,500 13,497,500 13,497,500 1,100,000 2016 Series C 44,835,000 44,835,000 44,835,000 2016 Series D 28,860,000 28,860,000 28,860,000 2016 Series E 19,061,250 19,061,250 19,061,250 -- 2016 2016 Series F 10 —0000 --j!M—OU ---10&4-0-000 —1105-000 551,680,030 356,604,309 (18,074,257) 338,530,052 22,127,049 Add unamonized premium�14O 57,382 .003 (4.331.1311 �11 I —_D_Q5L87241L 8.994 --_ W-0-19AM5 SAjl2AAjL2 _LW 5391 MLAM21— ULbAA-41 Jill I ligplipplipi lll�� ,111CHL API IML PlUbILIU11 UL JLHIC, )V, 4v 1 dic CV1111plibvt 'W1 LIIC lujiv - te individual issues: Public improvement (Pl) and/or refunding bonds: 2007 Series A at 4.0% to 5.0%, due through 2017 $ 4,055,000 2007 Series B at 3.75% to 5.0%, due through 2018 4,950,000 2007 Series C at 4.0% to 5.0%, due through 2021 5,504,568 2008 Series A at 4.0% to 6.0%, due through 2018 4,675,000 2010 Series A at 4.0% to 5.0%, due through 2020 4,177,500 2010 Series B at 3.33 5% to 6.1due through 203 0 16,020,000 2013 Series A at 2.0% to 5.0%, due through 2032 51,088,253 2013 Series B at 3.0% to 5.0%, due through 2023 15,655,000 2013 Series C at 4.0% to 5.0%, due through 2024 15,365,000 2013 PI Series A at 2.75%, due through 2048 1,125,981 2016 Series A at 3.0% to 5.0%, due through 2035 99,620,000 2016 Refunding Series B at 3.0% to 5.0%, due through 2026 13,497,500 2016 Refunding Series C at 5,0%, due through 2027 44,835,000 2016 Refunding Series D at 5.0%, due through 2028 28,860,000 2016 Refunding Series E at 2.0% to 5.0%, due through 2029 19,061,250 2016 Taxable Series F at 1.2% to 1,55%, due through 2019 10.04Q&00 Notes to the Basic Financial Statements Annual debt service requirements to maturity for the above general obligation bonds are as follows: In periods prior to the year ended June 30, 2017, the County defeased certain general obligation bonds by placing the proceeds of ".. bonds a to provide for all future debt servi ts on the old bonds. Accordin91 -he a ' 1, N�l 111 0 amortizedover " life of the respective bond issues. fMM CouncilThe County oN the issuance $487.9 million in general obligationbonds to finance both specified and unspecified capital improvement projects. At June 30, 2017, $233.2 millionissued, Suhseqitent Events On July 6, 2017, the County issued a total of $139,895,000 in general obligation bonds, The interest rates range from 3.0% to 5.0%. The bonds are due through 2037. The bonds were authorized as noted above. Governmental Activities Fiscal year ending June 30: Principal Interest 2018 $ 22,127,049 $ 14,976,644 2019 22,353,209 14,427,860 2020 20,409,410 13,558,568 2021 22,027,709 12,598,376 2022 23,106,084 11,518,385 2023 —2027 114,033,221 40,833,056 2028— 2032 76,581,464 16,293,935 2033 —2037 37,352,761 2,825,693 2038 —2042 203,585 60,439 2043 —2047 233,161 30,457 2048 —2049 102,399 2.835 Total $338.530.052 $127126.248 In periods prior to the year ended June 30, 2017, the County defeased certain general obligation bonds by placing the proceeds of ".. bonds a to provide for all future debt servi ts on the old bonds. Accordin91 -he a ' 1, N�l 111 0 amortizedover " life of the respective bond issues. fMM CouncilThe County oN the issuance $487.9 million in general obligationbonds to finance both specified and unspecified capital improvement projects. At June 30, 2017, $233.2 millionissued, Suhseqitent Events On July 6, 2017, the County issued a total of $139,895,000 in general obligation bonds, The interest rates range from 3.0% to 5.0%. The bonds are due through 2037. The bonds were authorized as noted above. these bonds, but the County remains liable because they are general obligations of the in the government -wide statement of net assets for the County for the fiscal year ended June 30, 2017: 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 financial assistance to the four counties in the state to finance construction of wastewater projects, The County has nine projects approved for funding with these loans. WEN Issue Balance Balance N_Qte � &mqunt Jkly 1 2016 bsues Retirements JVne 30 2017 Series c`Note x'| S /5,0000 $ — S 15.000,000 $(/5,00000) $ — Series C.Note R'z 8.000.000 — 0.800,000 (8.000.000) — Series C.Note R-3 2,000,000 — 2,0O ,08 (2,000,000) — Series C.Note n4 5`800.000 — 5.000.000 (5.000,000) — Series C.Note m-5 5.000.000 — 5,000.000 — 5.000.000 Series CNote R,6 5.000,008 — 5.000,000 — 5.000,000 Series C,Note n-7 /.800.090 — 1.000.000 — 1.000.000 Series C,Note m -m /.000,000 — /.000,000 — 1.000.000 Series C.Note R -e }.00u.Ooo — /.004.000 — 1,000.080 Series C.Note R'/n /.Ono,OOO — 1.000,000 — 1.000.000 Series C,Note a'|` 500,000 — 500,0 00 — 500,000 Series C.NomR-|z 500,808 — 580/00 — 500,000 Series C.Note R'|3 10,000.000 — 10.000.000 (10.000.000) — Series C.Note R'/^ 4,800,000 4,800,00 (4`800,000) — Series C.Note n-15 /5.000`000 — 15.000.000 — /5.008.008 Series C,Note R-|* 8.000.000 — 0.000.008 — 8.000,000 Series C, Note a'\7 2.000.000 — 2.008.000 — 2.080.000 Series C,Note 8-|o 5,000.080 — 5.000.008 — 5.008.O8O Series [, Note R'|9 18.000.000 — 10,008.000 — 10.000,008 Series C.Note R -2o __6JK8UU0 ELUM-LDO Mim-M Law—M 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 financial assistance to the four counties in the state to finance construction of wastewater projects, The County has nine projects approved for funding with these loans. WEN COUNTY OF HAWAPI Notes to the Basic Financial Statements HIMMMOPM5 The schedule below shows the County's SRF transactions for the fiscal year ended June 30, 2017: Loans Approved Loan Balance Principal Interest Loan Balance Due Within 6uthInzed Amount July 1 2016 Additions 2020 &ne 30, 2017 Qne Year Cesspool 2,194,763 193,098 2022 2,204,141 176,651 2023 —2027 Conversion $ 8,363,773 S 4,673,319 S (434,669) 4,238,650 S 436,794 Honoka'a LCC 4,513,158 2,867,665 579 (178,389) 2,689.276 179,284 Queen Lili'uokalani 9,421,732 6,991,527 (483,407) 6,508,120 485,832 Kalaniana'ole 8,621,409 5,613,236 (317,125) 5,296.111 319,718 Kealakehe WWTPAU 20,339,870 7,317,504 5,821,440 (519,118) 12,619,826 686,465 North Kona 3,454,500 - 1,958,708 (1,034,800) 923,908 - Kcalakchc Effluent Reuse _-1111544 - 149,386 349.386 gk7 1214kI25-1 $-LU.9-UA WkLm UZA=r UJ 07 093 The rernaining loans bear interest at 0.25% to 0.5% exclusive of a 0.25% to 0.75% loan fee, and require payments through fiscal year 2039. !ARE Governinental Activities Fiscal year ending June 30: Principal Interest 2018 $ 2,107,093 240,835 2019 2,137,812 225,792 2020 2,185,205 209,699 2021 2,194,763 193,098 2022 2,204,141 176,651 2023 —2027 10,935,004 632,967 2028 —2032 7,951,487 262,520 2033 —2037 2,829,686 41,221 2038 —2039 80.086 579 Total .211 !ARE is a simunary, lv= Acr gencra Mg-forni 1* UuMi- ItIrMIC711=1 year ended June 30, 2017: Governmental activities: Compensated absences Claims and judgments (see Note 12) Capital leases (see Note 8) Landfill costs payable (see Note 9) Pollution remediation (see Note 9) Other post employment benefit obligation (see Note 13) Total Balance Balance Due Within July 1 2016 Additions* PaYments June 30 2017 One Year $37,907,805 $14,635,464 $(13,057,367) $39,485,902 $9,813,735 13,859,496 4,478,097 (3,901,900) 14,435,693 2,923,529 4,916,178 3,769,403 (2,120,001) 6,565,580 1,989,281 22,633,000 7,205,521 (315,521) 29,523,000 195,405 16,414,110 (871,471) 15,542,639 6,864,765 7 7,0�098 5 7 36 �8-1O 000 -Uj� �203Q 82 �247 822 $J.U.7AQ"4 -IAU-6.9 01 ,- $J2.U&2 -3-6 7L62 JIAZ.4WJ &ZIJ _ 11MA"AM. six" absences since most employees are paid by the general fund. Fund Balances - Debt Service Funds The fund balance in the debt service funds at June 30, 2017 includes $24,205,703, which is reserved for principal payments on general obligation bonds and $2,599,986, which is reserved for the payment of interest on the bonds. I On February 12, 2013, the County issued general obligation bonds on behalf of Kula'irnano Elderly Housing Project (Project) to pay off its two notes payable to the U.S. Department of Agriculture, Farmers Home Administration with principal and interest balances aggregating $835,108, The Project is responsible for the debt service payment related to their portion of the bonds, which is also secured with the County's general obligation pledge. Because the Project is responsible for only a portion of the total bonds issued, it was decided that the payments of $7,826 on the old notes at 5.547% interest. Under this payment schedule, the Project will make contributions through 2025 of the bonds 2032 maturity date. ME I Uff ITARGIM The following is a summary of the Project's bond payable transactions for the fiscal year ended June 30, 2017: Balance at July 1, 2016 $ 707,808 Deductions —_ff§,O 6 1) Balance at June 30, 2017 651,747 Less current portion 51 Note payable, net of 21,997 current portion 17,905 Fiscal year ending June 30: 2018 2019 2020 2021 2022 2023-2026 IM •I III Ili! Ili! 1! 111111% 1! Ini III I I ligil I MIMT#�� Principal Interest $ 59,251 $ 32,999 62,622 29,533 66,186 25,869 69,952 21,997 73,932 17,905 319,804 _27,,056 IsTri L�cl; I _. V"LOMIll .1i, the Hawai'i Housing Finance and Development Corporation in the arnount of $478,430, The loan is non-interest bearing and matures on February 27, 2041. In exchange, the County assumed ownership of the Ouli Ekahi project which consists of a 33 single family affordable rental housing project. The following is a summary of enterprise fund loan payable transactions for the fiscal year ended June 30, 2017: Balance at June 30, 2017 Less current portion Loan payable, net of current portion 111 11 E iiii III Ili IN RIVER I Ill ill III ME Beam MMSMIM Fiscal year ending June 30 2018 2019 2020 2021 2022 2U2] -2U27 2O28 -2O32 2033 MIM The County has issued general obligation bonds on behalf of Improvement District No. 18 for water improvements (see Note 4). These bonds were then refunded by a portion of the 2013 Series A Bonds that were issued. The Improvement District is responsible for the payment of the debt service on these bonds, but the County remains I iable because they are general obligations of the County. The improvement district's share of the refunded bonds matures annually through 2027 and bear interest at the previous rates of 4.375% to 4.75%. Total general obligation bonds payable included in the government -wide statement of net position were $1,071,453 at June 30, 2017, The County has also issued general obligation bonds on behalf of Improvement District No, 19 for water improvements (see Note 4). The Improvement District is responsible for the payment of the debt service on these bonds, but the County remains liable because they are general obligations of the County. The improvement district's share of the refunded bonds matures annually through 2048 and bear interest at the previous rates of 2,75%. Total general obligation bonds payable included in the government -wide statement of net position were $1,125,982 at June 30, 2017, 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. MUNWOMMM 191511MI r x x - following is a summary of bond transactionso • District No. 18, o ,,Improvements,y No. 19, Kona Ocean endedSubdivision for tile fiscal year June 30, 2017: DeductionsBalance at July 1, 2016 $2,292,610 ' Balance at June 30, 2017 S2-192AJi The following is a summary of the annual maturities for the improvement district general obligation bonds; Fiscal year ending June 30: Principal Interest 2018 $ 99,189 $ 78,752 2019 103,379 74,470 2020 107,752 70,001 2021 112,317 65,336 2022 117,082 60,466 2023 -2027 664,559 221,440 2028 -2032 276,248 112,296 2033 -2037 177,762 86,619 2038 -2042 203,586 60,440 2043 -2047 233,161 30,457 2048 -2049 102,400 2834 Total General fund $ 1,391,468 Capital projects fund 102,878,357 Bond redemption fund -- Nonmajor funds 5.819,678 Contractual commitments for the enterprise funds were immaterial, Intergovernmental revenues — o o pecifil purposes that are subject to review and auditby grantor agencies, - requests for reimbursement to the grantor g_ for expenditures disallowed under terms the grants. In the opinion of g of w disallowedcosts,� be material- W29991M Claijyu — Numerous claims and lawsuits have been filed against the County in the normal course of its operations. A liability for probable losses is included on the government -wide statement of net position (see Note 12). Although the outcome of the various claims and lawsuits is not presently determinable, in the opinion of the County's Corporation Counsel, of the County. ADA complimice — The County entered into a stipulated agreement, filed on June 4, 1998, which relates to the Department of Parks and Recreation (Parks). The agreement required Parks to establish practices, policies and procedures regarding its programs, and prepare a transition plan by the middle of the year 2000. The self-evaluation and transition plan for r actice nd r ced e a ep. I, I d d a ved W. -IM ffm�l MA U -csUr Ylvt CHY41 I UTS Rfw= [Y,- dl ry dto I aV97FIT recommends specific actions on those requests. i The County is exposed to various risks of losses related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees, and natural disasters, Tile County maintains fire and commercial multiple peril insurance on County facilities, flood insurance on selected structures, medical malpractice insurance for emergency medical technicians, aviation liability for helicopter operations, liability coverage on transit buses, privately owned police vehicles and retired senior volunteers, and property damage coverage on County Police fleet vehicles and Kohala. Ranch fire truck. The County maintains fire and property coverage on several County housing projects (Kula'imano and Ouli Ekahi). There was no reduction in insurance coverage during the year from coverage in the prior year, Duriiv the (cast three fiscal pears- the amount of settlements in cases covered b insurance has not exceeded the insurance coverage, Tile County is substantially self-insured for tile majority of its vehicles as well as for all other perils including workers' compensation and genera) liability. The liability for claims and judgments is reported on the government -wide statement of net position and the majority will be liquidated from the County's general fund. Liabilities are reported when it is probable that a loss has occurred and the amount of that loss can be reasonably estimated. These losses include an estimate of claims that have been incurred but not reported (IBNR), Claim liabilities, including IBNR, are based on the estimated ultimate cost of settling the claims, and include incremental costs for the hiring of special counsel and expert witnesses. Claims liabilities are estimated by a case-by-case review of all claims and tile application of historical experience to outstanding claims. Estimates of IBN R are based on historical experience, The liability for claims and judgments is reported on the government -wide statement of net position. At June 30, 2017, the amount of this liability was $14,435,693. This is the County's best estimate based on available information. Changes in the reported liability since July 1, 2015 are given below. 21=1111 IN F111139MMS"Im- W-M General Workers' Total Lia iii Compensation Lab� Balance at July 1, 2015 $ 2,633,719 $ 10,653,188 $ 13,286,907 Incurred claims (including IBNR)* 470,965 3,537,320 4,008,285 Claim payments X14,598) f 212 1,0�98 _(2A15,696) Balance at June 30, 2016 $ 2,490,086 $ 11,369,410 $ 13,859,496 Incurred claims (including IBNR)* 199,478 4,278,619 4,478,097 Claim payments (125.362) (3,506,538) (3,901.900 Balance at June 30 2017L=Za%4 =�=22 =L49-1 L.UJ=4 S JAAJ�.M 21=1111 IN F111139MMS"Im- W-M M== H.1 if I - I .. 0 . I .. . . Benefits Provided - The ERS provides retirement, disability, and death benefits that are covered by the provisions of the noncontributory, contributory, and hybrid retirement plans. The three plans provide a monthly retirement allowance equal to the benefit multiplier (generally 1 .25% or 2%) multiplied by the average final compensation multiplied by years of credited service. The benefit multiplier decreased by 0.25% for new hybrid and contributory plan members hired after June 30, 2012. Average final compensation is based on the five highest paid years of service excluding the payment of salary in lieu of vacation for members hired after June 30, 2012. For those hired between January 1, 1971 and June 30, 2012, AFC is based on the three highest paid years of service excluding the payment of salary in lieu of vacation. If the employee was hired prior to January 1, 197 1, the AFC is the average salary earned durin the five hbyhest �said pears of service- including the - apment of salavA in lieu of vacation, or &ee highest- paid'years of service, excluding the payme nt of salary in lieu of vacation, For members hired before July 1, 2012, the original retirement allowance is increased by 2.5% cach July I following the calendar year of retirement. This cumulative benefit is not compounded and increases each year by 2.5% of the original retirement allowance without a ceiling (2.5% of the original retirement allowance the first year, 5.0% the second year, 7.5% the third year, etc.). For members hired after June 30, 2012 the post-retirement annuity increase was decreased to 1.5% per year. "11,7411141111141NIt WA a KH I W.J41 RIV I Wfd to I U I rOT'T'ren# M07MV Retirement Benefits - General employeesretirement benefits are deten-nined as 1 .25% of average final compensation multiplied by the years of credited service. Employees with 10 years of credited service are eligible to retire at age 62. Employees with 30 years of credited service are eligible to retire at age 55. Disability Benefits - Members are eligible for service -related disability benefits Em COUNTY OF HAWAI'l ummium COUNTY OF HAWAII �M",77nmp I'll, �� 1. r W —r. M at least I year of service, Ordinary death benefits consist of a lump sum payment of the WITY0 MIT W_ same as those for contributory plan members hired June 30, 2012 and prior. Hvbrid Plan for EmDlovees Hired Prior to julyj 2012 Retirement Benefits - General employees' retirement benefits are determined as 2% of average final compensation multiplied by the years of credited service, General employees with 5 years of credited service are eligible to retire at age 62. General employees with 30 years of credited service are eligible to retire at age 55. Disability Benefits - Members are eligible for service -related disability benefits regardless of length of service and receive a lifetime pension of 35% of their average final compensation plus refund of their contributions and accrued interest. Ten years of credited service is required for ordinary disability. Ordinary disability benefits are determined in the same manner as retirement benefits but are payable immediately, without an actuarial re, reTRYUNWAITIFF n4w.,W] WrITA-905"I M Death Benefits - For service -connected deaths, the surviving spouse/reciprocal beneficiary receives a lump sum payment of the member's contributions and accrued or re-entry into a new reciprocal beneficiary relationship. If there is no surviving spouse/reciprocal beneficiary, surviving children (up to age 18) or dependent parents are eligible for the monthly benefit. If there is no spouse/reciprocal beneficiary or dependent children/parents, the ordinary death benefit is payable to the designated beneficiary. at least 5 years of service. Ordinary death benefits consist of a lump sum payment of the member's contributions and accrued interest multiplied by 150%, or 50% Joint and Survivor lifetime pension if the member was not eligible for retirement at the time of 100% Joint and Survivor lifetime pension it the member was eligible for retirement at the time of death and designated one beneficiary. Hvbrid Plan for Emolovees Hired After June 30. 2012 Retirement Benefits - General employees' retirement benefits are determined as 1.75% of average final compensation multiplied by the years of credited service. General employees with 10 years of credited service are eligible to retire at age 65. Employees with 30 years of credited service are eligible to retire at age 60, Sewer workers, water safety officers, and EMTs may retire with 25 years of credited service at age 55, Disability and Death Benefits - Provisions for disability and death benefits generally to emy-lokiees who were ac W# #h w W 4`241 Wswiva interest multiplied by 120'i%0Joint and Survivor lifetime pension if the member was not eligible for retirement at the time of death and designated one beneficiary, or 100% Joint and Survivor lifetime pension if the member was eligible for retirement at the time of death and designated one beneficiary. Contributions - Contributions are established by HRS Chapter 88 and may be amended through legislation. The employer rate is set by statute based on the recommendations of t ERS actuary resulting from an experience study conducted every five years. Since July 1, 2005, the employer contribution rate is a fixed percentage of compensation, including the normal cost plus amounts required to pay for the unfunded actuarial accrued liabilities, Th al I other employees. Contributions to the pension plan from the County for the year ended June 30, 2017, 2016, and 2015 were $36,157,981, $34,013,001, and $31,456,148, respectively. uff�� I I C 511, /-t I/-, go nFur-M71MY"I"Ime 14.2% of their salary. Hybrid plan members hired prior July 1, 2012 are required to contribute 6.0% of their salary. Hybrid plan members hired after June 30, 2012 are required to contribute 8.0% of their salary. AL J IUIC J V, i i, ME uslunty ru,717M a i MMYruTW $619,129,088 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date, The County's proportion of the net pension liability was based on the actual employer contributions to the pension plan relative to the contributions of all participating employers. At June 30, 2016, the County's proportion was 4.62%, which was an increase of .24% from its proportion measured as of June 30, 2015. NOW I Differences between expected and actual experience Net difference between projected and actual investment earnings on pension plan investments Changes in assumptions Changes in proportion and differences between employer contributions and proportionate share of contributions County contributions subsequent to the measurement date Total Deferred Deferred Outflows Inflows of of Resources Resources 22,931,024 $ 6,759,333 41,702,998 -- 126,260,518 18,375,458 5,773,781 3 6,15,7981 -- 24=5=,L 2IS7. I-IZ03 I L4 $36,157,981 reported as deferred outflows of resources related to the County's contributions the net pension liability in the fiscal year ended June 30, 2018. related to pensions will be recognized in pension expense as follows: maim Fiscal Year Ending June 30 Amount 2018 $ 39,203,620 2019 39,203,620 2020 51,591,632 2021 44,572,275 2022 22.165.737 L==Lff4z&_W the measurement: Inflation 2.50% Payroll growth rate 3.50% per annum Salary increases 3.50% - 7.00%, including inflation Investment rate of return 7.00% per annum, including inflation Cost of living adjustments 2.50% /1.50% Mortality rates used in the actuarial valuation as of June 30, 2016 were based on the following: Active memFe—rs— Rnu Tt—pffs—o—f e mortality taffFe for acTfve employees basTi� on tile occupation of tile member. Healthy retirees — The 2016 Public Retirees of liawai'i mortality table, generational projection using the BB projection table from the year 2016 and with multipliers based on plan and group experience. Disabled retirees — Base Table for healthy retiree's occupation, set forward 5 years, generational projection using the BB projection table from the year 2016. Minimun, mortality rate of 3.5% for males and 2.5% for females. The actuarial assumptions used in the June 30, 2016 valuation were based on the results of an actuarial experience study for the five-year period ending June 30, 2015. The major changes to assumptions resulting from the 2015 actuarial experience study were (I ) a decrease in the investment return assumption from 7.65% to 7.00% and (2) the mortality assumptions were modified to assume longer life expectancies as well as to reflect continuous mortality improvement, ERS updates their experience studies every five years. The long-terin expected rate of return on pension plan investments was determined using a building-block method in which best -estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of •USIVENUMMM UIM-MBIMOIN VFT-C-TEHTTUf-aFT4F I—M L L CT-t4r1reu T T percentage and by adding expected inflation. -# M_ NIMM summarized in the following table: Discount rate — The discount rate used to measure the total pension liability was 7.00%, a decrease from the 7.65% rate used at the prior measurement date. The projection of cash flows used to determine the discount rate assumed that emvjovee contributions will be made the current contribution rate and that contributions from the County will be made at statutril ] required rates, actuarially determined. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-terrn expected rate o determine the total pension liability. 1, 11 1 liffial MINI »go- MR -61 plro�torultrlaw sriurc"Ili I UMilVII JId*IIILJ VIVIAU VIC 11 IL VUFC; UdIQLIHIe,;V rate that is I -percentage -point lower (6.00%) or I -percentage -point higher (8,00%) than the current rate: I% Iecrease Current Discount I% Increa (6.00%) Rate (7.00%) (8.00%)1 County's proportionate share of the net pension liability $ 729.3 6 1LI29,M S 468.162-682 IM Long -Term Strategic Allocation Target Expected Real (Risk -Based Classes) Allocation Rate of Return Broad growth 63.00% 835% Crisis risk offset 20.00% 5.50% Real return 10.00% 6.15% Principal protection — 7.00% 2.20% 100.00% Discount rate — The discount rate used to measure the total pension liability was 7.00%, a decrease from the 7.65% rate used at the prior measurement date. The projection of cash flows used to determine the discount rate assumed that emvjovee contributions will be made the current contribution rate and that contributions from the County will be made at statutril ] required rates, actuarially determined. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-terrn expected rate o determine the total pension liability. 1, 11 1 liffial MINI »go- MR -61 plro�torultrlaw sriurc"Ili I UMilVII JId*IIILJ VIVIAU VIC 11 IL VUFC; UdIQLIHIe,;V rate that is I -percentage -point lower (6.00%) or I -percentage -point higher (8,00%) than the current rate: I% Iecrease Current Discount I% Increa (6.00%) Rate (7.00%) (8.00%)1 County's proportionate share of the net pension liability $ 729.3 6 1LI29,M S 468.162-682 IM month of June 2017, as required by HRS, and the excess pension cost under Act 153/SLH 2- 12 REFER HRS Section 88-100 for fiscal year ended June 30, 2017. i ,11111MWO�# 2 1 1 31= The County also sponsors a nonqualified, governmental single employer defined benefit pension plan for members of the County Band (County of Hawai'i Bandsmen Pension System) who are or were ineligible for benefits under ERS and whose employment began before June 1, 1990. Under HRS Chapter 88, the County Pension provides retirement benefits that are computed based on the average annual salary during the last 10 years of employment with a minimum pension amount of $50 per month. There are no assets accumulated in a trust for the payment of benefits. As of the valuation date of June 30, 2017, there were 23 inactive employees or beneficiaries receiving benefits-, 9 inactive employees not yet receiving benefit payments; and 8 active itent bers. $1,146,780. The total pension liability was measured as of June 30, 2017 based on an actuarial valuation as of that date. Y fv(.TtTrF7Vt a pension deferred inflow of resources of $49,924. the measurement: Inflation 2.50% Payroll growth rate 3.50°x® per annum Salary increases 3.50%, including inflation Cost of living adjustments 2.50% Except for the salary increase and retirement rate assumptions, all other demographic assumptions are the same as those used to measure the total pension liability under the ERS plan. -WE " rXr P, Iffe MW ,iaily municipal bond at closest to but not later than the measurement date of tile Fidelity "20 -Year Municipal GO AA Index". The following presents the County's total pension liability calculated using the discount rate of 3.56%, as well as what the County's total pension liability would be if it were calculated using a discount rate that is I -percentage-point lower (2.56%) or I -percentage-point higher (4.56%) than the current rate: I% Decrease Current Discount I % Increase (2.56%) Rate (3.56%) (4,56%) County's total pension liability S 1.331.977 L=j. �47 LM �7� MEEMEME= Total Pension Liability Service Cost Interest on the Total Pension Liability Assumption Changes Benefit Payments Net Change in Total Pension Liability 11 UM OUNIN W KIM Offigmam 87A) to contribute to the Hawai'i Employer -Union Health Benefits Trust Fund (the EUTF). The EUTF is an agent, multi pie -employer defined benefit plan providing certain healthcare and life insurance benefits to all qualified retirees, active employees, their dependents and their beneficiaries. The EUTF was established on July 1, 2003 to design, provide, and administer medical, prescription drug, dental, vision, chiropractic, dual -coverage medical and prescription drug, and group life benefits. For employees hired prior to July 1, 1996, the County pays the entire monthly healthcare premium for employees retiring with 10 or more years of credited service, and 50% of th monthly premium for employees retiring with fewer than 10 years of credited service. Ti current (pay-as-you-go) premium costs are paid by the respective funds but the net other postemployment benefit obligation is paid by the General Fund. I For employees hired after June 30, 1996, and who retire with fewer than 10 years of service, the County makes no contributions, For those retiring with at least 10 years but fewer than I years of service, the County pays 50% of the retired employees' monthly Medicare or non - Medicare premium. For employees hired after June 30, 1996, and who retire with at least 15 years but fewer than 25 years of service, the County pays 75% of the retired employees' monthly Medicare or non -Medicare premium. For those retiring with over 25 years of servi the County pays the entire healthcare premium. For employees hired after June 30, 200 1, and who retire with fewer than 10 years of service, the County makes no contributions. For those retiring with at least 10 years but fewer than 15 SEE years of service, the County pays 50% of tile retired employees' monthly Medicare or non - Medicare premium based on the self -plan. For employees hired after June 30, 2001, and who retire with at least 15 years but fewer than 25 years of service, the County pays 75% of the retired employees' monthly Medicare or non -Medicare premium; for those retiring with over 25 years of service, the County pays the entire healthcare premium. For active employees, the employee's contributions are based upon negotiated collective bargaining agreements. Employer contributions for employees not covered by collective bargaining agreements and for retirees are prescribed by the HRS. I ttr_LCIIIIIIIC�t III UUU12,11alluc 7111.11 077'j#=T ICLCI�i U1 /-%kX*,'AI1 Statement No. 45, Accounting and Financial Reporting by Employei-sfor Postemployment Benefits 01her than Pensions (GASB Statement No. 45). GASB Statement No. 45 addresses the failure of previous financial reporting practices to measure and recognize tile cost of OPEB during the periods when employees render the services or to provide relevant information about OPEB obligations and the extent to which progress is being made in funding those obligations. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty (30) years. The current ARC rate is 22. 1 % of annual covered payroll. Annual required contribution $36,472,000 Interest on net OPEB obligation 5,391,000 Adjustment to annual required contribution (5,033,000) Annual OPEB Cost 36,830,000 Contributions made (31,592,035) Increase in net OPEB liability 5,237,965 Net OPEB liability -beginning of year 77,009,857 Net OPEB liability -end of year $82,247,822 "J"liffiff . . Ifflomr4d 0 . I q 9371 �11 I 1W*J 0,147AM, The annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and th net OPEB (asset) liability for the year ended June 30, 2017 and the preceding two years we as follows: I The schedule of funding progress based on the actuarial valuation date of July 1, 2015, is as follows: Actuarial accrued liability $466,874,000 Actuarial value of plan assets — 91,579,000 Unfunded actuarial accrued liability (URAL} $375,295,000 Funded ratio 19.6% Covered payroll (active plan members) $159,255,000 URAL as a percentage of covered payroll 235.7% Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Example include assumptions about future employment, mortality, and the healthcare cost trend, Amounts determined regarding the funded status of the plan and the annual required with past expectations and new estimates are made about the future. LTVC. dl��Vt7djTdT_V-dTfC 111 MWO - 11. 1 MEW 104114 C&STf M U1111, ML accrued liabilities for benefits. rojec 1C InalMal MPOI L1r1&-RJJr,**SeS are CUM* on ne 711 plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point, The actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the July 1, 2015 actuarial valuation, the entry age non -nal cost actuarial cost method was used. The actuarial assumptions included a 7.0% discount rate, which is based on the County's anticipated funding level, and an annual healthcare cost trend rate of 7.0-9,0% M= Percentage of Annual Fiscal Year OPEB Cost Net OPEB Ended Annual OPEB Cost Contributed CDbli at�ion June 30, 2015 $32,864,000 56.8% $65,755,197 June 30, 2016 $34,002,000 66.9% $77,009,857 June 30, 2017 $36,830,000 85.8% $82,247,822 The schedule of funding progress based on the actuarial valuation date of July 1, 2015, is as follows: Actuarial accrued liability $466,874,000 Actuarial value of plan assets — 91,579,000 Unfunded actuarial accrued liability (URAL} $375,295,000 Funded ratio 19.6% Covered payroll (active plan members) $159,255,000 URAL as a percentage of covered payroll 235.7% Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Example include assumptions about future employment, mortality, and the healthcare cost trend, Amounts determined regarding the funded status of the plan and the annual required with past expectations and new estimates are made about the future. LTVC. dl��Vt7djTdT_V-dTfC 111 MWO - 11. 1 MEW 104114 C&STf M U1111, ML accrued liabilities for benefits. rojec 1C InalMal MPOI L1r1&-RJJr,**SeS are CUM* on ne 711 plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point, The actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the July 1, 2015 actuarial valuation, the entry age non -nal cost actuarial cost method was used. The actuarial assumptions included a 7.0% discount rate, which is based on the County's anticipated funding level, and an annual healthcare cost trend rate of 7.0-9,0% M= r4rGIFIRWINSWIL-MM MTT� initially, reduced by decrements to an ultimate rate of 5.0% after eight years. The assurriptionis ziso include a 3.5% increase in payroll and a 3.0% inflation rate. The UAAL is being 9mortized as a level percentage of projected payroll on a closed basis. The remaining tmortization period at July 1, 2015 for the UAAL balance varies depending on the date each portion was established but is set to not exceed 30 years. The equivalent single amortization period is 22.0. The EUTF issues a publicly available financial report that includes financial statements and required supplementary information, which is available on-line at their web -site www.eutf.haAAU,ggv or by contacting them at P.O. Box 2121, Honolulu, Hl 96805-212 1. a3ves are terin 7«t partpaic in Me 71 1 conip,77isation V Hawai'i, adopted pursuant to Internal Revenue Code (IRC) section 457. The plan permits managed by a plan administrator. The deferred compensation amounts are not available to employees until termination, retirement, death, or unforeseeable emergency. A] I plan assets are held in a trust fund to protect them from claims of general creditors and frorn diversion to any uses other than paying benefits to participants and beneficiaries. The County has no responsibility for loss due to the investment or failure of investment of funds and assets in the plans, but does have the duty of due care that would be required of an ordinary prudent investor. Therefore, the deferred compensation plan assets are not reported in the accompanying basic financial statements. MMMMMMM�� funds of $50,410,841, with bank balances of $51,709,283 were held by the County on behalf of the Department. These balances were fully insured or collateralized with securities held by the County's agent in the County's name, use and is recorded as a restricted asset, Such funds amounted to $888,225 at June 30, 2017. At June 30, 2017, the Department had $25,000,000 in investments. 99MR111WOM 11 11 1 Ill . N I �ilUtMt LQ Irl UIC-AMIL3 acquired by the County for its water system from January 1, 1924 to December 31, 1949, less accumulated depreciation. Acquisitions prior to 1924 and acquisitions by gift or grant prior to 1950 are not included in utility plant. Additions to utility plant since January 1, 1950 are stated at original cost and include contributions and customers at their cost or estimated cost. Construction costs include amounts for contract work, engineering supervision and other direct and indirect costs. Construction period interest is capitalized on utility plan constructed with tax-exempt debt, 1111.1110 111 gn I Ard 4 1 1101momr.] A I wI It mir-111 E I �T'A III E law4asing I r4r'M*j ywom tog I EjjI Structures and improvements 40 to 50 years Machinery and equipment 5 to 25 years Water systems 10 to 40 years 111111IIII qI1111111111 I! I I! I I ; I I III; � I I� I � 1 111111 M- ► a Utility plant in service $498,316,252 Less: accumulated depreciation 1212&40 .279 260,675,973 Preliminary survey and investigation charges 5,337,002 Construction work in progress 29,979,075 Land and rights 4,898,583 Net capital assets SMINfi-31 at June 30, 2017 are comprised 2004 Series D at 4.5%, due through 2039 $ 212,583 2008 Series A at 4.125%, due through 2043 129,793 2010 Series A at 4.0% to 5.0%, due through 2020 1,392,500 2010 Series 13 at 3.33% to 6.1 %, due through 2030 5,340.000 "Total public improvement bonds 7,074;876 Public improvement refunding bonds; 4,744,774 2007 Series C at 4.0% to 5.0%, due through 2021 2,935,432 2016 Series 13 at 3.0% to 5.0%, due through 2026 13,497,500 2016 Series E at 2.0% to 5.0%, due through 2029 6,353,750 Revolving fund loans: 2021 State revolving fund loans, interest up to 1.37%, 5,028,479 due through 2037 33,756„825 Total long-term debt 63,618,383 Add; Unamortized premium 1,929m528 Total $ _5.54 .91 I At June 30, 2017, future principal and interest payments for long-term debt are scheduled as follows: Fiscal year ending June 30: Pringipal Interest "Total 2018 $ 3,964,472 $ 1,983,860 $ 5,948,332 2019 4,744,774 1,836,847 6,581,621 2020 4,920,787 1,667,775 6,588,562 2021 5,028,479 1,475,968 6,504,447 2022 5,142,560 1,276,872 6,419,432 2023 —2027 21,971,330 3,921,372 25,892,702 2028— 2032 11,790,844 1,072,178 12,863,022 2033 —2037 5,443,816 248,471 5,692,287 2038 —2042 603,508 13,010 616,518 2043 7.813 322 8.135 Contributions in Aid of Construction The Department r g $9,310,212 of contributionsd of constructiono year ended c W r r730WITM, liabilityClainis andjudginenis — The Department maintains property, auto liability, and general policies. Department self-insured for workers' compensation r other perils. experience to outstanding claims, Construction! The Der, obligated under construction contractsfor utility plant and other projects.f approximated $19,594,317 June 30, 2017. of ,. ".: `. •r .: ; f � t f!.� ;! ,M', "M t, .+ „. net pension liability was determined by an actuarial valuation as of that date, The contributions to the pension plan relative to projected contributions of all participating employers, proportion meas" II as of June 30, For the year ended June 30, 2017, the Department recognized pension expense of $3,696,028. At June 30, 2017, the Department reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows Inflows of of Resources Resources Differences between expected and actual experience $ 582,442 $ 423,337 Net difference between projected and actual investment Earnings on pension plan investments 1,789,236 - Changes in assumptions 5,493,487 -- Changes in proportion and differences between employer contributions and proportionate share of contributions 2,386,904 2,018,877 Department contributions subsequent to the measurement date l ,603,278 Total 55 471=ZA=41a1A WHO The $1,603,278 reported as deferred outflows of resources related to the Department's related to pensions will be recognized in pension expense as follows: 2018 1,667,202 2019 1,667,203 2020 2,015,569 2021 1,497,749 2022 962,132 , 5 Itrr r rr r r r« r > r x liabilitythe discount rate — The following presents the Count�s proportionate share of the net pensi < .using the discount rate of 7.00%, as well as what theCounty's proportionate share of the net pension liability would be if it were calculated using a disco rate that is I #ercentage-point lower (6.00%) or # `(8.00%) than the Decreasecurrent rate: Current Discount ■ Increase * Department'sproportionate share of the net pension a i S 29.247.607", i is "! Payables to the pensionr ,L arnount payable totaled $134,225, which represents the employer contribution for the month of June 2017, as required #` HRS. Post -Retirement Benefits '11 # ♦ ; ' + 191myri M, "T The financial statements of the Department for the fiscal year ended June 30, 2016 included to the fiscal year end but no service connection income was recognized. Therefore, an adjustment was made to decrease customers' deposits and increase beginning net position by $449,220 for the fiscal year ended June 30, 2016. 1 r •,; d Actuarial $61,907 $394,633 Accrued 15,7% $130,170 255.6% UAAL as a Actuarial Liability Unfunded Percentage Actuarial Value of (AAL) — AAL Funded Covered of Covered Valuation Assets Entry Age (UAAL) Ratio Mayr°nll Payroll Lute a b (b -a) (a/b) (c ((b-a)/c) July 1, 2011 $61,907 $394,633 $332,726 15,7% $130,170 255.6% July 1, 2013 $66,077 $410,182 $344,1.05 16.1% $137,810 24M% July 1, 2015 $91,579 $466,874 $375,295 19. % $159,255 235.7®/ 11 i ,-TI w - Net Pension Liability (ERS) Last 10 Fiscal Years Effs to presenf-ino-r-maTiTiT-16f I I years, as of Ue measure—m-e-nf TaTe-3-1 U77. collective net pension liability for each respective fiscal year. Additional years will be built prospectively as information becomes available. Imm Proportionate Share of the Plan County's County's Net Pension Fiduciary Net Proportion of Proportionate Liability as a Position as a the Net Share of the County's %age of %age of the Measurement Pension Net Pension Covered Covered Total Pension Period Ended Liability (%) Liability ($) Payroll Payroll Liability June 30, 2016 4.6% $618,129,088 $156,556,514 394.8% 51.2% June 30, 2015 4.4% $382,070,813 $149,760,317 255.1% 62.4% June 30, 2014 4.0% $322,626,262 $137,669,418 234.3% 63.9% June 30, 2013 4.2% $377,065,856 $129,153,763 292.0% 58.0% Effs to presenf-ino-r-maTiTiT-16f I I years, as of Ue measure—m-e-nf TaTe-3-1 U77. collective net pension liability for each respective fiscal year. Additional years will be built prospectively as information becomes available. Imm Schedule of the Employer Pension Contributions (ERS) Last Ten Fiscal Years mum Actual County Contributions Statutorily Contributions Contribution as a /®age of Fiscal Year Required recognized Deficiency County's Covered Ended Cont 11 Tune 30, 2017 $ 36,1.57,981 $ 36,157,981 $ -- $ 163,626,447 22.1% June 30, 2016 $ 34,013,001 $ 34,013,001 $ -- $ 156,556,514 21.7% June 30, 2015 $ 31,456,148 $ 31,456,148 $ -- $ 149,760,317 21.0% June 30, 2014 $ 26,503,830 $ 26,503,830 $ -- $ 137,669,418 1.9.3% June 30, 2013 $ 23,763,101 $ 23,763,101 $ -- $ 129,153,763 18.4% June 30, 2012 $ 20,884,021 $ 20,884,021 $ -- $ 123,218,017 16.9% June 30, 2011 $ 21,424,642 $ 21,424,642 $ -- $ 126,714,584 16.9% June 30, 2010 $ 22,120,137 $ 22,120,137 $ -- $ 132,253,481 16.7% June 30, 2009 $ 22,310,600 $ 22,310,600 $ -- $ 133,934,674 16.7/® June 30, 2008 $ 18,195,447 $ 18,195,447 $ -- $ 126,897,194 14.3% mum I IN MI 71 Ts Mirl to — Changes of Assumptions Amounts reported in the schedule of the proportionate share of the net pension liability as of the measurement period ended June 30, 2016 were significantly impacted by the following changes of actuarial assumptions: The investment return assumption decreased from 7.65% to 7.00% l'il*itality assym�fiiriys were- assumc+#nger lik exAzctanms ai well as .-eflect continuous mortality improvement mlvlafl�# 0 �%.-U • EVVITNOMMI edule of Changes in Total Pension Liability (Bandsmen Pension) Last Ten Fiscal Years Measurement year ending 2017 June 30, UZM123�= Service Cost $ 16,416 Interest on the Total Pension Liability 36,289 Assumption Changes (113,807) Benefit Payments —Iil,347) Net Change in Total Pension Liability (114,449) Total Pension Liability — Beginning 1,261,229 Total Pension Liability — Ending .6,i Covered Employee Payroll $49,505 Total Pension Liability as a Percentage of Covered Employee Payroll 2,316.5% ;7,11 1 0 is pension liability for each respective fiscal year. Additional years will be built prospectively as information becomes available. MOM This page: intentionally lefl blank, NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS HIGHWAY FUND - Used to account for the costs of maintaining the County's highways and streets. Financing is provided primarily by fuel, motor vehicle weight and public utility franchise taxes. SEWER FUND - Used to account for costs of operating the County's various sewer systems. Financing is provided by charges to users for sewer services. SOLID WASTE FUND — Used to accumulate moneys for the operation, maintenance, and administration of the County's solid waste management, collection and disposal systems. Financing is provided by tipping fees at the landfills and by disposal permit fees. CEMETERY FUND - Used to accumulate moneys to guarantee the future maintenance of County cemetery sites. Financing is provided from the sale of burial lots in County cemeteries. PARKING METER FUND - Used to account for the costs of maintaining County on -street and off-street parking areas. Financing is provided by the proceeds from parking meters. 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. BIKEWAY FUND - Used to accumulate moneys for the construction of bikeways within the County. Financing is provided by bicycle license fees. WORKFORCE INVESTMENT ACT FUND - Used to account for employment and training services provided to economically disadvantaged adults, dislocated workers and youth. Financing is provided by federal grants. GOLF COURSE FUND - Used to account for the cost of operating the Hilo Municipal Golf Course. Funding is provided from green fees and payments from restaurant and pro shop concessionaires. GEOTHERMAL RELOCATION AND COMMUNITY BENEFITS FUND - Used to account for the County's share of geothermal resource royalties received from the operator of a geothermal power plant located in the County. The funds are earmarked for a geothermal relocation program and to benefit the lower Puna area. 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. HAWAII COUNTY HOUSING AGENCY- Used to account for Federal and County moneys used to provide public housing assistance within the County. PARK DEDICATION FUND - Used to account for moneys deposited with the County by subdividers to provide land for parks and playgrounds in subdivisions. DEBT SERVICE FUND 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. This page intentionally left blank COUNTY OF HAWAII Nontttajor Governmental Funds Combining Balance Sheet June 30, 2017 Deferred Inflows of Resources Unavailable Revenue - Fund balances: Restricted for: Debt service - Highways, streets and abandoned vehicles 6,814,624 Rental assistance and subsidy - Committed to: Sanitation - Highways, streets and abandoned vehicles - Rental assistance and subsidy - Cemetery - Golf course - Lower Puna area - Parks and recreational projects - Total fund balances 6,814,624 Total liabilities, deferred inflows 1,235,896 1,260,770 - 7,846,436 8,628,463 - - - 130,659 7,846,436 8,628,463 130,659 261,634 261,634 and fund balances $ 9,275,695 $ 9,963,351, $13,431,280 $130,659 $261,634 Special Revenue Funds Solid Parking Highway Sewer Waste Cemetery Meter Fund Fund Fund Fund Fund Assets Cash and cash equivalents 5 7,930,984 5 8,512,262 $11,727,077 $130,659 $ 261,634 Investments - - - - - Imprest fund - 400 250 - Receivables: Due from other governments 1,194,653 11,033 392,945 - - Due from other governmental funds 150,058 202,410 174 - - Due from other nongovernmental funds - 1,350 - - - Trade, net of allowance for doubtful accounts - 1,235,896 1,260,770 - - Real estate held for sale - - - - - Other - - 50,064 - 1,344,711 1,450,689 1,703,953 - - Total assets 5 9,275,695 $ 9,963,351 $13,431,280 5130,659 $ 261,634 Liabilities, Deferred Inflows and Fund Balances Liabilities: Accounts payable $ 1,055,434 $ 238,216 $ 2,513,904 $ - $ Accrued payroll 504,397 188,088 375,764 - - Due to other governmental funds 662,010 375,470 640,361 - - Advance Collections -Intergovernmental 238,270 - 11,998 - - Other 960 79,245 20 - - Totalliabilities 2,461,071 881,019 3,542,047 - - Deferred Inflows of Resources Unavailable Revenue - Fund balances: Restricted for: Debt service - Highways, streets and abandoned vehicles 6,814,624 Rental assistance and subsidy - Committed to: Sanitation - Highways, streets and abandoned vehicles - Rental assistance and subsidy - Cemetery - Golf course - Lower Puna area - Parks and recreational projects - Total fund balances 6,814,624 Total liabilities, deferred inflows 1,235,896 1,260,770 - 7,846,436 8,628,463 - - - 130,659 7,846,436 8,628,463 130,659 261,634 261,634 and fund balances $ 9,275,695 $ 9,963,351, $13,431,280 $130,659 $261,634 339,307 $ 13,903 $ $ 1,580 $ 4,648 - 47,509 81,013 270,960 2,346 424,968 13,903 270,960 51,435 621,889 569 $ 16,911 $ 79,271 $ - 155,239 - 268 184,791 - 176,284 569 17,079 595,585 29,71 642,719 - - 1,514,153 8,459,970 - - 1,219,449 74,719 - 4,087,297 - 88,426 8,459,970 621,889 74,719 4,087,297 642,719 2,733,602 88,426 $8,884,938 $635,792 $ 270,960 $ 126,154 $4,087,866 $ 659,798 $ 3,358,905 $ 88,426 (Continued) SpecW Revenue Funds Golf Geothermal Relo. Beauti- Hawaii County Park Disposal Bikeway InnvdtfonE Course & Communay fication Housing Dedication Fund Fund 0 2j- �Aa f.,Ld_ Fund Benefins Fund Fund enc Fund $8,884,938 $635,792 $ $ 123,650 $3,540,621 $ 659,798 $3,124,412 $ 27,768 - - - - 60,658 2,000 800 - 231,966 - 166,009 37,352 - - 402,551 - 38,994 504 144,694 30,332 - 270,960 504 - 547,245 233,693, $8,884,938 $635,792 $ 270,960 $ 126,154 $4,087,866 $ 659,798 $3,358,905 $ 88,426 339,307 $ 13,903 $ $ 1,580 $ 4,648 - 47,509 81,013 270,960 2,346 424,968 13,903 270,960 51,435 621,889 569 $ 16,911 $ 79,271 $ - 155,239 - 268 184,791 - 176,284 569 17,079 595,585 29,71 642,719 - - 1,514,153 8,459,970 - - 1,219,449 74,719 - 4,087,297 - 88,426 8,459,970 621,889 74,719 4,087,297 642,719 2,733,602 88,426 $8,884,938 $635,792 $ 270,960 $ 126,154 $4,087,866 $ 659,798 $ 3,358,905 $ 88,426 (Continued) COUNTY OF HAWAII Nonmajor Governmental Funds Combining Balance Sheet June 30, 2017 Debt Service Fund Total Nonmajor Interest Governmental Fund Funds ,assets Cash and cash equivalents $2,663,185 $ 48,222,780 Investments 60,658 Imprest fund 3,450 Receivables: Clue from other governments - 1,996,606 Due from other governmental funds - 389,994 Clue from other nongovernmental funds - 1,350 Trade, net of al lowance for doubtful accounts - 2,496,666 Real estate held for sale - 402,551 Other - 264,588 - 5,551,755 Total assets $2,663,185 $ 53,838,643 Liabilities, Deferred Inflows and Fund Balances Liabilities: Accounts payable $ - $ 4,258,995 Accrued payroll - 1,275,645 Due to other governmental funds - 2,217,219 Advance Collections -Intergovernmental - 250,268 Other 63,199 319,708 Total liabilities 63,199 8,321,835 Deferred Inflows of Resources Unavailable Revenue - 2,526,384 Fund balances: Restricted for: Debt service 2,599,986 2,599,986 Highways, streets and abandoned vehicles - 8,079,232 Rental assistance and subsidy - 1,514,153 Committed to: Sanitation - 16,474,899 Highways, streets and abandoned vehicles - 8,721,604 Rental assistance and subsidy - 1,219,449 Cemetery - 130,659 Golf course - 74,719 Lower Puna area - 4,087,297 Parks and recreational projects - 88,426 Total fund balances 2,599,986 42,990,424 Total liabilities, deferred inflows and fund balances $2,663,185 53,838„643 See accompanying independent auditors' report. - 112- This, page intentiOMAY left b1mik, E� COUNTY OF HAWAII Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances For the Fiscal Year Ended June 30, 2017 Revenues Fueltaxes Public utility franchise taxes Licenses and permits Intergovernmental Charges for services Investment earnings (loss) Other Total revenues Expenditures Current: General Government Public safety Highways and streets Health, education and welfare Culture and recreation Sanitation Pension and retirement contributions Employees' health insurance Other Debt service: Principal Interest Total expenditures Excess (deficiency) of revenues over (under) expenditures Other Financing Sources (Uses) Transfers in Increases in capital leases Transfers out Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Fund balances at end of year 7,451,863 Special Revenue Funds 17,274,718 Solid Parking Highway Sewer Waste Cemetery Meter Fund Fund —.Fund Fund Fund $ 8,288,676 $ S m $ $ 7,950,750 - 475,927 - 12,128 11,773,233 30,389 28,801,296 8,830,204 1,063,102 - - 288,840 _I1,015,33J5 .(?0,3232914 - 7,784,565 9,305,944 18,679,575 12,997 405,693 30,304 1,560,567 11,750 ,952,825 29,481,454 7,814,869 11,155,351 11,750 12,997 7,451,863 17,274,718 - 7,733,585 28,148,574 - - 2,165,352 743,621 1,508,164 - - 1,024,730 270,192 704,852 - - 717,956 82,806 611,359 - - 154,549 - 475,927 - 12,128 - 30,389 28,801,296 8,830,204 31,479,265 - - 680,158 _I1,015,33J5 .(?0,3232914 11,750 12,997 10,000 2,120,785 18,679,575 8,233 - 1,413,164 ,952,825 - ... 3,934,592) 2,120,785 20,092,739 - -- (3,254,434) 1,105,450 (231,175) 11,750 12,997 10,0697058 6,740,986 8,859,638 118,909 248,637 $ 6,814,624 $ 7,846,436 $ 8,628,463 $ 130,659 $261,634 ---V-ehicle Special Revenue Funds WorkfDrce Golf Geothennal RCIOC Beauti- Hawaii County Park, Disposal Bikeway Innovation & Course acommumn fioutiom Housing Dedication Fund Fund _0 en Aci Lund_ Fund Benefits Fund Fund ��f�Fumd - 2,282,664 - 77,621 - ' - - - - - 190,220 - - - - ~ - 1,021.604 - - - 19^017,328 - 2.724 - - 585,557 - - - - ' - ' - - - 3,831 15 B ---- - ---- ~ ----- - ---- || ----- - ----- 9 - -----' 2,299,165 77,621 505,557 1,113,208 190,22020,001,17615 - - - - 1, 141,202 ^ 85/604 - - - 188,840 - ^ - - 1,021,604 - ^ - 21,831,642 ' - ' - 936,033 ^ 127,948 - - 1,704,359 - - _ , _ _ _ 17,73* ~ - 105,096 - ~ 656,346 - 16,549 - ' 186,362 - - 282,868 - ' - - 2,347 - - - - - - ~ - - - 4,959 ' - - - - ~ - 525 - 1,738,646 85,604 1,021,604 1,230,638 1,141,202 316,780 22,776,340 - - ~ 477,519 ' - 1,572,396 - - - ~ ' - - 38,967 ' - - - - - ' - - - - ~77 ^ - l - ----- ---- ---- ---- -----` ---- ------ ----' 560,519 (7,983) ' (167'562) (27,994) (126.560) (1,183,801) 15 7,899,451639,872 �_ 242,281 4,115,291769,2793,897,40388,411 $8,459,970 �S 02/ 8@9 S S 74,719 $ 4,087,297 $ 642,719 ,733,� ,� (Continued) COUNTY OF HAWAII Nonrnajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances For the Fiscal Year Ended June 30, 2017 s See accompanying independent auditors' report. Debt Service Fund Total Nonmajor Interest Governmental Fund Funds Revenues Fuel taxes $ - 8,288,676 Public utility franchise taxes - 7,950,750 Licenses and permits - 14,323,738 Intergovernmental 388,011 21,778,885 Charges for services - 17,691,787 Investment earnings (loss) - 3,846 Cather - 4,1 15,316 Total revenues 388,011 74,152,998 Expenditures Current General Government - 1,141,202 Public safety - 7,451,863 Highways and streets - 17,549,162 Health, education and welfare - 22,853,246 Culture and recreation - 1,063,973 Sanitation - 37,586,518 Pension and retirement contributions - 5,277,117 Employees` health insurance - 2,405,553 Cather - 1,414,468 Debt service: Principal - 635,435 Interest 17,154,756 17,197,798 Total expenditures 17,154,756 114,576,335 Excess (deficiency) of revenues over (under) expenditures 16,766,745) (40,423,337) Other Financing Sources (Uses) Transfers in 16,275,431 39,135,706 Increases in capital leases - 1,460,364 Transfers out _ 3,952,825 Total other financing sources (uses) 16,275,431 36,643,245 Net change in fund balances (491,314) (3,780,092) Fund balances at beginning of year 3,091,300 46,770,516 Fund balances at end of year $ 2,599,986 $ 42,990,424 See accompanying independent auditors' report. Budget and Actual (Budgetary rXIMrt. 4 w Revenues: Taxes: Fuel taxes Public utility franchise taxes Total taxes Licenses and permits - motor vehicle weight taxes 1ntergoverrimental Charges for services Other Expenditures: General government Public safety - protective inspection Public safety - traffic engineering Highways and streets Highways and streets - mass transit Pension and retirement contributions Employees' health insurance Cather Excess (deficiency) of revenues over (under) expenditures Actual Variance Original Final (Budgetary Positive Bud et Budget Basis) (Ne ative) $ 7,800,000 $ 7,800,000 7,934,224 $ 134,224 9,100,000 9,100,000 7,950,750 (1,149,250) 16,900,000 16,900,000 15,884,974 (1,015,026) 11,100,000 11,100,000 11,773,233 673,233 1,503,567 1,590,036 1,053,719 (536,317) 500,000 500,000 324,792 (175,208) 74,399 74,399 80,901 6,502 30,077,966 30,164,435 29,117,619 (1,046,816) 11,000 11,000 2,102 8,898 8,293,279 8,389,748 7,489,429 900,319 12,261,132 12,261,132 9,406,925 2,854,207 7,400,000 7,400,000 7,056,390 343,610 2,497,650 2,347,650 2,163,307 184,343 1,100,000 1,100,000 1,025,593 74,407 854,000 1,004,000 709,698 294,302 32,417,061 32,513,530 27,853,444 4,660,086 (2,339,095) (2,349,095) 1,264,175 3,613,270 Other financing sources (uses) - transfers in (out) - Transfers in - General Fund - 10,000 10,000 - Transfers out - Capital Projects Fund (3,500,000) (3,720,566) (3,646,708) 73,858 tinder expenditures 10,069,058 10,069,058 10,069,058 balanceFund See accompanying independent auditors' report. COUNTY OF HAWAII Mzr�J Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) MMM See accompanying independent auditors' report. MR -IN Actual Variance Original Final (Budgetary Positive budget Budget Basis) egative) Revenues: Charges for services - sewer fees $7,371,924 S 7,371,924 $7,784,565 S 412,641 Other - 30,304 30,304 Total revenues 7,371,924 7,371,924 7,814,869 442,945 Expenditures: Sanitation 10,108,110 10,108,110 8,698,771 1,409,339 Pension and retirement contributions 884,600 847,600 739,745 107,855 Employees' health insurance 306,000 306,000 268,963 37,037 Other 550,000 587,000 76,578 510,422 Total expenditures 11,848,710 11,848,710 9,784,057 2,064.,653 Deficiency of revenues under expenditures (4,476,786) (4,476,786) (1,969,188) 2,507,598 Other financing sources: Transfers in - General Fund 2,120,785 2,120,785 2,120,785 - Excess (deficiency) of revenues and other sources over (under) expenditures (2,356,001) (2,356,001) 151,597 2,507,598 Fund balance at beginning of year 6,740,986 6,740,986 6,740,986 - Fund balance at end of year $ 4,384,985 $ 4,384,985 $ 6,892,583 =M=� $ 2,507,598 See accompanying independent auditors' report. MR -IN COUNTY OF HAWAII Solid Waste Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance 4 Budget and Actual (Budgetary Basis) For the Fiscal Year Ended ,lune 30, 2017 Revenues: Intergovernmental Charges for services - tipping fees Other Total revenues Expenditures: Sanitation Pension and retirement contributions Employees' health insurance Other Total expenditures Deficiency of revenues under expenditures Other financing sources: Transfers in - General Fund Excess (deficiency) of revenues and other sources over (under) expenditures Fund balance at beginning of year Fund balance at end of year Actual Original Final (Budgetary Budget Budget Basis) S 428,013 428,013 $ 295,001 8,507,450 8,507,450 9,305,944 247,212 247,212 1,560,567 9,182,675 9,182,675 11,161,512 28,5 91,211 28,541,211 1,548,200 1,505,200 770,000 704,000 471,000 630,000 31,380,411 31,380,411 (22,197,736) (22,197,736) Variance Positive Negative) 26,167,821 2,373,.90 1,505,1 19 81 703,464 536 597,591 32,409 4,385,253 $ 4,385,253 867,092 8,859,638 8,859,638 8,859,638 t 4,385,253 $ 4,385,253 COUNTY OF HAWAII Cemetery Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 2017 Revenues - other - sale of cernetery plots Expenditures - health, education and welfare Excess of revenues over expenditures Fund balance at beginning of year Fund balance at end of year MKM Actual Variance Original Final (Budgetary Positive Budget E�et is) (Negative S 10,000 $ 10,000 $ 11,750 $ 1,750 10,000 10.000 - 10,000 - - 11,750 11,750 118,909 118,909 118,909 - S 118,909 S 118,909 S 130,659 $ 11,750 MKM COUNTY OF HAWAII Parking Meter Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 2017 Revenues - Charges for services - highways and streets Excess of revenues over expenditures -cFT-gfT7mTg-m y7ar rFund balance at end of year See accompanying independent auditors' report. Actual Variance Original Final (Budgetary Positive Budget Bud et _Basis) (Ne native) $ $ 12,997 S 12,997 12,997 12,997 248,637 248,637 248,637 - S 248,637 $ 248,637 $ 261,634 $ 12,997 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 2017 Actual Variance Original Final (Budgetary Positive Budget BudgetBasis} (Negative) Licenses and permits _ vehicle disposal fee $2,178,552 $ 2,178,552 5 2,282,664 $ 104,112 Charges for services - towing charges 1,000 1,000 2,724 1,724 Miscellaneous 12,500 12,500 13,778 1,278 Total revenues 2,192,052 2,192,052 2,299,166 107,114 Sanitation 5,282,563 5,282,563 1,466,479 3,816,084 Pension and retirement contributions 29,273 29,273 17,419 11,854 Employees' health insurance 24,000 24,000 16,504 7,496 Cather 2,000 2,000 2,000 Total expenditures 5,337,836 5,337,836 1,500,402 3,837,434 Excess (deficiency) of revenues over (under) expenditures (3,145,784) (3,145,784) 798,764 3,944,548 Fund balance at beginning of year 7,899,451 7,899,451 7,899,451 - Fund balance at end of year $4,753,667 S 4,753,667 S 8,698,215 $ 3,944,548 See accompanying independent auditors` report. KOIRMFWAMMYAM AM GM, Z M �1, Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 2017 Revenues - licenses and permits - bicycle tax Expenditures - highways and streets Excess (deficiency) of revenues over (under) expenditures Fund balance at beginning of year Fund balance at end of year See accompanying independent auditors' report. Actual Original Final (Budgetary _j Budget Budget Basis) $ 75,000 $ 75,000 $ 77,621 102,495 102,495 24,780 (27,495) (27,495) 52,841 629,872 629,872 629,872 $602,377 $602,377 $682,713 Variance Positive (Negative) $ 2,621 77,715 80,336 $80,336 COUNTY OF HAWAII Workforce Innovation & Opportunity Act Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 2017 Actual Variance Original Final (Budgetary Positive Bud et Budget Basis) (Negative) Revenues - intergovernmental - federal grants $ $ $ Expenditures - health, education and welfare Excess of revenues over expenditures Fund balance at beginning of year Fund balance at end of year $ $ $ See accompanying independent auditors' report. COUNTY OF HAWAII Golf o rse Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Eudget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 2017 Actual Variance Original Final (Budgetary Positive fludget u�et Basis) (Negative) Revenues: Charges for services s 596,400 s 596,400 $ 585,557 $ (10,843) Culture and recreation 1,020,918 1,020,918 932,877 88,041 Pension and retirement contributions 200,270 200,270 185,1.64 15,106 Employees' health insurance 114,504 114,504 106,324 8,180 Other 11,131 11,131 2,346 8,785 -Total expenditures 1,346,823 1,346,823 1,226,711 120,112 Deficiency of revenues under expenditures (750,423) (750,423) (641,154) 109,269 Other financing sources: Transfers in - General Fund 477,519 477,519 477,519 - Excess of revenues and other sources over expenditures (272,904) (272,904) (163,635) 109,269 Fund balance at beginning of year 242,281 242,281 242,281 - Fund balance at end of year s (30,623) S (30,623) 78,646 $ 109,269 COUNTY OF HAWAII I C1114 I'll 4 L Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 2017 Revenues Miscellaneous: Geothermal royalties Sale of real property Total revenues Expenditures: General government: Planning and zoning Excess (deficiency) of revenues over (under) expenditures Fund balance at beginning of year Fund balance at end of year Actual Variance Original Final (Budgetary Positive Budget t et Basis) (Negative) $ 600,000 $ 600,000 $ 360,850 $ (239,150) 706,225 706,225 600,000 600,000 1,067,075 467,075 1,700,000 1,700,000 823,005 876,995 (1,100,000) (1,100,000) 244,070 1,344,070 4,115,291 4,115,291 4,115,291 - S 3,015,291 $3,015,291 $ 4,359,361 $ 1,344,070 COUNTY OF HAWAII Beautification Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 2017 See accompanying independent auditors' report. Actual Variance Original Final (Budgetary Positive B�et �et Basis)2L _ egLt �ve) Revenues ® licenses and permits - highway beautification S 182,000 S 182,000 190,220 $ 8,220 Expenditures: Highways and streets 179,800 179,800 178,800 1,000 Culture and recreation 131,300 131,300 112,762 18,538 Total expenditures 311,100 311,100 291,562 19,538 Deficiency of revenues under expenditures (129,100) (129,100) (101,342) 27,758 Fund balance at beginning of year 769,279 769,279 769,279 Fund balance at end of year S 640,179 $ 640,179 S 667,937 $ 27,758 See accompanying independent auditors' report. C(JlJ1*ITY OF HAWAII �chedule of Revenues, Expenditures,and Changes in Fund Budget and Actual (Budgetary Basis) Revenues: Intergovernmental - Federal - HUD - Voucher program Investment earnings Resale of property Other Expenditures: Health, education and welfare Pension and retirement contributions Employees' health insurance Total expenditures ,actual Variance Original Final (Budgetary Positive Budget et iasis) (Negative) $ 16,288,452 19,288,452 $ 19,047,155 $ (241,297) 1,609 1,609 3,831 2,222 ® - 98,883 98,883 68,744 68,744 528,914 460,170 16,358,805 19,358,805 19,678,783 319,978 over (under) expenditures (185,993) 17,300,197 20,308,197 19,871,908 436,289 713,198 713,198 654,719 58,479 342,299 342,299 282,429 59,870 18,355,694 21,363,694 20,809,056 554,638 Deficiency of revenues under expenditures (1,996,889) (2,004,889) (1,130,273) 874,616 Other financing sources ® transfers in - Transfers in ® General Fund 1,810,896 1,818,896 1,572,396 (246,500) Excess (deficiency) of revenues and other sources over (under) expenditures (185,993) (185,993) 442,123 628,116 Fund balance at beginning of year 3,897,403 3,897,403 3,897,403 - und balance at end of year $ 3,71 1,410 $ 3,71 1,410 $ 4,339,526 $ 628,116 COUNTY OF HAWAII Park Dedication Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 2017 Revenues - investment earnings Excess of revenues over expenditures Fund balance at beginning of year Fund balance at end of year See accompanying independent auditors' report. Actual Variance Original Final (Budgetary Positive Bud _.!j�et Budget __.Basis) (Negative) S S 760 S 760 760 760 88,411 88,411 88,411 S 88,411 $ 88,411 89,171 $ 760 OF= Cash and cash equivalents Investments Due from other agency funds Other receivables Total assets I= Agency Funds Combining Statement of Agency Funds Net Position June 30, 2017 State Improvement Improvement Improvement and Weight District District District Refundable Tax No, 18 No. 19 Revolving Deposits Fund Fund Fund Fund Fund $1,980,809 $ 478,889 $ 255,131 $ 5,627 $ 357,693 - 252,935 167,995 - 4,252 1,556 105 -T1,980,809 —i-483,141 $ 509,622 $ 17-3,622 7--335-7,798 Due to other agency funds $ - S - $ - $ $ 2,925 Accrued liabilities 1,980,809 6,009 3,956 - Advances payable - 13,737 13,069 - 354,873 Assets field for the benefit of improvement districts 463,395 492,597 173,622 Total liabilities $1,980,809 $ 483,141 $ 509,622 $ 173,622 $ 357,798 See accompanying independent auditors' report. S 698 S - $ - S - S - $ - $ 3,623 516,048 354,875 335,428 1,025 1,160 333 3,199,643 _ - - - 381,679 3,292 •1 S 516,746 354,875 335,429 1,0251,160 3,625 S 4,717,851 Non -Profit Organ and Business Payroll Flexible Lapsed license Tissue Improvement Clearance Spending Warrants Plates Education District Fund Account Fund Fund Fund I - Kailua 'Total S 85,426 S 354,875 S 323,234 S 1,025 S 1,160 55 $ 3,843,924 - - - - - 420,930 - - 3,623 - 3,623 431,320 - 8,571 - - 3,570 449,374 $ 516,746 S 354,875 S 335,428 S 1,025 S 1,160 $ 3,625 $ 4,717,851 S 698 S - $ - S - S - $ - $ 3,623 516,048 354,875 335,428 1,025 1,160 333 3,199,643 _ - - - 381,679 3,292 •1 S 516,746 354,875 335,429 1,0251,160 3,625 S 4,717,851 State eight'rax Fund Assets Cash and cash equivalents Liabilities Vouchers payable Accrued liabilities - due to State of Hawaii r Improvement District No. 18 Fund Assets Cash and cash equivalents Other receivables Total assets Liabilities Vouchers Payable Due to other non -agency funds Accrued liabilities Advances payable Assets held for the benefit of improvement districts UZZIM Improvement District No. 19 Fund Assets Cash and cash equivalents Investments Other receivables Total assets fit► Vouchers Payable Due to other non -agency funds Accrued liabilities Advances payable Assets held for the benefit of improvement districts Total liabilities A WIN T Balance Balance July 1, June 30, 2016 Additions Deductions 2017 23,784,953 1,933,982 23,858,979 23,812,152 1,980,809 402,107 243,426 6 4 { . 478,889 3,684 258,713 t ,145 4,252 $ - $ 889 S 889 $ - 1,878 1,757 1,878 1,757 3,683 206,509 205,940 4,252 14,626 13,737 14,626 13,737 385,604 205,848 128,057 463,395 A „ 1 $ 222,675 $ 101,800 $ 69,344 $ 255,131 258,205 - 5,270 252,935 4,312 80,301 83,057 1,556 S 485,192 $ 182,101 $ 157,671 $ 509,622 $ - $ 7,133 S 7,133 $ - 2,540 2,400 2,540 2,400 4,312 80,301 83,057 1,556 6,580 13,069 6,580 13,069 471,760 88,731 4.;IV 492,597 w $ 509,622 COUNTY OF HAWAII Performance and Refundable Deposits Fran Assets Cash and cash equivalents $ 258,758 $ 554,970 455,045 $ 357,593 Clue from other non -agency funds 1,500 105 1,500 105 Total assets $ 250,358 $ 555,075 $ 457,545 $ 357,798 RIMM Vouchers payable $ - $ 454,857 $ 454,857 $ Due to other agency funds 5,678 2,925 5,578 2,925 Advances payable 254,590 559,450 459,267 354,873 Total liabilities $ 260,368 $ 1,017,242 $ 919,812 $ 357,798 Payroll Clearance Fun Assets Cash and cash equivalents $ 470,978 $ 281,895,652 $ 282,281,204 $ 85,426 Clue from other non -agency funds 271,558,809 271,558,809 - Other receivables 2,179 429,141 - 431,320 Total assets $ 473,157 $ 553,883,602 $ 553,840,013 $ 516,746 { Vouchers payable $ - $ 134,322,557 $ 134,322,557 $ - Due to other agency funds 177 3,035 2,514 698 Accrued liabilities 472,980 299,346,752 299,303,684 516,048 Total liabilities $ 473,157 $ 433,672,344 $ 433,628,755 $ 516,746 Balance Balance July 1, June 30, 2015 Additions Deductions 2017 Improvement [district Revolving Frond Assets Cash and cash equivalents $ 3,535 $ 2,091 $ - $ 5,527 Investments 170,055 - 2,051 157,995 Total assets $ 173,592 $ 2,091 $ 2,051 $ 173,522 Liabilities Assets held for the benefit of improvement districts $ 173,592 $ 2,091 $ 2,051 $ 173,522 Performance and Refundable Deposits Fran Assets Cash and cash equivalents $ 258,758 $ 554,970 455,045 $ 357,593 Clue from other non -agency funds 1,500 105 1,500 105 Total assets $ 250,358 $ 555,075 $ 457,545 $ 357,798 RIMM Vouchers payable $ - $ 454,857 $ 454,857 $ Due to other agency funds 5,678 2,925 5,578 2,925 Advances payable 254,590 559,450 459,267 354,873 Total liabilities $ 260,368 $ 1,017,242 $ 919,812 $ 357,798 Payroll Clearance Fun Assets Cash and cash equivalents $ 470,978 $ 281,895,652 $ 282,281,204 $ 85,426 Clue from other non -agency funds 271,558,809 271,558,809 - Other receivables 2,179 429,141 - 431,320 Total assets $ 473,157 $ 553,883,602 $ 553,840,013 $ 516,746 { Vouchers payable $ - $ 134,322,557 $ 134,322,557 $ - Due to other agency funds 177 3,035 2,514 698 Accrued liabilities 472,980 299,346,752 299,303,684 516,048 Total liabilities $ 473,157 $ 433,672,344 $ 433,628,755 $ 516,746 COUNTY OF HAWAII Agency Funds Combining Statement of Changes in Assets and Liabilities For the Fiscal Year Ended June 30, 2017 Flexible Spending Account Assets Cash and cash equivalents Liabilities Accrued liabilities Lapsed Warrants Fund Assets Cash and cash equivalents Due from other agency funds Other receivables Total assets Liabilities Vouchers payable Accrued liabilities Total liabilities Non -Profit License Plates Fund Assets Cash and cash equivalents Liabilities Vouchers payable Accrued liabilities: Due to non-profit agency Total liabilities Organ and Tissue Education Fund Assets Cash and cash equivalents Liabilities Vouchers payable Accrued liabilities - due to State of Hawaii Total liabilities Balance Balance July 1, June 30, 2016 Additions Deductions 2017 $ 355,731 $ 357,701 $ 358,557 $ 354,875 $ 355,731 $ 357,701 $ 358,557 S 354,875 S 311,363 $ 12,051 $ 180 323,234 5,855 3,623 5,855 3,623 6,073 8,571 6,073 8,571 S 323,291 S 24,245 $ 12,108 $ 335,428 180 $ - 323,291 20,477 8,340 335,428 323,291 $ 20,657 $ 8,520 $ 335,428 S 1,125 S 4,550 $ 4,650 S 1,025 $ - $ 4,650 $ 4,650 $ - 1,125 4,550 4,650 1,025 9,200 $ 9,300 S 1,115 S 4,456 S 4,411 S 1,160 $ - $ 3,579 $ 3,579 $ - 1,115 4,456 4,411 1,160 S 1,115 S 8,035 $ 7,990 $ 1,160 COUNTY OF HAWAII Agency Funds Combining Statement of Changes in Assets and Liabilities For the Fiscal Year Ended June 30, 2017 Balance Balance July 1, June 30, 2016 Additions Deductions 2017 Business Improvement District I-Kailua Assets Cash and cash equivalents $ 811 $ 810,275 $ 811,031 55 Other receivables - BID I-Kailua Assessment 22,156 794,436 813,300 3,292 Due from other non -agency funds 2 856 580 278 Total assets $ 22,969 $ 1,605,567 $ 1,624,911 3,625 Liabilities Vouchers payable $ - $ 809,652 $ 809,652 $ - Accrued liabilities - due to KVBID 516 333 516 333 Due to other non -agency funds 297 817 1,114 - Assets held for the benefit of improvement districts 22,156 784,525 803,389 3,292 Total liabilities $ 22,969 $ 1,595,327 $ 1,614,671 $ 3,625 Total - All Agency Funds Assets Cash and cash equivalents $3,962,191 $ 307,840,195 $ 307,958,462 $3,843,924 Investments 428,261 - 7,331 420,930 Due from other agency funds 5,955 3,623 5,855 3,623 Due from other non -agency funds 1,602 271,559,770 271,560,989 383 Other receivables - BID I-Kailua Assessment 22,156 794,436 813,300 3,292 Other receivables 16,248 776,726 347,275 445,699 Total assets $4,436,313 $ 580,974,750 $ 580,693,212 $4,717,851 Liabilities Vouchers payable $ - $ 159,388,460 $ 159,388,460 $ - Due to other agency funds 5,855 5,960 8,192 3,623 Due to other non -agency funds 4,715 4,974 5,532 4,157 Accrued liabilities 1,159,997 300,011,740 299,959,578 1,212,159 Accrued liabilities - due to non-profit agency 1,125 4,550 4,650 1,025 Accrued liabilities - due to State of Hawaii 1,935,097 23,863,435 23,816,563 1,981,969 Accrued liabilities - due to KVBID 516 333 516 333 Advances payable 275,896 586,256 480,473 381,679 Assets held for the benefit of improvement districts 1,053,112 1,081,195 1,001,401 1,132,906 Total liabilities $4,436,313 $ 484,946,903 $ 484,665,365 $4,717,851 • rs III TIMM •. I Assets Cash and cash equivalents Investments Total assets Net Position Held in trust for other parties Total net position RMINumdm�N � Private Purpose Trusts ummmd� $__2,286,872 S 2,491,464 $ 4,778,336 $ 2,286,872 $ 2,491,464 $ 4,778,336 Shippers' Total Geothennal Wharf Private Asset Trust Purpose —Fund Fund Trusts S 743,344 $ 944,701 1,688,045 — 1,543,528 1,546,763 3,090,291 $ 2,286,872 $ 2,491,464 $ 4,778,336 $__2,286,872 S 2,491,464 $ 4,778,336 $ 2,286,872 $ 2,491,464 $ 4,778,336 Me"AMBRAMMA Private Purpose Trusts Combining Statement of Changes in Private Purpose Trust Net Position For the Fiscal Year Ended June 30, 2017 Additions Contributions: Puna Geothermal Venture Investment earnings: Net increase (decrease) in fair value of investments Dividends Interest Total additions Deductions Claims Consultant Grant payments Investment Fees Total deductions Change in net position Net position, beginning of year Net position, end of year See accompanying independent auditors' report. Shippers' Total Geotherrnal Wharf Private Asset Trust Purpose Fund Fund Trusts $ 50,000 $ - $ 50,000 (18,942) 78,566 59,624 - 33,585 33,585 19,345 939 20,284 50,403 113,090 163,493 1,526 - 1,526 - 125,794 125,794 - 13,144 13,144 1,526 13 8,93 8 140,464 48,877 (25,848) 23,029 2,237,995 2,517,312 4,755,307 $ 2,286,872 2,491,464 $4,778,336 This, page inte!ntionally lei! lan,k, SWIN STATISTICAL SECTION (UNAUDITED) Contents Page Financial Trends — These schedules contain trend information to help help the reader understand how the County's financial performance and well-being have changed over time. 139 Revenue Capacity— These schedules contain information to help the reader assess the County's most significant local revenue source, the property tax. 144 Debt Capacity — These schedules present information to help the reader assess the affordability of the County's current levels of outstanding debt and the County's ability to issue additional debt in the future. 150 Demographic and Economic Information — These schedules offer demographic and economic indicators to help the reader understand the environment within which the County's financial acitivities take place. 153 Operating Information — These schedules contain service and infrastructure data to help the reader understand how the information in the County's financial report relates to the services provided and the activities performed by the County. 155 I I Q— Z pa P�a, w In Ic efy ('It Cli . 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E u E 'Sp a Z uu C4 u :D 142- I I I I `4 V FIM Changes in Fund Balances, Governmenlrd Funds (Modified accrual basis of accounting) Lost Ten fiscal Years (Amounts in thousands) Unmanned - see accompanying independent auditors'repon I Amount Car fiscal year 2014 has been changed for consistency . 183 , 2008 21709 2010 21711 2012 2013 2014 20 -15 ---�- O 16 2017 Revenuer Property tax $208,313 5225,859 5215,548 $216,511 $208,231 5201,201 S223,482 $236,190 5249,054 5266,517 Public service company tax 8,381 10,229 9,647 9,297 9,997 10,766 10,380 10,386 9,801 8,423 Fuel tax 7,888 7,662 7,406 7,603 8,293 6,353 7,373 7,633 7,934 8,289 Public utility franchise tax 9,027 11,118 8,963 9,416 l 1,065 l O,087 10,793 00,924 9,004 7,951 Licenses and permits t5,918 14,972 04,725 15,097 05,790 15,99E 19,618 22,046 22,432 22,932 Wergovernmental 72,601 70,869 77,614 93,748 l00,867 79,912 75,257 86,272 95,173 79,220 Charges for services 22,154 21,404 18,909 1!1,416 16,885 67,055 19,392 20,357 21,672 21,708 Investment earnings (loss)' 12,144 8,914 2,253 flo 406 (619) 0,704 716 614 632 Seadersent corunbutions - 12,500 Offier 7151 5,690 3,24 7,874 4,2116 4,399 30,084 9,769 06,02 1 9,791 Total Revenues 363,577 376,716 358,306 376,472 375,635 358,646 398,093 404,193 421,816 427,463 Expenditures: Current: General govcmment 42,99t 45,882 40,586 34,251 35,088 33,360 36,679 40,805 40,488 40,819 Public safety 10.1,617 107,540 108,798 104,9'1'7 104,523 106,885 011,221 t22,9t9 127,451 136, t 63 High,ways ond streets 0,529 17,059 20,222 07,014 17,338 17,923 20,270 20,964 22,479 20,329 Sanitation 33,405 35,025 35,675 28,424 29,511 30,672 29,949 31,464 34,015 39,676 1-tealds, education and welfare 24,609 24,596 25,519 26,847 23,749 24,09 23,070 24,540 25,380 30,535 Culture and recreation 08,079 18,853 07,266 06,001 16,763 96,337 18,334 20,056 21,561 21,196 Pension and retirement contributions 24,296 28,870 28,509 27,284 27,773 29,816 33,032 38,495 41,359 43,718 Employees' health insurance 18,089 19,119 23,573 25,292 25,902 26,01E 26,786 27,730 30,012 32,147 Other posarsmidaymeni benefins 13,629 14,930 15,700 17,307 - 3,1470 4,532 7,180 68,495 Other 5,344 6,257 4,773 4,758 4,183 2,991 3,238 4,696 3,931 3,839 Debt service: Principal 16,548 19,749 20,720 42,233 24,834 25,718 0,013 22,004 22,432 22,032 Interest 13,116 12,790 14,584 14,941 15,032 14,345 14,644 13,871 12,974 17,289 Capital outlay 70,156 89,368 100,653 87782 71,220 48.565 51,369 79,398 044,288 111,109± Total Expenditures 403,508 440,158 456,578 446,970 395,916 376,822 390,775 451,375 533,650 529,342 Revenues over (under) Expenditures (19,930) (63,442) (98,272) (70,499) (20,281) (H,M) 7,308 (47,182) (111,934) (100,979) Omer Finmuting Sources (Uses): Sate of assets 3,470 58 to 6 153 1 10 25 66 20 Capital leases 2,487 1,026 1,948 47 2,521 1,307 64 6,971 3,389 3,769 State Revolving Fund loans 1,916 280 6,811 9,257 4,569 4,991 3,072 7,317 8,630 Sale ofbords 50,000 45,000 - 50,480 130,136 Issuance ofband anticipation notes (BANs) - 19,000 59,900 Refunding bonds - 47,510 106.254 Premium on bonds 185 2,078 17,570 23,174 Refunding bandsfBANs uISUMICe Costs (19) (508) Payment to refunded bond escrow agent (45,352) (128,920) Retirement of refunded debt -(9,635) Transfers in 64,929 56,697 61,495 56,099 59,970 51,356 61,238 59,394 57,412 66,864 Transfers out (64,929) (5(,697) (61,495) (56 (59,971 (5 t,356) (61,238) (59„394)(57,412) __ _ L �)_ (IW Total other financing sources 7E3 --51-549 -11-150 __56j88_ 7243 6.6,872 ___ 3,026 0,996 -.240,908 7i,720µ Net change in fund balances S(32,358) S(11,89 S(70,522)11 L(14,Mj =1112M S 48,696 S 10,46 $ (45,186) S 29, VI Debt service as a percentage of noncapind expenditures 93% 90% 104% l5 9% 12 3% 119% 100% 9.3% 9 l% 94% Unmanned - see accompanying independent auditors'repon I Amount Car fiscal year 2014 has been changed for consistency . 183 , I w IO M M "o = c, 0' N m m w " C) r- 'Ir rA ON kn F ;z w N gr C4 C) kf) N d C14 m 0 0 o C> C, 'n ")to " 'n I et n � C't cl« cl� —� ap M C7 r, CD IzT (N ON 00 C\ M M t- ON C) IT V) C\ wl ',0 t- 0 O ,I, oo r- -,T ad r, V, r- r- 00 r- 0 M Tr C-4 kn W) 00 00 M C) N aA a0 vi m tr) kn tf C -T t6 6 -,T CV rq Eoq I I I I 9 I 01\ r- (D 0% w C) r, w m ;� n 0" a) O� <D m <tr ;; �o r- ,�E 'n 0 r- "o = w C7, r- "T 0 I'd- r- rq �t an rq C'4 N t"�, n Oli r,^ 0�, � C� ri C rl� rl^ rl� M CD r- It V) IT Cy r- 0 en 7 ;7 V) G it) 0 m 00 m L3, CD r- N 'tr 'o 0 00 C> rq * r N rl) — 00 '4- V) r) m aq � N v! 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E " 15 0 0 E2 u u < (D 0 01, 0 tn M r- — — m (31 M W) C -J U, to M rs kn r- C) ua ri C-4 C4 C-� C7� 6's kn u CD C=) C. 0 O'\ c) eo» 0 CD r- W) all 'Ir oll 00 Ln m t-. o oN 00 00 �o 00 r- 0 C� C� "� lc� lc� r- — — nt �O r4 m r- — 00 wl 0 '�r tn " 'It r- tz C'r- r vi r- m � M7 C4 rr 2 0 > cu cc z cc < bo o U" = < I 75 V� as .Fa 0 ca lu :3 = CL r— C: Oo—, 0 14 0 > S U >' 0 00 > tz 'a CL r- 0 cu E v 4) CL U ax 0 COUNTY OF HAWAII Principal Taxpayers Note: Gross valuation at January 1, 2016: $28,673,884,179 IEENRWZWi 1111 fl� 131112111 Fiscal Year 2017 Fiscal Year 2008 Percentage Percentage 2016 of Total 2007 of Total Assessed Assessed Assessed Assessed TaxRayer Business Valuation Rank Valuation Valuation Rank Valuation Kohanaiki Shores LLC Developer $ 278,850,500 1 1.0% Mauna Kea/Hapuna Beach Corps. Developer/Hotel 171,886,200 3 0.8% - Hualalai Investors LLC Developer/Hotel 163,662,200 4 0.6% 241,692,800 1 0.8% Hilton Resorts Corp. Timeshare 158,400,000 5 0.6% - MAPS Orchid Hotel LLC Hotel 121,777,400 6 0.4% - - Mauna Lani Resort Inc. Developer/Hotel 96,189,500 7 0,3% 110,729,300 6 0.4% Raptor Residence LLC Residential 73,925,900 8 0.3% - - Target Corporation Retailer 66,389,900 10 U% Ho Retail Properties LTD Retailer 66,709,500 9 0.2% - - Hilton Land Investment I LLC Hotel 210,286,200 2 0.7% 225,835,700 2 0.7% 1250 Oceanside Partners Developer 95,440,700 7 03% Mauna Kea Development Corp Hotels/Dev, 204,812,400 3 0.7% Kona BB Property Hotel 64,923,900 10 0.2% WB KD Acquisition LLC Developer 150,186,100 5 0.5% WB-LCP Orchid Owner LLC Hotel 162,254,700 4 0.5% Kona Coast Resort Ltd Condo/Time Share 82,733,300 8 0.3% BRE/Waikoloa LLC Hotel 73,931,400 9 0.2% $ 1,408,077,300 5A% $ 1,412,540,300 4.6% Note: Gross valuation at January 1, 2016: $28,673,884,179 IEENRWZWi 1111 fl� 131112111 W' 0 �o kn m a, Lei Lr) wi 00 r- m ON DO IT kn VI 0 14 1 2 a d v CD CD C> 0 C> tT oll t - r°ap" 07 er ra yr e- m kn m 00 " kn et Q Ln = e� al� to w 0) m m to w IT cz r°r tn rw r-= c-' r= -�f C r va vr kn zr CNmv u N ra cv r rC� ria clq ° b N ezv r- 00v a g E (4J u CYY wm r� HT1 ✓ 00 C�'1 rn CJ C7 kn 0 r r-- �O +n "t m 7t 0 .a r� ON ti (ON n r- C� Q P !ca V1:1 12C, M 4i�" � r" @° "'T4 - r a 14'as as _ _ U N N ry r4 r t r i N N �' adz W r$ m! wa Ch r+7 ' o r:K Lf) ca r'^ 00 Cii m b 00 t"� r"J ra"i wW C9W C� c qtr +n vn It r- r- m et 4a Ci is ca N ra ra ry r4 $a Q% 0 C4 N rq CN rq tu r4 W' W) 'n et wi I Impilmly-IM, ", 'IQ = !2 L- N! m N "" MM m c 0 m c� c7 0�, 4c1 r,� E 0lllw n lc� CIL 14� ,q A ',r CK �"O� a"� rq m m M en m �r -Cr V N 10 M 0 C-4 ol cy, 00 CIL ri Cq nNp<trtn 10 ON r.- m N CO tv 43 u n c� ol� IR 1% aa„ an IT 'tr m m m N IT �o on 00 t- M 00 w 10 w m cll r,4ria C'i 10 In w lll� n c ol� a, 0 10 a, a rq r- oc� ea r N rq Ili �ricSaw oj 0 r� 10 r- m VII w w a r,,� c� lc� n cl� 0� r, o rj Lo r- M o r- 00 m rn G� C14 Cq rq In en 00 cl A N N (14 rq N CN Nrq N 11 I ��j �012 Last Ten Fiscal Years NOTES: (a) See Table 10 for debt applicable to legal debt margin. (b) See Table 5 for net taxable property values. (c) See Table 11 for population data. notes to the basic financial statements. Debt Percent of Applicable to Net Taxable Fiscal Legal Debt Property Per Year Margin (a) Value (b) Oapita (c) 2008 265,431,280 1.0% 1,510 2009 296,535,925 1.0% 1,667 2010 277,481,633 1.0% 1,549 2011 305,615,691 1.2% 1,636 2012 317,699,844 1.3% 1,679 2013 315,676,941 1.3% 1,654 2014 298,709,020 1.3% 1,538 2015 312,632,049 1.2% 1,592 2016 362,963,113 1.4% 1,829 2017 405,488,342 1.4% N/A NOTES: (a) See Table 10 for debt applicable to legal debt margin. (b) See Table 5 for net taxable property values. (c) See Table 11 for population data. notes to the basic financial statements. R I m 00 00 00 a, cr, co vi wn rn en ell rn r4 Nt, ol rq rM rl� m C-4 cm m m M CD r'4 rq 6-4 o r4 kn Ch �rm a cz C-4 ON N Wq W) 00 r - r4 M In vi Wt I I I I I I I I I I I m wulm w 'IT w M 00 tn 14i rq u 152- I m wulm w 'IT w M 00 tn 14i rq u ca E CL MOO u u u W014JUiMISAIRTl:�If111 e Fast Ten Fiscal Years Fiscal *:Personal *Per Year *Resident Income Capita Ended Population (thousands Personal School Unemployment June 30, as of July 1 of dollars) Income Enrollment Rate 2007 177,733 $ 5,509,169 $ 30,997 30,618 3.4% 2008 181,506 $ 5,899,236 32,502 30,408 5.7% 2009 183,629 $ 5,517,497 $ 30,047 30,138 9.9% 2010 185,381 $ 5,717,885 $ 30,844 29,741 10.0% 2011, 187,229 $ 6,114,237 $ 32,656 30,103 9.7% 2012 189,191 $ 6,318,657 $ 33,398 30,314 8.3% 2013 190,821 $ 6,544,583 $ 34,297 33,948 6.6% 2014 194,190 $ 6,771,329 $ 34,870 29,985 6.5% 2015 196,428 $ 7,067,347 $ 35,979 29,865 5.2% 2016 198,449 $ 7,618,924 $ 38,392 29,753 4,7% Source: County of Hawai'i, Department of Research and Development, Bureau of Economic Analysis, State of Department of s • "f"' «. i ..M State of Hawaii County of Hawai'i United States Government Four Seasons Resort Hualalai Mauna Kea and Hapuna Prince Resorts and Mauna Kea Services Hilton Waikoloa Village KTA Super Stores The Fain-nont Orchid, Hawaii Mauna Lani Resort ((operations), Inc. Hapuna Beach Prince Hotel Mauna Lani Bay Hotel North Hawaii Community Hospital Total COUNTY OF HAWAII Principal Employers, County of Hawaii June 30, 2017 and 2008 880 2017 1.3% 2008 5 1.3% 1,200 Percentage 7 1.2% Percentage 600 8 of Total County 900 391 of Total County Employees Rank - Employees Rank Eaployrnent - 785 367 10 14,200 1 20.9% 8,009 1 9.7% 2,700 2 4.0% 2,538 2 3.1% 1,500 3 2.2% 1,279 3 1.5% 1,240 4 1.8% 587 9 0.7% 880 6 1.3% 900 5 1.3% 1,200 800 7 1.2% 800 600 8 0.9% 900 391 9 0,6% - - 650 - 785 367 10 0.5% 438 23,578 34.7% 17,186 Total employee count 67,942 Source: County of Hawaii, Department of Research and Development EEMMMM�. MKIE 4 1.5% 6 1.0% 5 1.1% 8 0.8% 7 0.9% 10 0.5% 20.1% 82,750 2w I I w , r'l N V) Nrq wr- m Ir r In �r m 'D 0, 0 w C, I'- r- 811, 01 111,88 880 W) .0 Ol a, C� 0 8 8 = wr) 0 00 11 t, 0� V: "J: "� -'r 'tr bN Ir eq !2 (-4 C-4 10 C-4 a, 'T 8 w 9 0 8 00 W) w 8 8 0, = 00 8 0, 8 a cc 8 In *� . C� V: m g v to m m W1 w VI V: q T t- .0 7 q r- «^^ m (�! 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