2020-COH - Comprehensive Annual Financial Report

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Business-type activities. Business-type activities increased the County's net position by $727,940 versus an increase of $170,948 in the prior year. Expenses for health, education and welfare account for all of the $645,452 of expenses which represents a 6 percent increase from the prior year,due to increases in repairs and maintenance and administrative charges. Charges for services were $482,150 and operating grants and contributions were $269,273, which were comparable to the prior year. FINANCIAL ANALYSIS OF THE COUNTY'S FUNDS As noted earlier,the County uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds. 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 serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year,the County's governmental funds reported combined ending fund balances of $251.0 million, an increase of $26.6 million (12 percent) in comparison with prior year. Approximately 35 percent of this total amount ($88.9 million) constitutes unrestricted fund balance. The unrestricted portion of the fund balance is comprised of (1) $60.5 million in committed fund balance, (2) $46.0 million in assigned fund balance,and (3) negative $17.6 million in unassigned fund balance.The remainder of the fund balance is divided between $8.2 million in nonspendable fund balance for inventory and $154.0 million in restricted fund balance. Approximately 74 percent of the total restricted fund balance is due to restrictions relating to highways, streets and abandoned vehicles ($75.7 million) and debt service ($38.8 million). $15.5 million of the fund balance restricted for highways, streets and abandoned vehicles was due to the General Excise Tax fund that was created in the prior year,which accounts for the general excise tax surcharge that became effective in fiscal year 2019. The fund balance of the General Excise Tax Fund increased by $9.5 million due to the fact that the surcharge was in effect for a full 12 months in fiscal year 2020 and doubled during the last 6 months. 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 $61.4 million,while total fund balance increased to $84.9 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 represents 17 percent of total general fund expenditures,while total fund balance represents 24 percent of that same amount. The fund balance of the County's general fund increased by $8.7 million during the current fiscal year as compared to an increase of $15.1 million in the prior year. Key factors in this decrease ($6.4 million) over last year's increase are as follows: • A positive increase of $14.3 million (5 percent) in real property tax revenues and $9.2 million (15 percent) in intergovernmentai revenues. As explained previously,the increase in real property tax revenues is due to an increase (5%) in the value of net taxable real property as evidenced in the accompanying statistical tables. $5.1 million was also received from the State to reimburse the County for costs incurred in connection with the situation on Mauna Kea. - 20 -