2020-COH - Comprehensive Annual Financial Report

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The positive impact of the increase in revenues was offset by increases of $33.6 million (10 percent) in expenditures. $6.8 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 and retiree benefits. The County also faced the continuation of funding costs related to emergency protective measures resulting from the COVID-19 pandemic as opposed to the lava eruption and hurricanes in the prior years. The fund balance of the County's capital projects fund decreased by $5.3 million (10 percent) during the current fiscal year. The decrease is primarily due to an increase of $21.8 million in expenditures from the prior year. See discussion regarding construction activity during the current year in the capital asset section below. The increase in expenditures were offset by an other financing source of $30.3 million related to the bond anticipation notes (BANs) that were issued in the prior year and considered a current liability because the legal steps regarding the issuance of the bonds to pay off these notes were not completed at the time the audited financial statements were issued. The legal steps will be completed prior to the issuance of this year's financials. There was also an increase in transfers in from the General Excise Tax (GET) fund of $8.6 million as a direct result of increases to the surcharge revenue in the GET fund. The debt service funds consist of the Bond Redemption Fund and the Interest Fund. These funds have combined total fund balances of $38.8 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 $5.6 million, which was a 17 percent change from the prior year and due to an increase of transfers in of $3.8 million. Proprietaryfunds. The County's proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. Unrestricted net position of the Kulaimano Elderly Housing Project (Kulaimano) at the end of the year amounted to $668,562, and $609,424 for the Ouli Ekahi Affordable Housing Project (Ouli Ekahi). The total net position for Kulaimano increased by $130,526 and the net position for Ouli Ekahi increased by $597,414. Other factors concerning the finances of these two funds have already been addressed in the discussion of the County's business-type activities. GENERAL FUND BUDGETARY HIGHLIGHTS Differences between the original budget and the final amended budget were primarily the result of a $42.1 million increase in appropriations,the most significant reasons were due to $16.9 million in increases in the grant appropriations from the State relating to the County's response to the situation at Mauna Kea and relating to the County's share of the State's allocation of federal funds received under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Differences between the final budget and the actual (budgetary basis) resulted in approximately $18.8 million less revenues than expected and $27,1 million less expenditures than appropriated. This is primarily due to the following factors: The negative variance of $18.8 million in revenues is comprised mostly of $11.8 million from intergovernmental revenues, of which $3.2 million was unrecognized in the General Fund relating to the State's Transient Accommodations Tax (TAT) grant and $3.7 million from various federal capital grants related to Section 5309. - 21 -