Annual Comprehensive Financial Report 2021

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At the end of the fiscal year, the County held an "AA" rating from Standard & Poor's, 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 $5.3 billion, which is in excess of the County's outstanding general obligation debt. Currently the County's outstanding debt represents 8 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. ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES • The unemployment rate for the County for the current fiscal year is at approximately 7.9 percent, which is 5.3 percent lower than at the end of the prior fiscal year. This increase is a result of the current COVID-19 pandemic that is plaguing the world. • The number of domestic and international visitors to the County for the current fiscal year was approximately 0.58 million, with an approximately 55 percent decrease from the previous year's count of 1.29 million. With the COVID-19 pandemic plaguing not only our nation but the entire world, the County is preparing to deal with the fiscal and economic impact that will continue to impact our island beyond the upcoming fiscal year of 2022. Concerns in the area of increasing unemployment, ability of businesses to continue to operate, fulfilling the basic needs of the island citizens and working to protect the population will impact the budget. The County administration will continue to monitor the effects of the pandemic and plan accordingly to prepare for the tough decisions that will need to be made regarding the health and safety of people. Act 1, 1s` Special Session 2021, which became law on July 8, 2021, authorizes the counties to establish and administer their own transient accommodations tax (TAT) at a maximum rate of 3 percent. On December 10, 2021, Mayor Mitchell D. Roth signed into law Ordinance 21-89 which imposed a 3 percent HCTAT, which shall take effect on January 1, 2022. Monies collected are to be deposited into the general fund as unrestricted revenues. At the end of the current fiscal year, unrestricted fund balance in the general fund was $56.5 million. The County has appropriated $32.1 million of this amount for spending in the 2022 fiscal year budget and the majority is included in the assigned portion of the fund balance. REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of the County's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the Director of Finance, County of Hawaii, 25 Aupuni Street, Suite 2103, Hilo, Hawaii 96720. -26-