HomeMy WebLinkAboutAnnual Comprehensive Financial Report 2022 Countyof H
State of Hawaii
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Annual Comprehensive Financial Report
For the Fiscal Year
July 1 , 2021 to June 30, 2022
COMPREHENSIVE
ANNUAL FINANCIAL REPORT
Fiscal Year Ended June 30, 2022
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COUNTY OF HAWAII
Hilo, Hawaii
Mitchell Roth
Mayor
Lee Lord
Managing Director
Prepared by
The Department of Finance
Deanna Sako
Director of Finance
COUNTY OF HAWAII
Annual Comprehensive Financial Report
For the Fiscal Year Ended June 30, 2022
Table of Contents
Page
INTRODUCTORY SECTION
Letter of Transmittal 1
GFOA Certificate of Achievement 8
Organization Chart 9
List of Elected Officials 10
List of Principal Officials 11
FINANCIAL SECTION
Report of Independent Auditors 13
Management's Discussion and Analysis 17
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Position 30
Statement of Activities 32
Fund Financial Statements:
Balance Sheet-Governmental Funds 34
Reconciliation of the Governmental Funds Balance Sheet to the
Statement of Net Position 35
Statement of Revenues, Expenditures, and Changes in Fund Balances-
Governmental Funds 36
Reconciliation of the Change in Fund Balances of Governmental
Funds to the Statement of Activities 38
Statement of Revenues, Expenditures, and Changes in Fund Balance-
Budget and Actual(Budgetary Basis)-General Fund 40
Statement of Revenues, Expenditures, and Changes in Fund Balance-
Budget and Actual(Budgetary Basis)-General Excise Tax Fund 44
Statement of Net Position-Proprietary Funds 45
Statement of Revenues, Expenses, and Changes in Fund Net Position-
Proprietary Funds 46
Statement of Cash Flows-Proprietary Funds 47
Statement of Fiduciary Net Position-Fiduciary Funds 48
Statement of Changes in Fiduciary Net Position-Fiduciary Funds 49
Notes to the Basic Financial Statements 50
Required Supplementary Information 113
FINANCIAL SECTION (Continued)
Page
Combining and Individual Nommajor Fund Statements and Schedules:
Combining Balance Sheet-Nonmajor Governmental Funds 128
Combining Statement of Revenues,Expenditures, and Changes in Fund
Balances-Nonmajor Governmental Funds 132
Schedules of Revenues,Expenditures, and Changes in Fund Balances-
Budget and Actual(Budgetary Basis):
Highway Fund 135
Sewer Fund 136
Solid Waste Fund 137
Cemetery Fund 138
Parking Meter Fund 139
Vehicle Disposal Fund 140
Bikeway Fund 141
Workforce Innovation&Opportunity Act Fund 142
Golf Course Fund 143
Geothermal Relocation and Community Benefits Fund 144
Beautification Fund 145
Hawaii County Housing Agency 146
Park Dedication Fund 147
Short-term Vacation Rental Enforcement Fund 148
Geothermal Asset Fund 149
Combining Statement of Agency Funds Net Position-Custodial Funds 150
Combining Statement of Changes in Net Position-Custodial Funds 152
Combining Statement of Private Purpose Trust Net Position-Private Purpose Trusts 154
Combining Statement of Changes in Net Position-Private Purpose Trusts 155
STATISTICAL SECTION
Table 1 -Net Position by Component 157
Table 2- Changes in Net Position 158
Table 3 -Fund Balances, Governmental Funds 160
Table 4- Changes in Fund Balance, Governmental Funds 161
Table 5 -Real Property Assessed Values by Classification and Tax Rates 162
Table 6-Principal Taxpayers 166
Table 7-Property Tax Levies and Collections 167
Table 8-Ratios of Outstanding Debt by Type 168
Table 9-Ratios of General Bonded Debt Outstanding 169
Table 10- Legal Debt Margin Information 170
Table l l - Demographic and Economic Statistics 171
Table 12-Principal Employers, County of Hawaii 172
Table 13 -Full-Time Equivalent County Government Employees by Function 173
Table 14- Operating Indicators by Function 174
Table 15- Capital Asset Statistics by Functions 175
INTRODUCTORY SECTION
SV OF p
Mitchell D.Roth °'4 � �';. Deanna S. Sako
Mayor Director
a� ;•
Diane Nakagawa
Deputy Director
ITt.OF•NF'.N
County of Hawaii
Finance Department
25 Aupuni Street,Suite 2103 • Hilo,Haivai'i 96720
(808)961-8234 • Fax(808)961-8569
January 27, 2023
The Honorable Mayor and Members of the Council
County of Hawaii
25 Aupuni Street
Hilo, Hawaii 96720
We transmit herewith the Annual Comprehensive Financial Report for the County of Hawaii,
State of Hawaii (the County), for the fiscal year July 1, 2021 to June 30, 2022.
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
respects and are reported in a manner designed to present fairly the financial position 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, 2022 and results
of operations for the fiscal year then ended. The report is divided into three sections:
• The Introductory Section includes this transmittal letter, a Certificate of Achievement for
Excellence in Financial Reporting, the County of 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 Statistical Section includes selected financial and demographic information, generally
presented on a multi-year basis.
This report includes all funds of the County of Hawaii, including its component unit, the
Department of Water Supply, established by the County Charter as a semi-autonomous body of
the County government. This component unit is included in the County's reporting entity
because of its financial relationship with the County.
Hawaii County is an equal opportunity provider and employer.
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The County provides a full range of municipal services. These include police and fire protection;
emergency medical care;public prosecutor; culture and recreation; sanitation; social services;
water; planning and zoning; construction and maintenance of highways, streets and
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 Hawaii, 4,028 square miles in size. It is twice as large as
the combined area of all the other inhabited islands in the Hawaiian Archipelago. Since there is
no other local or municipal government within the County, there are no overlapping taxes and no
overlapping debt. The County has an elected mayor and a nine-member council.
Economic Condition and Outlook
The island of Hawaii, commonly known as the Big Island, is located 214 miles from Honolulu,
the state capital; 2,200 miles from the west coast of the continental United States; and 4,000
miles from Japan. The city of Hilo on the east side of the island serves as the county seat as well
as the transportation and financial center for the Big Island. Hilo's infrastructure includes Hilo
Harbor, a deep-water port, and Hilo International Airport, which is capable of handling fully-
loaded wide-bodied aircraft. Kailua-Kona and South Kohala, major tourist destination areas on
the west side of the Big Island, are served by flights from the United States mainland and Canada
through the Kona International Airport, with flights from Tokyo beginning again. Scheduled
freight services are available between the islands by air and sea transport. Communities on the
island are linked by a network of State and County maintained streets and highways.
The Big Island is the most diversified of the neighbor island economies. As a result it is buffered
to some extent when any one industry lags. The unemployment rate for the County as of
November 2022 was at 4.1 percent as compared to 4.5 percent from a year ago, which is
according to the State of Hawaii Department of Business, Economic Development&Tourism
(DBEDT).
In addition to the mild climate and natural beauty it shares with other areas in the state, the
County features the Hawaii Volcanoes National Park, in addition to four other national parks
that focus on Hawaiian culture and history.
Tourism has always been one of the major industries on the island. In fiscal year 2019, the
County suffered from two natural disasters, Hurricane Lane and a volcanic eruption in the
community of Puna, which took a toll on the island's visitor industry. Even with the halting of
volcanic activity during the fiscal year, efforts continue within the County and impacted
community to deal with the devastation and devise plans for recovery. Despite sensational
headlines that described the island as being covered with molten lava, the island has remained
open for business.
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Major Initiatives
For the Year
Public Safety—Groundbreaking for the new Joint Police/Fire Communications Center in Hilo
took place in October 2021 and is expected to be completed in 2024. The Police Department
assumed the animal control services function during the fiscal year and dealt with 2,162 animals
including cats, dogs, fowl, cows, pigs, sheep, goats,horses, fish, rabbits, and guinea pigs.
The Hawaii Fire Department proceeded with the replacement of Chopper 2, which is expected
to arrive in the summer of 2023. The new medical helicopter is an Airbus H125 that was
purchased through generous donors via the Sayre Foundation. A new information and
technology position was established for the Department, which has been tasked to bring the
Department into the digital age by deploying mobile data terminals in the response vehicles and
will later include GIS mapping data for command decisions and the streaming of live data to the
responders.
Public Works—Over the past fiscal year the Department of Public Works (DPW) completed
major projects in our community including:
• The Ali`i Drive Culvert Replacement, valued at $12 million, was completed in July 2021.
The project included the demolition and reconstruction of a concrete culvert bridge. The
new structure provides a wider stream flow opening, a longer span, with 16-foot wide
travel lanes and two 7-foot wide sidewalks. It was also a project of the Statewide
Transportation Improvement Program (STIP).
• The Mamalahoa Highway Widening, Mud Lane to Mana Road, valued at $19.6 million,
was completed in September 2021. The project created turn lanes at side intersections and
included grading,paving, retaining walls, and installing pavement markings and signs. It
was also a STIP project.
• The Kilauea Avenue Rehabilitation, Wailoa Bridge to Pu`ainak6 Street, is valued at $12
million, was completed in June 2022. The project included pavement rehabilitation,
installing pavement markers, striping, and traffic detectors. It is also a STIP project.
Culture and Recreation - The Department continued to complete the ADA transition plan and
completed accessibility improvements to the Pana`ewa Rainforest Zoo & Gardens and
Equestrian Center, Dr. Francis F.C. Wong Stadium,Nd'alehu Park and Community Center,
Pahala Ballfield Facility and Hilo Bayfront Beach Park.
For the Future
Public Safety—The Police Department's major initiatives for the future include improvements to
its facilities and initiating construction in progress projects, such as a new Kea`au Police Station,
expansion and improvements to the Kona Station and replacing the PGV radio site and other
towers.
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Public Works-DPW is currently working on these major projects:
• The Kalaniana`ole Avenue Reconstruction, Kamehameha/Railroad Avenue to Ka`uhane
Avenue, is valued at $22 million. The project is in collaboration with the State
Department of Transportation (DOT) and includes multi-use accessibility and the
enhancement of roadway capacity, operations and safety for motorists, bicyclists and
pedestrians. The work involves the widening of Kalaniana`ole Avenue to add for a
concrete curb, gutter and sidewalk, a paved shoulder,bicycle lanes, utility relocation and
the installation of a new waterline. The projected completion date is in December 2022.
• The Hawaii County Emergency Call Center is valued at $31 million. The project
includes a new 17,127-square-foot essential facility building for the Police and Fire
Dispatch. The project generally consists of site work, a parking lot(58 parking stalls),
loading zones, landscaping, redundant generators, a fuel tank, and a communication
tower. The projected completion date is March 2024.
• The Waikoloa Road Rehabilitation, Mamalahoa Highway to Queen Ka`ahumanu
Highway, is valued at$39 million and is scheduled to begin in May 2023. The project
includes resurfacing the asphalt concrete pavement. The projected completion date is in
September 2024. It is also a STIP project.
• The Kilauea Lava Recovery repairs is valued at $82 million and is scheduled to begin in
the Summer of 2023. This project will repair damages caused by the May 3, 2018 lava
flow. The project completion date is in the Fall of 2025. It is also a project of the Federal
Emergency Management Agency (FEMA).
Culture and Recreation—A high priority for the Department is the development and
implementation of its Action Plan, which includes a strategic plan,parks and cemetery
maintenance plans, discontinued use of glyphosate products in the parks and implementing a
Parks and Recreation's Homeless in the County working group.
Other Financial Information
Internal Control
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
requires estimates and judgments by management.
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Budgetary Control
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
expenditures for purposes of determining legal compliance with the annual budget, all leases are
treated as operating leases, and accounts payable are not accrued.
The County also maintains an encumbrance accounting system as one technique of
accomplishing budgetary control. Encumbrances outstanding at fiscal year end are 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, The
Financial Reporting Entity (GASB Statement No. 14), Statement No. 39,Determining Whether
Certain Organizations Are Component Units (GASB Statement No. 39) and Statement No. 61,
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 in
the County's basic financial statements. For further discussion on other significant accounting
policies, refer to the notes to the basic financial statements.
Financial Highlights
In fiscal year 2022, overall expenses from governmental activities decreased by $100.5 million
(15%) from the previous year, which was a result of the County experiencing a$41.3 million
decrease in expenses related to net pension liability due to the large positive return on
investments experienced by the State's retirement plan. In the prior fiscal year, the County
incurred approximately $77.1 million of expenditures while responding to the additional needs
caused by the COVID-19 pandemic. $77.0 million was funded by the Coronavirus Aid, Relief,
and Economic Security Act (CARES Act), which the County received from the State's allocation
of federal funds and was in addition to the many other various federal grants received by the
County.
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The positive impact of the above reduction in expenses was offset by a slight reduction in
revenues. The County saw a$62.8 million reduction in operating grants and contributions,
which was primarily a reflection of the fact that most of the grants that the County expended
during the previous fiscal year was not extended into the current fiscal year. Most notably was
the CARES Act grant previously discussed above. The negative impact of such a large decrease
in one aspect of revenues was mitigated by increases in the other categories of revenue, which
most notably included an increase in property taxes by $12.8 million due to a $1.7 billion
increase in the assessed value of the net taxable real property, with the majority stemming from
the category of taxable buildings ($1.5 million). Revenues from the general excise tax surcharge
increased by $13.4 million from the prior year, which corresponds to improvements in the
economy overall as the County and State recovered from the impacts of COVID-19, including
increased tourism activity. The County also recognized $17.5 million in revenue from the
County transient accommodations tax, under Act 1, 1st Special Session 2021, which became law
on July 8, 2021. The counties were authorized 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 were to be deposited into the general fund
as unrestricted revenues.
Other Information
Independent Audit
The County Charter requires an annual audit by independent certified public accountants. N&K
CPAs Inc. was selected in accordance with the County Charter and the procurement provisions
of the Hawaii Revised Statutes (HRS) and Hawaii Administrative Rules (HAR) to perform the
audit.
Employee Union Contracts
Hawai'i County's civil service employees are members of eight different bargaining units, of
which all contracts are set to expire on June 30, 2025.
Certificate qfAchievement
The Government Finance Officers Association of the United States and Canada(GFOA)
awarded a Certificate of Achievement for Excellence in Financial Reporting to the County of
Hawaii for its Annual Comprehensive Financial Report for the fiscal year ended June 30, 2021.
This was the thirty fourth consecutive year that the government has received this prestigious
award. In order to be awarded a Certificate of Achievement, a government must publish an
easily readable and efficiently organized annual comprehensive financial report. This report
must satisfy both generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe our current
Annual Comprehensive Financial Report continues to meet the Certificate of Achievement
Program's requirements, and we are submitting it to the GFOA to determine its eligibility for
another certificate.
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Acknowledgments
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 Hawaii.
Deanna Sako
Director of Finance
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Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
County of Hawaii
Hawaii
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2021
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Executive Director/CEO
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County of Hawaii
Organization Chart
County Electorate
County Council Mayor Prosecuting Attorney
County County Office of Management:
Clerk Auditor 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 ofAging 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
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County of Hawaii
Elected Officials
June 30, 2022
Administrative Officers (Term: 2020-2024)
Mitchell Roth Mayor
Kelden Waltjen Prosecuting Attorney
County Council (Term: 2020-2022)
Maile "Medeiros" David Chair
Aaron S.Y. Chung Vice Chair
Heather L. Kimball Member
Susan L. K. Leeloy Member
Ashley L. Kierkiewicz Member
Matt Kaneali'i-Kleinfelder Member
Rebecca Villegas Member
Holeka Goro Inaba Member
Herber M. "Tim"Richards III, DVM Member
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Principal Officials
June 30, 2022
County Clerk Jon Henricks
County Auditor Tyler Benner
Managing Director Lee Lord, PhD
Deputy Managing Director Bobby Command
Corporation Counsel Elizabeth Strance
Director of Finance Deanna Sako
Planning Director Zendo Kern
Director of Personnel Waylen Leopoldino
Director of Research and Development Douglass Adams
Chief of Police Paul Ferreira
Fire Chief Kazuo Todd
Director of Public Works Steven Rodenhurst
Director of Environmental Management Ramzi Mansour
Parks and Recreation Director Maruice Messina
Manager-Chief Engineer, Department of Water Supply Keith Okamoto
Civil Defense Administrator Talmadge Magno
Director of Liquor Control Gerald Takase
Mass Transit Administrator, Acting John Andoh III
Executive on Aging William Farr III
Administrator, Office of Housing and
Community Development Susan Kunz
Director of Information Technology Scott Uehara
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FINANCIAL SECTION
999 BISHOP STREET,SUITE 2200
HONOLULU, HAWAII 96813
N&K CPAs, Inc. T(808) 524-2255 F(808) 523-2090
ACCOUNTANTS I CONSULTANTS
INDEPENDENT AUDITOR'S REPORT
To the Chair and Members of the County Council
County of Hawai'i
Report on the Audit of the Financial Statements
Opinions
We have audited the 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 Hawaii, State of Hawai'i (County), as of and for the fiscal year
ended June 30, 2022, and the related notes to the financial statements, which collectively
comprise the County's basic financial statements as listed in the table of contents.
In our opinion, the accompanying financial statements referred to above present fairly, in all
material respects, the respective financial position 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, as of June 30, 2022, and the respective changes in
financial position and, where applicable, cash flows thereof and the respective budgetary
comparison for the general fund and general excise tax fund for the fiscal year then ended in
accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We have conducted our audit in accordance with auditing standards generally accepted in the
United States of America (GAAS) and the standards applicable to financial audits contained in
Government Auditing Standards issued by the Comptroller General of the United States
(Government Auditing Standards). Our responsibilities under those standards are further
described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our
report. We are required to be independent of the County and to meet our other ethical
responsibilities, in accordance with the relevant ethical requirements relating to our audit. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinions.
Emphasis of Matter
Adoption of New Accounting Principle
As discussed in Note 1 to the financial statements, the County adopted the Governmental
Accounting Standards Board Statement No. 87, Leases, during the fiscal year ended June 30,
2022. Our opinions are not modified with respect to this matter.
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N&K CPAs, Inc.
ACCOUNTANTS I CONSULTANTS
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements
in accordance with accounting principles generally accepted in the United States of America, and
for the design, implementation, and maintenance of internal control relevant to the preparation
and fair presentation of the financial statements that are free from material misstatement,whether
due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are
conditions or events, considered in the aggregate, that raise substantial doubt about the County's
ability to continue as a going concern for twelve months beyond the financial statement date,
including any currently known information that may raise substantial doubt shortly thereafter.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement,whether due to fraud or error, and to issue an auditor's
report that includes our opinions. Reasonable assurance is a high level of assurance but is not
absolute assurance and therefore is not a guarantee that an audit conducted in accordance with
GAAS and Government Auditing Standards will always detect a material misstatement when it
exists. The risk of not detecting a material misstatement resulting from fraud is higher than one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control. Misstatements are considered material if
there is a substantial likelihood that, individually or in the aggregate, they would influence the
judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the
audit.
• Identify and assess the risks of material misstatement of the financial statements,whether
due to fraud or error, and design and perform audit procedures responsive to those risks.
Such procedures include examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the County's internal control. Accordingly,
no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluate the overall
presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the
aggregate, that raise substantial doubt about the County's ability to continue as a going
concern for a reasonable period of time.
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N&K CPAs, Inc.
ACCOUNTANTS I CONSULTANTS
We are required to communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit, significant audit findings, and certain internal
control-related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis (pages 17 through 27), schedule of changes in the net
OPEB liability and related ratios (pages 113 through 117), schedule of contributions (OPEB)
(pages 118 through 120), schedule of the County's and Department's proportionate share of the
net pension liability (ERS) (page 121), schedule of the employer pension contributions (ERS)
(pages 122 through 123), and schedule of changes in total pension liability (bandsmen pension)
(pages 124 through 125) be presented to supplement the basic financial statements. Such
information is the responsibility of management and, although not a part of the basic financial
statements, is required by the Governmental Accounting Standards Board who considers it to be
an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the
required supplementary information in accordance with GAAS, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for
consistency with management's responses to our inquiries, the basic financial statements, and
other knowledge we obtained during our audit of the basic financial statements. We do not
express an opinion or provide any assurance on the information because the limited procedures
do not provide us with sufficient evidence to express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the County's basic financial statements. The combining and individual
nonmajor fund financial statements and budgetary comparison schedules are presented for
purposes of additional analysis and are not a required part of the basic financial statements. Such
information is the responsibility of management and was derived from and relate directly to the
underlying accounting and other records used to prepare the basic financial statements. The
information has been subjected to the auditing procedures applied in the audit of the basic
financial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the basic
financial statements or to the basic financial statements themselves, and other additional
procedures in accordance with GAAS. In our opinion, the combining and individual nonmajor fund
financial statements and budgetary comparison schedules are fairly stated, in all material
respects, in relation to the basic financial statements as a whole.
Other Information
Management is responsible for the other information included in the annual report. The other
information comprises the introductory and statistical sections but does not include the basic
financial statements and our auditor's report thereon. Our opinions on the basic financial
statements do not cover the other information, and we do not express an opinion or any form of
assurance thereon.
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N&K CPAs, Inc.
ACCOUNTANTS I CONSULTANTS
In connection with our audit of the basic financial statements, our responsibility is to read the other
information and consider whether a material inconsistency exists between the other information
and the basic financial statements, or the other information otherwise appears to be materially
misstated. If, based on the work performed, we conclude that an uncorrected material
misstatement of the other information exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
January 27, 2023, on our consideration of the County's internal control over financial reporting
and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant
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.
Honolulu, Hawaii
January 27, 2023
- 16 -
MANAGEMENT'S DISCUSSION AND ANALYSIS
This section of the County of Hawai`i's (the County)Annual Comprehensive Financial Report
presents a narrative overview and analysis of the financial activities of the County for the fiscal
year ended June 30,2022. We encourage readers to consider the information presented here in
conjunction with additional information that we have furnished in our letter of transmittal.
FINANCIAL HIGHLIGHTS
• The assets and deferred outflows of resources of resources of the County exceeded its
liabilities and deferred inflows of resources at the end of the fiscal year by$318.5 million(net
position). This amount includes a negative balance of$755.5 million in unrestricted net
position, a positive increase of$125.2 million from the prior year,which is explained in the
sections below. This amount includes $2.0 billion of total assets and$172.4 million of total
deferred outflows of resources; $1.6 billion of total liabilities and$223.4 million of total
deferred inflows of resources.
• As of the end of fiscal year 2022, the County's governmental funds reported combined
ending fund balances of$376.4 million, an increase of$42.6 million from the prior year.
Approximately 36 percent of this total amount, $135.9 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 $81.6
million, or 21 percent of total general fund expenditures.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the County's basic financial
statements. The County's basic financial statements comprise three components: (1)
Government-wide financial statements, (2)Fund financial statements, and(3)Notes to the basic
financial statements. This report also contains both required and other supplementary
information in addition to the basic financial statements themselves.
Government-wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview
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, deferred
outflows of resources,liabilities, and deferred inflows of resources,with the difference reported
as net position. Over time,increases or decreases in net position may serve as a useful indicator
of whether or not the financial position of the County 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 expenses are reported in this statement for some items that will only 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,
- 17 -
sanitation and general government. The business-type activities of the County include rental
housing for senior citizens and families.
The government-wide financial statements include not only the County itself(known as the
primary government),but also the Department of Water Supply, a legally separate entity that the
County is financially accountable for. Financial information for this component unit is reported
separately from the financial information presented for the primary government itself.
Fund Financial Statements
The fund financial statements are designed to report information about groupings of related
accounts which are used to maintain control over resources that have been segregated for specific
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
spending. Such information may be useful in determining what financial resources are
available in the near future to finance the County's programs.
Because the focus of governmental funds is narrower than that of the government-wide
financial statements, it is useful to compare the information presented for governmental
funds with similar information presented for governmental activities in the government-wide
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
and 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-maj or 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 and
the general excise tax fund are 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
- 18 -
are used to report the same functions presented as business-type activities in the government-
wide financial statements. The County uses enterprise funds to account for the operations of
the Kulaimano Elderly Housing Project and the Ouli Ekahi Affordable Housing Project.
Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of
parties outside the County. The private-purpose trusts and the custodial funds are reported
under the fiduciary funds. Since the resources of these funds are not available to support the
County's own programs, they are not reflected in the government-wide financial statements.
The accounting used for fiduciary funds is much like that used for proprietary funds.
Notes to the Basic Financial Statements
The notes to the basic financial statements provide additional information that is essential to a full
understanding of the data provided in the government-wide and fund financial statements.
Other Supplementary Information
In addition to the basic financial statements and accompanying notes,this report also presents
certain required supplementary information,which is presented immediately following the notes
to the basic financial statements. The combining statements referred to earlier in connection with
nonmajor governmental funds and budgetary comparison schedules for the nonmajor special
revenue funds are presented immediately following the required supplementary information.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
Condensed Statements of Net Position
June 30,2022 and 2021
Primary Government
Governmental Activities Business-type Activities Total
2022 2021 2022 2021 2022 2021
Assets:
Current and other assets $ 562,831,081 $ 483,615,506 $ 1,093,447 $ 986,238 $ 563,924,528 $ 484,601,744
Capital assets,net 1,427,420,194 1,382,181,844 3,555,355 3,507,197 1,430,975,549 1,385,689,041
Total assets 1,990,251,275 1,865,797,350 4,648,802 4,493,435 1,994,900,077 1,870,290,785
Deferred Outflows
Of Resources: 172,440,984 209,237,089 -- -- 172,440,984 209,237,089
Total Assets and Deferred
Outflows of Resources 2,162,692,259 2,075,034,439 4,648,802 4,493,435 2,167,341,061 2,079,527,874
Liabilities:
Long-term liabilities
outstanding 1,482,602,194 1,703,789,631 41,501 100,691 1,482,643,695 1,703,890,322
Other liabilities 142,670,686 114,058,875 90,049 101.664 142,760,735 114,160,539
Total liabilities 1,625,272,880 1,817,848,506 131,550 202.355 1,625,404,430 1,8187050,861
Deferred Inflows
Of Resources: 223,406,926 74,995,154 -- -- 223,406,926 74,995,154
Total Liabilities and
Deferred inflows
Of Resources 1,848,679,806 1,892,843,660 131,550 202,355 1,848,811,356 1,893,046,015
Net position:
Net investment in
capital assets 955,734,185 917,612,276 3,513,854 3,406,506 959,248,039 921,018,782
Restricted 114,790,899 146,204,814 114,790,899 146,204,814
Unrestricted (756,512,631) (881,626,311) 1,003,398 884,574 (755,509,233) (880,741,737)
Total net position $ 314,012,453 $ 182,190,779 $ 4,517,252 $ 4,291,080 $318,529,705 $186,481,859
- 19 -
Analysis of Net Position
As noted earlier,net position may serve over time as a useful indicator of a government's
financial position. In the case of the County, assets and deferred outflows of resources exceeded
liabilities and deferred inflows of resources by$318.5 million at the close of the most recent
fiscal year.
By far the largest portion of the County's net position reflects its investment in capital assets
(e.g., land,buildings,infrastructure, and equipment) less any related debt used to acquire those
assets that is still outstanding. The County uses these capital assets to provide services to
citizens; consequently, these assets are not available for future spending. Although the County's
investment in its capital assets is reported net of related debt, it should be noted that the resources
needed to repay this debt must be provided from other sources, since the capital assets themselves
cannot be used to liquidate these liabilities.
An additional portion of the County's net position represents resources that are subject to external
restrictions on how they may be used.
At the end of the current fiscal year,the County is able to report positive balances in two of its
three categories of net position,both for the government as a whole, as well as for its separate
governmental activities. All three categories of net position are positive for its business-type
activities.
The County's net position increased by$132.0 million from the prior year, which was an increase
of$98.6 million(295%) from the increase that was experienced last fiscal year. The main
reasons for the large increase in the current year's increase over last year,was due to a substantial
decrease in expenditures related to the County's net pension liability,which was offset by a slight
decrease in overall revenues.
See further discussion regarding the changes in the County's net position in the section labeled
Analysis of Changes in Net Position.
The County's net capital assets increased by$45.3 million(3 percent) due to the large amount of
capital improvement projects done by the County during the current fiscal year and infrastructure
related assets that were contributed. See further discussion of the increase in capital assets on
page 25.
The County's long-term liabilities outstanding decreased by $221.2 million(13 percent) due
primarily to the principal payments made for both bonds and SRF loans and amortization of
related bond premiums totaling $36.9 million and the changes in the net liabilities of the other
post-employment benefit obligation and the pension obligation. There was a$131.1 million
decrease in the County's net pension liability and a$61.5 decrease in the net other post-
employment benefit obligation. See further discussion of the increase in long-term debt
outstanding on page 25.
- 20 -
Condensed Statements of Activities
For the Fiscal Years Ended June 30,2022 and 2021
Primary Government
Governmental Activities Business-type Activities Total
2022 2021 2022 2021 2022 2021
Revenues:
Program revenues:
Charges for services $ 59,815,972 $ 52,163,107 $ 500,472 $ 485,498 $ 60,316,444 $ 52,648,605
Operating grants and contributions 102,386,921 165,236,320 277,837 262,821 102,664,758 165,499,141
Capital grants and contributions 36.716,672 28,772,337 - - 36,716,672 28,772,337
General revenues:
Property taxes 372,144,094 359,304,950 - - 372,144,094 359,304,950
Othertaxes 119,947,854 85,477.138 119,947,854 85,477,138
Grants and contributions,unrestricted 638,219 556,488 638,219 556,488
Investment earnings 190,002 552,408 436 392 190,438 552,800
Other 1,698,844 1,225,852 - - 1,698,844 1,225,852
Total revenues 693,538,578 693,288,600 778,745 748,711 694,317,323 694,037,31 1
Expenses:
General government 84,642,838 88,736,125 84,642,838 88,736,125
Public safety 242,555,050 353,318,886 242,555,050 353,318,886
Highways and sheets 66,452,718 71,625,009 66,452,718 71,625,009
Health,education and welfare 61,230,308 48,213,864 728,454 740,211 61,958,72 48,954,075
Culture and recreation 32,573,321 25,092,892 - - 32,573,321 25,092,892
Sanitation 61,075,307 61,260,244 61,075,307 61,260,244
Interest on long-term debt 13,011,481 13,811,108 13,011,481 13,811,108
Total expenses 561,541,023 662,058,128 728,454 740,211 562,269,477 662,798,339
Increase in net position
before transfers 131,997,555 31,230,472 50,291 8,500 132,047,846 31,238,972
Transfers (175,881) (1,669,662) 175,881 1,669,662 - -
Changeinnetposition 131,821,674 29,560,810 226,172 1,678,162 132,047,846 31,238,972
Net position at beginning ofyear 182,190,779 150,411,099 4,291,080 2,612,918 186,481,859 153,024,017
Prior period adjustment 2,218,870 2,218,870
Net position at begirming of year,
asrestated 182,190,779 152,629,969* 4,291,080 2,612,918 186,481,859 155,242,887
Net position at end of year $3 t4,012,453 $182,190,779 $ 4,517,252 S 4,291,080 S 318,529,705 $186,481,859
*Due to the implementation of GASB 84,a prior period adjustment to governmental activities of
$2,218,870 is reflected in June 2021. The restated beginning balance for fiscal year 2021 is$152,629,969
for governmental activities.
Analysis of Changes in Net Position
Governmental activities. Governmental activities increased the County's net position by$131.8
million, which represented almost the entire total increase in net position of the County.
There was only a$250,000 (less than a fraction of 1 percent) increase in revenues from
governmental activities, due to the offsetting following factors. As mentioned previously, the
County saw a$62.8 million reduction in operating grants and contributions,which was primarily
a reflection of the fact that most of the grants that the County expended during the previous fiscal
year was not extended into the current fiscal year. Most notably was the CARES Act grant
previously discussed above. The negative impact of such a large decrease in one aspect of
revenues was mitigated by increases in the other categories of revenue, which most notably
included an increase in property taxes by$12.8 million due to a $1.7 billion increase in the
assessed value of the net taxable real property,with the majority stemming from the category of
taxable buildings ($1.5 million). Revenues from the general excise tax surcharge increased by
$13.4 million from the prior year,which corresponds to improvements in the economy overall as
- 21 -
the County and State recovered from the impacts of COVID-19, including increased tourism
activity. The County also recognized$17.5 million in revenue from the County transient
accommodations tax, under Act 1, 1st Special Session 2021, which became law on July 8,2021.
The counties were authorized 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 were to be deposited into the general fund as unrestricted revenues.
Overall expenses from governmental activities decreased by$100.5 million(15%) from the
previous year, which was a result of the County experiencing a$41.3 million decrease in
expenses related to net pension liability due to the large positive return on investments
experienced by the State's retirement plan. In the prior fiscal year,the County incurred
approximately$77.1 million of expenditures while responding to the additional needs caused by
the COVID-19 pandemic. $77.0 million was funded by the Coronavirus Aid,Relief, and
Economic Security Act(CARES Act),which the County received from the State's allocation of
federal funds and was in addition to the many other various federal grants received by the
County.
The charts below illustrate the County's governmental expenses and revenues by function, and its
revenues by source. As shown,public safety is the largest function in expense (43 percent),
followed by general government(15 percent) and highways and streets (12 percent). General
revenues such 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
programs,property taxes are the largest single source of funds (54 percent), followed by other
taxes (17 percent) and operating grants and contributions (15 percent).
Expenses and Program Revenues—Governmental Activities
Year Ended June 30,2022
300 000 000 ...................................................................................................................................................................................................................................................................................................................
$250 000 000 ...................................................................................................................................................................................................................................................................................................................
`=Expenses IIIII Program revenues
$200,000,000
$150,000,000
$100,000,000
$50,0000
0$0
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- 22 -
Revenue by Source—Governmental Activities
Year Ended June 30,2022
..............................................................................................................................................................................................................................................................................................................................................................................................................................................
Grants and contributions
not restricted to specific Other, $1,698,844
programs, $638,219 Investment earnings,
$190,002
Charges for services,
$59,815,972
Othertaxes,
$119,947,854
Operating grants and
contributions,
$102,386,921
Capital grants and
contributions,
$36,716,672
Property taxes,
$372,144,094
Business-type activities. Business-type activities net position increased by$226,000 and had an
extremely minimal impact on the increase in the County's net position overall. The largest factor
that contributed to the increase is the capital asset transfer from the governmental activities of
$176,000. Expenses for health, education and welfare account for all of the$728,454 of expenses
which represents a 2 percent decrease from the prior year,with the largest decrease occurring in
the area of general administration charges. Charges for services were $500,472 and operating
grants and contributions were$277,837,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 fiscal year 2022,the County's governmental funds reported combined ending
fund balances of$376.4 million, an increase of$42.6 million(13 percent)in comparison with
prior year. Approximately 36 percent of this total amount($135.9 million) constitutes
unrestricted fund balance. The unrestricted portion of the fund balance is comprised of(1) $58.8
million in committed fund balance, (2) $50.4 million in assigned fund balance, and(3) $26.6
million in unassigned fund balance. The remainder of the fund balance is divided between$8.3
million in nonspendable fund balance for inventory and prepaid items and$232.2 million in
restricted fund balance. Approximately 83 percent of the total restricted fund balance is due to
restrictions relating to highways, streets and abandoned vehicles ($144.8 million) and debt service
- 23 -
($46.9 million). $67.2 million of the fund balance restricted for highways, streets and abandoned
vehicles was due to the General Excise Tax fund that was created in fiscal year 2019,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$29.3 million due primarily to increased
sales activity throughout the County,which also correlates to the increased levels of tourism.
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 $81.6 million,while total fund balance
increased to $111.6 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 21 percent of total general fund expenditures,while total
fund balance represents 29 percent of that same amount.
The fund balance of the County's general fund increased by $23.0 million during the current
fiscal year as compared to an increase of$3.7 million in the prior year. Key factors in this
substantial increase ($19.3 million) over last year's increase are as follows:
• A positive increase of$17.5 million(5 percent)in real property tax revenues and$12.8
million(100%)in County transient accommodations tax were offset by a$74.6 million(56%)
decrease in intergovernmental revenues. As previously stated,the decrease that the County
experienced in operating grants and contributions was primarily a reflection of the fact that
most of the grants that the County expended during the previous fiscal year was not extended
into the current fiscal year. Most notably was the CARES Act grant previously discussed
above that was recorded in the general fund. The negative impact of such a large decrease in
one aspect of revenues was mitigated by increases in the other categories of revenue,which
most notably included an increase in property taxes and the County transient
accommodations tax,both of which were discussed previously.
• The negative impact of the increase in revenues was offset by decreases of$55.6 million(13
percent) in expenditures. As explained previously,the County no longer focused on funding
costs related to emergency protective measures resulting from the COVID-19 pandemic,with
the assistance of the financial aid that was received by the federal government. In the prior
year,the County incurred approximately$77.1 million of expenditures while responding to
the additional needs caused by the COVID-19 pandemic. These expenditures were
represented just one of the many federal grants received by the County to assist in dealing
with the additional financial burden resulting from the pandemic that did not occur in the
current year.
The fund balance of the County's capital projects fund decreased by $24.0 million(25 percent)
during the current fiscal year. The decrease is primarily due to the fact that there was zero
amount of other financing sources resulting from new issuances of debt by the County in the
current fiscal year. Despite the absence new issuances of debt, the Capital projects fund incurred
$52.8 million in capital expenditures, which was only $3.9 million less than the prior year and a
decrease of only 7 percent. See discussion regarding construction activity during the current year
in the capital asset section below.
The debt service funds consist of the Bond Redemption Fund and the Interest Fund. These funds
have combined total fund balances of$46.9 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 $1.8 million, which was a 4 percent change from the prior year. The increase
in fund balance was lower than the increase experienced in the prior year due to the fact that the
- 24 -
amount of transfers-in matched more closely with the actual expenditures incurred for principal
and interest payments.
Proprietary funds. 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 $391,695, and$611,703 for the Ouli Ekahi Affordable Housing Project(Ouli
Ekahi). Unrestricted net position for Kulaimano increased by $122,346 and unrestricted net
position for Ouli Ekahi decreased by$3,522. 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$77.9 million increase in appropriations for expenditures and other financing uses, the most
significant reasons were due to $50.1 million of additional grant appropriations from the federal
government relating to mass transit($18.5 million)from the Federal Transit Administration and
the Community Development Block Grant funding from the U.S. Department of Housing and
Urban Development($31.1 million).
Differences between the final budget and the actual(budgetary basis)resulted in approximately
$15.6 million less revenues than expected and$42.5 million less expenditures than appropriated.
This is primarily due to the following factors:
• Although revenue generated from taxes exceeded the budget by$32.2 million,revenue from
grants and other sources fell short of the budget by$16.6 million.
• Approximately$16.5 million of the unspent appropriations is related to salaries and wages
and the 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 total variance in
expenditures: public safety ($13.7 million)and highways and streets ($9.0 million).
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital assets. The County's investment in capital assets for its governmental and business-type
activities as of June 30, 2022 amounts to $1.4 billion(net of accumulated depreciation). This
investment in capital assets includes land and improvements,buildings and improvements,
equipment, easements, 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 3
percent.
Major capital asset events during the current fiscal year included the following:
• Construction continued on the Hawaii County Radio System Upgrade project;
construction in progress as of the end of the current fiscal year had reached$18.2 million
with$2.4 million coming from the current fiscal year.
• Construction continued on the Hilo Wastewater Treatment Plan Upgrade project;
construction in progress as of the end of the current fiscal year had reached$2.4 million
with$1.9 million coming from the current fiscal year.
- 25 -
0 Construction continued on the Dr. Francis Wong Stadium Accessibility Improvements
project; construction in progress as of the end of the current fiscal year had reached$3.8
million with$.5 million coming from the current fiscal year;project was transferred to
Buildings.
• Construction continued on the Papa`aloa Park and Pa`auilo Park Accessibility
Improvements project; construction in progress as of the end of the fiscal year had
reached$3.1 million with $2.7 million coming from the current fiscal year.
• Construction continued on the Pana`ewa Rainforest Zoo & Gardens and the Pana`ewa
Equestrian Center Accessibility Improvements projects; construction in progress as of the
end of the current fiscal year had reached$10.7 million with$.4 million coming from the
current fiscal year;project was transferred to Buildings.
• Construction continued on the Kalaniana`ole Avenue Reconstruction project;
construction in progress as of the end of the fiscal year had reached$9.4 million with
$3.7 million coming from the current fiscal year.
0 Construction continued on the Kilauea Avenue Rehabilitation project; construction in
progress as of the end of the current fiscal year had reached$11.3 million with$5.8
million coming from the current fiscal year.
• Construction began on the Waianuenue Avenue Rehabilitation project; construction in
progress as of the end of the fiscal year had reached$4.2 million.
• Construction continued on the Hawaii County Emergency Call Center project;
construction in progress as of the end of the fiscal year had reached$9.7 million with
$8.0 million coming from the current fiscal year.
• $18.1 million of dedicated roads were received by the County in the current fiscal year.
Capital Assets
(net of depreciation)
June 30, 2022 and 2021
Primary Government
Governmental Activities Business-type Activities Total
2022 2021 2022 2021 2022 2021
Land and improvements $ 310,930,661 $ 292,632,722 $ 753,877 $ 753,877 $ 311,684,538 $ 293,386,599
Infrastructure assets 281,053,440 297,110,815 - - 281,053,440 297,110,815
Ground and site improvements - - 36,158 40,505 36,158 40,505
Buildings and improvements 645,409,863 641,575,608 2,699,466 2,630,029 648,109,329 644,205,637
Easements 15,570,853 11,240,425 - - 15,570,853 11,240,425
Right to use assets 14,420,125 14,420,125
Equipment 63,135,522 65,571,550 65,854 82,786 63,201,376 65,654,336
Construction work in progress 96,899,730 74,050,724 96,899,730 74,050,724
Total $1,427,420,194 $1,382,181,844 $3,555,355 $3,507,197 $1,430,975,549 $1,385,689,041
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$373.4 million and State
Revolving Fund loans of$46.8 million. At the end of the current fiscal year, the County had total
bonded debt outstanding of$373.4 million. This entire amount was comprised of general
obligation bonds which are backed by the full faith and credit of the County.
- 26 -
The County's total bonded debt decreased by$27.5 million(7 percent) during the current fiscal
year,which represented regularly scheduled principal payments of$27.5 million.
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 $5.5 billion,which is in excess
of the County's outstanding general obligation debt. Currently the County's outstanding debt
represents 7 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 4.3
percent,which is 4.3 percent lower than at the end of the prior fiscal year. This serves as
an indication of the improving economic outlook for the island.
• The number of domestic and international visitors to the County for the current fiscal
year was approximately 1.5 million, with an approximately 159 percent increase from the
previous year's count of.58 million,which further demonstrates that the County is
returning to pre-pandemic conditions.
At the end of the current fiscal year,unrestricted fund balance in the general fund was $81.6
million. The County has appropriated$27.9 million of this amount for spending in the 2023
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.
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BASIC FINANCIAL STATEMENTS
29 -
COUNTY OF HAWAII
Statement of Net Position
June 30,2022
Primary Government
Governmental Business-type Component
Activities Activities Total Unit
Assets
Current assets:
Cash and cash equivalents(notes 3 and 14) $ 169,763,739 $ 1,286,006 $ 171,049,745 $ 23,181,846
Restricted cash and cash equivalents(note 3) 248,970,450 43,651 249,014,101 -
Investments(note 3) 4,946,772 - 4,946,772 16,000,000
Receivables,net(note 4) 107,533,435 17,147 107,550,582 13,146,709
Receivable from improvement district
(notes 4 and 10) 181,057 - 191,057 -
Internal balances(note 5) 329,971 (329,971) - -
Inventories 7,505,704 - 7,505,704 1,593,673
Prepaid expenses 823,678 3,912 827,590 60,288
Other 4,686,894 - 4,686,894 207,387
Total current assets 544,741,700 1,020,745 545,762,445 54,189,903
Investments(note 3) 10,740,905 10,740,905 4,000,000
Restricted investments(note 3) 2,788,605 - 2,788,605 -
Restricted cash and cash equivalents(note 3 and 14) - 72,702 72,702 888,225
Receivable from improvement district,excluding
current portion(notes 4 and 10) 3,913,659 - 3,913,659 -
Other 646,212 646,212 2,241,897
Capital assets(notes 6,8 and 14):
Utility plant in service,net - - 278,073,957
Infrastructure assets,net 281,053,440 - 281,053,440 -
Grotmd and site improvements,net - 36,158 36,158
Buildings and improvements,net 645,409,863 2,699,466 648,109,329
Equipment,net 63,135,522 65,854 63,201,376
Easements,net 15,570,853 - 15,570,853 -
Preliminary survey and investigation charges - - - 2,213,049
Land and improvements 310,930,661 753,877 311,684,538 5,324,040
Right to use assets,net 14,420,125 - 14,420,125 257,452
Construction work in progress 96,899,730 - 96,899,730 19,937,881
Total capital assets,net 1,427,420,194 3,555,355 1,430,975,549 305,806,379
Total noncurrent assets 1,445,509,575 3,628,057 1,449,137,632 310,694,604
Total assets 1,990,251,275 4,648,802 1,994,900,077 367,126,404
Deferred Outflows of Resources
Deferred loss on refunding 4,063,708 - 4,063,708 -
Deferred outflow related to pensions and other
post employment benefits(notes 13 and 14) 168,377,276 168,377,276 7,448,161
Total deferred outflows of resources 172,440,984 - 172,440,984 7,448,161
Total Assets and Deferred Outflows of Resources 2,162,692,259 4,648,802 2,167,341,061 374,574,565
(Continued)
-30-
COUNTY OF HAWAII
Statement of Net Position
June 30,2022
(Concluded)
Primary Government
Governmental Business-type Component
Activities Activities Total Unit
Liabilities
Current liabilities:
Accounts payable and accrued liabilities $ 26,196,875 $ 77,569 $ 26,274,444 $ 6,577,539
Accrued payroll 12,512,624 - 12,512,624 2,029,486
Advance collections-intergovernmental 93,723,963 7,432 93,731,395 -
Interest due on long-term debt 5,880,657 4,931 5,885AS8 414,870
Bonds and loans payable,current portion net
(notes 10 and 14) 36,987,218 16,500 37,003,718 5,902,341
Compensated absences,current portion(note 10) 10,236,803 - 10,236,803 644,977
Claims andjudgments,current portion
(notes 10,12 and 14) 5,876,117 5,876,117 138,464
Leases and other financing agreements,
current portion(notes 8 and 10) 5,785,096 5,785,096 31,569
Landfill costs payable,current portion
(notes 9 and 10) 1,844,006 1,844,006 -
Customers'deposits - - - 234,727
Other 4,656,567 217 4,656,784 -
Total current liabilities 203,699,926 106,549 203,806,475 15,973,973
Noncurrent liabilities:
Bonds and loans payable,net
(notes 10 and 14) 443,195,185 25,001 443,220,186 69,176,692
Compensated absences(note 10) 36,848,888 - 36,848,888 1,309,499
Claims and judgments(notes 10,12 and 14) 16,654,861 16,654,861 161,536
Leases and other financing agreements
(notes 8 and 10) 18,537,357 18,537,357 227,517
Landfill costs payable(notes 9 and 10) 9,226,994 9,226,994 -
Customers'deposits - - 16,203,571
Net pension liability(notes 13 and 14) 565,988,032 565,988,032 29,017,165
Net OPEB liability(notes 13 and 14) 311,503,693 311,503,693 10,451,786
Other 19,617,944 19,617,944 -
Total noncurrent liabilities 1,421,572,954 25,001 1,421,597,955 126,547,766
Total liabilities 1,625,272,880 131,550 1,625,404,430 142,521,739
Deferred Inflows of Resources
Deferred inflows related to pensions and other
post employment benefits(notes 13 and 14) 217,182,490 - 217,182,490 11,425,594
Deferred inflows-other 6,224,436 6,224,436 2,591,814
Total Deferred Inflows of Resources 223,406,926 - 223,406,926 14,017,408
Total Liabilities and Deferred
Inflows of Resources 1,848,679,806 131,550 1,848,811,356 156,539,147
Net Position
Net investment in capital assets 955,734,185 3,513,854 959,248,039 228,036,135
Restricted for:
Debt service(note 10) 46,874,048 - 46,874,048 -
Highways,streets and abandoned vehicles 40,056,169 40,056,169
Public access open space 12,172,697 12,172,697
Disaster and emergencies 8,493,427 8,493,427
Other 7,194,558 - 7,194,558
Unrestricted (756,512,631) 1,003,399 (755,509,233) (10,000,717)
Total net position S 314,012,453 S 4,517,252 S 318,529,705 $ 218,035,418
See accompanying notes to the basic financial statements.
-31 -
COUNTY OF HAWAII
Statement of Activities
For the Fiscal Year Ended June 30,2022
Program Revenues
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions
Primary government:
Governmental activities:
General government $ 84,642,838 $ 1,505,745 $ 5,496,977 $ 3,849,522
Public safety 242,555,050 8,375,603 38,480,639 1,353,960
Highways and streets 66,452,718 17,617,754 7,404,688 29,323,912
Health, education and welfare 61,230,308 930,661 50,154,948 16,511
Culture and recreation 32,573,321 1,779,503 41,969 211,403
Sanitation 61,075,307 29,606,706 807,700 1,961,364
Interest on long-term debt 13,011,481 - - -
Total governmental activities 561,541,023 59,815,972 102,386,921 36,716,672
Business-type activities:
Health, education and welfare 728,454 500,472 277,837 -
Total primary government $ 562,269,477 $ 60,316,444 $ 102,664,758 $ 36,716,672
Component unit:
Water(note 15) $ 62,624,927 $ 57,583,247 $ - $ 12,653,207
General revenues:
Taxes:
Property taxes,levied for general purposes
Public service company taxes
County transient accomodations tax
Franchise taxes
Fuel taxes
General excise tax surcharge
Grants and contributions not restricted to specific programs
Investment earnings(expense)
Miscellaneous
Transfers
Total general revenues
Change in net position
Net position,beginning of fiscal year,as previously stated
Prior period adjustment
Net position, beginning of fiscal year,as restated
Net position, end of fiscal year
See accompanying notes to the basic financial statements.
- 32 -
Net(Expense) Revenue and Changes in Net Assets
Primary Government
Governmental Business-type Component
Activities Activities Total Unit
$ (73,790,594) $ - $ (73,790,594) $ -
(194,344,848) - (194,344,848) -
(12,106,364) - (12,106,364) -
(10,128,188) - (10,128,188) -
(30,540,446) - (30,540,446) -
(28,699,537) - (28,699,537) -
(13,011,481) - (13,011,481) -
(362,621,458) - (362,621,458) -
49,855 49,855 -
(362,621,458) 49,855 (362,571,603) -
- - - 7,611,527
372,144,094 - 372,144,094 -
8,010,990 - 8,010,990 -
17,511,739 - 17,511,739
9,141,336 - 9,141,336 -
21,546,859 - 21,546,859 -
63,736,930 - 63,736,930 -
638,219 - 638,219 -
190,002 436 190,438 294,347
1,698,844 - 1,698,844
(175,881) 175,881 - -
494,443,132 176,317 494,619,449 294,347
131,821,674 226,172 132,047,846 7,905,874
182,190,779 4,291,080 186,481,859 212,119,595
- - - (1,990,051)
182,190,779 4,291,080 186,481,859 210,129,544
$ 314,012,453 $ 4,517,252 $ 318,529,705 $ 218,035,418
- 33 -
COUNTY OF HAWAII
Governmental Funds
Balance Sheet
June 30,2022
General Other Total
Capital Excise Governmental Governmental
General Projects Tax Fund Funds Funds
Assets
Cash and cash equivalents(note 3) $ 160,795,272 S 71,115,217 S 46,871,736 $ 139,951,964 S 418,734,189
Investments(note 3) 15,687,677 2,788,605 - - 18,476,282
Receivables,net(note 4) 35,746,340 - - 3,386,693 39,133,033
Due from other governmental funds(note 5) 2,403,622 1,456,782 142,053 1,274,992 5,277,449
Due from other nongovernmental fiords(note 5) - - - 329,971 329,971
Receivables from other governments(note 4) 30,989,707 10,691,517 22,817,589 3,901,589 68,400,402
Inventories 7,505,704 - - - 7,505,704
Other 2,328,505 662,975 - 3,165,304 6,156,784
Total assets S 255,456,827 $ 86,715,096 S 69,831,378 S 152,010, 113 S 564,013,814
Liabilities,Deferred Inflows and Fund Balances
Liabilities:
Accounts payable $ 8,835,645 $ 10,996,271 $ 2,564,704 $ 3,800,255 $ 26,196,875
Accrued payroll 10,570,668 - 69,611 1,872,345 12,512,624
Due to other governmental funds(note 5) 670,197 537,901 24,361 4,044,990 5,277,449
Advance collections-intergovernmental 80,871,622 3,215,501 - 9,636,840 93,723,963
Other 3,126,919 386,547 10,398 832,703 4,356,567
Total liabilities 104,075,051 15,136,220 2,669,074 20,187,133 142,067,478
Deferred Inflows of Resources:
Unavailable revenue(note 71) 39,821,979 - - 5,676,637 45,498,616
Fund balances:
Nonspendable: Inventory&Prepaid 8,329,382 - - - 8,329,382
Restricted for:
Debt service(note 10) - - - 46,874,048 46,874,048
Highways, streets and abandoned vehicles - 37,558,476 67,162,304 40,056,169 144,776,949
Public access open space 12,172,697 - - - 12,172,697
Disaster and emergencies 9,493,427 - - - 8,493,427
Other 996,415 12,722,478 - 6,198,143 19,917,036
Committed to:
Budget stabilization 7,720,615 - - - 7,720,615
Lower Puna area - - - 4,988,281 4,988,281
Rental assistance and subsidy - - - 1,138,211 1,138,211
Sanitation - - - 16,439,006 16,439,006
Self insurance 260,691 - - - 260,691
Highways,streets and abandoned vehicles - 7,434,765 - 10,031,264 17,466,029
Parks and recreational projects - 2,220,627 - 61,072 2,281,699
Zoning change impact mitigation(fair share) - 6,462,199 - - 6,462,199
Other 408,787 1,285,299 - 360,549 2,054,635
Assigned to:
Subsequent year's budget 27,881,048 - - - 27,881,048
Other 18,669,694 3,895,032 - - 22,564,726
Unassigned 26,627,041 - - - 26,627,041
Total fund balances 111,559,797 71,578,876 67.162,304 126,146,743 376,447,720
Total liabilities,deferred inflows, and fund balances S 255,456,827 86,715,096 69,831.378 S 152,010,513 &164.013.814
See accompanying notes to the basic financial statements.
-34-
COUNTY OF HAWAII
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position
June 30,2022
Total fund balances-governmental funds $ 376,447,720
Amounts reported for govertmiental activities in the statement of
net position are different because:
Capital assets used in governmental activities are not financial
resources and therefore are not reported in the funds. These assets
consist of:
Land and improvements 310,930,661
Infrastructure assets,net 291,053,440
Buildings and improvements,net 645,409,863
Equipment,net 63,135,522
Easements,net 15,570,853
Right to use assets,net 14,420,125
Construction work in progress 96,899,730
Total capital assets,net 1,427,420,194
Deferred amounts on refunding,pension and other post employment benefits
are reported as deferred outflows of resources in the government-wide
financial statements but are not reported in the governmental fund statements 172,440,984
Some of the County's revenues will be collected after year-end but are
not available soon enough to pay for the current period's expenditures
and therefore are deferred(unearned)in the funds.(note 7) 39,274,180
Some liabilities are not due and payable in the current period and
therefore are not reported in the funds. Those liabilities consist of:
Bonds and loans payable,net of receivable
from improvement district (476,087,687)
Interest due on long-term debt (5,880,657)
Leases and other financing agreements (24,322,453)
Compensated absences (47,085,691)
Claims and judgments (22,530,978)
Landfill costs payable (11,071,000)
Pollution remediation (17,475,000)
Underground storage tank liability (1,775,000)
Net OPEB liability (311,503,693)
Net pension obligation (565,988,032)
Total long-term liabilities (1,483,720,191)
Unamortized gain on refunding (667,944)
Deferred amounts related to pension and other post employment benefits are
reported as deferred inflows of resources in the government-wide financial
statements but are not are not reported in the governmental fund statements (217,182,490)
Net position of governmental activities $ 314,012,453
See accompanying notes to the basic financial statements.
-35 -
COUNTY OF HAWAII
Governmental Funds
Statement of Revenues,Expenditures,and Changes in Fund Balances
For the Fiscal Year Ended June 30,2022
General Other Total
Capital Excise Governmental Governmental
General Projects Tax Fund Funds Funds
Revenues
Property taxes $ 372,701,175 $ - $ - $ - $ 372,701,175
Public service company taxes 8,010,990 - - - 8,010,990
County transient accomodations tax 12,751,483 - - - 12,751,483
Fuel taxes - - - 21,546,859 21,546,859
Public utility franchise taxes - - - 9,141,336 9,141,336
Licenses and permits 11,165,918 - - 16,170,750 27,336,668
General excise tax surcharge - - 63,736,930 - 63,736,930
Intergovernmental 58,013,701 14,101,058 - 46,543,093 118,657,852
Charges for services 1,765,743 - - 27,874,968 29,640,711
Investment earnings 203,894 (188,190) - 7,005 22,709
Other 2,447,879 1,354,760 3,000 1,778,382 5,584,021
Total revenues 467,060,783 15,267,628 63,739,930 123,062,393 669,130,734
Expenditures
Current:
General government 48,499,723 - - 2,508,057 51,007,780
Public safety 153,606,003 - - 9,780,893 163,386,896
Highways and streets 6,214,717 - 16,039,013 15,789,565 38,043,295
Health,education and welfare 14,257,401 - - 46,381,182 60,638,583
Culture and recreation 22,739,838 - - 1,223,994 23,963,832
Sanitation 2,631,974 - - 47,295,967 49,927,941
Pension and retirement
contributions(note 13) 62,062,216 - 349,969 9,181,244 71,593,429
Employees'health insurance 16,628,185 - 97,785 3,513,558 20,239,528
Other postemployment benefits 38,439,395 - - - 38,439,395
Other 7,812,481 - 6,558 1,322,566 9,141,605
Debt service:
Principal 3,352,179 - - 33,338,415 36,690,594
Interest 391,376 - - 18,336,470 18,727,846
Capital outlay 11,509,218 52,760,808 - - 64,270,026
Total expenditures 388,144,706 52,760,808 16,493,325 188,671,911 646,070,750
Excess(deficiency)of revenues
over(under)expenditures 79,916,077 (37,493,180) 47,246,605 (65,609,518) 23,059,984
(Continued)
- 36-
COUNTY OF HAWAII
Governmental Funds
Statement of Revenues,Expenditures,and Changes in Fund Balances
For the Fiscal Year Ended June 30,2022
(Concluded)
General Other Total
Capital Excise Governmental Governmental
General Projects Tax Fund Funds Funds
Other Financing Sources(Uses)
Sale of assets $ 198,821 $ - $ - $ - $ 198,821
Increase in leased assets(notes 8 and 10) 14,410,929 - - 4,905,001 19,315,930
Transfers in(note 5) - 13,468,136 - 79,200,761 92,668,897
Transfers out(note 51) (70,539,925) - (17,986,854) (4,142,118) (92,668,897)
Total other financing sources(uses) (55,930,175) 13,468,136 (17,986,854) 79,963,644 19,514,751
Net change in fund balances 22,985,902 (24,025,044) 29,259,751 14,354,126 42,574,735
Fund balances at beginning of fiscal year 88,573,895 95,603,920 37,902,553 111,792,617 333,872,985
Fund balances at end of fiscal year $ 111,559,797 $ 71,578,876 $ 67,162,304 $ 126,146,743 $ 376,447,720
See accompanying notes to the basic financial statements.
- 37-
COUNTY OF HAWAII
Reconciliation of the Change in Fund Balances of Governmental Funds
to the Statement of Activities
For the Fiscal Year Ended June 30,2022
Net change in fund balances-total governmental funds S 42,574,735
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 and amortization
expense. In the current period,these amounts are:
Capital outlay 78,293,355
Dedicated and contributed property 19,374,450
Depreciation and amortization expense and loss on disposals (52,429,455)
Excess of capital outlay over depreciation and amortization expense 45,238,350
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:
Leases and other financing agreements (19,315,930)
Total debt proceeds (19,315,930)
Repayment of long-term debt is reported as an expenditure in governmental
hinds,but the repayment reduces long-term liabilities in the statement of
net position. In the current year,these amounts consist of:
Bond principal retirement 27,364,184
State Revolving Fund loan repayments 3,583,027
Lease and other financing agreements payments 5,743,383
Total long-term debt repayment 36,690,594
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. 4,258,832
(Continued)
- 38 -
COUNTY OF HAWAII
Reconciliation of the Change in Fund Balances of Governmental Funds
to the Statement of Activities
For the Fiscal Year Ended June 30,2022
(Concluded)
Some items reported in the statement of activities do not involve current
financial resources and therefore are not reported as expenditures in
governmental funds. These activities are:
Net decrease in compensated absences S 1,337,804
Net decrease in claims and judgments 1,726,840
Net decrease in landfill closure/postclosure care costs 581,000
Net decrease in pollution remediation costs 1,244,518
Amortization of premium from bond issuance 5,834,146
Amortization of deferred loss on refunding (665,859)
Amortization of gain on refunding 102,761
Net decrease in accrued interest 445,317
Net decrease to expenses related to net OPEB liability 13,469,210
Net increase to expenses related to pension and salaries and wages (1,700,644)
Net additional expenses 22,375,093
Change in net position of governmental activities $ 131,821,674
See accompanying notes to the basic financial statements.
-39-
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 30,2022
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues:
Taxes and assessments:
Property taxes $ 353,000,000 $ 353,720,000 $ 372,701,175 $ 18,981,175
Public service company taxes 7,500,000 7,500,000 8,010,990 510,990
County transient accomodation tax - - 12,751,483 12,751,483
Total taxes and assessments 360,500,000 361,220,000 393,463,648 32,243,648
Licenses and permits:
Nonbusiness licenses and permits 4,011,739 4,011,739 6,020,008 2,008,269
Business licenses 2,226,426 2,226,426 1,897,464 (328,962)
Street use 3,082,202 3,082,202 3,248,446 166,244
Total licenses and permits 9,320,367 9,320,367 11,165,918 1,845,551
Intergovernmental:
Federal:
Programs for the aged 2,385,804 3,766,062 2,232,585 (1,533,477)
Community development block grants - 30,823,851 30,823,851 -
Law enforcement 4,915,904 5,279,839 2,483,012 (2,796,827)
Other 13,092,964 42,495,766 33,582,705 (8,913,061)
Total federal 20,394,672 82,365,518 69,122,153 (13,243,365)
State:
Emergency medical services 17,177,792 21,984,337 21,984,337 -
Other 7,660,242 8,339,377 5,756,426 (2,582,951)
Total State 24,838,034 30,323,714 27,740,763 (2,582,951)
Total intergovernmental revenue 45,232,706 112,689,232 96,862,916 (15,826,316)
Charges for services:
General government 4,160,372 4,160,372 3,730,260 (430,112)
Culture and recreation 1,561,350 1,561,350 850,044 (711,306)
Highways and streets 914,000 914,000 513,782 (400,218)
Public safety 90,200 90,200 88,363 (1,837)
Total charges for services 6,725,922 6,725,922 5,182,449 (1,543,473)
Fines and forfeitures 2,161,300 2,161,300 967,336 (1,193,964)
Rents 153,500 153,500 145,807 (7,693)
(Continued)
-40-
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 30,2022
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues(continued):
Interest and penalties $ 350,000 $ 350,000 $ 716,469 $ 366,469
Miscellaneous 4,950,219 5,350,219 5,081,976 (268,243)
Total revenues 429,394,014 497,970,540 513,586,519 15,615,979
Expenditures:
Current:
General government:
Finance 13,958,732 13,960,468 11,469,390 2,491,078
General government building 7,452,077 7,441,448 6,976,218 465,230
Legislative 4,117,066 3,836,066 3,458,660 377,406
Automotive equipment 4,497,076 4,499,076 4,425,693 73,383
Law 3,201,950 3,201,950 2,719,438 482,512
Research and development 2,705,715 6,807,465 6,167,178 640,287
Planning and zoning 4,672,187 5,350,687 4,838,731 511,956
Mayor's office 1,748,237 1,848,237 1,630,562 217,675
Engineering 748,800 746,800 713,422 33,378
Information technology 3,710,696 3,710,696 3,374,816 335,880
Human resources 2,328,037 2,379,037 1,924,757 454,280
Public works administration 1,480,049 2,212,049 2,116,109 95,940
Elections 1,174,189 1,174,189 828,817 345,372
County auditor 762,104 762,104 536,772 225,332
Total general government 52,556,915 57,930,272 51,180,563 6,749,709
Public safety:
Police department 73,018,183 74,965,118 68,898,279 6,066,839
Fire department 52,500,902 58,477,435 55,592,059 2,885,376
Prosecuting attorney 10,475,473 10,509,973 7,658,675 2,851,298
Protective inspection 3,831,843 3,877,472 3,347,110 530,362
Liquor control 2,213,876 2,407,463 1,987,149 420,314
Flood control 330,000 330,000 330,000 -
Civil defense agency 2,539,533 2,542,533 2,083,745 458,788
Animal control 1,967,135 1,967,135 1,514,885 452,250
Total public safety 146,876,945 155,077,129 141,411,902 13,665,227
Highways and streets:
Mass transit 5,013,540 23,966,477 14,964,535 9,001,942
(Continued)
-41 -
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 30,2022
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Expenditures(continued):
Current(continued):
Health,education and welfare:
Elderly activities $ 3,961,498 $ 3,983,171 $ 3,153,986 $ 829,185
Office of aging 4,489,407 5,817,204 3,760,993 2,056,211
Education 52,650 52,650 15,529 37,121
Social programs 2,500,000 2,500,000 2,443,738 56,262
Cemeteries 446,572 470,272 381,131 89,141
Physical examination 133,826 133,826 133,825 1
Total health,education and welfare 11,583,953 12,957,123 9,889,202 3,067,921
Culture and recreation:
Community music 308,431 308,431 212,399 96,032
Organized recreation:
Maintenance 12,181,333 12,255,059 11,659,809 595,250
Recreation 3,396,318 3,298,389 2,912,687 385,702
Aquatics 2,534,139 2,534,139 2,210,677 323,462
Hoolulu park complex 1,041,865 1,041,865 1,021,423 20,442
Administration 2,514,737 2,862,776 2,622,918 239,858
Children's zoo 881,974 900,674 803,907 96,767
Summer/Intercession 481,185 481,195 254,762 226,423
Culture and arts 387,588 403,596 372,749 30,847
Elderly activities administration 740,694 777,285 682,963 94,322
Total culture and recreation 24,468,264 24,863,399 22,754,294 2,109,105
Sanitation:
Environmental management 1,415,344 1,487,344 1,356,831 130,513
Pension and retirement contributions 68,332,191 67,299,297 62,502,657 4,796,640
Employees'health insurance 22,229,305 16,763,335 16,762,402 933
Other postemployment benefits 28,550,000 38,318,872 38,318,872 -
Other 8,712,423 16,287,023 14,119,825 2,167,198
Total current 369,738,880 414,950,271 373,261,083 41,689,188
(Continued)
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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 30,2022
(Concluded)
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Expenditures(continued):
Capital Outlay:
Community Development Block
grants(HUD) $ 150,000 $ 31,273,851 $ 30,730,438 $ 543,413
HOME Program 3,125,000 3,130,000 2,893,411 236,589
Other 3,306,921 3,306,921 3,306,921 -
Total capital outlay 6,581,921 37,710,772 36,930,770 780,002
Total expenditures 376,320,801 452,661,043 410,191,853 42,469,190
Excess of revenues over expenditures 53,073,213 45,309,497 103,394,666 58,085,169
Other financing uses:
Transfers out:
Housing Fund (1,905,602) (1,912,102) (1,912,102) -
Solid Waste Fund (23,239,360) (23,975,360) (23,975,360) -
Sewer Fund (1,565,686) (1,620,686) (1,620,686) -
Golf Course Fund (728,160) (743,160) (743,160) -
Capital Project Fund - (41,384) (41,384) -
Disaster/Emergency Fund (3,530,000) (3,770,000) (3,676,153) 93,847
Public Access,Open Space,and Natural
Resources Preservation Fund (7,060,000) (7,540,000) (7,454,024) 85,976
Public Access,Open Space,and Natural
Resources Preservation Maintenance Fund (882,500) (882,500) (284,894) 597,606
Budget Stabilization Fund (250,000) (250,000) (250,000) -
Comm Benefit Fund (250,000) (250,000) - 250,000
Debt Service Fund (45,795,352) (45,795,352) (45,795,352) -
Total transfers out (85,206,660) (86,780,544) (85,753,115) 1,027,429
Total other financing uses (85,206,660) (86,780,544) (85,753,115) 1,027,429
Excess(deficiency)of revenues
over(under)expenditures and other uses (32,133,447) (41,471,047) 17,641,551 59,112,598
Fund balance at beginning of fiscal year 88,573,895 88,573,895 88,573,895 -
Fund balance at end of fiscal year $ 56,440,448 $ 47,102,848 $ 106,215,446 $ 59,112,598
See accompanying notes to the basic financial statements.
-43 -
COUNTY OF HAWAII
General Excise Tax Fund
Schedule of Revenues,Expenditures,and Changes in Fund Balance-
Budget and Actual(Budgetary Basis)
For the Fiscal Year Ended June 30,2022
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues:
General excise tax surcharge $ 37,500,000 $ 37,500,000 $ 63,736,930 $ 26,236,930
Other - - 3,000 3,000
Total revenues 37,500,000 37,500,000 63,739,930 26,239,930
Expenditures:
Highways and streets-mass transit 18,958,146 23,858,146 19,099,201 4,758,945
Pension and retirement contributions 330,000 370,000 349,647 20,353
Employees'health insurance 200,000 200,000 98,646 101,354
Other 25,000 25,000 6,640 18,360
Total expenditures 19,513,146 24,453,146 19,554,134 4,899,012
Excess of revenues over expenditures 17,986,854 13,046,854 44,185,796 31,138,942
Other financing uses-transfers out-
Transfers out-Capital Projects Fund (9,586,854) (9,586,854) (9,586,854) -
Transfers out-Serial Bond Redemption Fund (6,200,000) (6,200,000) (6,200,000) -
Transfers out-Interest Fund (2,200,000) (2,200,000) (2,200,000) -
Excess(deficiency)of revenues
over(under)expenditures and other uses - (4,940,000) 26,198,942 31,138,942
Fund balance at beginning of fiscal year 37,902,553 37,902,553 37,902,553 -
Fund balance at end of fiscal year S 37,902,553 S 32,962,553 $ 64,101,495 $ 31,138,942
See accompanying independent auditors'report.
-44 -
COUNTY OF HAWAII
Proprietary Funds
Statement of Net Position
June 30,2022
Business-type Activities-
Enterprise Funds
Kulaimano Ouli Ekahi
Elderly Affordable
Housing Housing
Project Project Total
Assets
Current assets:
Cash and cash equivalents(note 3) $ 741,528 $ 544,328 $ 1,285,856
Restricted cash and cash equivalents(note 3) 13,190 30,461 43,651
Imprest fund(note 3) 50 100 150
Receivables,net(note 4) 4,282 12,865 17,147
Prepaid expenses 3,912 - 3,912
Total current assets 762,962 587,754 1,350,716
Noncurrent assets:
Restricted cash and cash equivalents(note 3) - 72,702 72,702
Capital assets(note 6):
Land and site improvements 511,000 515,727 1,026,727
Buildings and equipment 3,074,284 1,056,168 4,130,452
Less accumulated depreciation (1,415,182) (186,642) (1,601,824)
Total capital assets 2,170,102 1,385,253 3,555,355
Total noncurrent assets 2,170,102 1,457,955 3,628,057
Total assets 2,933,064 2,045,709 4,978,773
Liabilities
Current liabilities:
Accounts payable 19,793 15,586 35,379
Due to other governmental funds(note 5) 329,971 - 329,971
Security deposits payable from restricted assets 13,190 29,000 42,190
Deferred revenue 3,265 4,167 7,432
Interest payable 4,831 - 4,831
Notes payable,current portion(note 10) - 16,500 16,500
Other liabilities 217 - 217
Total current liabilities 371,267 65,253 436,520
Noncurrent liabilities:
Notes payable(note 10) - 25,001 25,001
Total liabilities 371,267 90,254 461,521
Net Position
Net investment in capital assets 2,170,102 1,343,752 3,513,854
Unrestricted 391,695 611,703 1,003,398
Total net position $ 2,561,797 $ 1,955,455 $ 4,517,252
See accompanying notes to the basic financial statements.
-45 -
COUNTY OF HAWAII
Proprietary Funds
Statement of Revenues,Expenses,and Changes in Fund Net Position
For the Fiscal Year Ended June 30,2022
Business-type Activities-
Enterprise Funds
Kulaimano Ouli Ekahi
Elderly Affordable
Housing Housing
Project Project Total
Operating revenues:
Rental receipts from tenants $ 143,386 $ 349,983 $ 493,369
Rental subsidy from federal government- HUD 277,837 - 277,837
Laundry receipts 4,235 - 4,235
Other - 2,868 2,868
Total operating revenues 425,458 352,851 778,309
Operating expenses:
Utilities 49,482 64,880 114,362
General and administration 178,175 191,142 369,317
Maintenance and repairs 55,723 37,309 93,032
Depreciation(note 6) 103,139 32,101 135,240
Total operating expenses 386,519 325,432 711,951
Operating income 38,939 27,419 66,358
Nonoperating revenues(expenses):
Investment income 426 10 436
Interest expense (16,503) - (16,503)
Total nonoperating revenues(expenses) (16,077) 10 (16,067)
Capital contributions
Transfers 148,115 27,766 175,881
Change in net position 170,977 55,195 226,172
Net position,beginning of fiscal year 2,390,820 1,900,260 4,291,080
Net position,end of fiscal year $ 2,561,797 $ 1,955,455 $ 4,517,252
See accompanying notes to the basic financial statements.
-46-
COUNTY OF HAWAII
Proprietary Funds
Statement of Cash Flows
For the Fiscal Year Ended June 30,2022
Business-type Activities-
Enterprise Funds
Kulaimano Ouli Ekahi
Elderly Affordable
Housing Housing
Project Project Total
Cash Flows from Operating Activities
Receipts from tenants $ 156,217 $ 349,452 $ 505,669
Receipts from federal government-HUD 277,837 - 277,837
Payments to suppliers for goods and services (287,991) (304,138) 592,129)
Net cash provided by operating activities 146,063 45,314 191,377
Cash Flows from Noncapital Financing Activities
Transfers out to other funds (91,838) - (91,838)
Net cash used in noncapital financing activities (91,838) - (91,838)
Cash Flows from Capital and Related Financing Activities
Principal paid on notes payable - (59,190) (59,190)
Purchase of capital assets (3,655) (3,862) (7,517)
Net cash used in capital and related financing activities (3,655) (63,052) (66,707)
Cash Flows from Investing Activities
Proceeds from maturities of investments 1,200,000 - 1,200,000
Purchase of investments (1,200,000) - (1,200,000)
Interest on investments 440 10 450
Net cash provided by investing activities 440 10 450
Net increase(decrease)in cash and cash equivalents 51,010 (17,728) 33,282
Cash and cash equivalents at beginning of fiscal year(including
restricted cash and cash equivalents) 703,758 665,319 1,369,077
Cash and cash equivalents at end of fiscal year(including
restricted cash and cash equivalents) $ 754,768 $ 647,591 $ 1,402,359
Reconciliation of Operating Income to Net Cash
Provided by Operating Activities
Operating income $ 38,939 $ 27,419 $ 66,358
Adjustments to reconcile operating income to net cash
provided by operating activities:
Depreciation expense 103,139 32,101 135,240
Change in assets and liabilities:
Receivables,net (1,640) 1,270 (370)
Prepaid expenses (723) - (723)
Accounts and other payables 3,481 (10,907) (7,426)
Deferred revenue 2,867 (4,569) (1,702)
Net cash provided by operating activities $ 146,063 $ 45,314 $ 191,377
Supplemental Disclosure of Noncash Capital and Related
Financing Activities
Capital contributions $ 148,115 $ 27,766 $ 175,881
See accompanying notes to the basic financial statements.
-47-
COUNTY OF HAWAII
Fiduciary Funds
Statement of Fiduciary Net Position
June 30,2022
Private-
Purpose Custodial
Trusts Funds
Assets
Cash and cash equivalents(note 3) $ 596,273 $ 5,249,865
Investments(note 3) 1,849,511 -
Receivables:
Due from other custodial funds - 2,975
Other receivables - 91,347
Total receivables - 94,322
Total assets 2,445,784 5,344,187
Liabilities
Accrued liabilities - 2,201,851
Due to other custodial funds - 2,975
Advances payable - 34,677
Total liabilities - 2,239,503
Net Position
Held in trust for other parties 2,445,784 3,104,684
Total net position $ 2,445,784 $ 3,104,684
See accompanying notes to the basic financial statements.
-48 -
COUNTY OF HAWAII
Fiduciary Funds
Statement of Changes in Fiduciary Net Position
For the Fiscal Year Ended June 30,2022
Private-
Purpose Custodial
Trusts Funds
Additions
Tax collections for state $ - $ 26,884,300
Special assessment collections - 1,182,989
Developer deposit - 161,609
Employee collections - 406,735
Lapsed checks - 69,216
Collections from vehicle registrations and licenses - 175,391
Investment earnings(losses) (211,901) 114
Total additions (211,901) 29,880,354
Deductions
Grant payments 145,438 -
Payment of taxes to state - 25,836,430
Payments to state,not for profits and
improvement district - 1,023,692
Contributions to debt repayment - 207,096
Administrative charges - 1,094,523
Community facility district expenses - 136,691
Reissuance of checks - 5,066
Reimbursements to employees - 394,201
Investment Fees 16,489 -
Other - 17,527
Total deductions 161,927 28,715,226
Change in net position (373,828) 165,128
Net position,beginning of fiscal year 2,819,612 2,939,556
Net position,end of fiscal year $ 2,445,784 $ 3,104,684
See accompanying notes to the basic financial statements.
-49-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
The accounting policies of the County of Hawaii(the County) conform to U.S. generally accepted
accounting principles (GAAP) as applicable to local governmental units. The following notes to
the basic financial statements are an integral part of the County's Annual Comprehensive Financial
Report (ACFR).
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Financial Reporting Entity
The County has implemented Governmental Accounting Standards Board Statement No. 14,
The Financial Reporting Entity(GASB Statement No. 14), Statement No. 39,Determining
Whether Certain Organisations Are Component Units (GASB Statement No. 39) and
Statement No. 61, 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 in the County's basic financial statements.
Primary Government 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 Hawaii(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 amended, 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
management's professional judgment, that the inclusion of an organization that does not meet
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
the organization to provide specific financial benefits to, or impose specific financial burdens
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
burden relationship with the primary government if any one of three conditions exist: (1) The
primary government is legally entitled to or can otherwise access the organization's resources;
(2)The primary government is legally obligated or has otherwise assumed the obligation to
- 50 -
COUNTY OF HAWAI`I
Notes to the Basic Financial Statements
June 30,2022
finance the deficits of, or provide financial support to,the organization; or(3)The primary
government is obligated in some manner for the debt of the organization.
As required by GAAP as set forth in GASB Statement No. 14,No. 39 and No. 61,these basic
financial statements present the County of Hawaii (the primary government) and its
component unit, the Department of Water Supply(the Department). This component unit is
included in the County's reporting entity because of its financial relationship with the County.
Discretely Presented Component Unit The component unit column in the basic financial
statements includes the financial data of the Department, a legally independent agency of the
County that is accounted for as an enterprise fund. It is reported in a separate column to
emphasize that it is legally separate from the County. The members of the Water Board,the
governing body of the Department, are appointed by the Mayor of the County and confirmed
by the County Council. The Department is granted corporate powers by state statute and the
County 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 the 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 Kelcuana6`a Street, Suite 20,Hilo,
Hawai`i 96720.
Basic Financial Statements
The basic financial statements include both government-wide (based on the County as a
whole) and fund financial statements. Both the government-wide and fund financial
statements (within the basic financial statements) categorize primary activities as either
governmental or business-type. In the government-wide statement of net position,both the
governmental and business-type activities columns (a) are presented on a consolidated basis
by column, (b) and are reflected, on a full accrual, economic resource basis,which
incorporates long-term assets and receivables as well as long-term debt and obligations.
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
operating-specific and discretionary(either operating or capital) grants while the capital grants
column reflects capital-specific grants. The net cost(by function or business-type activity) is
normally covered by general revenues.
- 51 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
The government-wide focus is more on the sustainability of the County as an entity and the
change in aggregate financial position resulting from the activities of the fiscal period.
The fund financial statements' emphasis is on the major funds in either the governmental or
business-type categories. Nonmajor funds (by category) are summarized into a single column.
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 the 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 the 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 funds are presented in the fund financial statements by type(private
purpose and custodial). 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
statements.
Government-wide and fund financial statements—The government-wide financial
statements (i.e., the statement of net position and the 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 the
process of incorporating fund data but interfund services provided and used have not been
eliminated in the process of consolidation. Governmental activities,which normally 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.
- 52 -
COUNTY OF HAWAI`I
Notes to the Basic Financial Statements
June 30,2022
Separate financial statements are provided for governmental funds,proprietary funds, and
fiduciary funds, even though the latter are excluded from the government-wide financial
statements. Major individual governmental funds and major individual enterprise funds are
reported as separate columns in the fund financial statements.
Activities in funds—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—for State and Local Governments, sets forth minimum criteria (percentage of the
assets, deferred outflows of resources, liabilities, 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.
The County reports the following major governmental funds:
General Fund—The general fund is the general operating fund of the County. It is used
to account for all activities of the general government, except those required to be
accounted for in other funds.
Capital Projects Fund—Used to account for the costs of constructing County capital
improvements financed with general obligation bond proceeds, federal and state grants,
and general and special revenue fund revenues. 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.
General Excise Tax Fund—The General Excise Tax(GET)is used to account for the
general excise tax and use surcharge as authorized by sections 46-16.8,237-8.6,238-2.6,
and 248-2.6(d)Hawaii Revised Statutes and the related authorized uses of such funds,
including operating or capital costs of public transportation with the county for public
systems.
The County reports the following major proprietary funds:
Kula`imano Elderly Housing Project—Used to account for the operation of a rental
housing project for low-income senior citizens located north of Hilo.
- 53 -
COUNTY OF HAWAI`I
Notes to the Basic Financial Statements
June 30,2022
Ouli Ekahi Affordable Housing Project—Used to account for the operation of a 33-unit
single-family affordable rental housing project located in Waimea.
The County reports the following fiduciary funds:
Private-Purpose Trust Funds—Used to account for investment income on funds
received from import businesses at the port of Hilo and the related expenditures to
promote health and safety on the Island of Hawaii.
Custodial Funds—Used to account for assets held by the County for other governmental
units and individuals. The custodial funds are custodial in nature and do not involve
measurement of results of operations. The County has the following custodial funds:
• State Weight Tax Fund
• Improvement District No. 18 Fund
• Improvement District No. 19 Fund
• Improvement District No. 20 Fund
• Improvement District Revolving Fund
• Performance and Refundable Deposits Fund
• Flexible Spending Account
• Lapsed Warrants Fund
• Non-Profit License Plates Fund
• Organ and Tissue Education Fund
• Business Improvement District 1-Kailua
Basis of Accounting
Basis of accounting refers to the period in which revenues and expenditures (or expenses) are
recognized in the accounts and reported in the basic financial statements. Basis of accounting
relates to the timing of the measurements made,regardless of the measurement focus applied.
The government-wide financial statements and the proprietary, fiduciary and component unit
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.
Accrual Basis-Revenues are recognized when earned and expenses are recognized when the
related obligation is incurred.
Modified Accrual Basis-Revenues are recorded when susceptible to accrual(that is,both
measurable and available). "Measurable" means the amounts are determinable. "Available"
means the amounts are collectible within the current period or soon enough thereafter(one
year for intergovernmental revenues)to be used to pay liabilities of the current period.
- 54 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
Licenses and permits, charges for current services, fines and forfeitures,penalties and
miscellaneous revenues are recorded as revenues when received in cash because they are
generally not measurable until actually received. Real property taxes and State Revolving
Fund loan proceeds are considered available when collected.
In applying the susceptible to accrual concept to intergovernmental revenues, the legal and
contractual requirements of the numerous individual programs are used as guidance. There
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
operating grants fall into this category. In the other,monies are virtually unrestricted as to
purpose of expenditure and are usually revocable only for failure to comply with prescribed
compliance requirements. These resources are reflected as revenues at the time of receipt or
earlier if the susceptible to accrual criteria are met.
The County reports deferred 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 revenue recognition 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
postelosure 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
Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained
in Pre-November 30, 1989 FASB (Financial Accounting Standards Board) and AICPA
(American Institute of Certified Public Accountants) Pronouncements.
Encumbrances
The general, special revenue, and capital projects funds follow encumbrance accounting under
which purchase orders, contracts and other commitments are recorded as an obligation of fund
balance and provide authority for the carryover of appropriations to the subsequent year in
order to complete these transactions. Encumbrances outstanding at year-end are 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.
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COUNTY OF HAWAI`I
Notes to the Basic Financial Statements
June 30,2022
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.
Investments consist of certificates of deposit,repurchase agreements, and securities with
original maturities exceeding three months. These include participating investment contracts
(U.S. government sponsored agency issues and negotiable certificates of deposit) as well as
nonparticipating investment contracts (time certificates of deposit and repurchase agreements).
Both 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 Mac) are based on quoted
market rates. Investments also consist of equity securities in the fiduciary fund financial
statements. These investments are stated at fair value based on closing quoted prices.
Real Property Taxes
The County's real property taxes are levied on July 1 each year on assessed valuation as of
January 1. The taxes become a lien on the property assessed as of the levy date. Taxes are
due and payable in two equal annual installments on August 20 and February 20. Accordingly,
real property taxes receivable as of June 30 are delinquent. Each delinquent installment bears
interest at 1%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 Hawaii 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
growth. A qualified business in an enterprise zone must satisfy the requirements of Chapter 31
of the Hawaii County Code and section 208E, Hawaii Revised Statutes.
Historic Residential Dedication Exemption—Section 19-89.1 of the Hawaii County Code
and Rule 36 of the Rules and Regulations of the Director of Finance provides an exemption to
encourage the preservation of residential structures that have been placed on the Hawaii
Register of Historic Places after January 1, 1977. The property owner must provide visual
access on a year-round basis or open the property to the public for twelve days per year. The
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,
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COUNTY OF HAWAI`I
Notes to the Basic Financial Statements
June 30,2022
automatically renewable indefinitely. Cancellation of the dedication by either the owner or
the Director of Finance may only be made upon five years' written advance notice and no
earlier than the end of the fifth tax year.Any person who becomes an owner of the dedicated
real property shall be subject to the restrictions and retroactive tax assessment provisions. If
the dedication is approved,the exemption based upon the dedication shall be effective July 1
of the tax year following the approval of the dedication. The dedicated exempt property or
portion of the property approved shall be subject to the minimum tax provisions of Section 19-
90(e) of the Hawaii County Code. If there is a breach in the agreement,the property would be
subject to roll back taxes,including penalty and interest.
Low and Moderate-Income Housing Exemption—Section 19-87 of the Hawaii 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 elderly,handicapped,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 Hawaii
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 the 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
along with a plot plan and provide details as to what agricultural activities is conducted on the
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.
Commercial Agricultural Use Dedication—Section 19-60 of the Hawai`i County Code and
Rule 31 of the Rules and Regulations of the Director of Finance provides reduced assessments
to encourage local agricultural production as well as the preservation of agricultural lands that
could otherwise be further developed,by valuing the dedicated lands at the agricultural use
value as opposed to the market value. An application form must be filed along with a plot
plan and provide details as to what agricultural activities is conducted on the property. Upon
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COUNTY OF HAWAI`I
Notes to the Basic Financial Statements
June 30,2022
review and approval,the owner is required to record the dedication at the Bureau of
Conveyances. There is currently only one available dedication length which is a 10 year
period,however,previously there was a 20 year dedication. This dedication does not
automatically renew. Valuation consideration is given to the type of agricultural activity.
Any breach to the terms of the recorded dedication would result in the cancellation of the
dedication, or portion thereof, and the immediate rollback calculation of taxes plus penalties
and interest.
Solar Water Heater Credit- Section 19-104 of the Hawaii County Code provides a one time
tax credit per tax map key for up to $300 for the owner of real property who installs a solar
water heater on the owner's property on or after January 1,2008. This program was created
with the purpose of providing an incentive to support renewable energy. The owner must
apply for the credit.
Information relevant to the disclosure of these programs for the fiscal year ended June 30,
2022 is as follows:
Tax Abatement Program Amount of Taxes Abated- as defined by GASB 77
Enterprise Zone $1,900
Historic Residential Dedication $316,878
Low and Moderate Income Housing $1,012,105
Agricultural Use Programs $29,794,389
Solar Water Heater Credit $27,693
Inventories
Inventories consist of materials and supplies and are reported as expenditures at the time of
consumption(consumption method). Police and fire department inventories are stated using
the first in, first out(FIFO)method. Other inventories are stated at average cost.
Liquor Control
Section 281 of the Hawaii Revised Statutes requires that liquor license revenues collected be
used only for costs and expenses directly relating to operational and administrative costs
actually incurred by the liquor commission collecting such fees. The unexpended fees at
June 30,2022 of$996,415 are reflected as a restriction of general fund balance.
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COUNTY OF HAWAI`I
Notes to the Basic Financial Statements
June 30,2022
Capital Assets
Capital assets,which include property,plant, equipment, and infrastructure assets (e.g.,roads,
bridges, curbs and gutters, streets and sidewalks, drainage systems,lighting systems, and
similar items), are reported in the applicable governmental or business-type activities columns
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.
The costs of normal maintenance and repairs that do not add to the value of the asset or
materially extend the life of the asset are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed.
Capital assets of the primary government and enterprise fund are depreciated or amortized
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
Right to use leased assets Dependent on terms of lease agreement
Deferred Outflows of Resources and Deferred Inflows of Resources
Deferred outflows of resources represent a consumption of net assets that applies to future
periods and will not be recognized as an outflow of resources (expense or expenditure) until
that time. The County has three items that qualifies for reporting in this category. The County
reports the deferred loss on refunding and deferred outflow related to both pensions and other
postemployment benefits (OPEB) as a deferred outflow of resources in its statement of net
position.
Deferred inflows of resources represent an acquisition of net assets that applies to future
periods and will not be recognized as an inflow of resources (revenue)until that time. Property
taxes, fees,lease rental income and other non-exchange transactions received in the current
fiscal year for the ensuing fiscal year are reported as deferred inflows of resources. These
amounts are deferred and recognized as an inflow of resources in the period that the amounts
become available. The County also reports deferred inflows of resources related to both
pensions and other postemployment benefits (OPEB).
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COUNTY OF HAWAI`I
Notes to the Basic Financial Statements
June 30,2022
Long-term Obligations
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
funds 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 off
instead of overtime pay. The time off is earned at the rate of one-and-a-half hours for each
hour of overtime worked. There is no statutory limit to the amount of compensatory time off
an employee can accumulate. Both compensatory time off and vacation credits are converted
to pay upon termination of employment.
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 along
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, 2022 totaled$76,368,000 for the primary government.
Leases
The financial statements reflect both a long-term lease liability and right to use asset at the
present value of payments expected to be made under the lease agreement. However, if the
lease agreement involves the asset's transfer of ownership to the County at the end of the
contract,the agreement has been recognized as a financed purchase and accounted for
accordingly.
For those leases in which the County leases real property to others,the County has recognized
a receivable and a deferred inflow of resources at the present value of payments expected to be
received under the lease agreement.
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COUNTY OF HAWAI`I
Notes to the Basic Financial Statements
June 30,2022
Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and
deferred inflows of resources related to pensions, and pension expense,information about the
fiduciary net position of the Employees' Retirement System of the State of Hawaii (ERS) and
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
refunds of employee contributions) are recognized when due and payable in accordance with
the benefit terms. Investments are reported at fair value.
Other Postemployment Benefits (OPEB)
For the purposes of measuring the net OPEB liability, deferred outflows or resources and
deferred inflows of resources related to OPEB, and OPEB expense, information about the
fiduciary net position of the Hawaii Employer-Union Health Benefits Trust Fund("EUTF")
and additions to/deductions from EUTF's fiduciary net position have been determined on the
same basis as they are reported for EUTF. For this purpose, EUTF recognizes benefit
payments when due and payable in accordance with the benefit terms. Investments are
reported at fair value, except for investments in commingled and money market funds,which
are reported at net asset value (NAV). The NAV is based on the fair value of the underlying
assets held by the respective fund less its liabilities.
Operating Revenues and Expenses
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, lease rent, and maintenance and repairs; administrative expenses; and depreciation on
capital assets. All revenues and expenses not meeting these definitions are reported as
nonoperating revenues and expenses.
Use of Estimates
The preparation of the basic financial statements in accordance 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
reported amounts of revenues, expenditures, and other financing sources and uses during the
reporting period. Actual results could differ from those estimates.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
Fund Balances
When both restricted and unrestricted fund balances are available for use, it is the County's
policy to use restricted fund balance first,then unrestricted fund balance. Furthermore,
committed fund balances are reduced first, followed by assigned amounts, and then
unassigned amounts when expenditures are incurred for purposes for which amounts in any of
those unrestricted fund balance classifications can be used.
The County reports the following classifications:
Nonspendable Fund Balance—Nonspendable fund balances are amounts that cannot be
spent because they are either not in spendable form, or, for legal or contractual reasons,
must be kept intact. The County has inventory and prepaids included in their
nonspendable fund balance.
Restricted Fund Balance—Constraints placed on the use of these resources are either
externally imposed by creditors (such as through debt covenants), grantors, contributors
or other governments or are imposed by law(under the Hawaii Revised Statutes or
County of Hawaii Charter).
Committed Fund Balance—Committed Fund Balances are amounts that can only be used
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.
Assigned Fund Balance—Assigned fund balances are amounts that are constrained by the
County's intent as determined by the Mayor but are neither restricted nor committed.
The County's only assigned fund balances are in the General Fund and Capital Projects
Fund and the majority consists of the portion of fund balance that is intended to balance
the subsequent year's budget,which is conveyed by the Mayor via his approval of
allotment requests and his approval of the current year's fund balance amount to be
included in the submittal for next year's annual budget ordinance.
Unassigned 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.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
The category of Other for the Restricted, Committed and Assigned fund balances on the
Governmental Funds Balance Sheet include funds restricted for the purposes of housing and
rental assistance;parks and recreation projects; general and public safety facilities; liquor
control; taxicab investigations; special duty officers and sewer loan programs.
Net Position
When both restricted and unrestricted net position are available for use,it is the County's
policy to use restricted net position first, and then unrestricted net position.
New Accounting Pronouncements
In June 2017, GASB issued Statement No. 87,Leases. The objective of this Statement is to
better meet the information needs of financial statement users by improving accounting and
financial reporting for leases by governments. The requirements of this Statement are
effective for reporting periods beginning after June 15, 2021. The County has fully
implemented the requirements in the current fiscal year.
In June 2018, GASB issued Statement No. 89,Accounting for Interest Cost Incurred Before
the End of a Construction Period. The objectives of this Statement are(1) to enhance the
relevance and comparability of information about capital assets and the cost of borrowing for
a reporting period and(2) to simplify accounting for interest cost incurred before the end of a
construction period. The requirements of this Statement are effective for reporting periods
beginning after December 15, 2020, as postponed by GASB 95. Management has determined
that this Statement does not have a material impact on the County's financial statements.
In May 2019, GASB issued Statement No. 91, Conduit Debt Obligations. The objectives of
this Statement are to provide a single method of reporting conduit debt obligations by issuers.
The requirements of this Statement are effective for reporting periods beginning after
December 15,2021. The County has not yet determined the effect this Statement will have on
its financial statements.
In January 2020, GASB issued Statement No. 92, Omnibus 2020. The objective of this
Statement are to enhance comparability in accounting and financial reporting and to improve
the consistency of authoritative literature. The requirements of this Statement relating to
leases, reinsurance recoveries, and derivative instruments are effective upon issuance. The
other requirements are either effective for fiscal years or reporting periods beginning after
June 15, 2021. Management has determined that this Statement does not have a material
impact on the County's financial statements.
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COUNTY OF HAWAI`I
Notes to the Basic Financial Statements
June 30,2022
In March 2020, GASB issued Statement No. 93,Replacement oflnterbank Of Rates.
The objective of this Statement are to address accounting and financial reporting implications
resulting from the replacement on an interbank offered rate (IBOR). Certain sections of the
requirements of this Statement are effective beginning with reporting periods that begin after
June 15, 2021. Management has determined that this Statement does not have a material
impact on the County's financial statements.
In March 2020, GASB issued Statement No. 94,Public-Private and Public-Public
Partnerships and Availability Payment Arrangements. The objective of this Statement is to
improve financial reporting by addressing issues related to public-private and public-public
partnership arrangements. The requirements of this Statement are effective for fiscal years
beginning after June 15,2022. The County has not yet determined the effect this Statement
will have on its financial statements.
In May 2020, GASB issued Statement No. 96,Subscription-Based Information Technology
Arrangements. The objective of this Statement is to provide uniform guidance for accounting
and financial reporting for transactions that meet the definition of a subscription-based
information technology arrangement. The requirements of this Statement are effective for
fiscal years beginning after June 15,2022. The County has not yet determined the effect this
Statement will have on its financial statements.
In June 2020, GASB issued Statement No. 97, Certain Component Unit Criteria, and
Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred
Compensation Plans—An Amendment of GASB Statements No. 14 and No. 84, and a
Supersession of GASB Statement No. 32. The primary objective of this Statement is to create
more consistent financial reporting of defined contribution pension plans, defined contribution
OPEB plans and other employee benefit plans,while mitigating associated costs. The
requirements of this Statement are effective for reporting periods beginning after June 15,
2021. Management has determined that this Statement does not have a material impact on the
County's financial statements.
In April 2022, GASB issued Statement No. 99, Omnibus 2022. The primary objectives of this
Statement are to enhance comparability in accounting and financial reporting and to improve
the consistency of authoritative literature as contained in GASB Statement No. 53, 87, 94 and
96. Certain requirements are effective upon issuance and management has determined that
these do not have a material impact on the County's financial statements. The remaining
requirements of this Statement are effective for fiscal years beginning after June 15, 2022 and
2023. The County has not yet determined the effect that the remaining requirements of this
Statement will have on its financial statements.
In June 2022, GASB issued Statement No. 100,Accounting Change and Error Corrections.
The objective of this Statement is to enhance accounting and financial reporting requirements
for accounting changes and error corrections to provide more understandable,reliable,
relevant, consistent, and comparable information. The requirements of this Statement are
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COUNTY OF HAWAI`I
Notes to the Basic Financial Statements
June 30,2022
effective for fiscal years beginning after June 15, 2023. The County has not yet determined
the effect this Statement will have on its financial statements.
In June 2022, GASB issued Statement No. 101, Compensated Absences. The objective of this
Statement is to better meet the information needs of financial statement users by updating the
recognition and measurement guidance for compensated absences. The requirements of this
Statement are effective for fiscal years beginning after December 15, 2023. The County has
not yet determined the effect that this Statement will have on its financial statements.
Adoption of New Accounting Principle
The County and Department implemented GASB Statement No. 87,Leases. The principal
objective of this Statement is to better meet the information needs of financial statement users
by improving accounting and financial reporting for leases by governments. As a result of this
new Statement,the County recognized its leases as lessor by recording a lease receivable and
deferred inflow of resources $1,000,984, $589,712, and$1,648,468 in the General Fund,
Hawaii County Housing Agency and Golf Course Fund,respectively. To record its leases as
lessee,the County recognized expenditures and other financing source in the governmental
funds totaling $19,315,930,were then recognized as a right to use asset and a long-teen lease
liability or equipment and a long-term other financing agreement liability,respectively, in the
Statement of Net Position. Also, as a result of GASB 87, a total of$799,636 was transferred
from equipment to right to use assets,with a corresponding $602,487 in accumulated
amortization for leases that were previously recognized as capital leases prior to the
implementation of GASB 87.
As a result of implementing GASB 87, the Department recognized its leases as lessor by
recording a lease receivable and corresponding deferred inflow of$2,640,583. To recognize
its lease as lessee,the Department recorded right to use lease assets and leases payable of
$261,060.
2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
Annual Budget
The County follows these procedures in establishing its operating and capital budgets:
• On or before March 1, the Mayor submits to the County Council proposed operating and
capital projects budgets for the fiscal year commencing the following July 1. The
operating budget includes proposed expenditures for the general fund and special revenue
funds, and the means of financing them. A project-length budget is submitted to the
County Council for the capital projects fund.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
• The Mayor submits to the County Council amendments to the proposed operating and
capital budgets within ten working days after the close of the state legislature,but not
later than May 5.
• The County Council conducts public hearings on the proposed operating and capital
budgets after March 1 but prior to the first reading on the budget bills,which must be
after May 5.
• On or before June 30, the County Council adopts the budgets. The legal level of
budgetary control is the department level because the Mayor can transfer funds from any
unencumbered appropriation to another within a department or agency without County
Council approval. During the year,the budget may be amended by action of the County
Council, except for appropriations required by law and appropriations for debt service,
which may not be decreased or deleted. Supplemental appropriations were made during
the 2021-22 fiscal year to recognize revenue from sources not anticipated at the time of
the original budget and to establish the authorization for such funds to be expended.
Such supplemental appropriations totaled$77.9 million in the general fund and$36.7
million in the special revenue funds. Legally adopted budgets include the General Fund,
Highway Fund, Sewer Fund, Solid Waste Fund, Cemetery Fund,Parking Meter Fund,
Vehicle Disposal Fund, Bikeway Fund,Workforce Investment Act Fund, Golf Course
Fund, Geothermal Relocation and Community Benefits Fund, Beautification Fund,
Hawaii County Housing Agency Fund,Park Dedication Fund, General Excise Tax Fund,
Short-Term Vacation Rental Enforcement Fund, and Geothermal Asset Fund.
• Appropriations for the operating budget lapse at the end of the fiscal year to the extent
that they have not been expended or encumbered. Appropriations for capital
expenditures that are not encumbered lapse at the end of two fiscal years following the
fiscal year that the appropriation was made.
• Formal budgetary integration is employed as a management control device during the
year for the General Fund, special revenue funds, and Capital Projects Fund. Formal
budgetary integration is not employed for debt service funds because effective budgetary
control is alternatively achieved through general obligation bond indenture provisions.
• 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
applied 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, intergovernmental revenues are recognized when awarded by the granting agency,
encumbrances and unexpended allotments are treated as expenditures, accounts payable
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.
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COUNTY OF HAWAI`I
Notes to the Basic Financial Statements
June 30,2022
Budget to GAAP Reconciliation
The following is a summary of the adjustments necessary to convert fund balances of the
County's General Fund and General Excise Tax Fund from a GAAP basis to a budgetary basis
at June 30, 2022:
General Excise
General Fund Tax Fund
Ending fund balance—GAAP basis $ 111,559,797 S67,162,304
Encumbrance adjustments:
Beginning encumbrances and unexpended allotments 3,204,431 1,455,723
Ending encumbrances and unexpended allotments (6,620,227) (4,521,049)
Other adjustments (1,928,555) 4,517
Ending fund balance—Non-GAAP budgetary basis S 106,215.446 ShALal.495
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 Hawaii 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.
Cash
The County maintains a number of checking and savings accounts for various funds and with
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.
The carrying amount of the County's deposits (cash,time certificates of deposit, and money
market accounts) as of June 30, 2022 was $428,318,011 for the primary government and
$5,846,138 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 the primary government and
fiduciary funds amounted to $447,090,682 at June 30, 2022. Of that amount, $445,479,163
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$1,611,519
represent deposits held by a management agent and were uncollateralized. Accordingly,these
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COUNTY OF HAWAI`I
Notes to the Basic Financial Statements
June 30,2022
deposits were exposed to custodial credit risk. Custodial credit risk is the risk that in the 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 the
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.
Investments
The County holds investments both for its own benefit and on behalf of some of the fiduciary
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),repurchase agreements and certificates of deposit, while the fiduciary funds also
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 the 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 1 —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 or liability take place with sufficient frequency
and volume to provide pricing information on an ongoing basis.
Level 2—Inputs other than quoted prices included within level 1 that are observable for
an asset or liability, either directly or indirectly. If the asset or liability has a specified
(contractual)term, a level 2 input must be observable for most of the full term of the asset
or liability.
Level 2 inputs include:
• Quoted prices for similar assets or liabilities in active markets,
• 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 market
data by correlation or other means.
Level 3 —Inputs are unobservable for an asset or liability.
- 68 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
Following is a description of the valuation techniques used by the County to measure fair
value:
Government sponsored securities of$10,247,496 and certificates of deposits of
$8,228,786: Valued using quoted prices at the end of the fiscal year for identical or
similar assets in markets that are not active (Level 2).
Equity securities of$1,849,511: Valued using quoted prices in active markets for
identical assets or liabilities that a government can access at the measurement date (Level
1).
The County's investments and maturities at June 30,2022 are as follows:
Maturity (in years)
Fair Value Less than 1 1 —5
Investments—Primary Government:
Certificates of deposit $ 8,228,786 $ 4,946,773 $ 3,282,013
Government sponsored securities 10,247,496 -- 10,247,496
$ 18,476,282 $ 4,946,773 $13,529,509
Investments—Private-Purpose Trusts:
Equity securities S 1,849,511 $ 1,849,511 $ --
Interest Rate Risk: The County minimizes its exposure to interest rate risk by limiting the
maturities of investments to five years or less in compliance with state statute. The County's
policy is to hold investments until maturity and does not engage in trading for capital gains.
Credit Risk: The County's investment portfolio primarily consists of U.S. government or
agency obligations, bonds of government sponsored enterprises,time certificates of deposit
and repurchase agreements. These investments are either insured by the FDIC, secured by
collateral or carry a credit rating equivalent to U.S. Treasuries.
Custodial Risk: Custodial risk is the risk of loss from the failure of the counterparty,which is
defined as any entity that obtained an investment on behalf of the County. All of the County's
deposits including repurchase agreements are secured by collateral which is kept by a third
party custodian. Broker-dealers utilized by the County are members of the Securities Investor
Protection Corporation, and all investment securities are held in the County's name.
Concentration of Credit Risk: State law limits deposits to no more than 60% of the total in
any one depository. The County seeks to further diversify its portfolio by purchasing from
different issuers,by purchasing different types of investments and by purchasing investments
at different maturities. The County also purchases its investments from a number of banks
and broker-dealers both located locally and on the mainland. As of June 30, 2022,
- 69 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
investments were distributed as follows: FTN Financial, 0.1%; Multi Bank Securities,4.3%;
First Hawaiian Bank,4.4%; Raymond James, 1.2%; Stifel Nicolaus & Company, 2.4%; Bank
of Hawaii, 34.5%; Territorial Savings 41.0%; and Hawaii National Bank, 12.1%.
Restricted Cash and Cash Equivalents and investments
Cash and cash equivalents and investments classified as restricted assets for the primary
government at June 30, 2022 amounted to $251,875,408.
Construction related contributions restricted to various capital improvement projects and fuel
tax funds received are recorded as restricted assets in the Capital Projects Fund. Such funds
totaled$71,752,338 at June 30, 2022.
Cash and investments in the Bond Redemption Fund and the interest Fund are restricted to
debt service related payments and amounted to $46,802,443.
Cash in the Highway Fund, Bikeway Fund, General Excise Tax and Beautification Fund are
restricted to costs incurred relating to highways and streets and the beautification of such
items and amounted to $85,936,864.
Cash in the Hawaii County Housing Agency and Short-term Vacation Rental Enforcement
Fund classified as restricted to provide public housing assistance and housing rules
enforcement amounted to $14,112,011.
Cash and investments in the Geothermal Asset Fund classified as restricted to compensating
persons impacted by geothermal energy development activities amounted to $2,320,566.
The restricted cash in the General Fund was comprised of cash restricted to costs incurred to
administer the liquor commission; cash restricted to the acquisition and maintenance of lands
or property entitlements for public outdoor recreation and education and cash and investments
restricted for disasters and emergencies. Such amounts totaled$996,415; $23,999,485 and
$5,838,933,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 $13,190 and$30,461,respectively, at June 30, 2022.
An operating reserve fund was established by the Ouli Ekahi Affordable Housing Project
pursuant to an agreement with the Hawaii Housing Finance and Development Corporation,
who are the holders of the project's note. This restricted reserve amounted to $72,702 at June
30, 2022.
- 70 -
COUNTY OF HAWAI`I
Notes to the Basic Financial Statements
June 30,2022
4. RECEIVABLES
Receivables as of June 30, 2022, for the County's individual major funds and other funds in
the aggregate,including the applicable allowances for uncollectible accounts, are as follows:
Governmental activities:
Capital General Other
General Projects Excise Governmental
Fund Fund Tax Fund Funds Total
Real property taxes $39,820,864 $ -- $ -- $ -- $ 39,820,864
Transient
Accommodations
Tax 4,760,256 -- -- -- 4,760,256
Accounts receivable:
Sewer -- -- -- 3,160,629 3,160,629
Solid waste -- -- -- 1,207,913 1,207,913
Intergovernmental 30,989,707 10,691,517 22,817,589 3,901,589 68,400,402
Gross receivables 75,570,827 10,691,517 22,817,589 8,270,131 117,350,064
Less: allowance for
uncollectibles (8,834,780) -- -- (981,849) (9,816,629)
Net total receivables 66,736.047 10,691, 117 $22,817,589 S 7,288,282 $107,533,435
During fiscal year 2005, the County issued$3,887,493 in general obligation bonds on behalf
of Improvement District No. 18, a custodial fund. On February 12, 2013 bonds were issued to
refund the outstanding principal balance of$1,345,945 for the Improvement District. During
fiscal year 2014 and 2015,the County also issued$448,669 and $720,331,respectively,in
general obligation bonds on behalf of Improvement District No. 19, a custodial fund. During
fiscal year 2021,the County issued$2,437,000 in general obligation bonds on behalf of
Improvement District No. 20, a custodial fund. At June 30, 2022, the outstanding balance for
the Improvement.Districts of$4,094,716 is reflected in the government-wide statement of net
position as a receivable(see Note 10).
Business-type activities:
Enterprise
Funds
Accounts receivable:
Rent $ 16,722
Other 525
Gross receivables 17,247
Less: allowance for
uncollectibles 100
Net total receivables 17 147
- 71 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
Lease Receivable
The County has entered into several agreements with third parties in which they have been
given the right to use certain assets owned by the County for specified periods of time in
exchange for monetary compensation. These assets include land and buildings and the
original terms of the leases range from 2 to 50 years with varying payment terms and
requirements. For the fiscal year ending June 30, 2022, the County recognized $150,532 in
lease revenue and$47,431 in interest revenue.
Balance Balance Due Within
July 1,2021 Additions Deletions June 30,2022 One Year
Fund:
General Fund $ -- $ 1,000,984 $ (61,150) $ 939,834 $ 62,569
Golf Course Fund -- 1,648,468 (53,721) 1,594,747 194,563
Hawaii County
Housing Agency -- 589,712 (35,6611 554,051 36,490
Total -- 3,239,164 (150,532) S 3,088,632 S 293, 222
The following are the lease receivable payments due in the upcoming years:
Fiscal year ending June 30: Principal Interest
2023 $ 293,622 $ 68,041
2024 295,925 61,263
2025 304,006 54,367
2026 309,530 47,296
2027 317,013 40,097
2028-2032 987,113 117,786
2033-2037 309,370 46,816
2038-2042 214,478 19,805
2043-2047 57,575 996
Total 3.088.632S4a6-467
- 72 -
COUNTY OF HAWAI`I
Notes to the Basic Financial Statements
June 30,2022
5. INTERFUND RECEIVABLES AND PAYABLES
Interfund receivables and payables consist of the following at June 30, 2022:
Receivable Fund Payable Fund Amount
General fund Capital projects fund $ 211,325
General excise tax fund 10,146
Other governmental funds 2,182,151
2,403,622
Capital projects fund General fund 58,384
Other governmental funds 1,398,398
1,456,782
General excise tax fund General fund 72,800
Other governmental funds 69,253
142,053
Other governmental funds General fund 539,013
Capital projects fund 326,576
General excise tax fund 14,215
Other governmental funds 395,188
1,274,992
Total $5,277,449
Other governmental funds Enterprise funds $ 329,971
The above Interfund balances result from the time lag between the dates that interfund goods
and services are provided or reimbursable expenditures occur, transactions are recorded, and
payment between funds are made.
Transfers for the fiscal year ended June 30, 2022 consisted of the following:
Transfers Out:
Capital General Other
General Projects Excise Governmental
Fund Fund Tax Fund Funds Total
Transfers in:
Capital Projects Fund $ 41,384 $ -- $ 9,586,854 $ 3,839,898 $13,468,136
Other governmental
funds 70,498,541 -- 8,400,000 302,220 79,200,761
70.539.925 -- 17,986,854 S 4,142,118 $92,668,897
The Interfund transfers noted above include transfers from the General Fund to provide
support for various County programs and to provide resources for the payment of debt
services. In addition, some of the other governmental funds have made transfers to the capital
projects fund for the construction of various projects.
- 73 -
COUNTY OF HAWAI`I
Notes to the Basic Financial Statements
June 30,2022
6. CAPITAL ASSETS
Capital asset activity for the fiscal year ended June 30, 2022 for the County was as follows:
Balance Balance
July 1, Retirements/ June 30,
2021 Additions Transfers 2022
Governmental activities:
Capital assets not being depreciated:
Land and
improvements $ 292,632,722 $ 18,297,939 $ -- $ 310,930,661
Easements 11,240,326 4,330,456 -- 15,570,782
Construction work in
progress 74,050,724 42,722,863 (19,873,857) 96,899,730
Total capital assets not
being depreciated 377,923,772 65,351,258 (19,873,857) 423,401,173
Capital assets being depreciated:
Buildings and
improvements 809,369,560 18,245,626 (1,376,110) 826,239,076
Equipment 182,529,653 8,560,738 (6,205,278) 184,885,113
Easements 456,639 -- -- 456,639
Infrastructure 689,416,290 9,087,497 698,503,787
Total capital assets
being depreciated 1,69L772,142 35,893,861 (7,581,388) 1,710,084,615
Less accumulated depreciation for:
Buildings and
improvements (167,793,952) (13,809,682) 774,421 (180,829,213)
Equipment (116,958,103) (10,467,453) 5,675,965 (121,749,591)
Easements (456,540) (28) -- (456,568)
Infrastructure (392,305,475) (25,144,872) -- (417,450,347)
Total accumulated
depreciation (677,514,070) (49,422,035) 6,450,386 (720,485,719)
Total capital assets
being depreciated,
net 1,004,258,072 (13,528,174) (1,131,0021 989,598,896
- 74 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
Balance Balance
July 1, Retirements/ June 30,
2021 Additions Transfers 2022
Amortizable right to
use assets:
Land $ -- $ 772,132 $ -- $ 772,132
Buildings and
improvements -- 15,086,502 -- 15,086,502
Equipment -- 437,909 741,628 1,179,537
Total amortizable right
to use assets 16,296,543 741,628 17,038,171
Less accumulated
amortization for:
Land -- (79,801) -- (79,801)
Buildings and
improvements -- (1,855,307) -- (1,855,307)
Equipment -- (134,562) 548,376) (682,938)
Total accumulated
amortization -- (2,069,670) 193,252 (2,618,046)
Total right to use
assets being
amortized,net 14,226,873 193,252 14,420,125
Governmental
activities capital
assets,net $1,382,181,844 $ 66 049, 557 (20,811,607) S1,427,420, 994
- 75 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
Balance Balance
July 1, Retirements/ June 30,
2021 Additions Transfers 2022
Business-type activities:
Capital assets not being depreciated:
Land $ 753,877 $ -- $ -- $ 753,877
Capital assets being depreciated:
Buildings and
improvements 3,797,356 175,881 -- 3,973,237
Ground and site
improvements 272,850 -- -- 272,850
Equipment 150,632 7,517 (933) 157,216
Total capital assets
being depreciated 4,220,838 183,398 9( 33) 4,403,302
Less accumulated depreciation for:
Buildings and
improvements (1,167,327) (106,447) -- (1,273,774)
Ground and site
improvements (232,345) (4,348) -- (236,692)
Equipment (67,946) (24,445) 933 (91,358)
Total accumulated
Depreciation (L467,518) (135,240) 933 (1,601,824)
Total capital assets
being depreciated,
net 2,753,320 48,158 933 2,801,478
Business-type
activities capital
assets,net 3.507.197 48,158 -- 3.555355
- 76 -
COUNTY OF HAWAI`I
Notes to the Basic Financial Statements
June 30,2022
Depreciation and amortization expense was charged to functions/programs of the primary
government as follows:
Governmental activities:
General government S 3,540,775
Public safety 5,520,642
Highways and streets 27,145,566
Sanitation 8,076,566
Health, education and welfare 3,287,310
Culture and recreation 3,920,846
Total depreciation and amortization expense—
governmental activities 51.491.705
Business-type activities:
Kula`imano Elderly Housing Project $ 103,139
Ouli Ekahi Affordable Housing Project 32,101
Total depreciation and amortization expense—
business-type activities 135,240
7. DEFERRED INFLOW OF RESOURCES
Deferred inflow of resources consists of the following at June 30, 2022:
Governmental activities:
Capital General Other Total
General Projects Excise Governmental Governmental
Fund Fund Tax Fund Funds Funds
Real property taxes $ 34,165,813 $ -- $ -- $ -- $ 34,165,813
Liquor control revenue 194,089 -- -- -- 194,089
County transient
accommodations tax 4,522,243 -- -- -- 4,522,243
Rental income 939,834 -- -- 2,148,797 3,088,631
Sewer revenue -- -- -- 2,250,944 2,250,944
Solid waste revenue -- -- -- 1,135,749 1,135,749
Housing revenue -- -- -- 141,147 141,147
Total presented in
fund financial
statements 39,821,979 -- -- 5,676,637 45,498,616
Add deferred inflows
of resources related
to pensions&OPEB 217,182,490 -- -- -- 217,182,490
Less adjustments for
accrual of revenues (35,746,340) -- -- (3,527,840J (39,274,180)
Total government-
wide financial
statements S 221,258,129 $ -- $ -- $ 2,148, 997 $ 223,406,926
- 77 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
8. LEASES
The County leases machinery and equipment under noncancellable leases expiring at various
dates through April 2027. These leases,in which the County will own the asset at the end of
the lease, are financed from the resources of various funds.
The estimated value of the leased machinery and equipment and accumulated depreciation,
amount to $20,665,383 and$5,006,604,respectively, and the related present value of the
remaining obligations under these finance leases amounting to $9,813,871 at June 30, 2022
are included in capital assets and long-term debt,respectively.
The County also leases land, office facilities and other equipment under noncancellable,in
which the County is only leasing the right to use the asset during the term of the agreement,
such leases expiring through December 2031,with option years that will more than likely be
exercised and will extend the leases until fiscal year 2037.
The future minimum payments under these leases at June 30,2022 are as follows:
Other Financing Agreement
Liabilities Lease Liabilities
Principal Interest Principal Interest
Year Ending June 30:
2023 $ 3,876,840 $ 155,739 $ 1,908,261 $ 321,153
2024 2,797,236 78,393 1,912,076 276,394
2025 1,618,384 39,764 1,958,033 230,781
2026 953,845 17,898 1,811,065 187,697
2027 332,372 3,535 1,823,824 145,976
2028 -2031 -- -- 3,961,870 361,366
2032-2037 -- -- 1,368,647 43,876
Total 9.578.677 295,329 14,743,776 S 1,567,243
9. SOLID WASTE LANDFILL CLOSURE AND POSTCLOSURE CARE COSTS
Hilo Landfill In December 2019, the County closed its landfill located in the city of Hilo.
Under state and federal requirements,the County would have to monitor and maintain this site
for thirty years from the closure date. The estimated cost of closure and postclosure is
$26,906,000,based on what it would cost to perform the required closure and postclosure care
in 2022. Actual costs may be higher due to inflation, changes in technology, or changes in
regulations. Through June 30, 2022, $23,378,000 was spent on closure and postclosure care
of the landfill. The remaining estimated liability of$3,528,000 is included in the government-
wide statement of net position. During the year ended June 30,2022, $623,000 was spent on
closure of the landfill. The County is providing financial assurance for postclosure care and
remediation through self insurance as explained below.
- 78 -
COUNTY OF HAWAI`I
Notes to the Basic Financial Statements
June 30,2022
Kealakehe In October 1993, the County closed its Kealakehe landfill in Kona. Under state
and federal requirements, the County would have to monitor and maintain this site for ten
years from the closure date. However, the County anticipates monitoring and maintaining the
site for thirty years because there is presently a subterranean fire which requires active
management. The estimated cost of closure and postclosure is $16,900,000,based on what it
would cost to perform the required closure and postclosure care in 2022. Actual costs may be
higher due to inflation, changes in technology, or changes in regulations. Through
June 30, 2022, $9,357,000 was spent on closure and postclosure care of the landfill.
The remaining estimated liability of$7,543,000 is included in the government-wide statement
of net position. During the year ended June 30,2022, $258,000 was spent on closure of the
landfill. The County is providing financial assurance for postclosure care and remediation
through self insurance as explained below.
Pu'uanahulu In May 1993, the County contracted with a private company to construct and
operate a new landfill on County land at Pu'uanahulu in West Hawaii. The present contract
calls for County employees to perform the daily operations of the landfill, and for the private
company to retain the overall management as well as perform all construction work on the
landfill cells. Under the terms of the contract,the County has no responsibility for
remediation, closure or postclosure care. Accordingly,no liability for this landfill is included
in the County's financial statements.
Financial Assurance For fiscal year 2022, 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.
In fiscal year 2013,the County closed its two metal salvage facilities located near the Hilo and
Kealakehe Transfer Stations. State law requires the County to perform necessary closure
activities, including,but not limited to,the removal of all remaining solid waste and
perfonning appropriate site assessments and remedial activities. The estimated liability as of
June 30, 2022 of approximately$17,475,000 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. The liability could change over time due to inflation or
deflation, changes in technology, or changes in laws and regulations governing the
remediation effort.
- 79 -
COUNTY OF HAWAI`I
Notes to the Basic Financial Statements
June 30,2022
The County currently maintains and utilizes 7 underground fuel storage tanks to fuel both
official and private vehicles that are used for County business. The tanks range in size from
1,000 to 8,000 gallons. The estimated liability of$1,775,000 for the cost to check for ground
contamination and potential cleanup is included in the County's financial statements as of
June 30, 2022.
10. LONG-TERM DEBT
General Obligation Bonds
The County issues general obligation bonds to provide funds for the acquisition and
construction of major capital facilities. These bonds have been issued by the County for the
primary government, component unit activities (see Note 14) and improvement districts.
The County's general obligation bonds are an absolute and unconditional general obligation of
the County for which its full faith and credit are pledged. The principal and interest payments
on the bonds are a first charge on the general fund of the County.
The following is a summary of general obligation bond transactions reported in the
governmental activities section of the government-wide statement of net position for the
County for the fiscal year ended June 30, 2022:
Bonds Issue Bond Balance Bond Balance Due Within
Authorized Amount July 1,2021 Issues Retirements June 30,2022 One Year
2007 Series C $ 10,787,388 $ 1,200,048 $ ($ 1,200,048) $ -- $
2013 Series B 21,010,000 7,275,000 (2,320,000) 4,955,000 2,430,000
2013 Series C 18,470,000 8,300,000 (1,955,000) 6,345,000 2,030,000
2013 PI Series A 1,169,000 1,032,615 (24,968) 1,007,647 25,655
2016 Series A 99,620,000 95,440,000 (4,395,000) 91,045,000 4,620,000
2016 Series B 13,497,500 8,830,000 (1,305,000) 7,525,000 1,372,500
2016 Series C 44,835,000 33,650,000 (4,115,000) 29,535,000 4,330,000
2016 Series D 28,860,000 24,180,000 (2,520,000) 21,660,000 2,650,000
2016 Series E 19,061,250 17,516,250 (1,623,750) 15,892,500 1,706,250
2017 Series A 90,000,000 81,530,000 (3,120,000) 78,410,000 3,285,000
2017 Series D 43,475,000 43,475,000 (2,825,000) 40,650,000 2,950,000
2020 PI Series A 2,437,000 2,437,000 2,437,000 59,000
2020 PI Series B 3,699,000 3,699,000 3,699,000 90,000
2020 Series A 59,815,000 59,815,000 59,815,000 --
2020 Series B 2,315,000 2,315,000 (1,155,000) 1,160,000 1,160,000
2020 Series C 10,215,000 10.215,000 (922,5001 9,292,500 967,500
469,266,138 400,909,913 (27,481,266) 373,428,647 27,675,905
Add imamortized
premium 91,063,227 65,796,727 (5,834,146) 59,962,581 5,706,566
$560,329,365 $466 706 440 ($33315.4121 $433,391. 228 $33,382, 771
- 80 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
General obligation bonds payable reported in the governmental activities section on the
government-wide statement of net position at June 30, 2022 are comprised of the following
individual issues:
Public improvement (PI) and/or refunding bonds:
2013 Series B at 3.0%to 5.0%, due through 2023 4,955,000
2013 Series C at 4.0%to 5.0%, due through 2024 6,345,000
2013 PI Series A at 2.75%, due through 2048 1,007,647
2016 Series A at 3.0%to 5.0%, due through 2035 91,045,000
2016 Refunding Series B at 3.0%to 5.0%, due through 2026 7,525,000
2016 Refunding Series C at 5.0%, due through 2027 29,535,000
2016 Refunding Series D at 5.0%, due through 2028 21,660,000
2016 Refunding Series E at 2.0%to 5.0%, due through 2029 15,892,500
2017 Series A at 5.0%, due through 2037 78,410,000
2017 Refunding Series D at 3.0%to 5.0%, due through 2032 40,650,000
2020 PI Series A at 1.125%, due through 2055 2,437,000
2020 PI Series B at 1.125%, due through 2055 3,699,000
2020 Series A at 4.0%to 5.0%, due through 2040 59,815,000
2020 Series B at 0.4%to 0.55%, due through 2022 1,160,000
2020 Series C at 5.0%, due through 2029 9,292,500
Total general obligation bonds payable S373,428,647
Annual debt service requirements to maturity for the above general obligation bonds are as
follows:
Governmental Activities
Fiscal year ending June 30: Principal Interest
2023 $ 27,675,905 $ 16,569,230
2024 29,926,110 15,222,112
2025 28,747,585 13,816,124
2026 27,866,830 12,470,342
2027 29,202,095 11,120,572
2028—2032 114,366,214 37,852,424
2033—2037 86,396,761 14,895,720
2038—2042 26,100,586 2,038,492
2043—2047 1,188,161 161,987
2048—2052 1,110,400 79,144
2053—2056 848,000 19,181
Total S373,428,647 S124,245,328
- 81 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
Refunded Bonds
In periods prior to the year ended June 30, 2022, the County defeased certain general
obligation bonds by placing the proceeds of new bonds in irrevocable trusts to provide for all
future debt service payments on the old bonds. Accordingly,the trust account assets and the
liability for the defeased bonds are not included in the County's financial statements. As of
June 30, 2022, approximately S40.7 million of bonds outstanding were considered defeased.
Bond Premiums
At June 30, 2022,total unamortized bond premiums were $59,962,581,which are being
amortized over the remaining life of the respective bond issues.
Bonds Authorized and Unissued
The County Council has authorized the issuance of$821.1 million in general obligation bonds
to finance both specified and unspecified capital improvement projects. At June 30, 2022,
$414.3 million was not yet issued.
Subsequent Events On October 27 and November 1, 2022, the County issued general
obligation bond anticipation notes (BANS) in the total amount of S22.5 million and$6.0
million, respectively. These notes were issue to provide funds to the acquisition and
construction of major capital facilities and bear interest of 4.03%and have an original
maturity of July 19, 2023.
State Revolving Fund Loans
The County has obtained loans to assist in financing mandated wastewater projects from the
State Water Pollution Control Revolving Fund(SRF). The purpose of this revolving fund is to
provide low-interest, long-term loans and other financial assistance to the four counties in the
state to finance construction of wastewater projects. The County has twelve projects approved
for funding with these loans.
The County's State Revolving Fund Loans are direct borrowings of the County for which its
full faith and credit are pledged. The State Revolving Fund Loans are secured by the gross
revenues of the County.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
The schedule below shows the County's SRF transactions for the fiscal year ended June 30,
2022:
Loans Approved Loan Balance Retirements/ Loan Balance Due Within
Authorized Amount July 1,2021 Additions Fora_iveness June 30,2022 One Year
Cesspool
Conversion $ 8,363,773 $ 2,478,313 $ $ (445,607) $ 2,032,706 $ 447,838
Honoka`aLCC 4,513,158 1,966,738 (182,901) 1,783,837 183,817
Queen
Lili`uokalani 9,421,732 4,550,150 (495,635) 4,054,515 498,115
Kalaniana`ole 7,847,045 4,429,615 (359,126) 4,070,489 360,924
Kealakehe
WWTPAU 21,162,934 12,393,278 (871,007) 11,522,271 873,186
North Kona 2,690,404 1,456,607 (80,647) 1,375,960 81,254
Kealakehe
Effluent Reuse 8,677,918 1,661,672 (87,325) 1,574,347 88,201
SH Landfill
Closure 23,099,553 16,387,259 (810,946) 15,576,313 819,075
Kealakehe Scrap
Metal 8,000,973 5,050,570 (249,833) 4,800,737 252,337
93.777.490 $50,374,202 $ $(3.583 0271 $46,791,175 3.604.747
The remaining loans bear interest at 0.25%to 0.50% exclusive of a 0.25%to 0.75%loan fee,
and require payments through fiscal year 2040.
Debt service to maturity for disbursements to date on these projects are as follows:
Governmental Activities
Fiscal year ending June 30: Principal Interest
2023 $ 3,604,747 $ 398,336
2024 3,626,570 368,413
2025 3,648,727 338,126
2026 3,670,889 307,805
2027 3,464,255 277,238
2028—2032 15,352,372 974,069
2033—2037 10,050,792 395,281
2038—2040 3,372,823 49,062
Total S46,791.175 1
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
Other General Long-Term Obligations
The following is a summary of other general long-term obligations transactions for the fiscal
year ended June 30, 2022:
Balance Balance Due Within
July 1,2021 Additions* Pam June 30,2022 One Year
Governmental activities:
Compensated absences $48,423,495 $13,106,220 $(14,444,024) $47,085,691 $10,236,803
Claims and judgments
(see Note 12) 24,257,818 8,971,480 (10,698,320) 22,530,978 5,876,117
Leases and other
financing agreements
(see Note 8) 10,749,906 19,315,930 (5,743,383) 24,322,453 5,785,096
Landfill costs payable
(see Note 9) 11,652,000 299,846 (880,846) 11,071,000 1,844,006
Pollution remediation
(see Note 9) 18,719,518 (36,104) (1,208,414) 17,475,000 300,000
Underground Storage
Tank(see Note 9) 1,775,000 -- -- 1,775,000 --
Total $115,577,737 41.657.372 (32,974.9871 124,260,122 $24,042,022
*Net of new claims liability and existing claims resolved at less than previous estimate.
Historically,the County's general fund has been used to liquidate the majority of other long-
term liabilities, including the other post employment benefit obligation and the compensated
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, 2022 includes $39,909,703,which is
restricted for principal payments on general obligation bonds and$6,964,345,which is
restricted for the payment of interest on the bonds.
Enterprise Fund Notes,Bond and Loan Payable
On February 12,2013, the County issued general obligation bonds on behalf of Kula`imano
Elderly Housing Project(Project)to pay offits 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
Project would continue to make bond payments equivalent to its previous monthly installment
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.
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COUNTY OF HAWAI`I
Notes to the Basic Financial Statements
June 30,2022
In fiscal year 2021,the County made the final scheduled principal payment of the bond and
thus,the Project now owes the County for the remainder of the contributions.
On October 29,2012,the County assumed the loan of its lessee Ouli Ekahi Partnership with
the Hawaii Housing Finance and Development Corporation in the amount 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, 2022:
Balance at July 1, 2021 $100,691
Deductions (59,190)
Balance at June 30, 2022 41,501
Less current portion (16,500)
Loan payable,net of
current portion 2 1
The following is a summary of the annual maturities for the enterprise fund loan payable:
Business-type Activities
Fiscal year ending June 30: Principal
2023 $ 16,500
2024 16,500
2025 8,501
Total 41 501
Special Assessment Bonds
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 liable 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 $650,069 at June 30, 2022.
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
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
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
$1,007,647 at June 30, 2022.
The County has also issued general obligation bonds on behalf of Improvement District No. 20
for sewer 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 2055 and bear interest at the previous rates of 1.125%. Total general
obligation bonds payable included in the government-wide statement of net position were
$2,437,000 at June 30,2022.
The bonds are secured by a first lien on the land benefited by the improvements, and are to be
repaid from the annual assessments levied against the owners of the land. The County acts as
an agent for the property owners within the improvement districts to collect assessments
receivable, forward payments to bond-paying agents at appropriate dates and, if required,
administer foreclosure proceedings.
The following is a summary of bond transactions for Improvement District No. 18,
Coastview/Wonderview Water Improvements,No. 19, Kona Ocean View Properties
Subdivision, and No. 20, Lono Kona Sewer Project for the fiscal year ended June 30, 2022:
Balance at July 1, 2021 $4,211,798
Deductions (117,082)
Balance at June 30, 2022 14,094716
The following is a summary of the annual maturities for the improvement district general
obligation bonds:
Fiscal year ending June 30: Principal Interest
2023 $ 181,057 $ 82,466
2024 187,251 76,489
2025 193,673 70,267
2026 199,334 63,795
2027 206,245 57,062
2028—2032 597,248 223,395
2033—2037 516,762 179,156
2038—2042 561,586 133,362
2043—2047 613,161 82,657
2048—2052 502,399 33,096
2053—2056 336,000 7,582
Total 4 094 716 1.009.327
- 86 -
COUNTY OF HAWAI`I
Notes to the Basic Financial Statements
June 30,2022
11. COMMITMENTS AND CONTINGENCIES
Contractual commitments—Contractual commitments for capital projects, expenses, and
supplies at June 30, 2022, except in the enterprise funds, are reflected in the balance sheets as
a part of the respective fund balance categories and are as follows:
General fund $ 18,669,694
Capital projects fund 180,255,421
General excise tax fund 4,521,049
Nonmajor funds 16,321,926
$219,768,090
Contractual commitments for the enterprise funds were immaterial.
Intergovernmental revenues—The County has received federal and state grants for specific
purposes that are subject to review and audit by grantor agencies. Such audits could lead to
requests for reimbursement to the grantor agency for expenditures disallowed under terms of
the grants. In the opinion of management of the County, disallowed costs, if any, would not
be material.
Claims—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,
the resolution of such matters will not have a material adverse effect on the financial condition
of the County.
ADA compliance—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
programs,practices and procedures was completed and approved by the County Council. The
cost impact of implementation is not material because the necessary modifications were
primarily procedural. The second part of this stipulated agreement required the reevaluation
of all County facilities,which was completed and accepted by the County Council on June 30,
2000. Approximately 240 County facilities were surveyed as part of this effort. The tentative
completion date of all necessary modifications and renovations was 12 years from the date the
County Council accepted the self-evaluation. The initial(1997-2000) estimated cost of the
modifications necessary to provide equal access to these facilities was $15.1 million,which
would have been spent over the 12-year period. Funding allocated by the County over the
initial few years for facilities modifications was $17.5 million, with another$4 million of
federal funding provided through community development block grants over the next 2 years.
The Department of Public Works requested an additional $2 million a year for non-Parks &
Recreation County facilities' ADA renovation projects. Because of severe disparities that
surfaced between the original ADA projects' scoping and construction estimates and actual
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
scopes and costs, as well as time/delivery issues that came into play because of necessary
permits and reviews, and design professionals' costs that weren't factored into the effort,the
County sought relief from the Court in the form of both a time extension and reprioritization
of sites. As a result,the County obtained approval of a modified 4-year plan wherein
accessibility improvements at the then remaining 35 park sites were required to be completed
by December 31, 2016. The County is engaged in ongoing quarterly briefings with the federal
magistrate judge assigned to this case wherein the County apprises plaintiffs counsel and the
court on its progress,highlighting achievements, noting procedural and permitting concerns
and delays, and constantly updating the status and completion projects for all remaining
projects. Currently,the projected completion date for all remaining projects is mid-2023. The
balance of the unimproved sites would be deferred indefinitely pending separate
improvement/enhancement projects that would inherently trigger accessibility improvements
due to the nature of each project's scoping and applicable ADA requirements. Of the 35 park
sites requiring accessibility improvements under the modified 4-year plan plus an additional
park site(Francis Wong Stadium at Ho'olulu Complex)that was reintroduced into the
transition plan via the court, 20 have been completed, 1 (`Ahalanui)has been permanently
omitted due to lava inundation, 3 (Hilo Bayfront,Pana`ewa Zoo, Wong Stadium)have been
substantially completed and are pending contract closeout, 2 (Miloli`i,Parks Maintenance) are
in various stages of design, 1 (Pahala Pool)has been awarded for construction and is pending
permitting issues, and 9 (Pa`auilo,Papa`aloa, Kahulcu,N5'51chu, Pahala Ballfield, Kolekole,
NAS, Richardsons, and Disappearing Sands) are in active construction. The County has
encumbered or spent more than $19M on these remaining 35 projects to date. Further to this,
the County has secured a general obligation bond in the amount of$25M dedicated to the
completion of the 12 projects in the active construction or earlier phases of completion. The
County had spent$42.0 million for construction and design consultant costs to complete the
50 park facilities (some having multiple ADA work being completed)prior to the
development of the modified four-year plan. Additionally, the County's ADA coordinator
(Equal Opportunity Officer)has access to an operational account of at least$50,000 to handle
requests for reasonable accommodations to assist County departments with addressing
requests concerning specialized access needs. The procedures for these requests have been
finalized and are available on the Department of Human Resources' web page under the
heading"Procedure for Requesting Modifications to County of Hawaii Facilities, Programs,
or Seivices". Also,Parks has a Recreation Specialist who reviews and investigates requests
for reasonable accommodations, and recommends specific actions on those requests, amongst
other duties.
12. RISK MANAGEMENT
The County is exposed to various risks of loss related to torts; theft, damage, and destruction
of assets; errors and omissions; work-related injuries to employees; and natural disasters.
County obtains property insurance,which includes coverage on a high deductible basis for
hurricane, flood, earthquake, and lava. It also purchases insurance coverages for flood on
selected structures,professional liability for emergency medical services, general liability for
lifeguards (waster safety), aviation liability for helicopter operations,retired senior volunteer
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COUNTY OF HAWAI`I
Notes to the Basic Financial Statements
June 30,2022
liability coverage, auto liability for both mass transit buses and subsidized police vehicles,
auto physical damage coverage for both police fleet vehicles and the Kohala Ranch fire truck,
and property insurance on specific housing projects if not covered contractually. The County
is substantially self-insured for liability and for all other exposures including workers'
compensation. As such, emphasis is on claims management and safety/risk control to protect
the public and employees and to mitigate loss costs. 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 the application of historical experience to outstanding claims.
Estimates of IBNR are based on historical experience. The liability for claims and judgments
is reported on the government-wide statement of net position. At June 30,2022,the amount
of this liability was $22,530,978. This is the County's best estimate based on available
information.
Changes in the reported liability since July 1,2020 are given below.
General Workers' Total
Liabili Compensation Liability
Balance at June 30, 2020 S 13,407,820 S 14,401. 006 27,809,426
Incurred claims (including IBNR)* 970,080 2,970,428 3,940,508
Claim payments (3,118,369) (4,373,747) (7,492,116)
Balance at June 30, 2021 S 11,259,531 12,998. 887 24.2 77.818
Incurred claims (including IBNR)* 2,540,743 6,430,737 8,971,480
Claim payments (3,823,574) (6,874,746) (10,698,320)
Balance at June 30, 2022 S 9,976,700 12.554.278 S 22.530.978
*Net of new claims liability and existing claims resolved at less than previous estimate.
13. EMPLOYEE BENEFIT PLANS
Pensions—Employees' Retirement System of the State of Hawaii
Pension Plan Description-All eligible employees of the State and counties are provided with
pensions through a cost-sharing multiple-employer defined benefit pension plan administered
by the Employees' Retirement System of the State of Hawaii(ERS). Benefit terms,
eligibility, and contribution requirements are established by HRS Chapter 88 and can be
amended through legislation. The ERS issues a publicly available financial report that can be
obtained at ERS's website: http://ers.ehawaii.gov/.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
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, 1971,the AFC is the average salary
earned during the five highest paid years of service, including the payment of salary in lieu of
vacation, or three highest paid years of service, excluding the payment of salary in lieu of
vacation.
For members hired before July 1, 2012, the original retirement allowance is increased by 2.5%
each July 1 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.
Retirement benefits for certain groups, such as police officers, firefighters, some investigators,
sewer workers,judges, and elected officials,vary from general employees.
Noncontributory Plan
Retirement Benefits - General employees' retirement benefits are determined 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
regardless of length of service and receive a lifetime pension of 35% of their average
final compensation. 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 reduction, and at a minimum of 12.5% of
average final compensation.
Death Benefits -For service-connected deaths, the surviving spouse/reciprocal
beneficiary receives a monthly benefit of 30% of the average final compensation until
remarriage or re-entry into a new reciprocal beneficiary relationship. Additional benefits
are payable to surviving dependent children up to age 18. If there is no spouse/reciprocal
beneficiary or dependent children, no benefit is payable.
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COUNTY OF HAWAI`I
Notes to the Basic Financial Statements
June 30,2022
Ten years of credited service is required for ordinary death benefits. For ordinary death
benefits,the surviving spouse/reciprocal beneficiary(until remarriage/reentry into a new
reciprocal beneficiary relationship) and dependent children(up to age 18)receive a
benefit equal to a percentage of member's accrued maximum allowance unreduced for
age or, if the member was eligible for retirement at the time of death,the surviving
spouse/reciprocal beneficiary receives 100%joint and survivor lifetime pension.
Contributory Plan for Employees Hired Prior to July 1, 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 55.
Police and firefighters' retirement benefits are determined as 2.5% of average final
compensation for each year of service up to a maximum of 80%.Police and firefighters
with 10 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 50% of their average
final compensation. Ten years of credited service is required for ordinary disability.
Ordinary disability benefits are determined as 1.75% of average final compensation
multiplied by the years of credit services and are payable immediately,without an
actuarial reduction, and at a minimum of 30% of average final compensation.
Death Benefits -For service-connected deaths, the surviving spouse/reciprocal
beneficiary receives a lump sum payment of the member's contributions and accrued
interest plus a monthly benefit of 50%of the average final compensation until remarriage
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.
Ordinary death benefits are available to employees who were active at time of death with
at least 1 year of service. Ordinary death benefits consist of a lump sum payment of the
member's contributions and accrued interest plus a percentage of the salary earned in the
12 months preceding death, or 50%Joint and Survivor lifetime pension if the member
was not eligible for retirement at the time of death but was credited with at least 10 years
of service 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.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
Contributory Plan for Employees 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 60.
Police and firefighters' retirement benefits are determined as 2.25% of average final
compensation for each year of service up to a maximum of 80%. Police and firefighters
with 10 years of credited service are eligible to retire at age 60.
Disability and Death Benefits- Members are eligible for service-related disability
benefits regardless of length of service and receive a lifetime pension of 50%of their
average final compensation plus refund of contributions and accrued interest. Ten years
of credited service is required for ordinary disability. Ordinary disability benefits are
1.75%of average final compensation for each year of service for police and firefighters
and are payable immediately, without an actuarial reduction, at a minimum of 30% of
average final compensation.
Death benefits for contributory plan members hired after June 30, 2012 are generally the
same as those for contributory plan members hired June 30, 2012 and prior.
Hybrid Plan for Employees Hired Prior to July 1, 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 reduction, and at a minimum of 25% of average final compensation.
Death Benefits -For service-connected deaths, the surviving spouse/reciprocal
beneficiary receives a lump sum payment of the member's contributions and accrued
interest plus a monthly benefit of 50%of the average final compensation until remarriage
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.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
Ordinary death benefits are available to employees who were active at time of death with
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
death but was credited with at least 10 years of service 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.
Hybrid Plan for Employees 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
remain the same except for ordinary death benefits. Ordinary death benefits are available
to employees who were active at time of death with at least 10 years of service. Ordinary
death benefits consist of a lump sum payment of the member's contributions and accrued
interest multiplied by 120%, or 50%Joint 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 the
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. The
contribution rates for fiscal year 2021 were 41.00% for police and firefighters and 24.0% for
all other employees. Contributions to the pension plan from the County for the year ended
June 30, 2022, 2021, and 2020 were $61,913,089, $63,953,781, and$52,778,035,
respectively.
The employer is required to make all contributions for members in the noncontributory plan.
For contributory plan employees hired prior to July 1, 2012, general employees are required to
contribute 7.8% of their salary and police and firefighters are required to contribute 12.2% of
their salary. For contributory plan employees hired after June 30, 2012, general employees are
required to contribute 9.8% of their salary and police and firefighters are required to contribute
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.
- 93 -
COUNTY OF HAWAI`I
Notes to the Basic Financial Statements
June 30,2022
Pension liabilities,pension expense, and deferred outflows of resources and deferred
inflows of resources related to pensions—At June 30, 2022,the County reported a liability of
$565,147,246 for its proportionate share of the net pension liability. The net pension liability
was measured as of June 30, 2021, 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, 2021, the
County's proportion was 4.63%,which was an increase of.08% from its proportion measured
as of June 30, 2020.
For the year ended June 30,2022,the County recognized pension expense of$66,030,110.
At June 30, 2022, the County 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 $ 23,256,329 $ 4,062,347
Net difference between projected and actual investment
earnings on pension plan investments -- 114,358,422
Changes in assumptions 721,085 269,156
Changes in proportion and differences between employer
contributions and proportionate share of contributions 34,748,328 23,716,109
County contributions subsequent to the measurement date 61,913,089 --
Total S120,638.831 142,406.034
$61,913,089 reported as deferred outflows of resources related to the County's contributions
to the pension plan subsequent to the measurement date will be recognized as a reduction of
the net pension liability in the fiscal year ended June 30, 2023.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
Other amounts reported as deferred outflows of resources and deferred inflows of resources
related to pensions will be recognized in pension expense as follows:
Net Deferred
Outflows
(Inflows)
Fiscal Year Ending June 30, of Resources
2023 $ (16,279,204)
2024 (17,917,308)
2025 (22,196,953)
2026 (28,530,887)
2027 1,244,060
183.680.2921
Actuarial assumptions—The total pension liability in the June 30,2021 actuarial valuation
was determined using the following actuarial assumptions, applied to all periods included in
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 1.50%
Mortality rates used in the actuarial valuation as of June 30, 2021 were based on the
following:
Active members—Multiples of the Pub-2010 mortality table for active employees based
on the occupation of the member.
Healthy retirees—The 2019 Public Retirees of Hawaii mortality table, generational
projection using the BB projection table from the year 2019 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 2019. Minimum
mortality rate of 3.5% for males and 2.5%for females.
The actuarial assumptions used in the June 30,2021 valuation were based on the results of an
actuarial experience study as of June 30,2018, with most assumptions based on the period
from July 1,2013,through June 30, 2018. The major changes to assumptions resulting from
the 2018 actuarial experience study were(1)to update the base mortality tables with client-
specific mortality tables developed using the actual mortality experience of non-disabled
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COUNTY OF HAWAI`I
Notes to the Basic Financial Statements
June 30,2022
retirees in ERS and(2)to update pre-retirement mortality tables for active employees to the
recently published Pub-2010 mortality tables for active employees,by job classification.
The long-term expected rate of return on pension plan investments was determined using a
"top down approach"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
return by weighting the expected nominal real rates of return by the target asset allocation
percentage.
The target allocation and best estimates of geometric rates of return for each major asset class
are summarized in the following table:
Long-Term Long-Term
Strategic Allocation Target Expected Rate of Expected Real
(Risk-Based Classes) Allocation Return Rate of Return*
Broad growth 63.00% 8.00% 5.90%
Diversifying Strategies 37.00% 5.10% 3.00%
100.00%
* Uses an expected inflation rate of 2.10%.
Discount rate—The discount rate used to measure the total pension liability was 7.00%,which
was the same rate used at the prior measurement date. The projection of cash flows used to
determine the discount rate assumed that employee contributions will be made at the current
contribution rate and that contributions from the County will be made at statutorily 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-term expected rate of return on pension
plan investments was applied to all periods of projected benefit payments to determine the
total pension liability.
Sensitivity of the County's proportionate share of the net pension liability to changes in the
discount rate—The following presents the County's proportionate share of the net pension
liability calculated using the discount rate of 7.00%, as well as what the County's
proportionate share of the net pension liability would be if it were calculated using a discount
rate that is 1-percentage-point lower(6.00%) or 1-percentage-point higher(8.00%)than the
current rate:
1%Decrease Current Discount 1%Increase
(6.00%) Rate (7.00%) (8.00%)
County's proportionate share of
the net pension liability S 795,646,878 S 565,147,246 S 375,108.125
- 96 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
Pension plan fiduciary net position—Detailed information about the pension plan's fiduciary
net position is available in the separately issued ERS Annual Comprehensive Financial Report
(ACFR) that includes financial statements and required supplementary information.
Payables to the pension plan—At June 30, 2022,the annual amount payable to the ERS
totaled$7,552,797,which represents the employer contribution for the second half of the
month of June 2022, 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, 2022.
Other Pension Plans-County of Hawaii Bandsmen Pension System
The County also sponsors a nonqualified, governmental single employer defined benefit
pension plan for members of the County Band (County of Hawaii 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, 2022, there were 15 inactive employees or beneficiaries
receiving benefits; 11 inactive employees not yet receiving benefit payments; and 4 active
members.
Pension liabilities,pension expense, and deferred outflows of resources and deferred
inflows of resources related to pensions—At June 30, 2022,the County reported a liability of
$840,786. The total pension liability was measured as of June 30, 2022 based on an actuarial
valuation as of July 1,2022.
For the year ended June 30, 2022,the County recognized pension payments of$37,713 and a
negative pension expense of$254,504,
Actuarial assumptions—The total pension liability in the June 30,2022 actuarial report was
determined using the following actuarial assumptions, applied to all periods included in the
measurement:
Inflation 2.50%
Salary increases 3.50%, including inflation
The discount rate used to measure the County's total pension liability was 3.69%based on the
daily municipal bond rate closest to but not later than the measurement date of the Fidelity
"20-Year Municipal GO AA Index".
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
The following presents the County's total pension liability calculated using the discount rate
of 3.69%, as well as what the County's total pension liability would be if it were calculated
using a discount rate that is 1-percentage-point lower(2.69%) or 1-percentage-point higher
(4.69%)than the current rate:
1%Decrease Current Discount 1%Increase
(2.69%) Rate (3.69%) (4.69%)
County's total pension liability S 840. 886 741 495
Schedule of Changes in Total Pension Liability
Measurement year ending June 30, 2022
Total Pension Liability
Service cost $ 11,943
Interest 21,813
Difference between expected and actual experience (68,212)
Changes of assumptions (230,048)
Benefit payments (37,713)
Net Change in Total Pension Liability (302,217)
Total Pension Liability—Beginning 1,143,003
Total Pension Liability—Ending 840 786
Post-Retirement Benefits
In addition to providing pension benefits, the County is required by state statute (HRS Chapter
87A)to contribute to the Hawaii Employer-Union Health Benefits Trust Fund(the EUTF).
The EUTF is an agent, multiple-employer defined benefit plan providing certain healthcare
and life insurance benefits to all qualified retirees, active employees, their dependents and
their beneficiaries.
Benefits Provided—Chapter 87A of the HRS grants the authority to establish and amend the
benefit terms to the board of trustees of the EUTF. The EUTF currently provides medical,
prescription drug, dental,vision, chiropractic, supplemental medical and prescription drug,
and group life insurance benefits for retirees and their dependents.
The following table provides a summary of the number of employees covered by the benefit
terms as of July 1, 2021.
Inactive employees or beneficiaries currently receiving benefits 1,765
Inactive employees entitled but not yet receiving benefit payments 199
Active employees 2,475
4.439
- 98 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
Contributions—The County's contribution levels are established by Chapter 87A of the HRS.
The county was required to contribute 100% of the ARC starting in fiscal year 2019. The
ARC represents a level of funding that is sufficient to cover, 1)the normal cost,which is the
cost of the other postemployment benefits attributable to the current year of service; and 2) an
amortization payment,which is a catch-up payment for past service costs to fund the unfunded
actuarial accrued liability over the next thirty years. For the fiscal year ended June 30, 2022,
contributions to the OPEB Plan from the County totaled$38,439,395 which resulted in an
average contribution rate of approximately 19.6% of covered-employee payroll.
On July 13, 2020,to address the budget shortfalls resulting from the COVID-19 pandemic,the
Governor of the State of Hawaii approved an emergency proclamation that suspended the law
requiring employers to pay the OPEB pre-funding in fiscal year 2021. This has been extended
to fiscal year 2022.
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 the
monthly premium for employees retiring with fewer than 10 years of credited service. The
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.
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 15
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 service,
the County pays the entire healthcare premium.
For employees hired after June 30, 2001, 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
years of service,the County pays 50% of the 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.
- 99 -
COUNTY OF HAWAI`I
Notes to the Basic Financial Statements
June 30,2022
Net OPEB liability—The County's net OPEB liability was measured as of July 1, 2021, and
the total OPEB liability used to calculate the net OPEB liability was determined by an
actuarial valuation as of that date. There were no changes between the measurement date, July
1, 2021, and the reporting date, June 30, 2022, that are expected to have a significant effect on
the net OPEB liability.
Actuarial assumptions—The total OPEB liability in the July 1, 2021 actuarial valuation was
determined using the following actuarial assumptions, applied to all periods included in the
measurement,unless otherwise specified:
Inflation 2.50%
Salary increases 3.50% -7.00%, including inflation
Payroll growth rate 3.50%
Investment rate of return 7.00%
Healthcare cost trend rates
PPO Initial rates of 7.25%; declining to a rate of 4.70%after
12 years
HMO Initial rate of 7.25%; declining to a rate of 4.70% after
12 years
Part B &base monthly Initial rates of 5.00%; declining to a rate of 4.70%
contribution after 9 years
Dental 4.00%
Vision 2.50%
Life insurance 0.00%
Mortality rates used in the actuarial valuation as of July 1,2021 were based on the following:
Active members—Multiples of the Pub-2010, Employee Tables for active employees
based on the occupation of the member.
Healthy retirees—The 2019 Public Retirees of Hawaii mortality table, generational
projection using the BB projection table from the year 2019 and with multipliers based on
plan and group experience.
Disabled retirees—Base Table for healthy retirees' occupation, set forward 5 years,
generational projection using the BB projection table from the year 2019. Minimum
mortality rate of 3.5% for males and 2.5% for females.
- 100 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
The actuarial assumptions used in the July 1, 2021 valuation were based on the experience
study covering the five year period ending June 30, 2018 as conducted for the Hawaii
Employees' Retirement System(ERS).
A Single Discount Rate of 7.00%was used to measure the total OPEB liability. This Single
Discount Rate was based on the expected rate of return on OPEB plan investments of 7.00%.
Beginning with the FYE 19 contribution,the funding policy of the County of Hawaii is to pay
the recommended actuarially determined contribution,which is based on layered, closed
amortization periods. In July 2020,the Governor's office issued the Tenth Proclamation
related to the Covid-19 Emergency, allowing employers of the EUTF to suspend ACT 268
contributions for fiscal year ending June 30, 2021 and instead limit their contribution amounts
to the OPEB benefits due. This relief provision related to OPEB funding was extended to the
fiscal year ended June 30,2022 and 2023 by Act 229, Session Laws of Hawaii 2021. The
EUTF's fiduciary net position is still expected to be available to make all projected future
benefit payments of current plan members. Therefore,the long-term expected rate of return
on the EUTF's investments was applied to all periods of projected benefit payments to
determine the total OPEB liability.
The target allocation and best estimates of arithmetic rates of return for each major asset class
are summarized in the following table:
Long-Term
Strategic Allocation Target Expected Real
(Risk-Based Classes) Allocation Rate of Return
U.S. Equity 16.00% 6.09%
Private Equity 12.50% 10.19%
Non-U.S. Equity 11.50% 7.12%
Real Assets 10.00% 6.16%
Trend Following 10.00% 2.01%
Private Credit 8.00% 5.83%
US Microcap 6.00% 7.62%
Long Treasuries 6.00% 1.06%
Reinsurance 5.00% 4.44%
Global Options 5.00% 4.33%
Alternative Risk
Premia 5.00% 1.46%
TIPS 5.00% (0.07%)
100.00%
- 101 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
Changes in the Net OPEB Liability:
The following schedule presents the changes in the net OPEB liability for the fiscal year
ending June 30, 2022:
Increase (Decrease)
Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability
(a) (b) (a)-(b)
Balance at June 30, 2021 $ 586,581,909 S 213.616,220 S 372,965,689
Changes for the fiscal year:
Service cost 12,764,228 -- 12,764,228
Interest on the total OPEB liability 40,832,661 -- 40,832,661
Employer contributions -- 38,334,627 (38,334,627)
Net investment income -- 57,339,331 (57,339,331)
Benefit payments (19,280,575) (19,280,575) --
Administrative expense -- (29,421) 29,421
Difference between expected
and actual experience (19,584,810) -- (19,584,810)
Other -- (170,462) 170,462
Net changes $ 14,731,504 $ 76,193,500 $ (61,461,996))
Balance at June 30, 2022 S 601,313,413 289,809,720 S 311,503,693
Sensitivity of the net OPEB liability to changes in the discount rate—The following presents
the net OPEB liability of the County, as well as what the County's net OPEB liability would
be if it were calculated using a discount rate that is 1-percentage-point lower(6.00%) or 1-
percentage-point higher(8.00%)than the current discount rate:
1%Decrease Current Discount 1%Increase
(6.00%) Rate (7.00%) (8.00%)
County's net OPEB liability 408,287,091 S 311,503,693 S 235,582, 009
Sensitivity of the net OPEB liability to changes in the healthcare cost trend rates—The
following presents the net OPEB liability of the County, as well as what the County's net
OPEB liability would be if it were calculated using a healthcare cost trend rate that is 1-
percentage-point lower or I-percentage-point higher than the current healthcare cost trend
rate:
Current
Healthcare Cost
1%Decrease Trend Rate 1%Increase
County's net OPEB liability S 231,702,450 S 311,503,693 S 414,952. 116
- 102 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
For the year ended June 30, 2022,the County recognized OPEB expense of$24,970,185. At
June 30, 2022,the County 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
Difference between expected and actual experience $ 5,209,092 $ 46,651,915
Changes of assumptions 4,099,958 2,405,834
Net difference between projected and actual earnings on
OPEB plan investments -- 25,718,707
County contributions subsequent to the measurement date 38,439,395 --
Total S 74.776,456
$38,439,395 reported as deferred outflows of resources related to the County's contributions
to the OPEB plan subsequent to the measurement date will be recognized as a reduction of the
net OPEB liability in the fiscal year ended June 30, 2023.
Other amounts reported as deferred outflows of resources and deferred inflows of resources
related to pensions will be recognized in pension expense as follows:
Net deferred
inflows of
Fiscal Year Ending June 30, resources
2023 $ 12,538,995
2024 12,516,263
2025 13,382,169
2026 16,040,965
2027 8,190,944
Thereafter 2,798,070
65,467,406
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.eut£hawaii.ov or by contacting them at P.O. Box 2121, Honolulu,HI 96805-2121.
Deferred Compensation Plan
County employees are permitted to participate in a deferred compensation plan of the State of
Hawaii, adopted pursuant to Internal Revenue Code(IRC) section 457. The plan permits
eligible employees to defer a portion of their salary until future years by contributing to a fund
- 103 -
COUNTY OF HAWAI`I
Notes to the Basic Financial Statements
June 30,2022
managed by a plan administrator. The deferred compensation amounts are not available to
employees until termination, retirement, death, or unforeseeable emergency.
All plan assets are held in a trust fund to protect them from claims of general creditors and
from 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.
14. COMPONENT UNIT DISCLOSURES
Deposits and Investments
At June 30,2022, the carrying amount of cash,time certificates of deposit and money market
funds of$44,070,071, with bank balances of$44,771,351 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.
The deposits and investments include cash received by the Department that is restricted as to
use and is recorded as a restricted asset. Such funds amounted to $888,225 at June 30, 2022.
Capital Assets
The Department began operations as of January 1, 1950. At that date,the utility plant in
service was transferred to the Department from the County at the cost of the utility plant assets
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 by governmental agencies,private subdividers
and customers at their cost or estimated cost. Construction costs include amounts for contract
work, engineering supervision and other direct and indirect costs.
Depreciation on the Department's utility plant assets in service is computed using the
straight-line method over the estimated useful lives of the assets as follows:
Structures and improvements 40 to 50 years
Machinery and equipment 5 to 25 years
Water systems 10 to 40 years
- 104 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
The capital assets of the Department at June 30, 2022 were as follows:
Depreciable assets
Utility plant in service $584,553,473
Less: accumulated depreciation (306,479,516)
278,073,957
Nondepreciable assets
Preliminary survey and investigation charges 2,213,049
Construction work in progress 19,937,881
Land and rights 5,324,040
27,474,970
Right to use lease assets
Land 226,050
Equipment 57,470
Less: accumulated amortization (26,068)
257,452
Net capital assets $305,806,379
The following is a summary of changes in capital assets during the fiscal year ended June 30,
2022.
Balance
July 1,2021 Retirements/ Balance
restated Additions Transfers June 30,2022
Nondepreciable assets
Land and rights $ 5,268,940 $ 55,100 $ -- $ 5,324,040
Preliminary survey and
investigation charges 3,256,742 900,436 (1,943,129) 2,213,049
Construction work in progress 24,436,397 14,229,897 (18,728,413) 19,937,881
Total capital assets not being
depreciated 32,961,079 15,185,433 (20.671,542) 27,474,970
Depreciable assets
Utility plant in service 560,826,916 26,728,887 (3,002,330) 584,553,473
Less accumulated depreciation (293,271,311) 15,765,318) 2,557,113 (306,479,510
Total capital assets being
depreciated 267,555,605 10,963,569 (445,217) 278,073,957
Right to use lease assets
Land 226,050 -- -- 226,050
Equipment 35,010 22,460 -- 57,470
261,060 22,460 -- 283,520
Accumulated amortization
Land -- (5,626) -- (5,626)
Equipment -- (20,442) -- (20,442)
-- (26,068) -- (26,068)
Total right to use lease assets 261,060 (3,608) -- 257,452
Net capital assets 8300,777,744 826,145,394 (21,116,759) 305.806.379
- 105 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
Long-Term Debt
The County has issued general obligation bonds on behalf of the Department. The
Department is responsible for the payment of the debt service on these bonds,but the County
remains liable because they are general obligations of the County. The Department has
recorded a liability for these general obligation bonds,which amounted to $20,139,155 at June
30, 2022.
General obligation bonds payable issued on behalf of the Department and other long-term debt
at June 30, 2022 are comprised of the following:
Public improvement bonds:
2008 Series A at 4.125%, due through 2043 $ 114,155
Public improvement refunding bonds:
2016 Series B at 3.0%to 5.0%, due through 2026 7,525,000
2016 Series E at 2.0%to 5.0%, due through 2029 5,297,500
2020 Series C &D at 5.0%, due through 2029 3,097,500
USDA Bond#R-1 at 2.0%, due through 2057 4,105,000
Revolving fund loans:
State revolving fund loans, interest up to 1.0%, 53,580,508
due through 2041
Total long-term debt 73,719,663
Add: Unamortized premium 1,359,370
Total 75.079.033
At June 30, 2022, future principal and interest payments for long-term debt are scheduled as
follows:
Fiscal year ending June 30: Principal Interest Total
2023 $ 5,639,478 $ 1,514,236 $ 7,153,714
2024 5,795,184 1,342,720 7,137,904
2025 6,046,180 1,168,476 7,214,656
2026 6,198,442 1,001,040 7,199,482
2027 6,351,350 828,135 7,179,485
2028—2032 19,792,476 2,589,253 22,381,729
2033—2037 15,353,215 1,190,560 16,543,775
2038—2042 6,418,982 368,584 6,787,566
2043 - 2047 661,507 139,744 801,251
2048 - 2052 704,214 88,902 793,116
2053 - 2057 758,635 34,478 793,113
Total 73.719.663 10.266.128 S83,985,791
- 106 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
The following is a summary of changes in long-term debt during the fiscal year ended June 30,
2022:
Balance Balance Due Within
July 1,2021 Additions Decreases June 30,2022 One Year
State revolving fund loans $ 46,997,951 $ 10,000,000 $ (3,417,443) $ 53,580,508 $ 3,372,203
Public improvement
bonds 18,831,243 4,105,000 (2,797,088) 20,139,155 2,267,275
Add:unamortized
premium 1,622,233 -- (262,863) 1,359,370 262,863
Total 67.451.427 14,105,000 S (6,477,3941 75,079,033 $ 5,902,341
Contributions in Aid of Construction
The Department recognized$12,653,207 of contributions in aid of construction for the fiscal
year ended June 30, 2022.
Other Long-Term Liabilities
The following is a summary of other long-term obligations transactions for the fiscal year
ended June 30,2022:
Balance
July 1,2021 Deductions/ Balance Due Within
restated Additions Payments June 30,2022 One Year
Customers' deposits $ 16,119,667 $ 710,240 $ (391,609) $ 16,438,298 $ 234,727
Accrued vacation 2,029,668 894,553 (969,745) 1,954,476 644,977
Accrued workers'
compensation 380,000 -- (80,000) 300,000 138,464
Leases payable 261.060 22,460 (24,434) 259,086 31,569
Total $ 18,790,395 $ 1,627,253 (1.465.7881 $ 18,951,860 $ 1,049,737
Commitments and Contingent Liabilities
Claims and judgments—The Department maintains property, auto liability, and general
liability insurance policies. The Department remains self-insured for workers' compensation
and other perils. The liability at June 30,2022 for workers' compensation claims of$300,000
was estimated based on a combination of case-by-case review and the application of historical
experience to outstanding claims.
Construction contracts—The Department is obligated under construction contracts for the
utility plant and other projects. Such commitments approximated$14,126,000 at
June 30, 2022.
- 107 -
COUNTY OF HAWAI`I
Notes to the Basic Financial Statements
June 30,2022
Pension Plan
Pension liabilities,pension expense, and deferred outflows of resources and deferred
inflows of resources related to pensions—At June 30, 2022,the Department reported a
liability of$29,017,165 for its proportionate share of the net pension liability. The net pension
liability was measured as of June 30, 2021, and the total pension liability used to calculate the
net pension liability was determined by an actuarial valuation as of that date. The
Department's proportion of the net pension liability was based on a projection of the employer
contributions to the pension plan relative to projected contributions of all participating
employers.
At June 30, 2021, the Department's proportion was .24%,which is an increase of.1% from its
proportion measured as of June 30, 2020.
For the year ended June 30, 2022,the Department recognized pension expense of$3,344,975.
At June 30,2022, 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 $ 811,089 $ --
Net difference between projected and actual earnings
on pension plan investments -- 4,927,920
Changes in assumptions 80,006 --
Changes in proportion and differences between employer
contributions and proportionate share of contributions 1,685,588 1,238,689
Department contributions subsequent to the measurement date 2,477,404 --
Total &hJ66&0
The $2,477,404 reported as deferred outflows of resources related to the Department's
contributions to the pension plan subsequent to the measurement date will be recognized as a
reduction of the net pension liability in the fiscal year ended June 30, 2023.
- 108 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
Other amounts reported as deferred outflows of resources and deferred inflows of resources
related to pensions will be recognized in pension expense as follows:
Net Deferred
Outflows
(Inflows) of
Fiscal Year Ending June 30, Resources
2023 $ (492,227)
2024 (879,557)
2025 (946,490)
2026 (1,304,725)
2027 33,073
(3,589.926)
Sensitivity of the Department's proportionate share of the net pension liability to changes in
the discount rate—The following presents the Department's proportionate share of the net
pension liability calculated using the discount rate of 7.00%, as well as what its proportionate
share of the net pension liability would be if it were calculated using a discount rate that is 1-
percentage-point lower(6.00%) or 1-percentage-point higher(8.00%)than the current rate:
1%Decrease Current Discount 1%Increase
(6.00%) Rate (7.00%) (8.00%)
Department's proportionate
share of the net pension liability S 39,578,213 S 29,017,165 20,310.191
Pension plan fiduciary net position—Detailed information about the pension plan's fiduciary
net position is available in the separately issued ERS Annual Comprehensive Financial Report
(ACFR)that includes financial statements and required supplementary information.
Payables to the pension plan—At June 30, 2022,the annual amount payable to the ERS
totaled$321,521, which represents the employer contribution for the month of June 2021 and
an accrual for excess pension costs attributed to the fiscal year, as required by HRS.
Post-Retirement Benefits Other than Pensions (OPEB)
Net OPEB liability, OPEB expense, and deferred outflows of resources and deferred inflows
of resources related to OPEB—At June 30, 2022, the Department reported a net OPEB
liability of$10,451,786. The net OPEB liability was measured as of July 1, 2021, and the
total OPEB liability used to calculate the net OPEB liability was determined by an actuarial
valuation as of that date. For the year ended June 30, 2022, the Department recognized OPEB
expense of$581,414.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
At June 30,2022, 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
Difference between expected and actual experience $ -- $ 2,566,499
Changes of assumptions 246,074 133,761
Net difference between projected and actual earnings on OPEB
plan investments -- 2,558,725
Employer contributions subsequent to the measurement date 2,148,000 --
Total 2.394.074 5.258.985
$2,148,000 reported as deferred outflows of resources related to the Department's
contributions to the OPEB plan subsequent to the measurement date will be recognized as a
reduction of the net OPEB liability in the fiscal year ended June 30, 2023.
Other amounts reported as deferred outflows of resources and deferred inflows of resources
related to pensions will be recognized in pension expense as follows:
Net Deferred
Inflows of
Fiscal Year Ending June 30, Resources
2023 $ 1,116,608
2024 1,114,177
2025 1,167,543
2026 1,289,397
2027 309,489
Thereafter 15,697
5.012.911
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COUNTY OF HAWAI`I
Notes to the Basic Financial Statements
June 30,2022
Changes in the Net OPEB Liability:
The following schedule presents the changes in the net OPEB liability for the fiscal year
ending June 30, 2022:
Increase (Decrease)
Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability
(a) (b) (a)-(b)
Balance at June 30,2021 $ 35,237,107 $ 20,843,293 S 14,393,814
Changes for the fiscal year:
Service cost 762,769 -- 762,769
Interest on the total OPEB liability 2,456,079 -- 2,456,079
Employer contributions -- 1,210,523 (1,210,523)
Net investment income -- 5,666,092 (5,666,092)
Benefit payments (1,063,301) (1,063,301) --
Administrative expense -- (2,922) 2,922
Difference between expected
and actual experience (287,233) -- (287,233)
Other -- (50) 50
Net changes $ 1,868,314 $ 5,810,342 $ (3,942,028)
Balance at June 30, 2022 37,105,421 26.653,635 $ 10,451,786
Sensitivity of the net OPEB liability to changes in the discount rate—The following presents
the net OPEB liability of the Department, as well as what the Department's net OPEB liability
would be if it were calculated using a discount rate that is 1-percentage-point lower(6.00%) or
1-percentage-point higher(8.00%)than the current discount rate:
1%Decrease Current Discount 1%Increase
(6.00%) Rate (7.00%) (8.00%)
Department's net OPEB liability 16,140,504 S 10,451,786 S 5,915, 112
Sensitivity of the net OPEB liability to changes in the healthcare cost trend rates—The
following presents the net OPEB liability of the Department, as well as what the Department's
net OPEB liability would be if it were calculated using a healthcare cost trend rate that is 1-
percentage-point lower or 1-percentage-point higher than the current healthcare cost trend
rate:
Current
Healthcare Cost
1%Decrease Trend Rate 1%Increase
Department's net OPEB liability S 10,451,786 S 16,601. 552
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2022
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.eut£hawaii. oovv or by contacting them at P.O. Box 2121, Honolulu,HI 96805-2121.
Prior Period Adjustment
Net position as of July 1,2021 has been restated due to errors related to capital assets that
were misclassified and should have been either placed in service(classified as utility plant in
service) or written-off prior to June 30, 2021. Therefore, an adjustment was made to increase
utility plant in service by$22,057,519, decrease construction work in progress by
$20,562,979,increase accumulated depreciation by$1,224,752, and decrease preliminary
survey and investigation charges by $2,259,839 as of June 30, 2021. The effect for the fiscal
year ended June 30,2021 was a decrease in change in net position of$460,378 and a decrease
in beginning net position as of July 1, 2021 of$1,990,051.
- 112 -
COUNTY OF HAWAII
Required Supplementary Information
June 30,2022
Schedule of Changes in the Net OPEB Liability and Related Ratios
Last 10 Fiscal Years*
2022
County Department
Total OPEB Liability
Service Cost $ 12,764,228 $ 762,769
Interest on the total OPEB liability 40,832,661 2,456,079
Benefit payments (19,280,575) (1,063,301)
Difference between expected and actual
experience (19,584,810) (287,233)
Net change in total OPEB liability 14,731,504 1,868,314
Total OPEB liability-Beginning 586,581,909 35,237,107
Total OPEB liability- Ending $ 601,313,413 $ 37,105,421
Plan fiduciary net position
Contributions- employer $ 38,334,627 $ 1,210,523
Net investment income 57,339,331 5,666,092
Benefit payments (19,280,575) (1,063,301)
Administrative expense (29,421) (2,922)
Other (170,462) (50)
Net change in plan fiduciary net position 76,193,500 5,810,342
Plan fiduciary net position-Beginning 213,616,220 20,843,293
Plan fiduciary net position-Ending $ 289,809,720 $ 26,653,635
Net OPEB liability $ 311,503,693 $ 10,451,786
Plan fiduciary net position as a percentage of
the total OPEB liability 48.2% 71.8%
Covered-employee payroll $ 197,978,022 $ 10,713,826
Net OPEB liability as a percentage of
Covered-employee payroll 157.3% 97.6%
- 113 -
COUNTY OF HAWAII
Required Supplementary Information
June 30,2022
2021
County Department
Total OPEB Liability
Service Cost $ 13,182,551 $ 773,607
Interest on the total OPEB liability 41,412,243 2,483,573
Benefit payments (19,277,123) (1,036,438)
Difference between expected and actual
experience (39,988,932) (2,403,748)
Change in assumptions (3,397,584) (190,921)
Net change in total OPEB liability (8,068,845) (373,927)
Total OPEB liability-Beginning 594,650,754 35,611,034
Total OPEB liability- Ending $ 586,581,909 $ 35,237,107
Plan fiduciary net position
Contributions- employer $ 41,604,474 $1,977,000
Net investment income 3,806,539 376,721
Benefit payments (19,277,123) (1,036,438)
Administrative expense (29,192) (3,013)
Other 127,017 (2,264)
Net change in plan fiduciary net position 26,231,715 1,312,006
Plan fiduciary net position-Beginning 187,384,505 19,531,287
Plan fiduciary net position-Ending $ 213,616,220 $ 20,843,293
Net OPEB liability $ 372,965,689 $ 14,393,814
Plan fiduciary net position as a percentage of
the total OPEB liability 36.4% 59.2%
Covered-employee payroll $ 189,053,873 $ 10,266,331
Net OPEB liability as a percentage of
Covered-employee payroll 197.4% 140.2%
- 114 -
COUNTY OF HAWAII
Required Supplementary Information
June 30,2022
2020
County Department
Total OPEB Liability
Service Cost $ 12,402,599 $ 746,672
Interest on the total OPEB liability 38,381,475 2,349,959
Benefit payments (18,651,726) (1,012,084)
Difference between expected and actual
experience 9,224,217 (314,598)
Change in assumptions 1,862,836 137,542
Net change in total OPEB liability 43,219,401 1,907,491
Total OPEB liability-Beginning 551,431,353 33,703,543
Total OPEB liability- Ending $ 594,650,754 $ 35,611,034
Plan fiduciary net position
Contributions- employer $ 39,770,000 $1,990,000
Net investment income 7,187,610 764,696
Benefit payments (18,651,726) (1,012,084)
Administrative expense (49,623) (5,493)
Other 8,531,701 522,371
Net change in plan fiduciary net position 36,787,962 2,259,490
Plan fiduciary net position-Beginning 150,596,543 17,271,797
Plan fiduciary net position-Ending $ 187,384,505 $ 19,531,287
Net OPEB liability $ 407,266,249 $ 16,079,747
Plan fiduciary net position as a percentage of
the total OPEB liability 31.5% 54.9%
Covered-employee payroll $ 185,575,775 $ 10,264,425
Net OPEB liability as a percentage of
Covered-employee payroll 219.5% 156.7%
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COUNTY OF HAWAII
Required Supplementary Information
June 30,2022
2019
County Department
Total OPEB Liability
Service Cost $ 12,056,311 $ 698,126
Interest on the total OPEB liability 36,036,284 2,264,524
Benefit payments (17,998,013) (1,016,548)
Difference between expected and actual
experience (3,679,099) (1,184,347)
Change in assumptions 7,240,956 432,233
Net change in total OPEB liability 33,656,439 1,193,988
Total OPEB liability-Beginning 517,774,914 32,509,555
Total OPEB liability- Ending $ 551,431,353 $ 33,703,543
Plan fiduciary net position
Contributions- employer $ 32,829,013 $1,936,548
Net investment income 9,474,156 1,111,306
Benefit payments (17,998,013) (1,016,548)
Administrative expense (29,227) (3,336)
Net change in plan fiduciary net position 24,275,929 2,027,970
Plan fiduciary net position-Beginning 126,320,614 15,243,827
Plan fiduciary net position-Ending $ 150,596,543 $ 17,271,797
Net OPEB liability $ 400,834,810 $ 16,431,746
Plan fiduciary net position as a percentage of
the total OPEB liability 27.3% 51.3%
Covered-employee payroll $ 178,889,344 $ 10,212,595
Net OPEB liability as a percentage of
Covered-employee payroll 224.1% 160.9%
- 116 -
COUNTY OF HAWAII
Required Supplementary Information
June 30,2022
2018
County Department
Total OPEB Liability
Service Cost $ 11,757,502 $ 687,414
Interest on the total OPEB liability 34,046,407 2,135,490
Benefit payments (17,054,987) (953,288)
Net change in total OPEB liability 28,748,922 1,869,616
Total OPEB liability-Beginning 489,025,992 30,639,939
Total OPEB liability- Ending $ 517,774,914 $ 32,509,555
Plan fiduciary net position
Contributions- employer $ 28,549,987 $1,867,788
Net investment income 10,380,705 1,245,946
Benefit payments (17,054,987) (953,288)
Administrative expense (23,228) (2,782)
Other 266,457 16,370
Net change in plan fiduciary net position 22,118,934 2,174,034
Plan fiduciary net position-Beginning 104,201,680 13,069,793
Plan fiduciary net position-Ending $ 126,320,614 $ 15,243,827
Net OPEB liability $ 391,454,300 $ 17,265,728
Plan fiduciary net position as a percentage of
the total OPEB liability 24.4% 46.9%
Covered-employee payroll $ 172,678,405 $ 9,791,132
Net OPEB liability as a percentage of
Covered-employee payroll 226.70% 176.34%
* This schedule is intended to present information for 10 years, as of the measurement date of the
collective net OPEB liability for each respective fiscal year. Additional years will be built
prospectively as information becomes available.
See accompanying notes to required supplementary information
- 117 -
COUNTY OF HAWAII
Required Supplementary Information
June 30,2022
Schedule of Contributions (OPEB)Last 10 Fiscal Years
County:
Contributions Contributions
in Relation to as a%age
Actuarially the Actuarially Contribution Covered- of Covered-
Fiscal Year Determined Determined Deficiency Employee Employee
Ended Contribution Contribution Excess Payroll Payroll
June 30, 2022 $ 45,147,000 $ 38,439,395 $ 6,707,605 $ 195,866,428 19.6%
June 30, 2021 $ 42,917,000 $ 38,181,347 $ 4,735,653 $ 197,978,022 19.3%
June 30,2020 $ 41,464,000 $ 41,604,474 $ 140,474 $ 189,053,873 22.0%
June 30,2019 $ 39,770,000 $ 39,770,000 $ -- $ 185,575,775 21.4%
June 30, 2018 $ 37,748,000 $ 32,829,013 $ 4,918,987 $ 178,889,344 21.1%
June 30,2017 $ 36,472,000 $ 28,549,987 $ 7,922,013 $ 172,678,405 21.1%
June 30, 2016 $ 33,614,000 $ 22,747,340 $ 10,866,660 $ 159,744,324 14.2%
June 30, 2015 $ 32,478,000 $ 18,657,000 $ 13,821,000 $ 152,490,296 12.2%
June 30, 2014 $ 30,526,000 $ 17,453,000 $ 13,073,000 $ 139,423,481 12.5%
June 30, 2013 $ 29,494,000 $ 13,892,000 $ 15,602,000 $ 130,803,306 10.6%
Department:
Contributions Contributions
in Relation to as a%age
Actuarially the Actuarially Contribution Covered- of Covered-
Fiscal Year Determined Determined Deficiency Employee Employee
Ended Contribution Contribution (Excess) Payroll Payroll
June 30, 2022 $ 2,148,000 $ 2,148,000 $ -- $11,020,814 19.5%
June 30, 2021 $ 2,046,000 $ 1,210,523 $ 835,477 $10,713,826 11.3%
June 30, 2020 $ 1,977,000 $ 1,977,000 $ -- $10,266,331 19.3%
June 30, 2019 $ 1,990,000 $ 1,990,000 $ -- $10,264,425 19.4%
June 30, 2018 $ 1,933,000 $ 1,936,548 $ 3,548 $10,212,595 19.0%
June 30, 2017 $ 1,867,000 $ 1,867,788 $ 788 $ 9,791,132 19.1%
June 30, 2016 $ 1,914,000 $ 1,913,204 $ 796 $ 9,464,649 20.2%
June 30, 2015 $ 1,850,000 $ 1,848,389 $ 1,611 $ 9,426,509 19.6%
June 30, 2014 $ 1,899,000 $ 1,900,758 $ 1,758 $ 8,635,402 22.0%
June 30,2013 $ 1,834,000 $ 1,833,733 $ 267 $ 7,966,529 23.0%
See accompanying notes to required supplementary information
- 118 -
COUNTY OF HAWAII
Required Supplementary Information
June 30,2022
Note—Significant Methods and Assumptions
Beginning July 1, 2017, an actuarial valuation of the County's and Department's liability
associated with other postemployment benefits other than pension provided through the EUTF is
performed as of July 1 of each year.
The following summarizes the significant methods and assumptions used to determine the
actuarially determined contribution for the fiscal year ended June 30, 2022:
Actuarial valuation date Developed in the July 1,2019 valuation
Actuarial cost method Entry Age Normal
Amortization method Level percent, closed
Equivalent single amortization period 17.6 and 15.9 for the County and Department,
respectively, as of June 30, 2022
Asset valuation method 4-year smoothed market
Inflation rate 2.50%
Investment rate of return 7.00%
Payroll growth 3.50%
Salary increases 3.50%to 7.00%including inflation
Healthcare cost trend rates
PPO Initial rates of 8.00%; declining to a rate of 4.86%
after 12 years
HMO Initial rate of 8.00%; declining to a rate of 4.86%
after 12 years
Part B Initial rate of 5.00%; declining to a rate of 4.70%
after 11 years
Dental Initial rate of 5.00% for first 2 years, followed by
4.00% for all future years
Vision Initial rate of 0.00% for first 2 years, followed by
2.50% for all future years
Life Insurance 0.00%
- 119 -
COUNTY OF HAWAII
Required Supplementary Information
June 30,2022
Demographic assumptions Based on the experience study covering the five
year period ending June 30, 2018 conducted for
the Hawaii Employees' Retirement System
Mortality System-specific mortality tables utilizing scale
BB to project generational mortality improvement
Participation rates 98%healthcare participation assumption for
retirees that receive 100% of the Base Monthly
Compensation. Healthcare participation rates of
25%, 65%, and 90% for retirees that receive 0%,
50%, or 75% of the base monthly contribution,
respectively. 100% for life insurance and 98%for
Medicare Part B.
There were no other factors that significantly affected trends in the amounts reported in the
schedule of changes in the net OPEB liability and related ratios or the schedule of contributions
(OPEB).
- 120 -
COUNTY OF HAWAII
Required Supplementary Information
June 30,2022
Schedule of the County's and Department's Proportionate Share
of the Net Pension Liability(ERS)
Last 10 Fiscal Years
County:
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, 2021 4.6% $565,147,246 $186,778,076 302.6% 64.3%
June 30, 2020 4.5% $696,251,655 $180,285,326 386.2% 53.2%
June 30, 2019 4.7% $668,213,164 $172,197,101 388.1% 54.9%
June 30, 2018 4.8% $635,693,501 $168,484,880 377.3% 55.5%
June 30, 2017 4.7% $609,904,199 $163,626,447 372.7% 54.8%
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 $129,153,763 292.0% 58.0%
Department:
Proportionate
Share of the Plan
Department's Department's Net Pension Fiduciary Net
Proportion of Proportionate Liability as a Position as a
the Net Share of the Department's %age of %age of the
Measurement Pension Net Pension Covered Covered Total Pension
Period Ended Liability(%) Liability($) Payroll Payroll Liability
June 30, 2021 0.2% $ 29,017,165 $11,016,038 263.4% 64.3%
June 30, 2020 0.2% $ 35,290,257 $10,439,473 338.0% 53.2%
June 30, 2019 0.2% $ 32,029,248 $10,318,136 310.4% 54.9%
June 30, 2018 0.3% $ 33,522,053 $ 9,742,400 344.1% 55.5%
June 30, 2017 0.2% $ 28,365,453 $ 9,358,187 303.1% 54.8%
June 30, 2016 0.2% $ 29,247,607 $ 9,046,930 323.3% 51.2%
June 30, 2015 0.2% $ 18,940,065 $ 9,012,196 210.2% 62.4%
June 30, 2014 0.3% $ 20,526,993 $ 8,272,307 248.1% 63.9%
June 30, 2013 0.2% $ 18,469,400 $ 7,640,477 241.7% 58.0%
* This schedule is intended to present information for 10 years, as of the measurement date of the
collective net pension liability for each respective fiscal year. Additional years will be built
prospectively as information becomes available.
See accompanying notes to required supplementary information
- 121 -
COUNTY OF HAWAII
Required Supplementary Information
June 30,2022
Schedule of the Employer Pension Contributions (ERS)
Last Ten Fiscal Years
County:
Actual
County Contributions
Statutorily Contributions Contribution as a%age of
Fiscal Year Required Recognized Deficiency County's Covered
Ended Contribution by the Plan (Excess) Covered Payroll Payroll
June 30,2022 $ 61,913,089 $ 61,913,089 $ -- $ 183,409,868 33.8%
June 30,2021 $ 63,953,781 $ 63,953,781 $ -- $ 186,778,076 34.2%
June 30,2020 $ 52,778,035 $ 52,778,035 $ -- $ 180,285,326 29.3%
June 30,2019 $ 44,853,953 $ 44,853,953 $ -- $ 172,197,101 26.0%
June 30, 2018 $ 41,562,933 $ 41,562,933 $ -- $ 168,484,880 24.7%
June 30,2017 $ 36,157,981 $ 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 19.3%
June 30,2013 $ 23,763,101 $ 23,763,101 $ -- $ 129,153,763 18.4%
Department:
Actual
County Contributions
Statutorily Contributions Contribution as a%age of
Fiscal Year Required Recognized Deficiency County's Covered
Ended Contribution by the Plan (Excess) Covered Payroll Payroll
June 30,2022 $ 2,477,404 $ 2,477,404 $ -- $ 10,450,084 23.7%
June 30, 2021 $ 2,579,631 $ 2,579,631 $ -- $ 11,016,038 23.4%
June 30, 2020 $ 2,258,593 $ 2,258,593 $ -- $ 10,439,473 21.6%
June 30, 2019 $ 1,950,358 $ 1,950,358 $ -- $ 10,318,136 18.9%
June 30, 2018 $ 1,757,461 $ 1,757,461 $ -- $ 9,742,400 18.0%
June 30, 2017 $ 1,603,278 $ 1,603,278 $ -- $ 9,358,187 17.1%
June 30, 2016 $ 1,553,128 $ 1,553,128 $ -- $ 9,046,930 17.2%
June 30, 2015 $ 1,520,994 $ 1,520,994 $ -- $ 9,012,196 16.9%
June 30, 2014 $ 1,664,580 $ 1,664,580 $ -- $ 8,272,307 20.1%
June 30, 2013 $ 1,214,933 $ 1,214,933 $ -- $ 7,640,477 15.9%
See accompanying notes to required supplementary information
- 122 -
COUNTY OF HAWAII
Required Supplementary Information
June 30,2022
Note—Changes of Assumptions
There were no changes of assumptions or other inputs that significantly affected the measurement
of the total pension liability since the measurement period ended June 30,2020.
There were no material changes in the actuarial assumptions used in calculating the amounts
reported in the schedule of the proportionate share of the net pension liability as of the
measurement period ended June 30, 2021 (fiscal year ended June 30, 2022).
- 123 -
COUNTY OF HAWAII
Required Supplementary Information
June 30,2022
Schedule of Changes in Total Pension Liability(Bandsmen Pension)
Last Ten Fiscal Years*
Measurement year
ending
June 30, 2022 2021 2020 2019 2018
Total Pension
Liability
Service Cost $ 11,943 $ 145,450 $ 7,577 $ 7,392 $ --
Interest on the Total
Pension Liability 21,813 28,152 29,250 38,149 --
Differences between
expected and actual
experience (68,212) (70,480) -- (89,947) --
Assumption Changes (230,048) 58,659 87,065 (44,293) --
Benefit Payments (37,713 (44,799) (49,612) (47,532) (58,808)
Net Change in Total
Pension Liability (302,217) 116,982 74,280 (136,231) (58,808)
Total Pension
Liability—Beginning 1,143,003 1,026,021 951,741 1,087,972 1,146,780
Total Pension
Liability—Ending 840 786 1 143 003 1 026 021 951 741 Lt&&7.972
Covered Payroll $ 22,729 $ 24,076 $ 26,349 $ 26,349 $ 49,505
Total Pension Liability
as a Percentage of
Covered Employee
Payroll 3,699.2% 4,747.5% 3,894.0% 3,612.1% 2,197.7%
- 124 -
COUNTY OF HAWAII
Required Supplementary Information
June 30,2022
Measurement year
ending 2017
June 30,
Total Pension
Liability
Service Cost $ 16,416
Interest on the Total
Pension Liability 36,289
Differences between
expected and actual
experience --
Assumption Changes (113,807)
Benefit Payments (53,347
Net Change in Total
Pension Liability (114,449)
Total Pension
Liability—Beginning 1,261,229
Total Pension
Liability—Ending 1,146.780
Covered Payroll $ 49,505
Total Pension Liability
as a Percentage of
Covered Employee 2,316.5%
Payroll
* This schedule is intended to present information for 10 years, as of the measurement date of the
total pension liability for each respective fiscal year. Additional years will be built prospectively as
information becomes available.
See accompanying notes to required supplementary information
- 125 -
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- 126 -
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
HIGHWAYFUND- 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.
BIKEWAYFUND-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.
BEA UTIFICATION 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 COUNTYHOUSING 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.
SHORT-TERM VACATION RENTAL ENFORCEMENT FUND—Used to account for cost of enforcing
County's short-term vacation rental enforcement laws. Financing is provided by all fees and fines collected
in connection with the law.
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.
BOND REDEMPTIONFUND-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.
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- 127 -
COUNTY OF HAWAII
Nonmajor Governmental Funds
Combining Balance Sheet
June 30,2022
Special Revenue Funds
Solid Parking Vehicle
Highway Sewer Waste Cemetery Meter Disposal
Fund Fund Fund Fund Fund Fund
Assets
Cash and cash equivalents $38,202,915 $ 13,407,023 $ 6,799,269 $ 123,941 $338,264 $ 10,776,441
Imprest fund - 400 250 - - -
Receivables:
Due from other governments 2,878,329 242,246 298,092 - - -
Due from other governmental funds 650,961 303,034 140,377 - - 282
Due from other nongovernmental funds - 4,800 - - - -
Trade,net of allowance for doubtful accounts - 2,250,944 1,135,749 - - -
Other - - 480,359 - - -
3,529,290 2,801,024 2,054,577 - - 282
Total assets $41,732,205 $ 16,208,447 $ 8,854,096 $ 123,841 $338,264 $ 10,776,723
Liabilities,Deferred Inflows and Fund Balances
Liabilities:
Accounts payable $ 747,677 $ 412,847 $ 2,306,200 $ - $ - $ 160,148
Accrued payroll 816,071 265,731 504,081 - - 2,878
Due to other governmental funds 744,756 635,787 974,950 - - 920,685
Advance Collections-Intergovernmental 99,254 - 11,998 - - -
Other 1,036 125,178 72 - - 12
Total liabilities 2,408,794 1,439,543 3,797,301 - - 1,083,723
Deferred Inflows of Resources
Unavailable Revenue - 2,250,944 1,135,749 - - -
Fund balances:
Restricted for:
Debt service - - - - - -
Highways,streets and abandoned vehicles 39,323,411 - - - - -
Housing and rental assistance - - - - - -
Lower Puna area - - - - - -
Committed to:
Sanitation - 12,517,960 3,921,046 - - -
Highways,streets and abandoned vehicles - - - - 338,264 9,693,000
Rental assistance and subsidy - - - - - -
Cemetery - - - 123,841 - -
Golf Course - - - - - -
Lower Puna area - - - - - -
Parks and recreational projects - - - - - -
Total fund balances 39,323,411 12,517,960 3,921,046 123,841 338,264 9,693,000
Total liabilities,deferred inflows
and fund balances $41,732,205 $ 16,208,447 $ 8,854,096 $ 123,841 $338,264 $ 10,776,723
- 128 -
Special Revenue Funds
Workforce Golf CieothermalReloc. Beauti- Hawaii County Park
Bikeway Irmovation& Course &Community fication Housing Dedication
Fund Opport.Act Fund Fund Benefits Fund Fund Agency Fund
$568,174 $ - $ 298,576 $4,695,068 $ 294,039 $ 13,687,796 $ 61,072
- - 2,000 - - 800 -
- 464,812 - - - 18,110 -
- - - - - 178,135 -
- - - - - 5,367 -
- 38,993 1,595,748 293,213 - 755,741 -
- 503,805 1,595,748 293,213 - 957,353 -
$568,174 $ 503,805 $1,896,324 $4,988,281 $ 294,039 $ 14,645,949 $ 61,072
$ 11,273 $ - $ 4,445 $ - $ 1,453 $ 156,212 $ -
- - 60,309 - - 202,480 -
- 503,805 - - 116,728 148,279 -
- - - - - 9,525,588 -
- - 116 - 1 458,089 -
11,273 503,805 64,870 - 118,182 10,490,648 -
- - 1,594,746 - - 695,198 -
556,901 - - - 175,857 - -
- - - - - 2,321,892 -
- - - - - 1,138,211 -
- - 236,708 - - - -
- - - 4,988,281 - - -
- - - - - - 61,072
556,901 - 236,708 4,988,281 175,857 3,460,103 61,072
$568,174 $ 503,805 $1,896,324 $4,988,281 $ 294,039 $ 14,645,949 $ 61,072
- 129 -
COUNTY OF HAWAII
Nonmajor Governmental Funds
Combining Balance Sheet
June 30,2022
(Concluded)
Debt Service Fund Total
Short-term Bond Nonmajor
Vacation Rental Geothermal Interest Redemption Governmental
Enforcement Fund Asset Fund Fund Fund Funds
Assets
Cash and cash equivalents $ 1,573,027 $2,320,566 $7,027,544 $39,774,899 $139,948,514
Imprest fund - - - - 3,450
Receivables:
Due from other governments - - - - 3,901,589
Due from other governmental funds 2,203 - - - 1,274,992
Due from other nongovernmental funds - - - 319,804 329,971
Trade,net of allowance for doubtful accounts - - - - 3,386,693
Other 1,250 - - - 3,165,304
3,453 - - 319,804 12,058,549
Total assets $ 1,576,480 $2,320,566 $7,027,544 $40,094,703 $152,010,513
Liabilities,Deferred Inflows and Fund Balances
Liabilities:
Accounts payable $ - $ - $ - $ - $ 3,800,255
Accrued payroll 20,795 - - - 1,872,345
Due to other governmental funds - - - - 4,044,990
Advance Collections-Intergovernmental - - - - 9,636,840
Other - - 63,199 185,000 832,703
Total liabilities 20,795 - 63,199 185,000 20,187,133
Deferred Inflows of Resources
Unavailable Revenue - - - - 5,676,637
Fund balances:
Restricted for:
Debt service - - 6,964,345 39,909,703 46,874,048
Highways,streets and abandoned vehicles - - - - 40,056,169
Housing and rental assistance 1,555,685 - - - 3,877,577
Lower Puna area - 2,320,566 - - 2,320,566
Committed to:
Sanitation - - - - 16,439,006
Highways,streets and abandoned vehicles - - - - 10,031,264
Rental assistance and subsidy - - - - 1,138,211
Cemetery - - - - 123,841
Golf Course - - - - 236,708
Lower Puna area - - - - 4,988,281
Parks and recreational projects - - - - 61,072
Total fund balances 1,555,685 2,320,566 6,964,345 39,909,703 126,146,743
Total liabilities,deferred inflows
and fund balances $ 1,576,480 $2,320,566 $7,027,544 $40,094,703 $152,010,513
See accompanying independent auditors'report.
- 130-
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- 131 -
COUNTY OF HAWAII
Nonmajor Governmental Funds
Combining Statement of Revenues,Expenditures,and Changes in Fund Balances
For the Fiscal Year Ended June 30,2022
Special Revenue Funds
Solid Parking Vehicle
Highway Sewer Waste Cemetery Meter Disposal
Fund Fund Fund Fund Fund Fund
Revenues
Fuel taxes $ 21,546,859 $ - $ - $ -
Public utility franchise taxes 9,141,336 - - - - -
Licenses and permits 13,037,822 - - - - 2,515,179
Intergovernmental 1,692,862 - 672,163 - - -
Charges for services 395,341 13,470,542 13,049,775 - 11,097 18,714
Investment earnings(loss) - - - - - -
Other 145,308 10,620 42,790 11,500 - 84,624
Total revenues 45,959,528 13,481,162 13,764,728 11,500 11,097 2,618,517
Expenditures
Current:
General Government 21,242,076 - - - - -
Public safety 9,780,893 - - - - -
Highways and streets 15,354,302 - - - - -
Health,education and welfare - - - - - -
Culture and recreation - - - - - -
Sanitation - 11,904,148 31,981,805 - - 3,410,014
Pension and retirement contributions 4,194,022 1,261,132 2,354,001 - - 35,379
Employees'health insurance 1,591,095 421,072 941,153 - - 9,956
Other 629,544 232,027 443,329 - - -
Debt service:
Principal 707,987 247,052 1,186,451 - - -
Interest 45,901 18,170 62,660 - - -
Total expenditures 34,545,820 14,083,601 36,969,399 - - 3,455,349
Excess(deficiency)of revenues
over(under)expenditures 11,413,708 (602,439) (23,204,671) 11,500 11,097 (836,832)
Other Financing Sources(Uses)
Transfers in - 1,620,686 23,975,360 - - -
Increases in leases and
other financing agreements 3,030,801 - - - - -
Transfers out (3,559,898) - - - - (582,220)
Total other financing sources(uses) (529,097) 1,620,686 23,975,360 - - (582,220)
Net change in fund balances 10,884,611 1,018,247 770,689 11,500 11,097 (1,419,052)
Fund balances at beginning of fiscal year 28,438,800 11,499,713 3,150,357 112,341 327,167 11,112,052
Fund balances at end of fiscal year $ 39,323,411 $ 12,517,960 $ 3,921,046 $ 123,841 $ 338,264 $ 9,693,000
- 132-
Special Revenue Funds
Workforce Golf GeothermalReloc. Beauti- Hawaii County Park
Bikeway lnnovation& Course &Community fication Housing Dedication
Fund Opport.Act Fund Fund Benefits Fmid Fund Agency Fund
$ - $ - $
53,370 - - - 209,589 - -
- 924,353 - - - 43,253,715 -
- - 929,499 - - - -
- - - - - 3,718 (40)
- - - 644,234 - 787,806 -
53,370 924,353 929,499 644,234 209,589 44,045,239 (40)
222,275 - - - 212,988 - -
- 924,353 - - - 45,456,829 -
- - 1,113,522 - 110,472 - -
- - 290,340 - - 961,069 -
- - 133,963 - - 388,035 -
- - 1,260 - - 16,406 -
- - 39,930 - - 209,785 -
- - 2,287 - - 39,660 -
222,275 924,353 1,581,302 - 323,460 47,071,784 -
(168,905) - (651,803) 644,234 (113,871) (3,026,545) (40)
- - 743,160 - - 1,912,102 -
- - - - - 1,874,200 -
- - 743,160 - - 3,786,302 -
(168,905) - 91,357 644,234 (113,871) 759,757 (40)
725,806 - 145,351 4,344,047 289,728 2,700,346 61,112
$ 556,901 $ - $ 236,708 $ 4,988,281 $ 175,857 $ 3,460,103 $ 61,072
- 133 -
COUNTY OF HAWAII
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures,and Changes in Fund Balances
For the Fiscal Year Ended June 30,2022
(Concluded)
Debt Service Fund Total
Short-term Bond Nonmajor
Vacation Rental Geothermal Interest Redemption Governmental
Enforcement Fund Asset Fund Fund Fund Funds
Revenues
Fuel taxes $ - $ - $ - $ - $ 21,546,859
Public utility franchise taxes - - - - 9,141,336
Licenses and permits 354,790 - - - 16,170,750
Intergovernmental - - - - 46,543,093
Charges for services - - - - 27,874,968
Investment earnings(loss) - 296 3,031 - 7,005
Other 1,500 50,000 - - 1,778,382
Total revenues 356,290 50,296 3,031 - 123,062,393
Expenditures
Current:
General Government 265,981 - - - 2,508,057
Public safety - - - - 9,780,893
Highways and streets - - - - 15,789,565
Health,education and welfare - - - - 46,381,182
Culture and recreation - - - - 1,223,994
Sanitation - - - - 47,295,967
Pension and retirement contributions 85,301 - - - 9,181,244
Employees'health insurance 28,284 - - - 3,513,558
Other - - - - 1,322,566
Debt service:
Principal - - - 30,947,210 33,338,415
Interest - - 18,167,792 - 18,336,470
Total expenditures 379,566 - 18,167,792 30,947,210 188,671,911
Excess(deficiency)of revenues
over(under)expenditures (23,276) 50,296 (19,164,761) (30,947,210) (65,609,5t8)
Other Financing Sources(Uses)
Transfers in - - 18,751,967 32,197,486 79,200,761
Increases in leases and
other financing agreements - - - - 4,905,001
Transfers out - - - - (4,142,118)
Total other financing sources(uses) - - 18,751,967 32,197,486 79,963,644
Net change in fund balances (23,276) 50,296 587,206 1,250,276 14,354,126
Fund balances at beginning of fiscal year 1,578,961 2,270,270 6,377,139 38,659,427 111,792,617
Fund balances at end of fiscal year $ 1,555,685 $2,320,566 $ 6,964,345 $39,909,703 $ 126,146,743
See accompanying independent auditors'report.
- 134-
COUNTY OF HAWAII
Highway Fund
Schedule of Revenues,Expenditures,and Changes in Fund Balance-
Budget and Actual(Budgetary Basis)
For the Fiscal Year Ended June 30,2022
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues:
Taxes:
Fuel taxes $ 17,250,441 $ 17,850,441 $ 21,546,859 $ 3,696,418
Public utility franchise taxes 8,553,000 8,553,000 9,141,336 588,336
Total taxes 25,803,441 26,403,441 30,688,195 4,284,754
Licenses and permits-motor vehicle weight taxes 12,000,000 12,000,000 13,037,822 1,037,822
Intergovernmental 1,492,918 1,492,918 1,667,862 174,944
Charges for services 565,000 565,000 594,384 29,384
Other 118,200 118,200 145,308 27,108
Total revenues 39,979,559 40,579,559 46,133,571 5,554,012
Expenditures:
General government-engineering 3,102,846 3,102,846 2,560,080 542,766
Public safety-police traffic enforcement 2,015,174 2,015,174 1,542,453 472,721
Public safety-protective inspection 740,700 740,700 736,825 3,875
Public safety-traffic engineering 10,118,603 9,476,933 7,882,987 1,593,946
Highways and streets 16,528,541 17,940,211 16,201,255 1,738,956
Pension and retirement contributions 4,600,000 4,600,000 4,187,166 412,834
Employees'health insurance 1,700,000 1,700,000 1,590,861 109,139
Other 1,475,000 1,475,000 629,131 845,869
Total expenditures 40,280,864 41,050,864 35,330,758 5,720,106
Excess(deficiency)of revenues over(under)
expenditures (301,305) (471,305) 10,802,813 11,274,118
Other financing uses-transfers out-
Transfers out-Capital Projects Fund (3,000,000) (3,700,015) (3,659,913) 40,102
Excess(deficiency)of revenues
over(under)expenditures and other uses (3,301,305) (4,171,320) 7,142,900 11,314,220
Fund balance at beginning of fiscal year 28,438,800 28,438,800 28,438,800 -
Fund balance at end of fiscsal year S 25,137,495 S 24,267,480 S 35,581,700 S 11,314,220
See accompanying independent auditors'report.
- 135 -
COUNTY OF HAWAII
Sewer Fund
Schedule of Revenues,Expenditures,and Changes in Fund Balance-
Budget and Actual(Budgetary Basis)
For the Fiscal Year Ended June 30,2022
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues:
Charges for services-sewer fees $ 12,840,148 $ 12,840,148 $ 13,470,542 $ 630,394
Other - - 10,620 10,620
Total revenues 12,840,148 12,840,148 13,481,162 641,014
Expenditures:
Sanitation 13,021,253 13,076,253 11,703,704 1,372,549
Pension and retirement contributions 1,484,800 1,484,800 1,256,260 228,540
Employees'health insurance 633,627 571,627 417,950 153,677
Other 1,075,000 1,137,000 977,631 159,369
Total expenditures 16,214,680 16,269,680 14,355,545 1,914,135
Deficiency of revenues under expenditures (3,374,532) (3,429,532) (874,383) 2,555,149
Other financing sources:
Transfers in-General Fund 1,565,686 1,620,686 1,620,686 -
Excess(deficiency)of revenues and other
sources over(under)expenditures (1,808,846) (1,808,846) 746,303 2,555,149
Fund balance at beginning of fiscal year 11,499,713 11,499,713 11,499,713 -
Fund balance at end of fiscal year $ 9,690,867 $ 9,690,867 $ 12,246,016 $ 2,555,149
See accompanying independent auditors'report.
- 136 -
COUNTY OF HAWAII
Solid Waste Fund
Schedule of Revenues,Expenditures,and Changes in Fund Balance-
Budget and Actual(Budgetary Basis)
For the Fiscal Year Ended June 30,2022
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues:
Intergovernmental $ 749,173 $ 749,173 $ 676,433 $ (72,740)
Charges for services-tipping fees 12,746,924 12,746,924 13,049,775 302,851
Other - - 42,790 42,790
Total revenues 13,496,097 13,496,097 13,768,998 272,901
Expenditures:
Sanitation 34,148,951 34,884,951 33,702,264 1,182,687
Pension and retirement contributions 2,578,970 2,578,970 2,356,450 222,520
Employees'health insurance 1,054,227 1,054,227 936,631 117,596
Other 535,000 535,000 461,154 73,846
Total expenditures 38,317,148 39,053,148 37,456,499 1,596,649
Deficiency of revenues under expenditures (24,821,051) (25,557,051) (23,687,501) 1,869,550
Other financing sources:
Transfers in-General Fund 23,239,360 23,975,360 23,975,360 -
Excess(deficiency)of revenues and other
sources over(under)expenditures (1,581,691) (1,581,691) 287,859 1,869,550
Fund balance at beginning of fiscal year 3,150,357 3,150,357 3,150,357 -
Fund balance at end of fiscal year $ 1,568,666 $ 1,568,666 $ 3,438,216 $ 1,869,550
See accompanying independent auditors'report
- 137 -
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 30,2022
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues-other-sale of cemetery plots $ 10,000 $ 10,000 $ 11,500 $ 1,500
Expenditures-health,education and welfare 10,000 10,000 10,000 --
Excess of revenues over expenditures - - 1,500 1,500
Fund balance at beginning of fiscal year 112,341 112,341 112,341 -
Fund balance at end of fiscal year $ 112,341 $ 112,341 $ 113,841 $ 1,500
See accompanying independent auditors'report.
- 138 -
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 30,2022
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues-Charges for services-highways and streets $ - $ - $ 11,097 $ 11,097
Excess of revenues over expenditures - - 11,097 11,097
Fund balance at beginning of fiscal year 327,167 327,167 327,167 -
Fund balance at end of fiscal year $ 327,167 $ 327,167 $ 338,264 $ 11,097
See accompanying independent auditors'report.
- 139 -
COUNTY OF HAWAII
Vehicle Disposal Fund
Schedule of Revenues,Expenditures,and Changes in Fund Balance-
Budget and Actual(Budgetary Basis)
For the Fiscal Year Ended June 30,2022
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues:
Licenses and permits-vehicle disposal fee $ 2,400,000 $ 2,400,000 $ 2,515,179 $ 115,179
Charges for services-towing charges 3,400 3,400 18,714 15,314
Miscellaneous 1,600 1,600 84,624 83,024
Total revenues 2,405,000 2,405,000 2,618,517 213,517
Expenditures:
Sanitation 3,001,164 3,241,164 3,186,228 54,936
Pension and retirement contributions 42,146 42,146 36,416 5,730
Employees'health insurance 29,760 29,760 10,165 19,595
Other 2,000 2,000 - 2,000
Total expenditures 3,075,070 3,315,070 3,232,809 82,261
Deficiency of revenues under expenditures (670,070) (910,070) (614,292) 295,778
Other financing uses-transfers out-
Transfers out-Capital Projects Fund (3,000,000) (3,000,000) (280,000) 2,720,000
Transfers out- Serial Bond Redemption Fund (490,000) (260,000) (252,337) 7,663
Transfersout-InterestFund (95,000) (85,000) (49,883) 35,117
Deficiency of revenues
under expenditures and other uses (4,255,070) (4,255,070) (1,196,512) 3,058,558
Fund balance at beginning of fiscal year 11,112,052 11,112,052 11,112,052 -
Fund balance at end of fiscal year $ 6,856,982 $ 6,856,982 $ 9,915,540 $ 3,058,558
See accompanying independent auditors'report.
- 140 -
COUNTY OF HAWAII
Bikeway Fund
Schedule of Revenues,Expenditures,and Changes in Fund Balance-
Budget and Actual(Budgetary Basis)
For the Fiscal Year Ended June 30,2022
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues-licenses and permits-bicycle tax $ 46,000 $ 46,000 $ 53,370 $ 7,370
Expenditures-highways and streets 199,000 199,000 36,603 162,397
Excess(deficiency)of revenues over(under)
expenditures (153,000) (153,000) 16,767 169,767
Fund balance at beginning of fiscal year 725,806 725,806 725,806 -
Fund balance at end of fiscal year $572,806 $572,806 $742,573 $169,767
See accompanying independent auditors'report.
- 141 -
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 30,2022
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues-intergovernmental $ - $ 1,514,427 $ 1,157,845 $ (356,582)
Expenditures-health,education and welfare - 1,514,427 1,157,845 356,582
Excess of revenues over expenditures - - - -
Fund balance at beginning of fiscal year - - - -
Fund balance at end of fiscal year $ - $ - $ - $ -
See accompanying independent auditors'report.
- 142-
COUNTY OF HAWAII
Golf Course Fund
Schedule of Revenues,Expenditures,and Changes in Fund Balance-
Budget and Actual(Budgetary Basis)
For the Fiscal Year Ended June 30,2022
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues:
Charges for services $ 821,024 $ 821,024 $ 929,499 $ 108,475
Expenditures:
Culture and recreation 1,133,900 1,158,350 1,158,250 100
Pension and retirement contributions 296,091 291,841 291,077 764
Employees'health insurance 137,000 134,800 133,786 1,014
Other 6,000 3,000 1,260 1,740
Total expenditures 1,572,991 1,587,991 1,584,373 3,618
Deficiency of revenues under expenditures (751,967) (766,967) (654,874) 112,093
Other financing sources:
Transfers in-General Fund 728,160 743,160 743,160 -
Excess(deficiency)of revenues and other sources
over(under)expenditures (23,807) (23,807) 88,286 112,093
Fund balance at beginning of fiscal year 145,351 145,351 145,351 -
Fund balance at end of fiscal year $ 121,544 $ 121,544 $ 233,637 $ 112,093
See accompanying independent auditors'report.
- 143 -
COUNTY OF HAWAII
Geothermal Relocation and Community Benefits Fund
Schedule of Revenues,Expenditures,and Changes in Fund Balance-
Budget and Actual(Budgetary Basis)
For the Fiscal Year Ended June 30,2022
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues
Miscellaneous:
Geothermal royalties $ 600,000 $ 600,000 $ 644,234 $ 44,234
Expenditures:
General government-planning and zoning 1,000,000 699,500 - 699,500
Public safety-fire - 300,500 - 300,500
Total expenditures 1,000,000 1,000,000 - 1,000,000
Excess(deficiency)of revenues over
(under)expenditures (400,000) (400,000) 644,234 1,044,234
Fund balance at beginning of fiscal year 4,344,047 4,344,047 4,344,047 -
Fund balance at end of fiscal year $ 3,944,047 $ 3,944,047 $ 4,988,281 $ 1,044,234
See accompanying independent auditors'report.
- 144 -
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 30,2022
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues-licenses and permits-highway
beautification $ 200,000 $ 200,000 $ 209,589 $ 9,589
Expenditures:
Highways and streets 221,200 221,200 220,801 399
Culture and recreation 133,630 133,630 110,472 23,158
Total expenditures 354,830 354,830 331,273 23,557
Deficiency of revenues under expenditures (154,830) (154,830) (121,684) 33,146
Fund balance at beginning of fiscal year 289,728 289,728 289,728 -
Fund balance at end of fiscal year $ 134,898 $ 134,898 $ 168,044 $ 33,146
See accompanying independent auditors'report.
- 145 -
COUNTY OF HAWAII
Hawaii County Housing Agency
Schedule of Revenues,Expenditures,and Changes in Fund Balance-
Budget and Actual(Budgetary Basis)
For the Fiscal Year Ended June 30,2022
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues:
Intergovernmental-
Federal-HUD-Voucher program $ 24,608,943 $ 48,352,443 $ 29,437,599 $ (18,914,844)
State-Housing grant - 4,000,000 - (4,000,000)
Investment earnings 1,620 3,844 3,718 (126)
Resale of property - - 154,752 154,752
Other 816,578 816,578 633,055 (183,523)
Total revenues 25,427,141 53,172,865 30,229,124 (22,943,741)
Expenditures:
Health,education and welfare 25,995,366 53,787,590 30,438,490 23,349,100
Pension and retirement contributions 1,144,585 1,144,585 959,195 185,390
Employees'health insurance 473,023 433,023 385,991 47,032
Total expenditures 27,612,974 55,365,198 31,783,676 23,581,522
Deficiency of revenues under expenditures (2,185,833) (2,192,333) (1,554,552) 637,781
Other financing sources-transfers in-
Transfers in-General Fund 1,905,602 1,912,102 1,912,102 -
Excess(deficiency)of revenues and other sources
over(under)expenditures (280,231) (280,231) 357,550 637,781
Fund balance at beginning of fiscal year 2,700,346 2,700,346 2,700,346 -
Fund balance at end of fiscal year $ 2,420,115 $ 2,420,115 $ 3,057,896 $ 637,781
See accompanying independent auditors'report.
- 146 -
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 30,2022
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues-investment earnings $ - $ - $ 122 $ 122
Excess of revenues over expenditures - - 122 122
Fund balance at beginning of fiscal year 61,112 61,112 61,112 -
Fund balance at end of fiscal year $ 61,112 $ 61,H2 $ 61,234 $ 122
See accompanying independent auditors'report.
- 147 -
COUNTY OF HAWAII
Short-Term Vacation Rental Enforcement Fund
Schedule of Revenues,Expenditures,and Changes in Fund Balance-
Budget and Actual(Budgetary Basis)
For the Fiscal Year Ended June 30,2022
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues:
Licenses-ST vacation rental fees $ 542,000 $ 542,000 $ 354,790 $ (187,210)
Fines and forfeitures 92,400 92,400 1,500 (90,900)
Total revenues 634,400 634,400 356,290 (278,110)
Expenditures:
General government:
ST vacation rental enforcement 481,168 481,168 257,567 223,601
Pension and retirement contributions 102,000 102,000 84,737 17,263
Employees'health insurance 60,000 60,000 27,454 32,546
Total expenditures 643,168 643,168 369,758 273,410
Deficiency of revenues under expenditures (8,768) (8,768) (13,468) (4,700)
Fund balance at beginning of fiscal year 1,578,961 1,578,961 1,578,961 -
Fund balance at end of fiscal year $ 1,570,193 $ 1,570,193 $ 1,565,493 $ (4,700)
See accompanying independent auditors'report.
- 148 -
COUNTY OF HAWAII
Geothermal Asset Fund
Schedule of Revenues,Expenditures,and Changes in Fund Balance-
Budget and Actual(Budgetary Basis)
For the Fiscal Year Ended June 30,2022
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues:
Licenses-geothermal assessment $ 50,000 $ 50,000 $ 50,000 $ -
Tnvestment earnings - - 5,342 5,342
Total revenues 50,000 50,000 55,342 5,342
Expenditures:
General government 50,000 50,000 50,000 -
Total expenditures 50,000 50,000 50,000 -
Excess of revenues over expenditures - - 5,342 5,342
Fund balance at beginning of fiscal year 2,270,270 2,270,270 2,270,270 -
Fund balance at end of fiscal year $ 2,270,270 $ 2,270,270 $ 2,275,612 $ 5,342
See accompanying independent auditors'report.
- 149 -
COUNTY OF HAWAII
Custodial Funds
Combining Statement of Custodial Fund Fiduciary Net Position
June 30,2022
Performance
State Improvement Improvement Improvement Improvement and
Weight District District District District Refundable
Tax No. 18 No. 19 No.20 Revolving Deposits
Fund Fund Fund Fund Fund Fund
Assets
Cash and cash equivalents $2,149,497 $ 419,273 $ 609,511 $ 539,577 $ 416,309 $ 227,595
Due from other custodial funds - - - - - -
Other receivables - 15,238 6,777 11,500 - -
Total assets $2,149,497 S 434,511 $ 616,288 S 551,077 $ 416,309 S 227,595
Liabilities
Accrued liabilities $2,149,172 $ 956 $ 1,359 $ 7,381 $ - $ -
Due to other custodial funds 325 - - - - 2,650
Advances payable - 16,422 1,394 16,861 - -
Totalliabilities $2,149,497 $ 17,378 $ 2,753 $ 24,242 $ - $ 2,650
Net Position
Held in trust for others $ - $ 417,133 $ 613,535 $ 526,835 $ 416,309 $ 224,945
Total net position $ - $ 417,133 $ 613,535 $ 526,835 $ 416,309 $ 224,945
See accompanying independent auditors'report.
- 150 -
Non-Profit Organ and Business
Flexible Lapsed License Tissue Improvement
Spending Warrants Plates Education District
Account Fund Fund Fund 1 -Kailua Total
$ 424,941 $ 425,438 $ 31,660 $ 4,910 $ 1,154 $ 5,249,865
- 2,975 - - - 2,975
- 52,573 - - 5,259 91,347
$ 424,941 $ 480,986 $ 31,660 $ 4,910 $ 6,413 $ 5,344,187
$ - $ - $ 31,660 $ 4,910 $ 6,413 $ 2,201,851
- - - - - 2,975
- - - - - 34,677
31,660 $ 4,910 $ 6,413 $ 2,239,503
$ 424,941 $ 480,986 $ - $ - $ - $ 3,104,684
$ 424,941 $ 480,986 $ - $ - $ - $ 3,104,684
- 151 -
COUNTY OF HAWAII
Custodial Funds
Combining Statement of Changes in Custodial Fund Fiduciary Net Position
For the Fiscal Year Ended June 30,2022
Improvement Improvement Improvement
State Weight District District District
Tax Fund No. 18 Fund No. 19 Fund No.20 Fund
Additions
Tax collections for state $ 26,884,300 $ - $ - $ -
Special assessment collections - 59,617 35,025 164,889
Developer deposit - - - -
Employee collections - - - -
Lapsed checks - - - -
Collections from vehicle registrations and licenses - - - -
Investment earnings - 43 61 36
Total additions 26,884,300 59,660 35,086 164,925
Deductions
Payment of taxes to state 25,836,430 - - -
Payments to state,not for profits and
improvement district - - - -
Contributions to debt repayment - 124,527 55,153 27,416
Administrative charges 1,047,870 956 1,359 7,381
Community facility district expenses - - - -
Reissuance of checks - - - -
Reimbursements to employees - - - -
Other - - - -
Total deductions 26,884,300 125,483 56,512 34,797
Change in net position - (65,823) (21,426) 130,128
Net position at beginning of fiscal year - 482,955 634,962 396,707
Net position at end of fiscal year $ - $ 417,132 $ 613,536 $ 526,835
- 152-
Performance
Improvement and Non-Profit Organ and Business
District Refundable Flexible Lapsed License Tissue Improvement Total
Revolving Deposits Spending Warrants Plates Education District Custodial
Fund Fund Account Fund Fund Fund 1 -Kailua Funds
$ - $ - $ - $ - $26,884,300
- - - - - - 923,458 1,182,989
- 161,609 - - - - - 161,609
- - 406,735 - - - - 406,735
- - - 69,216 - - - 69,216
- 38,200 112,334 24,857 - 175,391
(26) - - - - - - 114
(26) 199,809 406,735 69,216 112,334 24,857 923,458 28,880,354
- - - - - - - 25,836,430
- - - - 82,539 20,581 920,572 1,023,692
- - - - - - - 207,096
- - - - 29,795 4,276 2,886 1,094,523
- 136,691 - - - - - 136,691
- - - 5,066 - - - 51066
- - 394,201 - - - - 394,201
- 17,527 - - - - - 17,527
- 154,218 394,201 5,066 112,334 24,857 923,458 28,715,226
(26) 45,591 12,534 64,150 - - - 165,128
416,335 179,354 412,407 416,836 - - - 2,939,556
$ 416,309 $ 224,945 $424,941 $480,986 $ - $ - $ - $ 3,104,684
- 153-
COUNTY OF HAWAII
Private Purpose Trusts
Combining Statement of Private Purpose Trust Fiduciary Net Position
June 30,2022
Slippers' Total
Wharf Private
Trust Purpose
Assets Fund Trusts
Cash and cash equivalents $ 596,273 $ 596,273
Investments 1,849,511 1,849,511
Total assets $ 2,445,784 $ 2,445,784
Net Position
Held in trust for other parties $ 2,445,784 $ 2,445,784
Total net position $ 2,445,784 $ 2,445,784
See accompanying independent auditors'report.
- 154 -
COUNTY OF HAWAII
Private Purpose Trusts
Combining Statement of Changes in Private Purpose Trust Fiduciary Net Position
For the Fiscal Year Ended June 30,2022
Shippers' Total
Wharf Private
Trust Purpose
Fund Trusts
Additions
Investment earnings:
Dividends $ 48,711 $ 48,711
Interest 211 211
Net increase(decrease)in fair value of
investments (260,823) (260,823)
Total additions (211,901) (211,901)
Deductions
Grant payments 145,438 145,438
Investment Fees 16,489 16,489
Total deductions 161,927 161,927
Change in net position (373,828) (373,828)
Net position,beginning of fiscal year 2,819,612 2,819,612
Net position,end of fiscal year $ 2,445,784 $ 2,445,784
See accompanying independent auditors'report.
- 155 -
This page intentionally left blank,
- 156 -
STATISTICAL SECTION
(UNAUDITED)
Contents Page
Financial Trends—These schedules contain trend information to help the reader understand how
the County's financial performance and well-being have changed over time. 157
Revenue Capacity—These schedules contain information to help the reader assess the County's
most significant local revenue source,the property tax. 162
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. 168
Demographic and Economic Information—These schedules offer demographic and economic
indicators to help the reader understand the environment within which the County's financial
activities take place. 171
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. 173
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Table 4
COtTNTY OF HAR'AFI
Changes in Fund Balances,Governmental Funds
(Modified accrual basis of accounting)
Last Ten Fiscal Years
(Amounts in thousands)
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Revenues:
Property tax $201,201 S223,482 $236,190 S249,054 $266,517 5301,699 $313,631 S327,886 $355,161 5372,701
Public service company tax 10,766 10,380 10,386 9,801 8,423 7.612 8,494 8,862 8,167 8,011
County transient accomodations tax - - - - - - - - - 12,751
Fuel tax 6,353 7,373 7,633 7,934 8,289 13.342 17,343 20,108 18,763 21,547
Public utility franchise tax 11,087 10.793 10,824 9,004 7,951 8.331 9,442 9,365 8,259 9,141
Licenses and permits 15,991 19,619 22,046 22,432 22,932 24,066 24,653 25,155 24,880 27,337
General excise tax surcharge - - - - - - 12,518 35,538 50,288 63,737
Intergovernmental 79,912 75,257 86,272 85,173 79,220 90,025 101,627 113,632 187,650 118,659
Charges for services 17,055 19.392 20,357 21,672 21,708 23.553 27,516 30,080 24,846 29,641
Investment earnings(loss)' (618) 1,704 716 614 632 1.592 4,148 3,481 557 23
Settlement contributions 12,500 - - - - - - - - -
Other 4,399 30,084 9,769 16,132 11,791 4.932 4A43 4,174 3,424 5,584
Total Revenues 358,646 39X,OX3 404,193 421,816 427,463 475,052 524,015 57X,281 681,995 669,131
Expenditures:
Current:
General government 33,360 36,679 40,805 40,488 40,819 41,571 41.800 47,383 47,059 51,008
Public safety 106,885 111,221 122,819 127,451 136,163 137,718 145,094 154,921 232,212 163,387
Highways and streets t7,923 20,270 20,984 22,479 20,329 21,401 27.448 27,962 25,692 38,043
Sanitation 30,672 29,949 31,464 34,015 38,671 39,352 43,815 43,758 45,282 49,928
Health,education and welfare 24,199 23,070 24,540 25,380 30,535 29,876 31,109 30,943 41,391 60,639
Culture and recreation 16,337 18,334 20,056 21,561 21,196 21,324 22,022 22,533 22,883 23,964
Pension and retirement contributions 29,816 33,032 38,485 41,359 43,718 49,494 53,137 61,813 70,662 71,593
Employees'health insurance 26,011 26,786 27,731 30,112 32,147 33,802 17,522 18,846 20,107 20,239
Other postemployment benefits - 3,170 4,532 7,180 11,495 14,831 39,637 41,604 38,191 38,439
Other 2,991 3238 4,686 3,931 3,839 4.622 4,314 8,742 9,165 9,142
Debt service:
Principal 25,718 19,013 22,004 22,432 22,032 86,906 30,577 29,222 32,605 36,691
interest 14,345 14,644 13,871 12,974 17,289 17,739 19,223 18,590 18,241 18,728
Capital outlay 48,565 51,369 79,398 144,288 1111109 41,924 51,897 79,536 72,439 64,270
Total Expenditures 376,822 390,775 451,375 533,650 529,342 540,560 527,595 585,853 675,929 646,071
Revenues over(tinder)Expenditures (18,176) 7,308 (47,182) (111,834) (101,879) (65,508) (3,580) (7,572) 6,066 23,060
Other Financing Sources(Uses):
Sale of assets 1 10 25 66 21 23 47 10 33 199
Capital leases 1,307 14 1,971 3,389 3,769 3.809 6,777 2,822 4,901 19,316
State Revolving Fund loans 4,991 3,072 - 7,317 8,130 5.154 7,439 174 16,187 -
Sale ofbonds 50,480 - - 130,136 - 107.116 - - 38,106 -
Issuance of bond anticipation notes(BANS) - - - - 59,800 - - - - -
Refrndingbonds 47,510 - - 106.254 - 48,784 - - 11,254 -
Premium on bonds t7,570 - - 23,174 - 5,998 - - 17,745 -
Rehnding bondsBANs issuance costs - - - (508) - (276) - - (333)Payment to refunded bond escrow agent (45,352) - - (128,920) - (54,537) - - (13,344) -
Retirement of refunded debt (9,635) - - - - - - - - -
Rcclass of debt from current to long-term - - - - - - - 30,279 - -
Transfers in 51,356 61,238 59,394 57,412 66,864 75,711 77,240 90,199 86,482 92,669
Transfers out (51,356) 61,238) (59,394) (57,412) (66,864) (75,711) (77,240) (90,199) (86,482) (92669)
Total other financing sources 66,872 3,096 1,996 140,908 71,720 116,071 14,263 33,285 74,549 19,515
Net change in fiend balances $ 48,696 S 10A04 $(45,186) $ 29,074 $(30,159) $ 50,563 $ 10,683 $ 25,713 $ 80,615 $ 42,575
Debt service as a percentage of
noncapital expenditures 13.9% 10,01/1) 9.3% 9.1% 9.4% 20.91/,, 10.5% 9.1% 8.4% 9.81/.
Unaudited-see accompanying independent auditors report.
'Amount for fiscal year 2014 has been changed for consistency.
- 161 -
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- 165-
Table 6
COUNTY OF HAWAII
Principal Taxpayers
June 30,2022 and 2013
Fiscal Year 2022 Fiscal Year 2013
Percentage Percentage
2021 of Total 2012 of Total
Assessed Assessed Assessed Assessed
Taxpayer Business Valuation Rank Valuation Valuation Rank Valuation
Hilton Resorts Corp. Timeshare $ 281,770,400 1 0.8% $ 132,459,000 4 0.6%
Kohanaiki Shores LLC Developer 243,153,000 2 0.7% 65,342,600 9 0.3%
Mauna Kea/Hapuna Beach Corps. Developer/Hotel 181,046,700 3 0.5% 187,032,300 3 0.8%
DHL Mahi Opco LLC Developer/Hotel 178,432,000 4 0.5%
Hua.lalai Investors LLC Developer/Hotel 160,029,000 5 0.4% 197,921,000 2 0.8%
Mauna Kea Resort LLC Hotel 141,209,100 6 0.3%
Hilton Land Investment 1 LLC Hotel 121,326,100 7 0.3% 203,948,300 1 0.9%
MAPS Orchid Hotel LLC Hotel 102,022,800 8 0.3%
Raptor Residence LLC Residential 73,624,900 9 0.2%
Hotel/Condo/
Kona Coast Resort Ltd Time Share 67,886,800 10 0.2%
Mauna Lani Resort Inc. Developer/Hotel 965,267,000 6 0.4%
WB KD Acquisition LLC Developer 73,331,000 7 0.3%
Orchid 09 LLC Hotel 115,055,200 5 0.5%
Ho Retail Properties Developer 58,833,600 10 0.3%
Target Corporation Retailer 65,499,500 8 0.3%
$1,550,500,800 4.2% $ 2,064,689,500 5.2%
Note: Gross valuation at January 1,2021: $36,964,647,545
Gross valuation at January 1,2012: $23,527,568,906
Notes:
Source: County of Hawaii,Department of Finance,Real Property Tax Division
Unaudited- see accompanying independent auditors'report.
- 166-
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- 1LO -
Table 9
COUNTY OF HAWAI`I
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
Debt Percent of
Applicable to Net Taxable
Fiscal Legal Debt Property Per
Year Margin (a) Value(b) Capita(c)
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% 2,024
2018 414,446,063 1.4% 2,062
2019 425,153,552 1.3% 2,110
2020 315,676,941 0.9% 2,047
2021 416,225,798 1.2% 2,051
2022 385,067,012 1.0% 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.
Details regarding the County's outstanding debt can be found in the
notes to the basic financial statements.
Unaudited- see accompanying independent auditors'report.
- 169-
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Table 11
COUNTY OF HAWAVI
Demographic and Economic Statistics
Last 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
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%
2017 200,381 $ 8,053,011 $ 40,188 29,666 3.5%
2018 201,509 $ 8,509,388 $ 42,228 29,601 3.7%
2019 202,165 $ 8,602,392 $ 42,551 29,609 4.2%
2020 203,340 $ 9,410,824 $ 46,281 29,217 13.8%
2021 202,906 $ 10,152,965 $ 50,038 28,866 6.4%
* Amounts reflect subsequent adjustments
Source: State of Hawaii, Department of Business, Economic Development and Tourism,
https:Hdbedt.hawaii.gov/economic/databook/db202l
State of Hawai`i, Department of Business, Economic Development and Tourism,
https:Hdbedt.hawaii.gov/economic/unemployment-statistics
Bureau of Economic Analysis,https://apps.bea.gov/stable/iTable.cfm?RegID=70&step=1
Unaudited- see accompanying independent auditors'report.
- 171 -
Table 12
COUNTY OF HAWAI`I
Principal Employers,County of Hawaii
June 30,2022 and 2013
2022 2011(a)
Percentage Percentage
of Total County of Total County
Employer Employees Rank Employment Employees Rank Employment
State of Hawaii 16,500 1 23.8% 7,962 1 10.1%
County of Hawaii 2,700 2 3.9% 2,630 2 3.3%
Mauna Kea Beach Hotel 1,357 3 2.0% 513 9 0.6%
United States Government 1,300 4 1.9% 1,429 3 1.8%
KTA Super Stores 900 5 1.3% 750 5 0.9%
Kamehameha Schools Hawaii Island 686 6 1.0%
The Fairmont Orchid,Hawaii 588 7 0.8% 616 8 0.8%
Goodwill Hawaii Island 436 8 0.6%
Roberts Hawaii,Inc(Big Island) 343 9 0.5%
Royal Kona Resort 223 10 0.3%
Four Seasons Resort Hualalai 650 7 0.8%
Hilton Waikoloa Village 935 4 1.2%
Mauna Lam Resort(Operations),Inc. 450 10 0.6%
Wal-Mart 741 6 0.9%
Total 25,033 36.1% 16,676 21.0%
Total employee count 69,270 78,950
NOTES:
(a)Data for Fiscal Year 2012 and Fiscal Year 2013 are Unavailable
Source: County of Hawaii,Department of Research and Development
State of Hawai'i, Hawai'i Workforce Infonet: https://www.hiwi.org/vosnet/gsipub/documentview.aspx?
United State Department of Labor, Bureau of Labor Statistics: https://www.bis.gov/regions/west/news-release/
countyemploymentandwages_hawaii.htm
Pacific Business News,"Employers, Big Island" Issue date:7/1/22
- 172-
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