2022-COH - DWS Financial Statements and Supplementary Information With Independent Auditor's Reports

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County of Hawaii Department of Water Supply (A component unit of the County of Hawaii, State of Hawaii) MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued) Fiscal Year Ended June 30, 2022 Financial Analysis (Continued) Other liabilities decreased by $9.4 million, or 12.2% in FY2022, due primarily to decreases in net pension liability and net OPEB liability of $6.2 million and $3.9 million, respectively. Deferred inflows of resources increased by $6.3 million, or 82.8%, in FY2022, due primarily to increases in deferred inflows of resources related to pensions and OPEB of $4.4 million and $2.2 million, respectively. Net investment in capital assets decreased by $2.1 million, or 0.90%, in FY2022, due primarily to an increase in net capital assets of $5.0 million, offset by an increase in long-term debt of $7.6 million. Total net position increased $7.9 million, or 3.8%, in FY2022, due primarily to contributions in aid of construction with the receipt of $5.2 million in federal funds for reimbursement of capital project expenditures and $6.3 million in dedicated projects offset by a $4.2 million operating loss. In October 2020, the Water Board approved a 13% rate increase for water consumption and standby charges that became effective January 1, 2021. Total operating revenues increased by $6.1 million, or 12.1% in FY2022, due primarily to an increase in water consumption charges of $2.5 million, power charges of $2.5 million, and standby charges of $1.1 million. Operating expenses increased by $2.2 million, or 3.8%, in FY2022, due primarily to an increase in power and pumping of $6.3 million offset by decreases in general and administrative and transmission and distribution expenses of $4.3 million. Contributions in aid of construction increased by $8.3 million, or 191.1 %, in FY2022, due primarily to an increase in current year dedications by $5.1 million and in federal funding of $5.1 million for reimbursement of capital project expenditures. Capital Assets and Debt Administration As of June 30, 2022, the Department had $305.8 million invested in capital assets, and $75.1 million of long-term debt outstanding. 10