HomeMy WebLinkAboutCAFR 2012 Final with Opinion (2) COMPREHENSIVE
ANNUAL FINANCIAL REPORT
Fiscal Year Ended June 30, 2012
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COUNTY OF HAWAII
Hilo, Hawaii
William P. Kenoi
Mayor
William Takaba
Managing Director
Prepared by
The Department of Finance
Nancy E. Crawford
Director of Finance
COUNTY OF HAWAII
Comprehensive Annual Financial Report
For the Fiscal Year Ended June 30, 2012
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 15
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Assets 28
Statement of Activities 30
Fund Financial Statements:
Balance Sheet- Governmental Funds 32
Reconciliation of the Governmental Funds Balance Sheet to the
Statement of Net Assets 33
Statement of Revenues, Expenditures, and Changes in Fund Balances-
Governmental Funds 34
Reconciliation of the Change in Fund Balances of Governmental
Funds to the Statement of Activities 36
Statement of Revenues, Expenditures, and Changes in Fund Balance-
Budget and Actual (Budgetary Basis)-General Fund 38
Statement of Net Assets-Proprietary Funds 42
Statement of Revenues, Expenses, and Changes in Fund Net Assets-
Proprietary Funds 43
Statement of Cash Flows-Proprietary Funds 44
Statement of Fiduciary Net Assets -Fiduciary Funds 45
Statement of Changes in Fiduciary Net Assets-Fiduciary Funds 46
Notes to the Basic Financial Statements 47
Required Supplementary Information 87
FINANCIAL SECTION (Continued)
Page
Combining and Individual Nonmajor Fund Statements and Schedules:
Combining Balance Sheet-Nonmajor Governmental Funds 90
Combining Statement of Revenues, Expenditures, and Changes in Fund
Balances-Nonmajor Governmental Funds 94
Schedules of Revenues,Expenditures, and Changes in Fund Balances-
Budget and Actual (Budgetary Basis):
Highway Fund 97
Sewer Fund 98
Solid Waste Fund 99
Cemetery Fund 100
Parking Meter Fund 101
Vehicle Disposal Fund 102
Bikeway Fund 103
Workforce Investment Act Fund 104
Golf Course Fund 105
Geothermal Relocation and Community Benefits Fund 106
Beautification Fund 107
Hawaii County Housing Agency 108
Park Dedication Fund 109
Combining Statement of Agency Funds Net Assets-Agency Funds 110
Combining Statement of Changes in Assets and Liabilities-Agency Funds 112
Combining Statement of Private Purpose Trust Net Assets-Private Purpose Trusts 117
Combining Statement of Changes in Net Assets-Private Purpose Trusts 118
STATISTICAL SECTION
Table I -Net Assets by Component 119
Table 2-Changes in Net Assets 120
Table 3 -Fund Balances, Governmental Funds 122
Table 4- Changes in Fund Balance, Governmental Funds 123
Table 5 -Real Property Assessed Values by Classification and Tax Rates 124
Table 6-Principal Taxpayers 128
Table 7 -Property Tax Levies and Collections 129
Table 8 -Ratios of Outstanding Debt by Type 130
Table 9 -Ratios of General Bonded Debt Outstanding 131
Table 10-Legal Debt Margin Information 132
Table 11 -Demographic and Economic Statistics 133
Table 12 -Principal Employers, County of Hawaii 134
Table 13 -Full-Time Equivalent County Government Employees by Function 135
Table 14 -Operating Indicators by Function 136
Table 15 - Capital Asset Statistics by Functions 137
INTRODUCTORY SECTION
NTV of k�
William P.Kenoi ' Nancy E. Crawford
Mayor Director
Deanna S. Sako
Deputy Director
County of Hawaii
Finance Department
25 Aupuni Street, Room 2103 • Hilo,Hawaii 96720
(808)961-8234 • Fax(808)961-8569
December 27, 2012
The Honorable Mayor and Members of the Council
County of Hawaii
25 Aupuni Street
Hilo, Hawaii 96720
We transmit herewith the Comprehensive Annual Financial Report for the County of
Hawaii, State of Hawaii (the County), for the fiscal year July 1, 2011 to June 30, 2012.
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, 2012 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
Hawaii County is an equal opportunity provider and employer.
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body of the County government. This component unit is included in the County's
reporting entity because of its financial relationship with the County.
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. 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. Although the past few years proved
challenging to the island's economy, it appears that the County will continue on its steady
but slow road to improved financial health. This favorable outlook is supported by
positive trends in the following key areas of the island's economy.
The County's labor force numbered 83,617 at June 2012, which is a slight increase from
a year ago. A sign that the economy is continuing on the road to a brighter position than
that which faced the County several years ago is the fact that the County's unemployment
rate for the current fiscal year 2012 (9.2%) was slightly lower than the prior fiscal year
2011 (9.5%), which serves as a positive indicator for the third year in a row.
Tourism—Tourism has always been the major industry on the island. 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. A popular attraction, the park is the most visited
site in the state, handling over 2 million visitors annually, which became even more
popular with the increased activity of Kilauea Volcano. Another indication of the
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County's slowly rebounding industry, is the fact that there was a 4% increase in the
number of visitors to the island from the prior fiscal year. More importantly, spending
growth for this sector has been even stronger than the actual arrivals.
Construction--The construction industry continues to serve as the lagging sector of the
economy but there are recent signs that this may change soon. Although, construction
jobs remain below that of peak times, private building permits which serve as a better
indicator of the future shows encouraging results.
Scientific Research and Development—Due largely to its unique geographic
characteristics which has attracted scientists in fields of astronomy, meteorology,
volcanology, and agriculturelaquaculture,the County has benefited economically by the
significant investments made in scientific research. The total astronomy related capital
investment on Mauna Kea exceeds $600 million and combined annual budgets are about
$75 million. Astronomy continues to be a major factor in the success of the County's
economy with an estimated nearly 500 new jobs opening up through 2023 to meet the
needs of the current observatories and the creation of new jobs with the development of
the Thirty Meter Telescope (TMT) by the TMT Observatory Corporation. The Hawaiian
Volcano Observatory in Hawaii Volcanoes National Park and the Natural Energy
Laboratory of Hawaii Authority at Keahole, Kona are also major contributors to
international research and the local economy.
Major Initiatives
For the Year
During the year, the County focused on construction projects relating to housing,
sanitation and public safety, and other issues affecting the quality of life in the County.
Public Safety—Construction continued on the Makalei Fire Station reaching a total cost
of approximately $6.1 million at the end of the year and is expected to be placed into
service in the next fiscal year. The Fire Department installed two new lifeguard towers
valued at $87,000 for Hapuna Beach Park and Punaluu Beach Park and purchased a new
2,000 gallon Fire Apparatus Tanker for Kau for $221,000 that was funded by a
Community Development Block Grant.
Public Works—The Ane Keohokalole Highway in Kona was opened to the public in
June 2012 at a cost to the County of$28.9 million. The 2.9 mile highway serves as the
largest expenditure of American Recovery &Reinvestment Act money for transportation
infrastructure in the State and is also the first major road to be built by the County in
Kona since statehood.
Environmental Management—The processing capacity of the Honokaa Wastewater
Treatment Plant was upgraded from 56,400 to 200,000 gallons per day to service the
schools and business community within the Honokaa Town area at a cost of
approximately $5.0 million.
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For the Future
Public Safety—The Hawai'i Police Department held the On-Site Assessment by the
Commission on Accreditation for Law Enforcement Agencies (CALEA), on August 5-8,
2012. On Saturday,November 17, 2012,the Hawaii Police Department marked an
historical event when it was awarded a full three-year accreditation by CALEA. This
process, which began in early 2004, is a tribute to all of our employees, both civilian and
sworn, who collectively are bound to adhere to over 400 plus required standards. What
accreditation means for the Hawai'i Police Department is that the public can now be
assured, based on an independent review, we are indeed a department that adheres to
standards that are sensible, professional and ethical, and in keeping with a 21 st century
law enforcement agency.
The Hawaii Fire Department is working to obtain two new Fire Pumper Apparatus with
County funded leases. A new Fire Tanker Apparatus also will be secured primarily with
Community Development Block Grant funds. These replacements are important to the
continuing effort to provide apparatus that meets current National Fire Protection
Association safety guidelines.
The Kawailani Fire Station relocation planning and design will be initiated.
In this period of economic recovery the Fire Department is striving to continue to provide
needed services to the Hawai'i County residents and visitors.
Public Works —Two connector road projects in Kona will be underway in mid-2013. At
an estimated construction cost of$14 million,the Laaloa Avenue Extension Ph 1 in
North Kona will connect Laaloa Avenue with Kuakini Highway.
The Federal Highway Administration is helping to fund the following two road projects
on the island. The first is the Kaiminani Drive Roadway Improvements in North Kona at
an estimated cost of$10 million and the second is the Kamehameha Avenue
Reconstruction project in South Hilo at an estimated construction cost of$13 million.
Planning—The National Historic Preservation Act has charged the Hawaii State
Department of Land and Natural Resources with the monitoring of Hawaii's natural and
cultural resources. The Planning Department has begun the process of staffing the
Hawaii County Cultural Resource Commission as-well-as assisting the mayor's office in
seating commissioners. This commission will review, comment and may include
granting permits on all County projects, taking into consideration the cultural and
historical significance of island wide sites and surroundings.
The County of Hawaii will be hosting the Hawaii Congress of Planning Officials in
September 2013. This conference is for all planning commissions, planning directors and
planners for all counties within the State of Hawaii in addition to most of the industry
including architects, surveyors, major land owners and developers.
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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.
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 fiords 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 unexpcnded
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.
Cash Management
Cash temporarily idle during the year was invested in savings accounts, money market
mutual funds, certificates of deposit, repurchase agreements, and agency notes. The
average yield on deposits and investments was .17%.
The County's policy is to minimize credit and market risks while maintaining a
competitive yield on its portfolio. Accordingly, with the exception of$236,177 held by a
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rental management agent, deposits were either insured by federal depository insurance,
collateralized, or secured by irrevocable letters of credit. All collateral on deposit was
held for safe keeping with a County-designated agent in the County's name.
Financial Highlights
As a result of another year of declining property values which negatively impacted real
property tax revenues, the County was again faced with the dilemma of balancing its
budget. To avoid negatively impacting the local economy, the County worked diligently
to lower its operating costs while continuing to service the community and it people
rather than raise real property taxes.
The County continued the furloughs and pay reductions for both its HGEA and UPW
union employees but reduced the number of days from twice a month to only once a
month. The County also implemented a one-time payroll lag which delayed the payment
of the June 30, 2012 payroll to the following fiscal year and enabled the County to save
on salaries and wage expenditures for the current year.
As part of the strategy for balancing the budget, the County also decided to temporarily
forgo the employer contributions relating to the pre-funding of its postemployment
benefits other than pensions that it had fully fiuided for the previous four fiscal years.
Other Information
Independent Audit
The County Charter requires an annual audit by independent certified public accountants.
Accuity LLP 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
Six bargaining units have contracts that will expire on June 30, 2013 and negotiations are
underway. The remaining two bargaining units' contracts have already expired. One
remaining bargaining unit had an interest arbitration in November 2012 and the County
anticipates a decision by January 30, 2013. The other remaining bargaining unit is
planning for an interest arbitration in March 2013 and the County anticipates a decision
by June 17, 2013.
Certificate of Achievement
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 Hawai`i for its Comprehensive Annual Financial Report for the fiscal year
ended June 30, 2011. This was the twenty-fourth consecutive year that the government
has achieved this prestigious award. In order to be awarded a Certificate of
Achievement, a government must publish an easily readable and efficiently organized
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comprehensive annual 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 Comprehensive Annual 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.
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.
1
NANCY E. CRA FORD
Director of Finance
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Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
County of Hawaii
Hawaii
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2011
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports(CAFRs)achieve the highest
standards in government accounting
and financial reporting.
�lrt OFfi
tSTIES i
Z. President
Executive Director
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County of Hawaii
Organization Chart
County Electorate
County Council Mayor Prosecuting Attorney
County Legislative Office of Mana ement:
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, 2012
Administrative Officers (Term. 2008-2012)
William P. Kenoi Mayor
Charlene Iboshi (effective 411A 1) Prosecuting Attorney
County Council (Term. 2010-2012)
Dominic Yagong Chair
K. Angel Pilago Vice Chair
Fred BIas Member
Brenda Ford Member
Pete Hoffmann Member
Donald Ikeda Member
Dennis "Fresh" Onishi Member
Brittany Smart Member
J Yoshimoto Member
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Principal Officials
June 30, 2012
County Clerk Jamae Kawauchi
Legislative Auditor Colleen Schrandt
Managing Director William Takaba
Deputy Managing Director Walter Lau
Corporation Counsel Lincoln Ashida
Director of Finance Nancy E. Crawford
Planning Director Bobby Jean Leithead-Todd
Director of Personnel Ronald Takahashi
Director of Research and Development Randy Kurohara
Chief of Police Harry S. Kubojiri
Fire Chief Darren Rosario
Director of Public Works Warren Lee
Director of Environmental Management, Acting Dora Beck
Director of Parks and Recreation Robert Fitzgerald
Manager, Department of Water Supply Quirino Antonio, Jr.
Civil Defense Administrator Quince Mento
Director of Liquor Control Gerald Takase
Transit Operations Administrator Vacant
Executive on Aging Alan Parker
Administrator, Office of Housing and
Community Development Stephen Arnett
Director of Information Technology Mark Ow
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FINANCIAL SECTION
ACcuityLP
CLRTIFILO PUBLIC ACCOUNTANTS
Report of Independent Auditors
To the Chair and Members of the County Council
County of Hawaii
We have audited the accompanying 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 Hawaii (the"County")as of and for the year ended June 30,
2012,which collectively comprise the County's basic financial statements as listed in the table of
contents. These financial statements are the responsibility of the County's management. Our
responsibility is to express opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States
of America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and the significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis for our opinions.
In our opinion, the 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, 2012, and the respective changes in financial position and,where applicable, cash flows
thereof and the budgetary comparison for the general fund for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated December 27,
2012, 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 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 internal control
over financial reporting or on compliance. That report is an integral part of an audit performed in
accordance with Government Auditing Standards and should be considered in assessing the results
of our audit.
Accounting principles generally accepted in the United States of America require that management's
discussion and analysis and schedule of funding progress for the EUTF information on pages 15 through
25 and 87 be presented to supplement the basic financial statements. Such information, 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 auditing standards generally accepted in the
United States of America, 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
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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.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the County's basic financial statements as a whole. The introductory section, combining and
individual nonmajor fund financial statements, fund schedules, and statistical section are presented for
purposes of additional analysis and are not a required part of the basic financial statements. The
combining and individual nonmajor fund financial statements and fund schedules are the responsibility of
management and were derived from and relate directly to the underlying accounting and other records
used to prepare the financial statements. The information has been subjected to the auditing procedures
applied in the audit of the financial statements and certain additional procedures, including comparing and
reconciling such information directly to the underlying accounting and other records used to prepare the
financial statements or to the financial statements themselves, and other additional procedures in
accordance with auditing standards generally accepted in the United States of America. In our opinion,
the combining and individual nonmajor fund financial statements and fund schedules are fairly stated in
all material respects in relation to the financial statements as a whole. The introductory and statistical
sections have not been subjected to the auditing procedures applied in the audit of the basic financial
statements and, accordingly,we do not express an opinion or provide any assurance on them.
&C L L{P
Honolulu, Hawai'i
December 27, 2012
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MANAGEMENT'S DISCUSSION AND ANALYSIS
This section of the County of Hawai`i's(the County)Comprehensive Annual Financial Report
presents a narrative overview and analysis of the financial activities of the County for the fiscal
year ended June 30, 2012. 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 of the County exceeded its liabilities at the end of the fiscal year by$683.0 million
(net assets). This amount includes$39.8 million in unrestricted net assets, a decrease of$0.9
million from the prior year.
• The County's total net assets increased by$75.7 million during the fiscal year.
• As of the close of the current fiscal year,the County's governmental funds reported combined
ending fund balances of$146.4 million, a decrease of$12.6 million from the prior year.
Approximately 47 percent of this total amount, $68.3 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 $41.7
million, or 19 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 assets presents information on all of the County's assets and liabilities,
with the difference between the two reported as net assets. Over time, increases or decreases in
net assets 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 assets changed
during the most recent fiscal year. All changes in net assets 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,
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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-major 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 is
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
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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 agency 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 SupplementaKy 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 Statement of Net Assets
June 30,2012 and 2011
Primary Government
Governmental Activities Business-type Activities Total
2012 2011 2012 2011 2012 2011
Assets:
Current and other assets $ 252,075,426 $ 220,271,120 $1,036,087 $1,057,768 $ 253,111,513 $ 221,328,888
Capital assets,net 917,249,344 836,674,103 1,167,154 1,193,198 918,416,498 837,867,301
Total assets 1,169,324,770 1,056,945,223 2,203,241 2,250,966 1,171,528,011 1,059,196,189
Liabilities:
Long-term liabilities
outstanding 438,814,811 421,449,861 851,306 884,232 439,666,117 422,334,093
Other liabilities 48,424,315 29,058,381 395,021 423,100 48,819,336 29,481,481
Total liabilities 487,239,126 450,508,242 1,246,327 1,307,332 488,485,453 451,815,574
Net assets:
Invested in capital assets,net
of related debt 594,384,524 514,309,238 315,848 308,966 594,700,372 514,618,204
Restricted 48,360,223 51,840,697 185,148 185,087 48,545,371 52,025,784
Unrestricted 39,340,897 40,287,046 455,918 449,581 39,796,8I5 40,736,627
Total net assets $ 682,085,644 $ 606,436,981 $956,914 $943,634 $683,042,558 $607,380,615
17 -
Analysis of Net Assets
As noted earlier,net assets may serve over time as a useful indicator of a government's financial
position. In the case of the County, assets exceeded Iiabilities by$683.0 million at the close of
the most recent fiscal year.
By far the largest portion of the County's net assets(87 percent)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 assets (7 percent)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 all three
categories of net assets, both for the government as a whole, as well as for its separate
governmental and business-type activities.
The County's net assets increased by$75.7 million during the current fiscal year,which was
$20.1 million more than the increase during last fiscal year. Capital grants and contributions
increased by approximately$47.9 million relating mostly to highways and streets and sanitation.
The increase was offset and reduced by a decrease in real property taxes of approximately$15.2
million.
The County's net capital assets increased by$80.5 million 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 23.
The County's long-term liabilities outstanding increased by$17.3 million (4 percent) due
primarily to the increases resulting from the County's decision to forgo the employer
contributions relating to the pre-funding of its postemployment benefits other than pensions and
the issuance of new Bond Anticipation Notes. These increases were offset by principal payments
on the General Obligation Bonds and the State Revolving Fund loans from the prior year. See
further discussion of the increase in long-term debt outstanding on page 24.
- 18 -
Condensed Statement of Activities
For the Fiscal Years Ended June 30,2012 and 2011
Primary Government
Governmental Activities Business-type Activities Total
2012 2011 2012 2011 2012 2011
Revenues:
Program revenues:
Charges for services $ 34,875,798 $ 34,044,547 $ 393,464 $ 372,599 $ 35,269,262 $ 34,417,146
Operating grants and contributions 45,767,655 50,820,951 131,227 133,215 45,898,882 50,954,166
Capital grants and contributions 86,754,033 38,810,806 - - 86,754,033 38,810,806
General revenues:
Property taxes 209,894,427 225,055,099 - 209,894,427 225,055,099
Other taxes 29,255,027 26,315,977 - - 29,255,027 26,315,977
Grants and contributions,unrestricted 19,074,105 19,533,165 - - 19,074,105 19,533,165
Investment earnings 230,804 609,617 5,641 2,997 236,445 612,614
Other 1,773,258 5,973,275 - - 1,773,258 5,973,275
Total revenues 427,625,107 401,163,437 530,332 508,811 428,155,439 401,672,248
Expenses:
General government 56,115,599 53,439,428 - - 56,115,599 53,439,428
Public safety 152,288,979 154,008,027 - - 152,288,979 154,008,027
Highways and streets 42,462,299 34,812,165 - - 42,462,299 34,812,165
Health,education and welfare 28,127,691 30,336,420 517,052 550,801 28,644,743 30,887,221
Culture and recreation 23,412,948 22,167,818 - - 23,412,948 22,167,818
Sanitation 35,049,546 35,604,394 - - 35,049,546 35,604,394
Interest on long-term debt 14,519,382 15,176,682 - 14,519,382 15,176,682
Total expenses 351,976,444 345,544,934 517,052 550,801 352,493,496 346,095,735
Increase(decrease)in net assets 75,648,663 55,618,503 13,280 (41,990) 75,661,943 55,576,513
Net assets at beginning of year 606,436,981 550,818,478 943,634 985,624 607,380,615 551,804,102
Net assets at end of year $682,085,644 $606,436,981 $ 956,914 $ 943,634 $683,042,558 $607,380,615
Analysis of Changes in Net Assets
Governmental activities. Governmental activities increased the County's net assets by
$75.6 million or basically all of the total growth in net assets of the County.
Total revenues increased by$26.5 million(7 percent). The combined total revenues for both the
Operating and Capital grants and contributions also increased by approximately$42.9 million,
which related mostly to sanitation and highways and streets projects. This increase in grants and
contributions revenue was offset by decreases in the other revenue sources. The most significant
decrease of$15.2 million was in real property taxes,which was due to a slight decline in the
value of net taxable real property as evidenced in the accompanying statistical tables.
Total expenses increased by$6.4 million (2 percent). The major reason for the increase was due
to the rising cost of labor. The cost of employees' health care increased specifically relating to
future health benefits for employees by approximately$1.3 million and overall salaries and wages
increased by$2.6 million as a result of a reduction in the number of furlough days that employees
in several bargaining units were required to take each month.
- 19 -
Expenses and Program Revenues—Governmental Activities
Year Ended June 30,2012
$160,000,000
pF i
$140,000,000 i W Expenses
$120,000,000
■Program revenues
$100,000,0o0
$80,000,000
$60,000,000
$40,000,000 '
$20,000,000 € 6E1
$0
ae��� p�b� sys� ale eL{ea a yc
aA'5
ewe �� J�a'� tiJ�e oc
�e
Revenue by Source—Governmental Activities
Year Ended June 30,2012
Other, $1,773,258 _Chargesfor services,
Grants and Investment earnings, /` $34,875,798
contributions not $230,804
restricted to specifi
6thertaxes, = 0 eratin rants and
programs, �' �. P 8g
$19,074,105 rogra s, $29,255,027 contributions,
$45,767,655
3 j
E; d I 3�33�qgqg'I € �`
iii
t , Capital grants and
contributions,
Propertytaxes, E,`.°,=;fr, $86,754,033
$209,894,427
- 20 -
The charts above 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(16 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(49 percent), followed by capital
grants and contributions(20 percent)and operating grants and contributions(11 percent).
Business-type activities. Business-type activities increased the County's net assets by$13,280
versus a decrease of$41,990 in the prior year. Expenses for health, education and welfare account
for all of the$517,052 of expenses. Charges for services were $393,464,operating grants and
contributions were $131,227 and investment earnings were $5,641. Revenues increased by
$21,521 due to a$21,525 increase in rental receipts. Expenses decreased $33,749 (6 percent)due
to decreases in general and administration expenses of$29,739 and in lease expense of$18,364,
which were offset by an increase in utilities expense of$19,275.
FINANCIAL ANALYSTS OF THE COUNTY'S FUNDS
As noted earlier,the County uses fund accounting to ensure and demonstrate compliance with
finance-related legal requirements.
Governmental funds. The focus of the County's governmental funds is to provide information
on near-term inflows, outflows, and balances of spendable resources. Such information is useful
in assessing the County's financing requirements. In particular, unrestricted fund balance may
serve as a useful measure of a government's net resources available for spending at the end of the
fiscal year.
As of the end of the current fiscal year,the County's governmental funds reported combined
ending fund balances of$146.4 million, a decrease of$12.6 million in comparison with prior
year. Approximately 47 percent of this total amount($68.3 million)constitutes unrestricted fund
balance. The unrestricted portion of the fund balance is comprised of(1)$48.6 million in
committed fund balance, (2) $21.8 million in assigned fund balance and (3)negative $2.1 million
in unassigned fund balance. The remainder of the fund balance is divided between$3.3 million in
nonspendable fund balance for inventory and $74.7 million in restricted fund balance.
Approximately 79% of the restricted fund balance is due to restrictions relating to highways,
streets and abandoned vehicles($32.9 million)and debt service($26.2 million).
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$41.7 million,while total fund balance
increased to $48.7 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 19 percent of total general fund expenditures,while total
fund balance represents 22 percent of that same amount.
The fund balance of the County's general fund increased by$4.1 million during the current fiscal
year as compared to an increase of$5.1 million in the prior year. Key factors in this decrease
from last year's amount are as follows:
• A decrease of$8.3 million(4 percent) in real property taxes, which was mostly due to lower
collections resulting from the slight decline in the value of net taxable real property as
evidenced in the accompanying statistical tables.
- 21 -
• A decrease in intergovernmental revenue of$6.2 million (11 percent). The most significant
causes of the decrease were due to declines in public safety operating grants($3.1 million)
and in health, education and welfare capital grants($3.0 million).
• A net decrease of$15.7 million(7 percent)in total expenditures for the general fund which is
primarily the result of the County's decision to forgo the employer contributions relating to
the pre-funding of its postemployment benefits other than pensions that it had made for the
previous four fiscal years.
The fund balance of the County's capital projects fund decreased by$20.5 million during the
current fiscal year. The decrease is primarily due to the combined total of the fund's main
revenue source of long-term debt financing,which consists of state revolving fund loan proceeds
($4.6 million), intergovernmental revenue($30.0 million), and transfers in($3.7 million) being
less than capital and debt service expenditures($59.3 million)for the current fiscal year.
Although the fund balance of the capital projects fund was $29.5 million at the end of the current
fiscal year and the total unrestricted portion was $2.2 million,the unassigned portion of the
unrestricted fund balance was a negative$10.2 million. This was due to a change in the County's
procedures regarding the issuance of bonds, in that the County defers the issuance of bonds until
the funds are actually needed even though the project will be allotted so that work may begin and
will instead issue Bond Anticipation Notes. As of June 30, 2012,these notes are reflected as a
current liability in the fund because the legal steps regarding the issuance of the bonds to pay off
these notes have not been completed at the time the audited financial statements are being issued.
The debt service funds consist of the Bond Redemption Fund and the Interest Fund. These funds
have combined total fund balances of$26.2 million, all of which is restricted for the payment of
debt service. The net decrease in the combined fund balances during the current year in the debt
service funds was$0.5 million(2 percent).
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 assets of the Kulaimano Elderly Housing Project(Kulaimano)at the end of the
year amounted to $564,659, and the unrestricted net deficit of the Ouli Ekahi Affordable Housing
Project(Ouli Ekahi) amounted to $108,741. The net assets for Kulaimano decreased by$22,032
and the net assets for Ouli Ekahi increased by$35,312. 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$11.0 million increase in appropriations,most of which(94%) is due to increases in the
appropriations for capital and operating grants and contributions.
Differences between the final budget and the actual(budgetary basis)resulted in$3.9 million less
revenues than expected and$26.3 million less expenditures than appropriated. This is primarily
due to the following factors:
• $5.3 million negative variance in intergovernmental revenue,which was made up almost
entirely of the decrease in federal grants.
-22 -
• $6.5 million of the unspent appropriations is related 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 variance: public safety($3.9
million), general government($1.8 million)and culture and recreation($0.7 million).
• $2.3 million was unspent by Mass Transit regarding the purchase of new buses because the
federal grant that they received was lower than originally anticipated.
• $1.9 million is due to lower than anticipated payments needing to be made in pension related
payments. With each department increasing efforts to control costs,overtime was also
closely monitored and the corresponding pension expenditures were not incurred.
$2.5 million is due to the fact that the increase in health premiums for employees' was lower
than originally anticipated.
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, 2012 amounts to$918.4 million(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 10
percent.
Major capital asset events during the current fiscal year included the following:
• Construction continued on the Ane Keohokalolc Highway; construction in progress as of the
end of the current fiscal year increased by$13.3 million to reach a total of$28.9 million,
which was transferred to Infrastructure.
Construction continued on the Kaloko Housing Project and related wastewater treatment
plant; construction in progress as of the end of the current fiscal year for both projects
increased by$5.0 million to reach a total of$14.0 million,of which the portions relating to
the completed phases were transferred to Building and Improvements.
• Construction continued on the Honokaa large capacity cesspool project, construction in
progress as of the end of the current fiscal year increased by$3.9 million to reach a total of
$4.9 million.
• Construction continued on the Makalei Fire Station; construction in progress as of the end of
the current fiscal year had increased by$5.4 million to reach a total of$6.1 million.
+ Construction continued on the Panaewa Park New Covered Play Courts; construction in
progress as of the end of the current fiscal year had reached $2.4 million, which was
transferred to Buildings and Improvements.
• Construction began on the Hawaiian Ocean View Estates (H.O.V.E.)Water Facilities Project;
construction in progress as of the end of the current fiscal year had reached$6.0 million,
which was transferred to Buildings and Improvements.
• $31.8 million of dedicated roads were received by the County in the current fiscal year.
0 $6.3 million of sewer systems were dedicated to the County in the current fiscal year.
- 23 -
Capital Assets
(net of depreciation)
June 30,2012 and 2011
Primary Government
Governmental Activities Business-type Activities Total
2012 2011 2012 2011 2012 2011
Land and improvements $129,569,750 $107,682,068 $ 753,877 $ 753,877 $130,323,627 $108,435,945
Infrastructure assets 246,938,042 204,755,865 - - 246,938,042 204,755,865
Ground and site improvements - - 67,580 71,334 67,580 71,334
Buildings and improvements 455,481,924 387,259,565 329,730 354,345 455,811,654 387,613,910
Easements 3,232,428 1,649,304 - - 3,232,428 1,649,304
Equipment 50,089,791 52,130,844 15,967 13,642 50,105,758 52,144,486
Construction work in progress 31,937,409 83,196,457 - - 31,937,409 83,196,457
Total S 917,249,344 $836,674,103 $1,167,I54 $ 1,193,198 $918,416,498 $837,867,301
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$281.8 million, State
Revolving Fund loans of$29.1 million and general obligation bond anticipation notes of$33.0
million. At the end of the current fiscal year,the County had total bonded debt outstanding of
$281.8 million. This entire amount was comprised of general obligation bonds which are backed
by the full faith and credit of the County.
The County's total bonded debt decreased by$19.8 million (6.6 percent)during the current fiscal
year due to regularly scheduled principal payments.
At the end of the fiscal year,the County maintained its"AA-"rating from Standard&Poor's and
Fitch and"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 $3.7 billion, which is in excess
of the County's outstanding general obligation debt. Currently the County's outstanding debt
represents 8 percent of our debt limitation.
At the end of the current fiscal year,the County also had notes payable to the U.S. Department of
Agriculture, Farmers Home Administration amounting to$0.9 million.
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 9.2 percent,which
represents a slight decline from last year's rate for the same period of 9.5 percent.
• The number of visitors to the County for the current fiscal year was 1,371,073,which
represents a 4 percent increase from the previous year's count of 1,322,289. More
importantly, spending growth for this sector has been even stronger than the actual
arrivals.
-24 -
• Astronomy continues to be a major factor in the success of the County's economy with
an estimated nearly 500 new jobs opening up through 2023 to meet the needs of the
current observatories and the creation of new jobs with the development of the Thirty
Meter Telescope (TMT)by the TMT Observatory Corporation. The development of the
TMT atop Mauna Kea is progressing as it is in its final stages of approval. It is projected
that construction will span over nine years resulting in 300 construction jobs and 140 full-
time permanent jobs with an annual estimated budget of$26 million. The current annual
operating cost of the observatories that sit atop Mauna Kea is approximately$75.3
million,which includes the employment of over 500 county based workers.
• The construction industry continues to serve as the lagging sector of the economy but
there are recent signs that this may change soon. Although, construction jobs remain
below that of peak times, private building permits which serve as a better indicator of the
future shows encouraging results.
• Several industries in the County will reap the benefits from UH-Hilo's June
groundbreaking for Phase I of the University Village Student Housing Project. At an
estimated $32 million, the project will house just over 300 students and sit on a 33 acre
parcel fronting the University main entrance.
• The County's agriculture sector generally offers a positive economic view this year,
which is most evident in the macadamia and coffee production. In West Hawaii,the
forecasted nut production is expected to increase by about 15%with levels in East
Hawaii remaining the same as last year. Prices overall are anticipated to remain
consistently strong at levels comparable to last year or possibly even higher. Coffee
production on the island overall is expected to increase by 10% and prices are expected to
remain stable.
These factors were considered in preparing the County's budget for the 2013 fiscal year.
At the end of the current fiscal year, unrestricted fund balance in the general fund was $41.7
million. The County has appropriated$18.0 million of this amount for spending in the 2013
fiscal year budget and it 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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26
BASIC FINANCIAL STATEMENTS
-27 -
COUNTY OF HAWAII
Statement of Net Assets
June 30,2012
Primary Government
Governmental Business-type Component
Activities Activities Total Unit
Assets
Current assets:
Cash and cash equivalents(notes 3 and 14) $ 80,442,824 S 391,951 S 80,834,775 S 18,845,331
Restricted cash and cash equivalents(note 3) 50,693,240 37,914 50,731,154 -
Investments(notes 3 and 14) 9,160,002 401,080 9,561,082 5,935,775
Restricted investments(note 3) 23,325,561 - 23,325,561 -
Receivables,net(note 4) 49,326,271 4,856 49,331,127 7,420,277
Receivable from improvement district
(notes 4 and 10) 61,168 - 61,168 -
Internal balances(note 5) 1,350 (1,350) - -
Inventories 3,304,551 - 3,304,551 1,103,258
Prepaid expenses - 1,621 1,621 155,049
Other 762,868 - 762,868 -
Total current assets 217,077,835 836,072 217,913,907 33,459,690
Investments(note 3) 6,452,722 - 6,452,722 -
Restricted investments(notes 3 and 14) 25,815,511 - 25,815,511 5,349,930
Restricted cash and cash equivalents(note 3) - 200,015 200,015 -
Receivable from improvement district,excluding
current portion(notes 4 and 10) 2,729,358 - 2,729,358 -
Deferred charges - - - 3,125,475
Capital assets(notes 6, 8 and 14):
Utility plant in service,net - - - 219,014,522
Infrastructure assets,net 246,938,042 - 246,938,042 -
Ground and site improvements,net - 67,580 67,580 -
Buildings and improvements,net 455,481,924 329,730 455,811,654 -
Equipment,net 50,089,791 15,967 50,105,758 -
Easements,net 3,232,428 - 3,232,428 -
Construction work in progress 31,937,409 - 31,937,409 46,237,024
Land and improvements 129,569,750 753,877 130,323,627 3,570,659
Total capital assets,net 917,249,344 I,167,154 918,416,498 268,822,205
Total noncurrent assets 952,246,935 1,367,169 953,614,104 277,297,610
Total assets 1,169,324,770 2,203,241 1,171,528,011 310,757,300
(Continued)
-28 -
COUNTY OF HAWAII
Statement of Net Assets
June 30,2012
(Concluded)
Primary Government
Governmental Business-type Component
Activities Activities Total Unit
Liabilities
Current liabilities:
Accounts payable and accrued liabilities $ 15,423,389 $ 391,571 $ 15,814,960 $ 3,832,912
Accrued payroll 7,678,607 - 7,678,607 1,050,040
Deferred revenue(note 7) 2,503,918 3,450 2,507,368 -
Interest due on long-term debt 6,038,265 - 6,038,265 1,079,222
Bonds and loans payable,current portion net
(notes 10 and 14) 57,381,678 35,443 57,417,121 7,757,218
Compensated absences,current portion(note 10) 7,835,700 - 7,835,700 426,626
Claims and judgments,current portion
(notes 10, 12 and 14) 2,317,306 - 2,317,306 34,897
Capital leases,current portion(notes 8 and 10) 1,349,916 - 1,349,916 -
Landfill costs payable,current portion
(notes 9 and 10) 200,757 - 200,757 -
Customers'deposits - - - 577,870
Other 16,780,136 - 16,780,136 -
Total current liabilities 117,509,672 430,464 117,940,136 14,758,785
Noncurrent liabilities:
Bonds and loans payable,net
(notes 10 and 14) 290,837,497 815,863 291,653,360 53,289,576
Compensated absences(note 10) 24,744,879 - 24,744,879 1,153,470
Claims and judgments(notes 10, 12 and 14) 8,129,801 - 8,129,801 121,103
Capital leases(notes 8 and 10) 2,453,702 - 2,453,702 -
Landfill costs payable(notes 9 and 10) 21,223,243 - 21,223,243 -
Deferred revenue - - - 1,583,953
Customers'deposits - - - 15,596,808
Other(note 13) 22,340,332 - 22,340,332 -
Total noncurrent liabilities 369,729,454 815,863 370,545,317 71,744,910
Total liabilities 487,239,126 1,246,327 488,485,453 86,503,695
Net Assets
Invested in capital assets,net of related debt 594,384,524 315,848 594,700,372 213,125,341
Restricted for:
Capital projects 1,004,694 - 1,004,694 -
Debt service(note 10) 26,152,909 185,148 26,338,057 -
Highways,streets and abandoned vehicles 16,597,972 - 16,597,972 -
Public access open space 2,518,242 - 2,518,242 -
Other 2,086,406 - 2,086,406 -
Unrestricted 39,340,897 455,918 39,796,815 I1,128,264
Total net assets $ 682,085,644 $ 956,914 $ 683,042,558 $224,253,605
See accompanying notes to the basic financial statements.
-29 -
COUNTY OF HAWAII
Statement of Activities
For the Fiscal Year Ended June 30,2012
Program Revenues
Operating Capital
Charges for Grants and Grants and
Functions/Pro trams Expenses Services Contributions Contributions
Primary government:
Governmental activities:
General government $ 56,115,599 $ 2,306,855 $ 3,669,761 $ 7,692,048
Public safety 152,288,979 5,136,278 19,056,602 3,840,122
Highways and streets 42,462,299 10,544,711 2,193,469 56,283,086
Health,education and welfare 28,127,69I 454,913 19,769,528 1,840,873
Culture and recreation 23,412,948 1,601,195 107,539 2,182,876
Sanitation 35,049,546 14,831,846 970,756 14,9I5,028
Interest on long-term debt I4,519,382 - - -
Total governmental activities 351,976,444 34,875,798 45,767,655 86,754,033
Business-type activities:
Health,education and welfare 517,052 393,464 131,227 -
Total primary government $ 352,493,496 $ 35,269,262 $ 45,898,882 $ 86,754,033
Component unit:
Water(note 14) $ 52,105,064 $ 47,514,463 $ - $ 3,162,508
General revenues:
Taxes:
Property taxes,levied for general purposes
Public service company taxes
Public utility franchise taxes
Fuel taxes
Grants and contributions not restricted to specific programs
Investment earnings
Other
Total general revenues
Change in net assets
Net assets,beginning of year
Net assets,end of year
See accompanying notes to the basic financial statements.
-30 -
Net(Expense)Revenue and Changes in Net Assets
Primary Government
Governmental Business-type Component
Activities Activities Total Unit
$ (42,446,935) $ - $ (42,446,935) $ -
(124,255,977) - (124,255,977) -
26,558,967 - 26,558,967 -
(6,062,377) - (6,062,377) -
(19,521,338) - (19,521,338) -
(4,331,916) - (4,331,916) -
(14,519,382} - (14,519,382) -
(184,578,958) - (184,578,958) -
7,639 7,639 -
(184,578,958} 7,639 (184,571,319)
- - - (1,428,093)
209,894,427 - 209,894,427 -
9,896,715 - 9,896,715 -
11,065,112 - 11,065,112 -
8,293,200 - 8,293,200 -
19,074,105 - 19,074,105 -
230,804 5,641 236,445 226,785
1,773,258 - 1,773,258 -
260,227,621 5,641 260,233,262 226,785
75,648,663 13,280 75,661,943 (1,201,308)
606,436,981 943,634 607,380,615 225,454,913
$ 682,085,644 $ 956,914 $683,042,558 $ 224,253,605
-31 -
COUNTY OF HAWAII
Governmental Funds
Balance Sheet
June 30,2012
Other Total
Capital Governmental Governmental
General Projects Funds Funds
Assets
Cash and cash equivalents(note 3) $35,865,540 $26,265,902 $ 69,004,622 $ 131,136,064
Investments(note 3) 12,212,724 49,141,072 3,400,000 64,753,796
Receivables,net(note 4) 24,792,447 1,025,077 2,652,678 28,470,202
Due from other governmental funds(note 5) 1,065,980 - 210,918 1,276,898
Due from other nongovernmental funds(note 5) - - 1,350 1,350
Receivables from other governments(note 4) 9,837,366 10,042,009 976,694 20,856,069
Inventories 3,304,551 - - 3,304,551
Other 103,757 - 659,111 762,868
Total assets $2.1$2.3 86.474.060 S 76,905,373- $250.561.798
Liabilities and Fund Balances
Liabilities:
Accounts payable $ 2,311,882 $ 9,655,769 $ 3,455,738 $ 15,423,389
Accrued payroll 6,667,776 - 1,010,831 7,678,607
Due to other governmental funds(note 5) 62,859 699,554 514,485 1,276,898
Deferred revenue(note 7) 26,343,809 940,558 2,749,932 30,034,299
Bond anticipation note payable(note 10) - 33,000,000 - 33,000,000
Other 3,069,085 12,629,409 1,081,642 16,780,136
Total liabilities 38,455,411 56925.290 8,812,628 104I93,329
Fund balances:
Nonspendable: Inventory 3,304,551 - - 3,304,551
Restricted for:
Debt service(note 10) - - 26,152,909 26,152,909
Highways,streets and abandoned vehicles - 16,282,701 16,597,972 32,880,673
Public access open space 2,518,242 - - 2,518,242
Other 1,175,716 11,089,440 910,690 13,175,846
Committed to:
Budget stabilization 4,883,803 - - 4,883,803
Disaster and emergencies 4,944,925 - - 4,944,925
Lower Puna area - - 3,448,283 3,448,283
Rental assistance and subsidy - - 4,332,253 4,332,253
Sanitation - - 13,555,472 13,555,472
Self insurance 1,282,117 - - 1,282,117
Highways,streets and abandoned vehicles - 2,873,725 2,722,286 5,596,011
Parks and recreational projects - 3,923,963 86,785 4,010,748
Zoning change impact mitigation(fair share) - 2,995,486 - 2,995,486
Other 600,030 2,641,772 286,095 3,527,897
Assigned to:
Subsequent year's budget 18,003,150 - - 18,003,150
Other 3,837,693 - - 3,837,693
Unassigned 8,176,727 (10,258,317) - (2,081,590)
Total fund balances 48,726,954 29,548 770 68,092 745 146,368,469
Total liabilities and fund balances S 87,182,E $ 86 474 060 S 76,905,323 U50.561.798
See accompanying notes to the basic financial statements.
-32-
COUNTY OF HAWAII
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets
June 30,2012
Total fund balances-governmental funds $ 146,368,469
Amounts reported for governmental activities in the statement of
net assets 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 129,569,750
Infrastructure assets,net 246,938,042
Buildings and improvements,net 455,481,924
Equipment,net 50,089,791
Easements,net 3,232,428
Construction work in progress 31,937,409
Total capital assets 917,249,344
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) 27,530,381
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 (312,428,649)
Interest on long-term debt (6,038,265)
Capital leases (3,803,618)
Compensated absences (32,580,579)
Claims and judgments (I0,447,107)
Landfill costs payable (21,424,000)
Other Postemployment Benefit Obligation(OPEB) (22,340,332)
Total long-term liabilities (409,062,550)
Net assets of governmental activities S 682,085,644
See accompanying notes to the basic financial statements.
-33 -
COUNTY OF HAWAII
Governmental Funds
Statement of Revenues,Expenditures,and Changes in Fund Balances
For the Fiscal Year Ended June 30,2012
Other Total
Capital Governmental Governmental
General Projects Funds Funds
Revenues
Property taxes $208,230,486 $ - $ - $208,230,486
Public service company taxes 9,896,715 - - 9,896,715
Fuel taxes - - 8,293,200 8,293,200
Public utility franchise taxes - - 11,065,112 11,065,112
Licenses and permits 6,329,639 - 9,459,964 15,789,603
Intergovernmental 51,582,697 29,968,100 19,316,545 100,867,342
Charges for services 2,950,352 - 13,934,994 16,885,346
Investment earnings 242,352 155,445 7,962 405,759
Other 1,912,465 473,198 1,815,815 4,201,478
Total revenues 281,144,706 30,596,743 63,893,592 375,635,041
Expenditures
Current:
General government 34,820,684 - 267,094 35,087,778
Public safety 98,584,723 _ 5,938,867 104,523,590
Highways and streets 2,797,464 - 14,540,212 17,337,676
Health,education and welfare 6,755,112 - 16,993,666 23,748,778
Culture and recreation 15,906,268 - 856,367 16,762,635
Sanitation 970,292 - 28,540,492 29,510,784
Pension and retirement
contributions(note 13) 23,843,236 - 3,929,449 27,772,685
Employees'health insurance 23,772,419 - 2,129,549 25,901,968
Other 3,040,601 - 1,142,732 4,183,333
Debt service:
Principal 225,817 - 24,608,315 24,834,132
Interest 29,325 85,005 14,917,538 15,031,868
Capital outlay 11,572,257 59,211,493 436,576 71,220,326
Total expenditures 222,318,198 59,296,498 114,300,857 395,915,553
Excess(deficiency)of revenues
over(under)expenditures 58,826,508 (28,699,755) (50,407,265) (20,280,512)
(Continued)
-34-
COUNTY OF HAWAII
Governmental Funds
Statement of Revenues,Expenditures,and Changes in Fund Balances
For the Fiscal Year Ended June 30,2012
(Concluded)
Other Total
Capital Governmental Governmental
General Projects Funds Funds
Other Financing Sources(Uses)
Sale of assets $ 152,702 $ - $ - S 152,702
Increase in capital leases(notes 8 and 10) 927,591 - 1,593,418 2,521,009
State Revolving Fund loans(note 10) - 4,568,756 - 4,568,756
Transfers in(note 5) - 3,663,467 56,307,187 59,970,654
Transfers out(note 5) {56,307,187) - (3,663,467) (59,970,654)
Total other financing sources(uses) (55,226,894) 8,232,223 54,237,138 7,242,467
Net change in fund balances 3,599,614 (20,467,532) 3,829,873 (13,038,045)
Fund balances at beginning of year 44,658,150 50,0I6,302 64,262,872 158,937,324
Increase in reserve for inventories 469,190 - - 469,190
Fund balances at end of year $ 48,726,954 $29,548,770 $68,092,745 $146,368,469
See accompanying notes to the basic financial statemcnts.
-35 -
COUNTY OF HAWAII
Reconciliation of the Change in Fund Balances of Governmental Funds
to the Statement of Activities
For the Fiscal Year Ended.Tune 30,2012
Net change in fund balances-total governmental funds $ (13,038,045)
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 expense. In
the current period,these amounts are:
Capital outlay 70,373,656
Dedicated and contributed property 42,045,951
Depreciation expense and loss on disposals (31,844,366)
Excess of capital outlay over depreciation expense 80,575,241
Borrowings provide current financial resources to governmental funds;
however,issuing debt increases long-term liabilities in the statement
of net assets. In the current period,proceeds were received from:
State Revolving Fund loans (4,568,756)
Capital leases (2,521,009)
Total debt proceeds (7,089,765)
Repayment of long-term debt is reported as an expenditure in governmental
funds,but the repayment reduces long-term liabilities in the statement of
net assets. In the current year,these amounts consist of:
Bond principal retirement 19,434,340
State Revolving Fund loan repayments/forgiveness 12,073,394
Capital lease payments 1,774,473
Total long-term debt repayment 33,282,207
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. 2,092,126
(Continued)
-36-
COUNTY OF HAWAII
Reconciliation of the Change in Fund Balances of Governmental Funds
to the Statement of Activities
For the Fiscal Year Ended June 30,2012
(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:
Increase in inventories $ 469,190
Increase in Other Postemployment Benefit Obligation(OPEB) (22,461,100)
Decrease in compensated absences 1,271,293
Decrease in claims and judgments 450,030
Increase in landfill closure/postclosure care costs (415,000)
Amortization of premium from bond issuance 384,I71
Amortization of deferred amount on refunding of bonds (248,721)
Net decrease in accrued interest 377,036
Net additional expenses (20,173,101)
Change in net assets of governmental activities $ 75,648,663
See accompanying notes to the basic financial statements.
-37-
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 30,2012
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues:
Taxes and assessments:
Property taxes $ 207,300,000 $ 207,400,000 $208,230,486 $ 830,486
Public service company taxes 9,100,000 9,100,000 9,896,715 796,715
Total taxes and assessments 216,400,000 216,500,000 218,127,201 1,627,201
Licenses and permits:
Nonbusiness licenses and permits 3,018,689 3,018,689 3,224,716 206,027
Business licenses 1,516,743 1,516,743 1,598,196 81,453
Street use 1,480,000 1,480,000 1,506,727 26,727
Total licenses and permits 6,015,432 6,015,432 6,329,639 314,207
Intergovernmental:
Federal:
Programs for the aged 2,313,614 2,343,614 1,647,440 (696,174)
Community development block grants - 2,520,236 2,520,236 -
HOME program grant - 2,925,000 2,925,000 -
Law enforcement 1,596,500 3,982,438 3,430,234 (552,204)
Other 4,282,452 6,436,917 3,358,239 (3,078,678)
Total federal 8,192,566 18,208,205 13,881,149 (4,327,056)
State:
State General Fund-Act 185,
SLH 1990 17,298,000 17,298,000 18,686,406 1,388,406
Emergency medical services 14,358,592 14,374,308 14,374,308 -
Other 6,701,357 7,047,601 4,651,076 (2,396,525)
Total State 38,357,949 38,719,909 37,711,790 (1,008,119)
Total intergovernmental revenue 46,550,515 56,928,114 51,592,939 (5,335,175)
Charges for services:
General government 4,948,025 4,948,025 5,689,615 741,590
Culture and recreation 1,061,400 1,061,400 869,145 (192,255)
Highways and streets 919,050 919,050 774,680 (144,370)
Public safety 94,000 94,000 111,201 17,201
Total charges for services 7,022,475 7,022,475 7,444,641 422,166
Fines and forfeitures 1,388,500 1,388,500 872,118 (516,382)
Rents 190,545 190,545 150,887 (39,658)
(Continued)
-38-
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 30,2012
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues(continued):
Interest and penalties $ 517,820 $ 517,820 $ 226,833 $ (290,987)
Miscellaneous 5,104,818 5,396,200 5,262,878 (133,322)
Total revenues 283,190,105 293,959,086 290,007,136 (3,951,950)
Expenditures:
Current:
General government:
Finance 10,122,771 10,379,124 8,687,482 1,691,642
General government building 5,035,294 5,028,994 4,252,670 776,324
Legislative 2,920,450 3,270,450 3,141,691 128,759
Automotive equipment 5,630,649 5,628,549 4,816,928 811,621
Law 2,587,458 2,587,458 2,265,566 321,892
Research and development 3,229,731 3,271,594 3,079,864 191,730
Planning and zoning 2,739,337 2,754,750 2,481,9I2 272,838
Mayor's office 1,274,491 1,413,115 1,134,728 278,387
Engineering 1,185,333 1,187,433 1,108,9I9 78,514
Information technology 1,476,741 1,476,741 1,222,804 253,937
Human resources 1,722,935 1,732,877 1,551,755 181,122
Public works administration 1,253,203 1,263,103 1,196,045 67,058
Elections 775,638 775,638 619,280 I56,358
Legislative auditor 841,102 766,102 602,385 163,717
Total general government 40,795,133 41,535,928 36,162,029 5,373,899
Public safety:
Police department 52,140,405 53,897,623 49,256,137 4,641,486
Fire department 35,792,795 36,058,013 33,889,836 2,168,177
Prosecuting attorney 7,305,990 7,954,876 6,704,376 1,250,500
Protective inspection 1,919,138 1,915,538 1,751,891 163,647
Liquor control 1,469,143 1,504,143 1,185,892 318,251
Flood control 437,440 437,440 421,945 15,495
Civil defense agency 1,635,088 1,635,088 1,162,783 472,305
Animal control 1,982,500 1,982,500 1,982,500 -
Total public safety 102,682,499 105,385,221 96,355,360 9,029,861
Highways and streets:
Mass transit 3,933,565 5,719,878 3,008,677 2,711,201
(Continued)
-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 30,20I2
Actual Variance
Original Final (Budgetary Positive
Bud et Budget Basis) (Negative)
Expenditures(continued):
Current(continued):
Health,education and welfare:
Elderly activities $ 3,423,535 $ 3,473,535 $ 3,053,173 $ 420,362
Office of aging 2,826,076 2,904,320 2,220,474 683,846
Education 58,500 58,500 50,417 8,083
Social programs 1,500,000 1,500,000 1,500,000 -
Cemeteries 365,297 360,617 324,233 36,384
Physical examination 128,249 128,249 123,285 4,964
Total health, education and welfare 8,301,657 8,425,221 7,271,582 1,153,639
Culture and recreation:
Community music 263,726 260,726 197,723 63,003
Organized recreation:
Maintenance 6,790,279 6,955,799 6,702,039 253,760
Recreation 2,254,537 2,254,537 2,205,633 48,904
Aquatics 2,297,694 2,298,783 2,093,437 205,346
Hoolulu park complex 1,011,393 1,039,893 959,526 80,367
Administration 2,148,238 1,927,738 1,708,279 219,459
Children's zoo 637,682 648,842 609,276 39,566
Summer/Intersession 520,528 520,528 339,685 180,843
Culture and arts 222,001 225,001 203,733 21,268
Elderly activities administration 536,321 536,321 445,157 91,164
Total culture and recreation 16,682,399 16,668,168 15,464,488 1,203,680
Sanitation:
Environmental management 965,358 965,358 935,012 30,346
Pension and retirement contributions 24,517,127 24,517,127 22,598,082 1,919,045
Employees'health insurance 25,871,043 25,871,043 23,347,082 2,523,961
Other postemployment benefits 30,000 30,000 - 30,000
Other 4,696,022 4,668,085 2,341,641 2,326,444
Total current 228,474,803 233,786,029 207,483,953 26,302,076
(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 30,2012
(Concluded)
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Expenditures(continued):
Capital Outlay:
Community Development Block
grants(HUD) $ - $ 2,595,236 $ 2,595,236 $ -
HOME Program - 2,992,519 2,992,519 -
Total capital outlay - 5,587,755 5,587,755 -
Total expenditures 228,474,803 239,373,784 213,071,708 26,302,076
Excess of revenues over expenditures 54,715,302 54,585,302 76,935,428 22,350,126
Other financing sources(uses):
Transfers in:
Disaster/Emergency Fund - 200,000 200,000 -
Transfers out:
Housing Fund (838,384) (838,384) (838,384) -
Solid Waste Fund (18,158,708) (18,158,708) (18,158,708)
Golf Course Fund (315,666) (315,666) (315,666) -
Sewer Connection Loan Fund (50,000) (50,000) (50,000) -
Sewer Loan Fund (50,000) (50,000) (50,000) -
Self Insurance Fund (1,000,000) (1,000,000) (1,000,000)
Disaster/Emergency Fund (100,000) (100,000) (100,000) -
Public Access,Open Space,and Natural
Resources Preservation.Fund (4,146,000) (4,246,000) (4,164,610) 8I,390
Budget Stabilization Fund (2,777,397) (2,777,397) (2,777,397) -
Debt Service Fund (41,215,I47) (41,2I5,147) (41,215,147} -
Total transfers out (68,651,302) (68,751,302) (68,669,912) 81,390
Total other financing uses (68,651,302) {68,551,302) (68,469,912) 81,390
Excess(deficiency)of revenues and other
sources over(under)expenditures and other uses (13,936,000) (13,966,000) 8,465,516 22,431,516
Fund balance at beginning of year 44,658,150 44,658,150 44,658,150 -
Fund balance at end of year $ 30,722,150 $ 30,692,150 $ 53,123,666 $22,431,516
See accompanying notes to the basic financial statements.
-41 -
COUNTY OF HAWAII
Proprietary Funds
Statement of Net Assets
June 30,2012
Business-type Activities-
Enterprise Funds
Kulaimano Ouli Ekahi
Elderly Affordable
Housing Housing
Proaect Project Total
Assets
Current assets:
Cash and cash equivalents(note 3) $ 167,168 $ 224,633 S 391,801
Restricted cash and cash equivalents(note 3) 12,120 25,794 37,914
Investments(note 3) 40I,080 - 401,080
Imprest fund(note 3) 50 100 150
Receivables,net(note 4) 977 3,879 4,856
Prepaid expenses 1,621 - 1,621
Total current assets 583,016 254,406 837,422
Noncurrent assets:
Restricted cash and cash equivalents(note 3) 185,148 14,867 200,015
Capital assets(note 6):
Land and site improvements 511,000 503,877 1,014,877
Buildings and equipment 1,239,032 - 1,239,032
Less accumulated depreciation (1,086,755) - (1,086,755)
Total capital assets 663,277 503,877 1,167,154
Total noncurrent assets 848,425 518,744 1,367,169
Total assets 1,431,441 773,150 2,204,59I
Liabilities
Current liabilities:
Accounts payable 3,431 343,891 347,322
Internal balances(note 5) 1,350 - 1,350
Due to developer - 7,729 7,729
Security deposits payable from restricted assets 12,120 24,400 36,520
Deferred revenue(note 7) 1,456 1,994 3,450
Notes payable, current portion(note 10) 35,443 - 35,443
Total current liabilities 53,800 378,014 431,814
Noncurrent liabilities:
Notes payable(note 10) 815,863 - 815,863
Total liabilities 869,663 378,014 1,247,677
Net Assets
Invested in capital assets,net of related debt (188,029) 503,877 315,848
Restricted for debt service 185,148 - 185,148
Unrestricted 564,659 (108,741) 455,918
Total net assets S 561,778 $ 395,136 $ 956,9I4
See accompanying notes to the basic financial statements.
-42-
COUNTY OF HAWAII
Proprietary Funds
Statement of Revenues,Expenses,and Changes in Fund Net Assets
For the Fiscal Year Ended June 30,2012
Business-type Activities-
Enterprise Funds
Kulaimano Ouli Ekahi
Elderly Affordable
Housing Housing
Project Project Total
Operating revenues:
Rental receipts from tenants $ 116,263 $ 270,362 $ 386,625
Rental subsidy from federal government-HUD 131,227 - 131,227
Laundry receipts 3,195 - 3,195
Other - 3,644 3,644
Total operating revenues 250,685 274,006 524,691
Operating expenses:
Utilities 40,941 48,096 89,037
General and administration 91,015 105,486 196,501
Maintenance and repairs 52,512 56,354 108,866
Lease expense - 28,755 28,755
Depreciation(note 6) 32,907 - 32,907
Total operating expenses 217,375 238,691 456,066
Operating income 33,310 35,315 68,625
Nonoperating revenues(expenses):
Investment income(loss) 5,644 (3) 5,641
Interest expense (60,986) - (60,986)
Total nonoperating expenses (55,342) (3) (55,345)
Change in net assets (22,032) 35,312 13,280
Net assets,beginning of year 583,810 359,824 943,634
Net assets,end of year $ 561,778 $ 395,136 $ 956,914
See accompanying notes to the basic financial statements.
-43 -
COUNTY OF HAWAII
Proprietary Funds
Statement of Cash Flows
For the Fiscal Year Ended June 30,2012
Business-type Activities-
Enterprise Funds
Kulaimano Ouli Ekahi
Elderly Affordable
Housing Housing
Project Project Total
Cash Flows from Operating Activities
Receipts from tenants $ 118,335 $ 273,437 $ 391,772
Receipts from federal government-HUD 131,227 - 131,227
Payments to suppliers for goods and services (186,196) (268,000) (454,196)
Net cash provided by operating activities 63,366 5,437 68,803
Cash Flows from Capital and Related Financing Activities
Principal paid on notes payable (32,926) - (32,926)
Interest paid on notes payable (60,986) - (60,986)
Purchase of capital assets (6,863) - 6,863
Net cash used in capital and related financing activities (100,775) - (100,775)
Cash Flows from Investing Activities
Proceeds from maturities of investments 200,000 - 200,000
Interest on investments 4,896 (3) 4,893
Net cash provided by(used in)investing activities 204,896 (3) 204,893
Net increase in cash and cash equivalents 167,487 5,434 172,921
Cash and cash equivalents at beginning of year(including
restricted cash and cash equivalents) 196,999 259,960 456,959
Cash and cash equivalents at end of year(including
restricted cash and cash equivalents) $ 364,486 $ 265,394 $ 629,880
Reconciliation of Operating Income to Net Cash
Provided by Operating Activities
Operating income $ 33,310 $ 35,315 $ 68,625
Adjustments to reconcile operating income to net cash
provided by operating activities:
Depreciation expense 32,907 - 32,907
Change in assets and liabilities:
Receivables,net 478 (3,804) (3,326)
Prepaid expenses (21) - (21)
Accounts and other payables (1,449) (26,774) (28,223)
Deferred revenue (1,859) 700 (I,I59)
Net cash provided by operating activities $ 63,366 $ 5,437 $ 68,803
Supplemental disclosure of cash flow information-Interest paid $ 60,986 $ - $ 60,986
Noneash investing,capital and financing activities:
Net increase in fair value of investments $ 1,080 $ - $ 1,080
See accompanying notes to the basic financial statements.
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COUNTY OF HAWAII
Fiduciary Funds
Statement of Fiduciary Net Assets
June 30,2012
Private-
Purpose Agency
Trusts Funds
Assets
Cash and cash equivalents(note 3) $ 3,716,617 $ 3,496,791
Investments(note 3) 1,208,703 1,458,449
Receivables:
Due from other agency funds - 2,246
Other receivables - 34,293
Total receivables - 36,539
Total assets 4,925,320 $ 4,991,779
Liabilities
Due to other agency funds - 2,246
Accrued liabilities - 2,694,125
Advances payable - 534,805
Assets held for the benefit of improvement districts - 1,760,603
Total liabilities - $ 4,991,779
Net Assets
Held in trust for other parties 4,925,320
Total net assets $ 4,925,320
See accompanying notes to the basic financial statements.
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COUNTY OF HAWAII
Fiduciary Funds
Statement of Changes in Fiduciary Net Assets
For the Fiscal Year Ended June 30,2012
Private-
Purpose
Trusts
Additions
Contributions:
Puna Geothermal Venture $ 50,000
Investment earnings:
Net increase in fair value of investments 169,833
Dividends 55,919
Interest 2,930
Total additions 278,682
Deductions
Grant payments 120,609
Total deductions 120,609
Change in net assets 158,073
Net assets,beginning of year 4,767,247
Net assets,end of year $ 4,925,320
See accompanying notes to the basic financial statements.
-46-
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2012
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 Comprehensive Annual Financial
Report(CAFR).
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) and Statement No. 39,
Determining Whether Certain Organizations Are Component Units(GASB Statement No.
39). All organizations, activities or functions that meet the criteria in GASB Statement No.
14 and No. 39 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 defines component units as legally separate organizations for which
the elected officials of the primary government are financially accountable. "Financial
accountability" is the level of accountability that exists if a primary government appoints a
voting majority of an organization's governing board 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 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.
- 47 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2012
As required by GAAP as set forth in GASB Statement No. 14 and No. 39,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
Commission,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 Kekuanaoa Street,
Suite 20, Hilo, Hawaii 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 assets, 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.
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.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2012
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 on a current financial
resource 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 on 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 agency). 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 assets and the statement of changes in net assets)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. 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.
Separate financial statements are provided for governmental funds, proprietary funds, and
fiduciary funds, even though the latter are excluded from the government-wide financial
-49 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2012
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, liabilities, reserves,fund equity, revenues and expend itureslexpenses.
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, liabilities, 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.
The County reports the following major proprietary funds:
Kulaimano Elderly Housing Project—Used to account for the operation of a rental
housing project for low-income senior citizens Iocated north of Hilo.
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 funds received from geothermal
developers to mitigate the effects of geothermal energy development. Also 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.
- 50 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2012
Agency Funds—Used to account for assets held by the County for other governmental
units and individuals. The agency funds are custodial in nature and do not involve
measurement of results of operations. The County has the following agency funds:
• State Weight Tax Fund
• Improvement District No. 17 Fund(Officially closed on October 31, 2011)
• Improvement District No. 18 Fund
• Improvement District Revolving Fund
• Performance and Refundable Deposits Fund
• Payroll Clearance 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.
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
51 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2012
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 unearned revenue in its fund financial statements (see Note 7). Unearned
revenues 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 liability for unearned revenue is removed from the combined
balance sheet 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
postclosure care costs; and (c)principal and interest on general long-term debt which are
recognized as expenditures when due.
In accordance with GASB Statement No. 20,Accounting and Financial Reporting for
Proprietary Funds and Other Governmental Entities That Use Proprietary Fund Accounting,
the County applies all applicable GASB pronouncements as well as the following
pronouncements issued on or before November 30, 1989, unless those pronouncements
conflict with or contradict GASB pronouncements; Financial Accounting Standards Board
statements and interpretations, Accounting Principles Board opinions, and Accounting
Research Bulletins of the Committee on Accounting Procedures.
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.
Cash and Investments
Cash and cash equivalents include cash on hand, amounts in demand deposits, and short-term
investments with a maturity date of three months or less from the date acquired by the
County.
- 52 -
COUNTY OF HAWAII
Notes to the Basic Financial. Statements
June 30, 2012
Investments consist of time certificates of deposit at financial institutions and bank repurchase
agreements with original maturities exceeding three months. Included are 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 (FannieMae) and Federal Home Loan Mortgage Corporation(Freddie
Mac)are based on quoted market rates. Valuations of certificates of deposits are based on
cost, which approximate fair market value, as they almost invariably are held to maturity.
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.
Inventories
Inventories consist of materials and supplies and are reported as expenditures at the time of
purchase (purchase 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, 2012 of$1,175,716 are reflected as a restriction of general fund balance.
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
- 53 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2012
purchased or constructed. Donated capital assets are recorded 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.
Interest incurred during the construction phase of capital assets of business-type activities is
included as part of the capitalized value of the assets constructed.
Capital assets of the primary government and enterprise fund are depreciated 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
Long-term Obligations
The County reports long-term debt of governmental funds at face value on the government-
wide statement of net assets. Certain other governmental fund obligations not expected to be
financed with current available resources are also reported on the government-wide statement
of net assets. Longterm 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 assets along
with the estimated liability for social security and Medicare taxes and employers' retirement
contributions on those amounts.
- 54 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2012
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 Ieave at
June 30, 2012 totaled $66,800,000 for the primary government.
Leases
Leases transferring substantially all of the risks and benefits of ownership are recorded as
capital leases; other leases are operating leases (see Note 8). Capital leases are recorded as
capital asset additions at their estimated fair market value at the inception of the lease and the
related present value of the future minimum lease obligations is recorded as long-term debt.
Operating lease expenditures and expenses are recognized when the lease obligation is paid.
Retirement Plan Contributions
The County's contribution to the Employees' Retirement System of the State of Hawaii
includes the normal cost plus the level annual payment required to amortize the unfunded
actuarial accrued liability. The County's policy is to fund its required contribution annually
(see Note 13).
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 conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of assets and
liabilities, 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.
- 55 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2012
New Accounting Pronouncements
In December 2010, GASB issued Statement No. 61, The Financial Reporting Entity:
Omnibus, an amendment of GASB Statements No. 14 and 34 amending the requirements of
Statement No. 14, The Financial Reporting Entity, and Statement No. 34,Basic Financial
Statements-and Management's Discussion and Analysis—for State and Local Governments.
This Statement improves the financial reporting for governmental entities, which is comprised
of the primary government and related entities (component units). The Statement amends the
criteria for blending which helps ensure that the primary government includes only those
component units that are so intertwined with the primary government. The provisions of this
statement are effective for the County for periods beginning after June 15,2012. The County
has not yet determined the effect this Statement will have on its financial statements.
In December 2010, GASB issued Statement No. 62, Codification of Accounting and Financial
Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA
Pronouncements. This Statement will make it easier for preparers of state and local
government financial statements to find relevant authoritative guidance from one single
source. The provisions for this Statement are effective for the County for periods beginning
after December 15, 2011. The County has not yet determined the effect this Statement will
have on its financial statements.
In December 2010, GASB issued Statement No. 62, Codification of Accounting and Financial
Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA
Pronouncements. This Statement will make it easier for preparers of state and local
government financial statements to find relevant authoritative guidance from one single
source. The provisions for this Statement are effective for the County for periods beginning
after December 15, 2011. The County has not yet determined the effect this Statement will
have on its financial statements.
In June 2411, GASB issued Statement No. 63,Financial Reporting of Deferred Outflows of
Resources, Deferred Inflows of Resources, and Net Position. This Statement provides
financial reporting guidance for deferred outflows of resources, deferred inflows of resources,
and net position. The provisions for this Statement are effective for the County for periods
beginning after December 15, 2011. The County has not yet determined the effect this
Statement will have on its financial statements.
In March 2012, GASB issued Statement No. 65,Items Previously Reported as Assets and
Liabilities. The objective of this Statement is to clarify the appropriate reporting of deferred
outflows and deferred inflows of resources to ensure consistency in financial reporting. The
provisions for this Statement are effective for the County for periods beginning after
December 15, 2012. The County has not yet determined the effect this Statement will have
on its financial statements.
- 56 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2012
In March 2012, GASB issued Statement No. 66, Technical Corrections—2012. The objective
of this Statement is to enhance usefulness of financial reports by resolving conflicting
accounting and financial reporting guidance that could diminish the consistency of financial
reporting. The provisions for this Statement are effective for the County for periods
beginning after December 15, 2012. The County has not yet determined the effect this
Statement will have on its financial statements.
In June 2012, GAS13 issued Statement No. 68,Accounting and Financial Reporting for
Pensions. The Statement revises and establishes new financial reporting requirements for
most governments that provide their employees with pension benefits. The requirements for
this Statement are effective for the County for periods beginning after June 15,2014. The
County has not yet determined the effect this Statement will have on its financial statements.
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.
• 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 2011-2012 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 $11.0 million in the general fund and $2.2
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,
- 57 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2012
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 and Park Dedication 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.
Budget to GAAP Reconciliation
The following is a summary of the adjustments necessary to convert fund balances of the
County's General Fund from a GAAP basis to a budgetary basis at June 30, 2012:
Ending fund balance--GAAP basis $48,726,954
Encumbrance adjustments:
Beginning encumbrances and unexpended allotments 4,024,596
Ending encumbrances and unexpended allotments (3,837,693)
Other adjustments 4,209,809
Ending fund balance—Non-GAAP budgetary basis 53.123.666
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. Legally authorized investments include obligations of or guaranteed by the U.S.
- 58 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2012
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, 2012 was $164,547,074 for the primary government and
$8,671,857 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 $186,056,299 at June 30, 2012. Of that amount, $185,820,122
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$236,177
represent deposits held by a management agent and were uncollateralized. Accordingly,these
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
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 to limit its exposure to custodial credit risk. 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 fund also
holds equity securities.
- 59 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2012
The County's investments and maturities at June 30, 2012 are as follows:
Maturity(in years)
Fair Value Less than 1 1 —5
Investments—Primary Government:
Certificates of deposit $ 17,321,800 $ 15,885,009 $ 1,436,791
Repurchase agreements 15,500,000 15,500,000 --
Government sponsored securities 32.333.076 32,333,076
65,154,876 31.385.009 $33.769.867
Investments—Fiduciary Funds:
Certificates of deposit 1,45 ,449 1403-13S $ 1.055.311
Equity securities $ 1.208.703
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 consists of U.S. government or agency
obligations,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. More than 5% of the County's
investments are in certificates of deposit and repurchase agreements with the following
issuers: Bank of Hawaii (23%),First Hawaiian Bank(17%),Territorial Savings Bank(7%).
- 60 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2012
Restricted Cash and Cash Equivalents and Investments
Cash and cash equivalents and investments classified as restricted assets for the primary
government at June 30, 2012 amounted to $100,072,241.
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 $51,947,335 at June 30,2012.
Cash and investments in the Bond Redemption Fund and the Interest Fund are restricted to
debt service related payments and amounted to $26,444,839.
Cash in the Highway Fund, Bikeway Fund and Beautification Fund are restricted to costs
incurred relating to highways and streets and the beautification of such items and amounted to
$17,765,859.
The restricted cash in the General Fund was comprised of cash restricted to costs incurred to
administer the liquor commission and cash restricted to the acquisition of lands or property
entitlements for public outdoor recreation and education. Such amounts totaled $1,175,716
and $2,500,563, respectively.
Tenant security deposits received by the County for the Kulaimano Elderly Housing Project
and the Ouli Ekahi Affordable Housing Project are recorded as restricted assets. Such funds
amounted to $12,120 and $25,794, respectively, at June 30,2012.
Restricted amounts set aside by the Kulaimano Elderly Housing Project under its loan
agreement with the Farmers Home Administration totaled$185,148 at June 30, 2012. This
amount is restricted for debt service or for other purposes with prior approval from the
Farmers Home Administration. An operating reserve fund was established by the Ouli Ekahi
Affordable Housing Project pursuant to an agreement with the developer of the project. This
restricted reserve amounted to $14,867 at June 30, 2012.
- 61 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2012
4. RECEIVABLES
Receivables as of June 30, 2012, 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 Other
General Projects Governmental
Fund Fund Funds Total
Real property taxes $25,638,428 $ $ -- $25,638,428
Accounts receivable:
Sewer -- 2,183,482 2,183,482
Solid waste -- 2,302,878 2,302,878
Capital projects -- 1,025,077 -- 1,025,077
Intergovernmental 92837,366 10,042,009 976,694 20,856,069
Gross receivables 35,475,794 11,067,086 5,463,054 52,005,934
Less: allowance for
uncollectibles (845,981) (1,833,682 (2 679,663)
Net total receivables 34.62 .813 $11.067.086 $3,629,372 49.326.271
During fiscal year 2005,the County issued $3,887,493 in general obligation bonds on behalf
of Improvement District No. 18, an agency fund. At June 30,2012,the outstanding balance
of$2,790,526 is reflected in the government-wide statement of net assets as a receivable(see
Note 10).
Business-type activities:
Enterprise
Funds
Accounts receivable:
Rent $4,349
Other 507
Gross receivables 4,856
Less: allowance for
uncollectibles
Net total receivables
- 62 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2012
5. INTERFUND RECEIVABLES AND PAYABLES
Interfund receivables and payables consist of the following at June 30, 2012:
Receivable Fund Payable,Fund Amount
General Fund Capital Projects Fund $ 699,554
Other governmental funds 366,426
1,065,980
Other governmental funds General Fund 62,859
Other governmental funds 148,059
210,918
Total
Other governmental funds Enterprise funds $1 350
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, 2012 consisted of the following:
Transfers out:
Other
General Governmental
Fund Funds Total
Transfers in:
Capital Projects Fund $ -- $3,663,467 $ 3,663,467
Other governmental funds 56,307,187 -- 56,307,187
56.307.187 3.663.467 , 59.970.654
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.
- 63 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2012
6. CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2012 for the County was as follows:
Balance Balance
July I, Retirements/ June 30,
2011 Additions Transfers 2012
Governmental activities:
Capital assets not being depreciated:
Land and
improvements $ 107,682,068 $ 9,072,382 $ 12,815,300 $ 129,569,750
Easements 1,283,221 1,729,557 -- 3,012,778
Construction work in
progress 83,196,457 51,098,752 (102,357,800) 3I,937,409
Total capital assets not
being depreciated 1922,,161Y 746 61,900,691 (89,542,500) 164,519,937
Capital assets being depreciated:
Buildings and
improvements 452,785,465 75,034,467 (6,795) 527,813,I37
Equipment 118,629,410 5,868,591 (4,192,609) 120,305,392
Easements 439,300 -- -- 439,300
Infrastructure _371,325,581 71,973,658 (12,815,300) 430,483,939
Total capital assets
being depreciated 943,179,756 152,876,716 --(j-7,014,704) 1,079,041,768_
Less accumulated depreciation for:
Buildings and
improvements (65,525,900) (6,811,474) 6,161 (72,33I,213)
Equipment (66,498,566) (7,597,297) 3,880,262 (70,215,601)
Easements (73,217) (146,433) -- (219,650)
Infrastructure (166,569,716) (16,976,181) (183,545,897)
Total accumulated
depreciation (298,667 399 (31,531,385) 3,886,423 (326,312,361)
Total capital assets
being depreciated,
net 644,512,357 121,345,331 (13,128,281) 752,729,407
Governmental
activities capital
assets,net $836674.103 183246.022 ($102,670,781) 917249344
- 64 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2012
Balance Balance
July 1, Retirements/ June 30,
2011 Additions Transfers 2012
Business-type activities:
Capital assets not being depreciated:
Land $ 753,877 $ -- $ -- $ 753,877
Capital assets being depreciated:
Buildings and
improvements 1,136,008 -- -- 1,136,008
Ground and site
improvements 261,000 -- -- 261,000
Equipment 100,848 6,863 (4,687) 103,024
Total capital assets
being depreciated 1,497,856 6,863 (4,687) 1,500,032
Less accumulated depreciation for:
Buildings and
improvements (781,663) (24,615) -- (806,278)
Ground and site
improvements (189,666) (3,754) -- (193,420)
Equipment ___C87,206) (4,538) 4,687 (87,057)
Total accumulated
depreciation (1,058,535) J32,907) 4,687 (1,086,755)
Total capital assets
being depreciated,
net 439,321 2( 6,044) -- 413.277
Business-type
activities capital
assets,net 1 1 1 [$26.044) $ __ 1 1 1 4
- 65 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2012
Depreciation expense was charged to functions/programs of the primary government as
follows:
Governmental activities:
General government $ 3,024,680
Public safety 2,784,312
Highways and streets 18,388,134
Sanitation 4,618,173
Health, education and welfare 1,131,582
Culture and recreation 1,584,504
Total depreciation expense—governmental activities 31.531385
Business-type activities:
Kulaimano Elderly Housing Project 2
7. DEFERRED REVENUE:
Deferred revenue consists of the following at June 30, 2012:
Governmental activities:
Capital Other Total
General Projects Governmental Governmental
Fund Fund Funds Funds
Real property taxes $25,167,370 $ -- $ -- $ 25,167,370
Liquor control revenue 184,280 -- 184,280
Sewer revenue -- -- 1,288,376 1,288,376
Housing revenue -- -- 85,256 85,256
Solid waste revenue -- -- 1,376,300 1,376,300
Intergovernmental 992,159 940,558 -- 1,932,717
Total presented in
fund financial
statements 26,343,809 940,558 2,749,932 30,034,299
Less adjustments for
accrual of revenues (24,792,447) -- __(2,737,934) (27,530,381)
Total government-
wide financial
statements1,55], 62 $ 11 2.503.91 S
Business-type activities:
Enterprise
Funds
Unearned rental income 3.450
- 66 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2012
8. LEASES
The County leases machinery and equipment under noncancellable leases expiring at various
dates through June 2017. These capital leases are financed from the resources of various
funds.
The estimated value of the leased machinery and equipment at the inception of the capital
leases and accumulated depreciation, amounting to $7,509,730 and$1,368,064, respectively,
and the related present value of the remaining obligations under the capital leases amounting
to $3,803,618 at June 30, 2012 are included in capital assets and long-term debt,respectively.
The County also leases land, office facilities and other equipment under noncancellable
operating leases expiring through July 2029. Expenditures for such operating leases were
$1,836,075 for the fiscal year ended June 30, 2012.
The future minimum payments under capital and operating leases at June 30, 2012 are as
follows:
Capital Operating
Leases Leases
Year Ending June 30:
2013 $1,433,397 $1,605,942
2014 1,135,236 788,668
2015 831,634 757,776
2016 445,200 708,176
2017 131,165 686,301
2018 -2022 -- 779,267
2023 -2027 -- 74,053
2028 -2030 31,575
Total minimum lease payments 3,976,6325 .758
Less amount representing
interest 17( 3,014)
Obligations under capital leases 3.803.61 g
9. SOLID WASTE LANDFILL CLOSURE AND POSTCLOSURE CARE COSTS
Hilo Landfill The County owns and operates a landfill Iocated in the city of Hilo. State and
federal laws require the County to place covers on certain landfill sites and to monitor and
maintain the sites for thirty years after the facility is closed. Although the closure and
postclosure care costs will be paid near and after the date that the landfill stops accepting
waste,the County recognizes a portion of the closure and postclosure care costs in each
operating period. The liability for these costs is included in the government-wide statement
of net assets. The amount recognized each year is based on the landfill capacity used as of
- 67 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2012
the statement of net assets date. At June 30, 2012,the County recognized a liability of
$13,172,000, based on the use of 90%of the estimated capacity of the landfill. During the
fiscal year ended June 30,2012,there were no expenditures incurred for the closure of the
Iandfill. The remaining$1,558,000 in estimated cost of closure and postclosure care will be
recognized as the remaining estimated capacity is used. The estimated remaining useful life
of the landfill is still approximately four years. These amounts are based on what it would
cost to perform the required closure and postclosure care in 2012. Actual costs at that time
may be higher due to inflation, changes in technology, or changes in regulations.
Landfill capacity estimates are based on volumes going into the landfill subsequent to the last
available engineer's calculation. The volumes going into the landfill do not account for
decomposition, settlement, and corrosion;therefore the estimates are revised when new
engineering calculations, based on aerial photos and surveys, are available.
The County's permit to operate the landfill expired October 9, 1998. The County filed for an
extension which was approved by the State until permitted capacity is reached. In accordance
with state statute,the County is allowed to continue operations provided that the County acts
consistently with the permit previously granted and the extension application, plans,
specifications and all other information contained therein.
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 $15,950,000, based on what it
would cost to perform the required closure and postclosure care in 2012. Actual costs may be
higher due to inflation, changes in technology, or changes in regulations. Through
June 30,2012, $7,698,000 was spent on closure and postclosure care of the landfill. The
remaining estimated liability of$8,252,000 is included in the government-wide statement of
net assets. During the year ended June 30,2012, $124,000 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 Iandfill, and for the private
company to retain the overall management as well as perform all construction work on the
Iandfill 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 2012,the County has provided for financial resources
that will be available to provide for closure, postclosure care and remediation or containment
- 68 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2012
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.
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 an improvement district.
The following is a summary of general obligation bond transactions reported in the
government-wide statement of net assets for the County for the fiscal year ended June 30,
2012:
Bonds Issue Bond Balance Bond Balance Due Within
Authorized Amount July 1,2011 Issues Retirements June 30,2012 One Year
1993 Ref&PI $86,770,000 $1 1,575,000 $ -- ($ 5,630,000) $ 5,945,000 $ 5,945,000
2003 Series A 36,310,000 28,735,000 -- (1,665,000) 27,070,000 1,725,000
2004 Series A 30,000,000 25,270,000 (1,280,000) 23,990,000 1,340,000
2004 Ref Series B 19,545,000 10,845,000 (1,975,000) 8,870,000 2,055,000
2004 Ref Series C 5,050,140 2,199,924 (521,156) 1,678,768 539,604
2004 PI Series A 2,776,400 2,278,520 -- (325,997) 1,952,523 45,335
2004 PI Series B 920,000 853,173 (15,170) 838,003 15,833
2006 Series A 25,000,000 21,725,000 - (927,500) 20,797,500 972,500
2007 Series A 85,000,000 76,620,000 - (3,050,000) 73,570,000 3,200,000
2007 Series B 20,820,000 17,325,000 -- (1,855,000) 15,470,000 1,925,000
2007 Series C 10,787,388 10,787,388 - (795,684) 9,991,704 828,294
2008 Series A 50,000,000 48,335,000 - (1,735,000) 46,600,000 1,810,000
2010 Series A 26,493,750 26,493,750 - 26,493,750 --
2010 Series B 18.506,250 18.506.250 18.506,250
417,978,928 301,549,005 (19,775,507) 281,773,498 20,401,566
Add unamortized
premium 7,683,432 5,964,136 - (384,171) 5,579,965 384,171
Less deferred amount
on refunding (2.828.759) (1.433.635) 248,721 (1,184,914) (248.721)
$422,833.601 $306 079 506 $ -- ($19.910.957) $286,168.549 20.537.016
The 2010 Series B bonds were issued as bonds designated as"Recovery Zone Economic
Development Bonds"under the American Recovery and Reinvestment Act of 2009. The
County will receive a cash subsidy payment from the United States Treasury equal to 45%of
the interest payable on the Series B bonds.
- 69 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2012
General obligation bonds payable reported on the government-wide statement of net assets at
June 30,2012 are comprised of the following individual issues:
Public improvement(PI) and/or refunding bonds:
1993 Refunding and PI at 5.6%, due through 2013 $ 5,945,000
2003 Series A at 2.5%to 5.125%, due through 2023 27,070,000
2004 Series A at 3.25%to 5.25%, due through 2024 23,990,000
2004 Refunding Series B at 3.5%to 5.0%, due through 2015 8,870,000
2004 Refunding Series C at 3.25%to 3.7%, due through 2014 1,678,768
2004 PI Series A at 4.75%, due through 2037 1,952,523
2004 PI Series B at 4.375%, due through 2040 838,003
2006 Series A at 4.0%to 5.0%, due through 2026 20,797,500
2007 Series A at 4.0%to 5.0%, due through 2027 73,570,000
2007 Series B at 3.75%to 5.0%, due through 2018 15,470,000
2007 Series C at 4.0%to 5.0%, due through 2021 9,991,704
2008 Series A at 4.0%to 6.0%, due through 2028 46,600,000
2010 Series A at 1.7%to 5.0%, due through 2030 26,493,750
2010 Series B at 3.335% to 6.1%,due through 2030 18,506,250
Total general obligation bonds payable $281,72iM
Annual debt service requirements to maturity for the above general obligation bonds are as
follows:
Governmental Activities
Fiscal year ending June 30: Principal Interest
2013 $ 20,401,566 $ 13,153,332
2014 15,115,470 12,162,852
2015 17,773,630 11,444,082
2016 18,014,007 10,595,113
2017 16,366,890 9,781,285
2018 -2022 86,067,203 36,947,764
2023 —2027 81,130,284 16,644,275
2028 —2032 26,064,225 2,066,732
2033 —2037 695,934 102,719
2038 —2040 144,289 9,634
Total $281,773,498 $112.907.788
Bond Premiums
At June 30,2012,total unamortized bond premiums were $5,579,965,which are being
amortized over the remaining life of the respective bond issues.
- 70 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2012
Bonds Authorized and Unissued
The County Council has authorized the issuance of$296.1 million in general obligation bonds
to finance specified capital improvement projects. At June 30, 2012, $161.1 million was not
yet issued.
Subsequent Events On November 8, 2012 and November 21, 2012, the County Council
authorized the issuance of$30.4 million and$5.1 million,respectively, in general
obligation bonds for the County to finance specified capital improvement projects.
General Obligation Bond Anticipation Notes
In March 2011,the County issued a general obligation bond anticipation note(BAN) in the
total amount of$10,000,000. These notes were issued to provide funds for the acquisition
and construction of major capital facilities and bear interest at 1.22% and had an original
maturity date of September 2,2011. The note was then renewed on September 2,2011 and
again on March 1, 2012 with a new maturity date of August 30,2012.
There was a new issuance of a$15,000,000 note on September 2, 2011, which matured on
March 1, 2012 and was then renewed with a maturity date of August 30,2012.
There was a new issuance of an$8,000,000 BAN on June 27, 2012 with a maturity date of
October 31,2012.
Since all three of the BANS have a maturity date within 12 months of fiscal year end,the
$33,000,000 of debt is reflected as current liabilities.
The following is a summary of general obligation bond anticipation note transactions reported
in the government-wide statement of net assets for the County for the fiscal year ended June
30,2012:
Issue Balance Balance
Authorized Amount July I.2011 Issues Retirements June 30,2012
2011 Series B R-1 $ 10,000,000 $ 10,000,000 $ -- $ 10,000,000 $ --
2011 Series B R-2 10,000,000 -- 10,000,000 10,000,000
2011 Series B R-3 15,000,000 - 15,000,000 15,000,000 --
2012 Series B R-4 10,()00,000 - 10,000,000 -- 10,000,000
2012 Series B R-5 15,000,000 15,000,000 -- 15,000,000
2012 Series B R-6 8.000.000 - -.--.8,000,000 8.000.000
$�,nnn,nnn $10,000,000 $58,000,000 $35,000 000 $33.000.000
- 71 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2012
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 twenty projects
approved for funding with these loans.
The schedule below shows the County's SRF transactions for the fiscal year ended June 30,
2012:
Loans Approved Loan Balance Retirements Loan Balance Due Within
Authorized Amount July 1.2011 Additions /Forgiveness June 30,2012 One Year
Hilo WWTP $12,724,311 $1,592,109 $ -- ($ 786,227) $ 805,882 $ 805,882
Waiakea Mill 1,300,000 240,059 (78,052) 162,007 80,003
Waiakea
Houselots 459,321 57,706 - (28,497) 29,209 29,209
Waiakea
Houselots 1I 5,024,266 2,436,822 -- (277,881) 2,158,941 285,162
Ainako A&B 2,239,174 467,540 -- (130,123) 337,417 132,818
Kalanianaole 1,499,944 432,259 -- (91,408) 340,851 94,190
Kalanianaole RH 1,615,980 1,195,693 - (76,126) 1,119,567 77,934
AM Drive A&B 3,210,243 618,036 - (199,691) 418,345 205,281
Alii Drive C&D 3,780,000 1,010,785 -- (216,908) 793,877 221,399
Ahi Drive E&F 2,112,654 693,271 -- (130,100) 563,171 134,059
Waiaha Bay 3,697,893 1,038,770 -- (219,725) 819,045 225,876
Kealakehe 1,300,071 239,622 -- (77,910) 161,712 79,858
Holualoa Bay 3,080,000 1,070,217 -- (181,651) 888,566 187,178
PaukaaCCS 2,143,448 1,014,909 -- (116,525) 898,384 119,400
Cesspool
Conversion 8,363,773 6,814,095 - (423,829) 6,390,266 426,092
Pahoehoe 2,817,760 1,629,045 -- (144,548) 1,484,497 148,333
Komohana Hts
LCC-ARRA 1,085,800 1,085,800 (1,085,800) -
Honokaa LCC-
ARRA 5,332,346 5,065,729 266,617 (5,332,346) -- --
Honokaa LCC 4,811,709 -- 3,776,904 (1,000,000) 2,776,904 117,370
Queen
Liliuokalani
LCC-ARRA 1,019,929 1,019,929 - (1,019,929) -- --
Queen
Liliuokalani 10.186,277 8 832 868 525,235 (456,118) 8,901985 474,618
$77.804,899 :�3h,55.5,2� $�5 ($12.073.394) $29,Q50.626 $�'$99
The loans bear interest at 0.50%to 3.02%, exclusive of a 1.00% loan fee for all loans except
for the Hawaii County Cesspool Conversion Project which is subject to a 0.25% loan fee, and
require payments through fiscal year 2032. Those loans with the"ARRA" designation are
interest free with principal forgiveness upon the County's fulfillment of certain conditions.
- 72 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2012
Debt service to maturity for disbursements to date on these projects are as follows:
Governmental Activities
Fiscal year ending June 30: Principal Interest
2013 $ 3,844,662 $ 650,808
2014 3,087,580 495,888
2015 2,690,059 397,737
2016 2,373,818 307,672
2017 1,860,420 214,350
2018-2022 7,459,286 576,640
2023 —2027 5,525,962 200,958
2028-2032 2,208,839 32,818
Total 529,050,626 2 1
Other General Long-Term Obligations
The following is a summary of other general long-term obligations transactions for the fiscal
year ended June 30,2012:
Balance Balance Due Within
July 1,2011 Additions* Payments June 30,2012 One Year
Governmental activities:
Compensated absences $33,851,872 $9,165,390 ($10,436,683) $32,580,579 $7,835,700
Claims and judgments
(see Note 12) 10,897,137 3,150,000 (3,600,030) 10,447,107 2,317,306
Capital leases
(see Note 8) 3,057,082 2,521,009 (1,774,473) 3,803,618 1,349,916
Landfill costs payable
(see Note 9) 21,009,000 538,652 (123,652) 21,424,000 200,757
Other post employment
benefit obligation
(see Note 13) (120,768) 36,193,000 (13,731,900) 22,340,332 --
Total 68.694.323 $5168.051 029.666.7381 $90,595,636 1I,703.679
*Net of new claims Iiability and existing claims resolved at less than previous estimate.
Fund Balances-Debt Service Funds
The fund balance in the debt service funds at June 30, 2012 includes$24,014,149,which is
reserved for principal payments on general obligation bonds and $2,138,760,which is
reserved for the payment of interest on the bonds.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2012
Enterprise Fund Notes Payable
The Kulaimano Elderly Housing Project(Project) is indebted to the U.S. Department of
Agriculture, Farmers Home Administration on two notes payable with balances aggregating
$851,306 at June 30, 2012. The notes,which mature in September 2029, are repayable in
monthly installments of$7,826 including interest and are collateralized by substantially all of
the Project's property and equipment. Although the stated annual rate of interest on the notes
is 9%, such rate is reduced to 7% for as long as the Project has a U.S. Department of Housing
and Urban Development Section 8 Housing Assistance Payment contract in effect for all or
park of the units within the Project.
The following is a summary of enterprise fund notes payable transactions for the fiscal year
ended June 30,2012:
Balance at July 1, 2011 $884,232
Deductions (32,926)
Balance at June 30, 2012 851,306
Less current portion (35,443)
Note payable, net of
current portion 1 �6
The following is a summary of the annual maturities for the enterprise fund notes payable:
Business-type Activities
Fiscal year ending June 30: Principal Interest
2013 $ 35,443 $ 58,469
2014 38,006 55,906
2015 40,753 53,159
2016 43,699 50,213
2017 46,858 47,054
2018 -2022 290,272 179,288
2023 —2027 356,275 59,010
Total 3
Subsequent Events
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.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2012
Special Assessment Bonds
The County has issued general obligation bonds on behalf of Improvement District No. 18 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 bonds mature annually through 2040 and bear interest at
4.375%to 4.75%. Total general obligation bonds payable included in the government-wide
statement of net assets were$2,790,526 at June 30, 2012.
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, for the fiscal year ended June 30, 2012:
Balance at July 1,2011 $3,131,693
Deductions (341,167)
Balance at June 30, 2012 $2,790,526
The following is a summary of the annual maturities for the improvement district general
obligation bonds:
Fiscal year ending June 30: Principal Interest
2013 $ 61,168 $ 130,871
2014 64,014 125,073
2015 66,993 122,024
2016 70,111 118,833
2017 73,373 115,494
2018-2022 421,385 521,686
2023 —2027 529,034 411,530
2028-2032 664,225 273,186
2033 —2037 695,934 102,719
2038—2040 144,289 9,634
Total 2 2W9_11,0 5 0
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2012
11. COMMITMENTS AND CONTINGENCIES
Contractual commitments— Contractual commitments for capital projects, expenses,and
supplies at June 30,2012, 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 $ 3,837,693
Capital projects fund 25,910,289
Nonmajor funds 10,330,170
40.078.152
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 assets (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 affect on the financial
condition of the County.
ADA compliance—The County entered into two stipulated agreements (or Consent Decrees)
approved by the federal district court judges to implement provisions of the Americans with
Disabilities Act("ADA"). With respect to the first stipulated agreement, filed on October 2,
1997, relating to curb cuts,the County,with the help of a consultant, surveyed 669
intersections,then ranked them in order of priority. A transition plan,along with a funding
commitment,was approved by the County Council. The total cost of all curb cuts was
estimated to be $6.2 million. The cost of the first phase of the plan was $3 million,to be used
in high priority areas such as government facilities, schools, and hospitals. The remaining
cost was intended to cover curb cuts at parks and in low-density single family residential
areas. All corrective action was to be completed by July 2005,with an estimated 682 ramps
to be completed. Funding allocated so far for this effort is $10.6 million. Since the proposed
timetable proved to be too ambitious,the parties amended the agreement to require
contracting by July 2005, rather than completion by that date. Pursuant to the April 2005
Stipulation of the Parties and Order of the Court, all curb ramps for 2005 and most curb
ramps for 2004 were deferred. In the first phase, construction of curb ramps commenced in
2000 and ended in 2004,whereby 229 curb ramps were completed. In the second phase, 153
proposed curb ramps were deferred and 161 curb ramps were to be constructed. As of May
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 3 0,2012
21, 2008,there were approximately 204 curb ramps (which included at Ieast 151 of the 161
curb ramps that were required by the amended transition plan) installed in Hilo, Waikoloa
and Kona at a total cost of close to $4.8 million. In addition,the Department of Public Works
has developed and advertised Procedures for Requesting New Curb Ramps or Modifications
to Existing Curb Ramps within the County Streets. On September 20, 2012,the close-out
order of the consent decree was filed,thus dismissing the curb ramp case with prejudice,and
a copy of"County of Hawaii's Accessibility Design Guidelines and General Policies and
Procedures, Curb Ramps within Public Rights-of-Way"(June 2012)was attached as an
exhibit to that order.
The second stipulated agreement, filed on June 4, 1998,relates to the Department of Parks
and Recreation (the Parks Department). The agreement required the Parks Department 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 has been completed and approved by the County Council. The cost
impact of implementation is not material because the necessary modifications are primarily
procedural. The second part of this stipulated agreement is 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 repairs and renovations is 12 years from the date the County
Council accepted the self-evaluation. The initial(1997-2000)estimated cost of the facilities
repairs was $15.1 million,which would have been spent over the 12-year period. Funding
allocated initially for facilities repairs was $17.5 million,with another$4 million of federal
funding anticipated through community development block grants over the next 2 years.
Since 2000,the Department of Parks and Recreation has requested$2 to$3 million a year for
the different park facilities' ADA projects. The Department of Public Works has requested
an additional $2 million a year for the other County ADA facilities' project. Because of the
substantial hardships predominantly incurred in the funding and cost aspects of the
implementation of the Original Transition Plan,the learning curve process, and the timing
and scheduling of the different stages of work for each project,the parties worked on a plan
to implement the Transition Plan with the assistance of a federal district court Monitor and an
ADA Specialist, to obtain extensions on the initial deadlines for completion that were set in
the Original Transition Plan and to establish a Revised Transition Plan to satisfy the
requirements of the ADA. The County had spent$42.0 million for the construction and
design fees to complete 50 park facilities(some having multiple ADA work being
completed). There are four park facilities where construction has progressed; 29 park
facilities that must be completed; and the Parks estimated costs for completion is $15.1
million. On March 23,2012,the close-out of the consent decree was filed,whereby the Court
and parties established a reasonable four year timeline to complete the remaining ADA work
by December 31, 2016. In addition,the County's ADA coordinator(Equal Opportunity
Officer)has access to an identifiable account of at least$50,000 to handle requests for
reasonable accommodations for County departments; and the procedures for these requests
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2012
have been finalized and are available on the Human Resources Department's Equal
Opportunity and the ADA web page.
12. RISK MANAGEMENT
The County is exposed to various risks of losses related to torts;theft of, damage to, and
destruction of assets; errors and omissions; injuries to employees; and natural disasters. The
County maintains fire and commercial multiple peril insurance on County facilities, flood
insurance on selected structures, medical malpractice insurance for emergency medical
technicians, aviation liability for helicopter operations, liability coverage on transit buses and
privately owned police vehicles, and property damage coverage on County Police fleet
vehicles. There was no reduction in insurance coverage during the year from coverage in the
prior year. During the past three fiscal years,the amount of settlements in cases covered by
insurance has not exceeded the insurance coverage. The County is substantially self-insured
for the majority of its vehicles as well as for all other perils including workers' compensation
and general liability. The liability for claims and judgments is reported on the government-
wide statement of net assets 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 Iiability for claims and judgments
is reported on the government-wide statement of net assets. At June 30, 2012,the amount of
this liability was $10,447,107. This is the County's best estimate based on available
information. Changes in the reported liability since July 1,2010 are given below.
General Workers' Total
Liabili Compensation Liability
Balance at July 1,2010 $ 4,139,752 $ 11,230,939 $15,370,691
Incurred claims(including IBNR)* (993,836) 549,671 (444,165)
Claim payments (1,477,017) (2,552,372) (4,029,389)
Balance at June 30, 2011 $ 1,668,899 $ 9,228,238 $10,897,137
Incurred claims (including MNR)* 598,474 2,551,526 3,150,000
Claim payments (1,302157) (2.297,073) (3,600,030)
Balance at June 30, 2012 964.416 $ 9.482.691 10.447.107
*Net of new claims liability and existing claims resolved at less than previous estimate.
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2012
13. EMPLOYEE BENEFIT PLANS
Pension Plan
Plan description All eligible employees of the County are required by Chapter 88 of the
Hawai`i Revised Statutes(FIRS)to become members of the Employees' Retirement System of
the State of Hawai`i (the ERS), a cost-sharing multiple-employer defined benefit pension
plan. The ERS provides retirement, survivor, and disability benefits with multiple benefit
structures known as the contributory, hybrid, and noncontributory plans. All contributions,
benefits, and eligibility requirements are established by Chapter 88,FIRS, and can be
amended by legislative action.
The ERS regards the County, including its component unit, as one employer. Therefore,
separate information for the primary government and its component unit is not available. All
information given below on the pension plan is for the reporting entity as a whole, including
both the primary government and its component unit.
Employees covered by Social Security on June 30, 1984 were given the option of joining the
noncontributory plan or remaining in the contributory plan. All new employees hired after
June 30, 1984 and before July 1,2006, who are covered by Social Security,were generally
required to join the noncontributory plan. Qualified employees in the contributory and
noncontributory plan were given the option of joining the hybrid plan effective July 1,2006,
or remaining in their existing plan. Starting July 1, 2006, all new employees covered by
Social Security are required to join the hybrid plan.
The three plans provide a monthly retirement allowance equal to the benefit multiplier
percentage(1.25% or 2.00%) multiplied by the average final compensation(AFC)multiplied
by years of credited service. 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, if the employee became
a member prior to January 1, 1971. The AFC for members hired on or after this date is based
on the three highest paid years of service, excluding the payment of salary in lieu of vacation.
For postretirement increases, every retiree's original retirement allowance is increased by
2.5% on 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.).
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2012
The following summarizes the three plan provisions relevant to the general employees of the
respective plan:
Contributory Plan General employees in the contributory plan are required to contribute
7.8%of their salary and are fully vested for benefits upon receiving 5 years of credited
service. The County may also make contributions for these members. Under the
contributory plan, employees may retire with full benefits at age 55 and 5 years of
credited service, or may retire early at any age with at least 25 years of credited service
and reduced benefits. The benefit multiplier is 2.0% for employees covered by Social
Security.
Police officers, fire fighters and certain other members that are not covered by Social
Security contribute 12.2% of their salary and receive a retirement benefit using the
benefit multiplier of 2.5%for qualified service, up to a maximum of 80%of AFC. These
members may retire at age 55 with 10 years of credited service or at any age with 25
years of credited service,provided the last 5 years of credited service is in any of the
qualified occupations.
Hybrid Plan General employees in the hybrid plan are required to contribute 6.0% of
their salary and are fully vested for benefits upon receiving 5 years of credited service.
The County may also make contributions for these members. Employees may retire with
full benefits at age 62 and 5 years of credited service or at age 55 and 30 years of
credited service, or may retire at age 55 and 20 years of credited service with reduced
benefits. The benefit multiplier used to calculate retirement benefits is 2.0%.
Noncontributory Plan General employees in the noncontributory plan are fully vested
upon receiving 10 years of credited service. The County is required to make all
contributions for these members. Employees may retire with full benefits at age 62 and
10 years of credited service or age 55 and 30 years of credited service or age 55 and 20
years of credited service with reduced benefits. The benefit multiplier used to calculate
retirement benefits is 1.25%.
The ERS funding policy provides for periodic employer contributions at actuarially
determined rates, expressed as a percentage of annual covered payroll, such that the employer
contributions, along with employee contributions and an actuarially determined rate of
investment return, are adequate to accumulate sufficient assets to pay benefits when due. The
funding method used to calculate the total employer contribution required is the entry age
normal actuarial cost method. Effective July 1,2005, employer contribution rates are a fixed
percentage of compensation, including the normal cost plus amounts required to pay for the
unfunded actuarial accrued liability. Employers contributed 19.70%for police officers and
fire fighters, and 15.00%for all other employees. Employer rates are set by statute based on
the recommendation of the ERS actuary resulting from an experience study conducted every
five years.
- 80 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2012
The required pension contributions by the County for the years ended June 30,2012,2011,
and 2010 were$21,832,179,$21,435,798,and$22,127,289,respectively,which equal the
required contributions for each year. Measurement of assets and actuarial valuations are
made for the ERS as a whole and are not separately computed for individual participating
employers such as the County.
The ERS issues a CAFR that includes financial statements and required supplementary
information, which may be obtained by writing to the Employees' Retirement System of the
State of Hawaii, 201 Merchant Street, Suite 1400, Honolulu,Hawaii 96813.
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. The EUTF was established on July 1, 2003 to design,
provide, and administer medical, prescription drug, dental,vision, chiropractic, dual-coverage
medical and prescription drug, and group life benefits.
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.
- 81 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2012
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.
The County's annual other postemployment benefit(OPEB) cost is calculated based on the
annual required contribution(ARC) of the employer,which is an amount actuarially
determined in accordance with the parameters of Governmental Accounting Standards Board
Statement No. 45,Accounting and Financial Reporting by Employers for Postemployment
Benefits Other than Pensions(GASB Statement No. 45). GASB Statement No. 45 addresses
the failure of previous financial reporting practices to measure and recognize the cost of
OPEB during the periods when employees render the services or to provide relevant
information about OPEB obligations and the extent to which progress is being made in
funding those obligations. The ARC represents a level of funding that, if paid on an ongoing
basis, is projected to cover normal cost each year and amortize any unfunded actuarial
liabilities(or funding excess)over a period not to exceed thirty(30)years. The current ARC
rate is 27.8% of annual covered payroll.
The following section shows the County's Annual OPEB cost for the year ended June 30,
2012,the amount actually contributed to the plan, and changes in the net OPEB Iiability:
Annual required contribution $36,193,000
Interest on net OPEB obligation (9,000)
Adjustment to annual required contribution 7,000
Annual OPEB Cost 36,191,000
Contributions made 13,729,900
Increase in net OPEB liability 22,461,100
Net OPEB asset-beginning of year (120,768)
Net OPEB liability-end of year $22,340,332
The above net OPEB liability at the end of the year is included in the Statement of Net Assets
in the noncurrent other liability amount of$22,340,332.
The annual OPEB cost,the percentage of annual OPEB cost contributed to the plan, and the
net OPEB asset for the year ended June 30, 2012 and the preceding two years were as
follows:
Percentage of Annual Net OPEB
Fiscal Year OPEB Cost Obligation/
Ended Annual OPEB Cost Contributed Asset
June 30,2010 $25,823,000 109.1% ($3,931,381)
June 30,2011 $34,913,000 89.1% ($120,768)
June 30,2012 $36,191,000 37.9% $22,340,332
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COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2012
The schedule of funding progress based on the actuarial valuation date of July 1, 2011, is as
follows:
Actuarial accrued liability $394,633,000
Actuarial value of plan assets 61,907,000
Unfunded actuarial accrued liability(UAAL) $332,726,000
Funded ratio 16%
Covered payroll (active plan members) $130,170,000
UAAL as a percentage of covered payroll 256%
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts
and assumptions about the probability of occurrence of events far into the future. Examples
include assumptions about future employment,mortality, and the healthcare cost trend.
Amounts determined regarding the funded status of the plan and the annual required
contributions of the employer are subject to continual revision as actual results are compared
with past expectations and new estimates are made about the future.
Projections of benefits for financial reporting purposes are based on the substantive plan(the
plan as understood by the employer and plan members) and include the types of benefits
provided at the time of each valuation and the historical pattern of sharing of benefit costs
between the employer and plan members to that point. The actuarial methods and
assumptions used include techniques that are designed to reduce short-term volatility in
actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term
perspective of the calculations.
In the July 1, 2011 actuarial valuation,the entry age normal cost actuarial cost method was
used. The actuarial assumptions included a 7.0% discount rate, which is based on the
County's anticipated funding level, and an annual healthcare cost trend rate of 8.0% initially,
reduced by decrements to an ultimate rate of 5.0% after nine years. The assumptions also
include a 3.5% increase in payroll and a 3.0% inflation rate. The UAAL is being amortized
as a level percentage of projected payroll on an open basis. The remaining amortization
period at July 1, 2011 for the UAAL balance varies depending on the date each portion was
established but is set to not exceed 30 years.
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.cutf.hawaii.gov 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
- 83 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2012
fund 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, 2012, cash,time certificates of deposit and money market funds of$30,131,036,
with bank balances of$32,585,411 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 investments received by the Department that are
restricted as to use and are recorded as a restricted asset. Such funds amounted to $5,349,930
at June 30,2012. At June 30, 2012,the Department's investment portfolio consists of
certificates of deposit.
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. Construction period interest is capitalized on utility plan constructed
with tax-exempt debt.
Depreciation on the Department's utility plant assets in service is computed using the
straight-line method over the estimated useful Iives of the assets as follows:
Structures and improvements 40 to 50 years
Machinery and equipment 5 to 20 years
Water systems 10 to 40 years
- 84 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30, 2012
The capital assets of the Department at June 30, 2012 were as follows:
Utility plant in service $394,804,290
Less: accumulated depreciation (175,789,7681
219,014,522
Land and rights 3,570,659
Construction work in progress 46,237,024
Net capital assets $268,822,205
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 Iiability for these general obligation bonds,which amounted to $43,173,981 at
June 30, 2012.
General obligation bonds payable issued on behalf of the Department and other long-term
debt at June 30, 2012 are comprised of the following:
Public improvement bonds:
1993 Series A at 2.5%to 5.6%, due through 2013 $ 835,000
2004 Series D at 4.5%, due through 2039 236,578
2006 Series A at 4.0%to 5.0%, due through 2026 20,797,500
2008 Series A at 4.125%,due through 2043 142,570
2010 Series A at 3.33%to 6.1%, due through 2030 9,585,706
2010 Series B at 3.33%to 6.1%, due through 2030 6,107,099
Total public improvement bonds 37,704,453
Public improvement refunding bonds:
2004 Series at 2.0%to 5.25%, due through 2015 141,232
2007 Series at 4.0%to 5.0%, due through 202I 5,328 296
Total public improvement refunding bonds 5,469,528
Revolving fund loans:
State revolving fund loan, interest up to 1.37%,
due through 2030 13,406,406
American Recovery and Reinvestment Act State revolving
fund loan, interest free,with total principal forgiveness
upon fulfillment of conditions 4,466,407
Total revolving fund loans 17,872,813
Total 61,046.794
- 85 -
COUNTY OF HAWAII
Notes to the Basic Financial Statements
June 30,2012
At June 30, 2012, future principal payments for long-term debt are scheduled as follows:
Fiscal year ending June 30:
2013 $ 7,757,000
2014 2,532,000
2015 3,264,000
2016 3,324,000
2017 3,432,000
2018-2022 18,907,000
2023 —2027 16,272,000
2028—2032 5,388,000
2033 —2037 87,000
2038—2042 76,000
2043 7,794
Total 61.046.794
Contributions in Aid of Construction
The Department recognized $3,162,508 of contributions in aid of construction as
nonoperating revenues for the fiscal year ended June 30, 2012.
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 30,2012 for workers' compensation claims of
$156,000 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 $22,534,000 at
June 30, 2012.
Post-Retirement Benefits
Effective July 1, 2007,the Department adopted the provisions of GASB Statement No. 45.
This statement addresses how state and local governments should account for and report their
costs and obligations related to postemployment benefits, healthcare, and other nonpension
benefits. The Department's annual required contribution for its postemployment benefit
obligation for the year ended June 30, 2012 was $2,400,000. The Department made
contributions of$2,399,000 during the year ended June 30, 2012 and recorded a
postemployment benefit asset of$3,000 at June 30,2012.
- 86 -
COUNTY OF HAWAII
Required Supplementary Information
June 30, 2012
Schedule of Funding Progress for the EUTF
(In thousands)
Actuarial
Accrued UAAL as a
Actuarial Liability Unfunded Percentage
Actuarial Value of (AAL)— AAL Funded Covered of Covered
Valuation Assets Entry Age (UAAL) Ratio Payroll Payroll
Date (a) (b) (b-a) (a/b) (C) ((b-a)lc)
July 1, 2007 - $275,828 $275,828 - $127,420 216.5%
July 1, 2009 $28,814 $439,225 $410,411 6.6% $133,555 307.3%
July 1, 2011 $61,907 $394,633 $332,726 15.7% $130,170 255.6%
- 87 -
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- 88 -
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
HIGHWAY FUND-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.
BIKEWAY FUND-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 COUNTY HOUSING 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.
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 REDEMPTION FUND-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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- 89 -
COUNTY OF HAWAII
Nonmajor Governmental Funds
Combining Balance Sheet
June 30,2012
Special Revenue Funds
Solid Parking
Highway Sewer Waste Cemetery Meter
Fund Fund Fund Fund Fund
Assets
Cash and cash equivalents $ 15,920,849 $ 4,700,657 $10,733,325 $91,659 $186,796
Investments - - - - -
Imprest fund - 400 250 - -
Receivables:
Due from other governments 150,000 - 575,009 - -
Due from other governmental funds - 10,260 273 - -
Due from other nongovernmental funds - 1,350 - - -
Trade,net of allowance for doubtful accounts - 1,288,376 1,364,302 - -
Other 152 - 291,682 - -
I50,152 1,299,986 2,231,266 - -
Total assets $ 16,071,001 $ 6,001,043 $12,964,841 $91,659 $186,796
Liabilities and Fund Balances
Liabilities:
Accounts payable $ 860,218 $ 431,617 $ 1,634,273 $ - $ -
Accrued payroll 419,004 147,023 287,374 - -
Due to other governmental funds 34,133 3,153 183,368 - -
Deferred revenue - 1,288,376 1,376,300 - -
Other 179 58,871 57 -Total liabilities 1,313,534 1,929,040 3,481,372 - -
Fund balances:
Restricted for:
Debt service - - - - -
Highways,streets and abandoned vehicles 14,757,467 - - - -
Rental assistance and subsidy - - - - -
Committed to:
Sanitation - 4,072,003 9,483,469 - -
Highways,streets and abandoned vehicles - - - - 186,796
Rental assistance and subsidy - - - - -
Cemetery _ - - 91,659 -
Golf course - - - - -
Lower Puna area - - - - -
Parks and recreational projects - - - - -
Total fund balances 14,757,467 4,072,003 9,483,469 91,659 186,796
Total liabilities and fund balances $ 16,071,001 $ 6,001,043 $12,964,841 $91,659 $186,796
-90 -
Special Revenue Funds
Vehicle Workforce Golf Geothermal Reloo. Beauti- Hawaii County Park
Disposal Bikeway Investment Course &Community fication Housing Dedication
Fund Fund Act Fund Fund Benefits Fund Fund Agency Fund
$2,820,134 $643,203 $ - $ 230,618 $ 3,233,775 $ 1,201,807 $ 2,707,325 $ 86,785
- - - - - 3,400,000
2,000 - - 200 -
- - 25I,685 - - - - -
124,981 - - - - - 75,404 -
- - 38,993 1,688 220,035 - 106,561 -
124,981 - 290,678 1,688 220,035 - 181,965 -
$22945,115 $643,203 $ 290,678 $ 234,306 $ 3,453,810 $ 1,201,807 $ 6,289,490 $ 86,785
$ 404,702 $ - $ - $ 3,086 $ 5,527 $ 4,505 $ 111,810 $ -
4,923 - - 33,631 - - I18,876 -
- - 290,678 3,153 - - - -
- - - - - 85,256 -
- - - - - - 730,605 -
409,625 - 290,678 39,870 5,527 4,505 1,046,547 -
643,203 - - - 1,197,302 - -
- _ - - - 910,690 -
2,535,490 - - - - - - -
- - - _ - - 4,332,253 -
194,436 - - - -
- - - 3,448,283 - - -
- - - - - - - 86,785
2,535,490 643,203 - 194,436 3,448,283 1,197,302 5,242,943 86,785
$2,945,115 $643,203 $ 290,678 $ 234,306 $ 3,453,810 $ 1,201,807 $ 6,289,490 $ 86,785
(Continued)
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COUNTY OF HAWAII
Nonmajor Governmental Funds
Combining Balance Sheet
June 30,2012
(Concluded)
Debt Service Fund Total
Bond Nonmajor
Interest Redemption Governmental
Fund Fund Funds
Assets
Cash and cash equivalents $2,210,690 $24,234,149 $ 69,001,772
Investments - - 3,400,000
Imprest fund - - 2,850
Receivables:
Due from other governments - - 976,694
Due from other governmental funds - - 210,918
Due from other nongovernmental funds - - 1,350
Trade,net of allowance for doubtful accounts - - 2,652,678
Other - - 659,111
4,500,751
Total assets $2,210,690 $24,234,149 $ 76,905,373
Liabilities and Fund Balances
Liabilities:
Accounts payable $ - $ - $ 3,455,738
Accrued payroll - - 1,010,831
Due to other governmental funds - - 514,485
Deferred revenue - - 2,749,932
Other 71,930 220,000 1,081,642
Total liabilities 71,930 220,000 8,812,628
Fund balances:
Restricted for:
Debt service 2,I38,760 24,014,149 26,152,909
Highways,streets and abandoned vehicles - - 16,597,972
Rental assistance and subsidy - - 910,690
Committed to:
Sanitation - - 13,555,472
Highways,streets and abandoned vehicles - - 2,722,286
Rental assistance and subsidy - - 4,332,253
Cemetery - - 91,659
Golf course - - 1 94,436
Lower Puna area - - 3,448,283
Parks and recreational projects - - 86,785
Total fund balances 2,138,760 24,014,149 68,092,745
Total liabilities and fund balances $2,210,690 $24,234,149 $ 76,905,373
See accompanying independent auditors'report.
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- 93 -
COUNTY OF HAWAII
Nonmajor Governmental Funds
Combining Statement of Revenues,Expenditures,and Changes in Fund Balances
For the Fiscal Year Ended June 30,2012
Special Revenue Funds
Solid Parking
Highway Sewer Waste Cemetery Meter
Fund Fund Fund Fund Fund
Revenues
Fuel taxes $ 8,293,200 $ - $ - $ - $ -
Public utility franchise taxes 11,065,112 - - - -
Licenses and permits 7,149,063 - - - -
Intergovernmental 728,029 28,695 942,061 - -
Charges for services - 6,533,752 6,656,158 - 13,117
Investment earnings - - - - -
Other 840,903 361 4,816 7,000 -
Total revenues 28,076,307 6,562,808 7,603,035 7,000 13,117
Expenditures
Current:
General Government - - - - -
Public safety 5,902,867 - - - -
Highways and streets 14,465,703 - - - -
Health, education and welfare - - - -
Culture and recreation - - - - -
Sanitation - 6,442,200 21,221,008 - -
Pension and retirement contributions 1,641,686 581,853 1,067,490 - -
Employees'health insurance 942,590 271,361 614,216 - -
Other 449,873 388,731 299,574 - -
Debt service:
Principal - - 1,538,811 - -
Interest - - 75,858 - -
Capital outlay - - 280,250 - -
Total expenditures 23,402,719 7,684,145 25,097,207 - -
Excess(deficiency)of revenues
over(under)expenditures 4,673,588 (1,121,337) (17,494,172) 7,000 13,117
Other Financing Sources(Uses)
Transfers in - - 18,158,708 - -
Increase in capital leases - - 1,549,741 - -
Transfers out (3,213,467) - - - -
Total other financing sources(uses) (3,213,467) - 19,708,449 - -
Net change in fund balances 1,460,121 (1,121,337) 2,214,277 7,000 13,117
Fund balances at beginning of year 13,297,346 5,193,340 7,269,192 84,659 173,679
Fund balances at end of year $ 14,757,467 $ 4,072,003 $ 9,483,469 $ 91,659 $186,796
-94-
Special Revenue Funds
Vehicle Workforce Golf Geothermal Retoo, Beauti- Hawaii County Park
Disposal Bikeway Investment Course &Community fication Housing Dedication
Fund Fund Act Fund Fund Benefits Fund Fund Agency Fund
2,050,680 89,330 - - - 170,89I - -
- - 1,962,571 - - - 15,212,470 -
- 731,967 - - - -
- - - - 7,899 63
- - - 20 929,084 - 33,631 -
2,050,680 89,330 1,962,571 731,987 929,084 170,891 15,254,000 63
- - - 267,094 - - -
36,000 - - -
- - - 74,509 - -
- 1,962,571 - - - 15,031,095 -
- - - 830,143 5,527 20,697 - -
877,284 - - - - - - -
19,996 - - 144,706 - - 473,718 -
12,608 - - 86,598 - - 202,176 -
- - - 4,554 - - - -
- - - - 9,845 -
- - - - - - 2,418 -
156,326 - - - - - - -
1,066,214 - 1,962,571 1,066,001 308,621 95,206 15,719,252 -
984,466 89,330 - (334,014) 620,463 75,685 (465,252) 63
- - - 315,666 - - 838,384 -
- - - - - 43,677 -
(450,000) - - -
- - - 315,666 (450,000) - 882,061 -
984,466 89,330 - (18,348) 170,463 75,685 416,809 63
1,551,024 553,873 - 212,784 3,277,820 1,121,617 4,826,134 86,722
$2,535,490 $ 643,203 $ - $ 194,436 $ 3,448,283 $1,197,302 $ 5,242,943 $ 86,785
(Continued)
-95 -
COUNTY OF HAWAII
Nonmajor Governmental Funds
Combining Statement of Revenues,Expenditures,and Changes in Fund Balances
For the Fiscal Year Ended June 30,2012
(Concluded)
Debt Service Fund Total
Bond Nonmajor
Interest Redemption Governmental
Fund Fund Funds
Revenues
Fuel taxes $ - $ - $ 8,293,200
Public utility franchise taxes - - 11,065,112
Licenses and permits - - 9,459,964
Intergovernmental 442,719 - 19,316,545
Charges for services - - 13,934,994
Investment earnings - - 7,962
Other - - 1,815,815
Total revenues 442,719 - 63,893,592
Expenditures
Current:
General Government - - 267,094
Public safety - - 5,938,867
Highways and streets - - 14,540,212
Health,education and welfare - - 16,993,666
Culture and recreation - - 856,367
Sanitation - _ 28,540,492
Pension and retirement contributions - - 3,929,449
Employees'health insurance - - 2,129,549
Other - - 1,142,732
Debt service: -
Principal - 23,059,659 24,608,315
Interest 14,839,262 - 14,917,538
Capital outlay - - 436,576
Total expenditures 14,839,262 23,059,659 114,300,857
Excess(deficiency)of revenues
over(under)expenditures (14,396,543} (23,059,659) (50,407,265)
Other Financing Sources(Uses)
Transfers in 14,663,416 22,331,013 56,307,187
Increase in capital leases - - 1,593,418
Transfers out - - (3,663,467)
Total other financing sources(uses) 14,663,416 22,331,013 54,237,138
Net change in fund balances 266,873 (728,646) 3,829,873
Fund balances at beginning of year 1,871,887 24,742,795 64,262,872
Fund balances at end of year $ 2,138,760 $24,014,149 $68,092,745
See accompanying independent auditors'report.
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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 30,2012
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues:
Taxes:
Fuel taxes $ 6,690,816 $6,690,816 $ 8,293,200 $ 1,602,384
Public utility franchise taxes 9,325,032 9,325,032 11,065,112 1,740,080
Total taxes 16,015,848 16,015,848 19,358,312 3,342,464
Licenses and permits-motor vehicle weight taxes 6,667,389 6,667,389 7,149,063 48I,674
Intergovernmental 577,210 727,210 728,029 819
Charges for services 400,000 400,000 570,158 170,158
Other 80,618 80,618 270,745 190,127
Total revenues 23,741,065 23,891,065 28,076,307 4,I85,242
Expenditures:
Public safety-traffic engineering 5,800,716 6,137,716 5,620,162 517,554
Highways and streets 12,070,566 12,070,566 I0,509,326 1,561,240
Highways and streets-mass transit 4,044,593 4,044,593 4,044,389 204
Pension and retirement contributions 2,075,283 2,075,283 1,574,013 501,270
Employees'health insurance 1,087,116 1,087,116 902,401 184,715
Other 1,000,000 813,000 443,016 369,984
Total expenditures 26,078,274 26,228,274 23,093,307 3,134,967
Excess(deficiency)of revenues over(under)
expenditures (2,337,209) (2,337,209) 4,983,000 7,320,209
Other financing uses:
Transfers out-Capital Projects Fund (3,189,216) (3,213,467) (3,213,467) -
Excess(deficiency)of revenues over(under)
expenditures and other uses (5,526,425) (5,550,676) 1,769,533 7,320,209
Fund balance at beginning of year 13,297,346 13,297,346 13,297,346 -
Fund balance at end of year $ 7,770,921 $7,746,670 $ 15,066,879 $ 7,320,209
See accompanying independent auditors'report.
- 97 -
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 30,2012
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues:
Intergovernmental $ - $ - $ 28,695 $ 28,695
Charges for services-sewer fees 6,920,957 6,920,957 6,533,752 (387,205)
Other - - 361 361
Total revenues 6,920,957 6,920,957 6,562,808 (358,149)
Expenditures:
Sanitation 6,486,318 6,616,918 6,282,844 334,074
Pension and retirement contributions 661,303 557,803 557,443 360
Employees'health insurance 302,797 260,297 260,216 81
Other 1,635,000 1,650,400 485,272 1,165,128
Total expenditures 9,085,418 9,085,418 7,585,775 1,499,643
Deficiency of revenues under expenditures (2,164,461) (2,164,461) (1,022,967) 1,141,494
Fund balance at beginning of year 5,193,340 5,193,340 5,193,340 -
Fund balance at end of year $ 3,028,879 $ 3,028,879 $ 4,170,373 $ 1,141,494
See accompanying independent auditors'report.
-98 -
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 30,2012
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues:
Intergovernmental $ 915,000 $ 930,000 S 905,461 S (24,539)
Charges for services-tipping fees 6,875,306 6,875,306 6,656,158 (219,148)
Other - - 4,816 4,816
Total revenues 7,790,306 7,805,306 7,566,435 (238,871)
Expenditures:
Sanitation 25,978,228 25,993,228 22,832,853 3,160,375
Pension and retirement contributions 1,169,928 1,169,928 1,020,259 149,669
Employees'health insurance 657,036 657,036 588,410 68,626
Other 450,000 450,000 300,947 149,053
Total expenditures 28,255,192 28,270,192 24,742,469 3,527,723
Deficiency of revenues under expenditures (20,464,886) (20,464,886) (17,176,034) 3,288,852
Other financing sources:
Transfers in-General Fund 18,158,708 18,158,708 18,158,708 -
Excess(deficiency)of revenues and other
sources over(under)expenditures (2,306,178) (2,306,178) 982,674 3,288,852
Fund balance at beginning of year 7,269,192 7,269,192 7,269,192 -
Fund balance at end of year $4,963,014 $4,963,014 $ 8,251,866 $3,288,852
See accompanying independent auditors'report
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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 30,2012
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues-other-sale of cemetery plots $ 10,000 $ 10,000 $ 7,000 $ (3,000)
Expenditures-health,education and welfare 10,000 10,000 - 10,000
Excess of revenues over expenditures - - 7,000 7,000
Fund balance at beginning of year 84,659 84,659 84,659 -
Fund balance at end of year $ 84,659 $ 84,659 $ 91,659 $ 7,000
See accompanying independent auditors'report.
- 100-
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 30,2012
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues-Charges for services-highways and streets $ - $ - $ 13,117 $ 13,117
Excess of revenues over expenditures - - 13,117 13,117
Fund balance at beginning of year 173,679 173,679 173,679 -
Fund balance at end of year $ 173,679 $173,679 $ 186,796 $ 13,117
See accompanying independent auditors'report.
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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 30,2012
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues:
Licenses and permits-vehicle disposal fee $2,031,888 $2,031,888 $2,050,680 $ 18,792
Expenditures:
Sanitation 2,559,268 2,559,268 2,169,232 390,036
Pension and retirement contributions 21,563 21,563 19,194 2,369
Employees'health insurance 15,986 15,986 12,148 3,838
Other 2,000 2,000 - 2,000
Total expenditures 2,598,817 2,598,817 2,200,574 398,243
Deficiency of revenues under expenditures (566,929) (566,929) (149,894) 417,035
Fund balance at beginning of year 1,551,024 1,551,024 1,551,024 -
Fund balance at end of year $ 984,095 $ 984,095 $ 1,401,130 $ 417,035
See accompanying independent auditors'report.
- 102 -
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 30,2012
Original Actual Variance
and Final (Budgetary Positive
Budget Basis) (N(Negative)
Revenues-licenses and permits-bicycle tax $ 20,000 $ 89,330 $ 69,330
Expenditures-highways and streets 171,000 - 171,000
Excess(deficiency)of revenues over(under)
expenditures (15I,000) 89,330 240,330
Fund balance at beginning of year 553,873 553,873 -
Fund balance at end of year $402,873 $643,203 $240,330
See accompanying independent auditors'report.
- 103 -
COUNTY OF HAWAII
Workforce investment Act Fund
Schedule of Revenues,Expenditures,and Changes in Fund Balance-
Budget and Actual(Budgetary Basis)
For the Fiscal Year Ended June 30,2012
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues-intergovernmental-federal grants $ - $ 1,521,232 $ 1,422,662 $ (98,570)
Expenditures-health,education and welfare - 1,521,232 1,422,662 98,570
Excess of revenues over expenditures - - - -
Fund balance at beginning of year - - - -
Fund balance at end of year $ - $ - $ $ -
See accompanying independent auditors'report.
- 104-
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 30,2012
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues:
Charges for services $ 804,647 $ 804,647 $ 731,967 $ (72,680)
Other - - 20 20
Total revenues 804,647 804,647 731,987 (72,660)
Expenditures:
Culture and recreation 849,592 849,592 783,521 66,071
Pension and retirement contributions 151,845 152,445 139,223 13,222
Employees'health insurance 105,357 105,357 83,241 22,116
Other 13,519 12,919 4,383 8,536
Total expenditures 1,120,313 1,120,313 1,010,368 109,945
Deficiency of revenues under expenditures (315,666) (315,666) (278,381) 37,285
Other financing sources:
Transfers in-General Fund 315,666 315,666 315,666 -
Excess of revenues and other sources
over expenditures - - 37,285 37,285
Fund balance at beginning of year 212,784 212,784 212,784 -
Fund balance at end of year $ 212,784 $ 212,784 $ 250,069 $ 37,285
See accompanying independent auditors'report.
- 105 -
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 30,2012
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues-other-geothermal royalties $ 575,000 $ 575,000 $ 929,084 $ 354,084
Expenditures:
General government:
Legislative 24,890 24,890 24,890 -
Planning and zoning 429,110 429,110 242,204 186,906
Public safety-traffic 96,000 96,000 36,000 60,000
Culture and recreation-parks and recreation 25,000 25,000 - 25,000
Total expenditures 575,000 575,000 303,094 271,906
Excess of revenues over expenditures - - 625,990 625,990
Other financing uses:
Transfers out-Capital Projects Fund - (450,000) (450,000) -
Excess(deficiency)of revenues over(under)
expenditures and other uses - (450,000) 175,990 625,990
Fund balance at beginning of year 3,277,820 3,277,820 3,277,820 -
Fund balance at end of year $ 3,277,820 $2,827,820 $ 3,453,810 $ 625,990
See accompanying independent auditors'report.
- 106-
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 30,2012
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) _(Negative)
Revenues-licenses and permits-highway
beautification $ 153,600 $ 153,600 $ 170,891 $ 17,29I
Expenditures:
Highways and streets 92,300 92,300 72,534 19,766
Culture and recreation 61,300 61,300 27,394 33,906
Total expenditures 153,600 153,600 99,928 53,672
Excess of revenues over expenditures - - 70,963 70,963
Fund balance at beginning of year 1,121,6I7 1,121,617 1,121,617 -
Fund balance at end of year $1,121,617 S1,121,617 $1,192,580 $ 70,963
See accompanying independent auditors'report.
- 107 -
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 30,2012
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues:
Intergovernmental-
Federal-HUD-Voucher program $ I5,265,687 $ 15,265,687 $ 15,178,813 $ (86,874)
Other 41,046 41,046 33,657 (7,389)
Investment earnings 6,000 6,000 7,899 1,899
Resale of property - - 33,545 33,545
Other - - 86 86
Total revenues 15,312,733 15,312,733 15,254,000 (58,733)
Expenditures:
Health,education and welfare 15,404,388 15,404,388 14,725,884 678,504
Pension and retirement contributions 521,478 521,478 453,774 67,704
Employees'health insurance 225,251 225,251 193,586 31,665
Total expenditures 16,151,117 16,151,117 15,373,244 777,873
Deficiency of revenues under expenditures (838,384) (838,384) (119,244) 719,140
Other financing sources:
Transfers in-General Fund 838,384 838,384 838,384 -
Excess of revenues and other
sources over expenditures - - 719,140 719,140
Fund balance at beginning of year 4,826,134 4,826,134 4,826,134 -
Fund balance at end of year $ 4,826,134 $ 4,826,134 $ 5,545,274 $ 719,140
See accompanying independent auditors'report.
- 108 -
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 30,2012
Actual Variance
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)
Revenues-investment earnings $ - $ - $ 63 $ 63
Excess of revenues over expenditures - - 63 63
Fund balance at beginning of year 86,722 86,722 86,722 -
Fund balance at end of year $ 86,722 $ 86,722 $ 86,785 $ 63
See accompanying independent auditors'report.
- 109-
COUNTY OF HAWAII
Agency Funds
Combining Statement of Agency Funds Net Assets
June 30,2012
Performance
State Improvement Improvement Improvement and
Weight District District District Refundable
Tax No. 17 No. 18 Revolving Deposits
Fund Fund Fund Fund Fund
Assets
Cash and cash equivalents $1,755,546 $ - $ 17,532 $ 286,569 $ 522,542
Investments - - 1,458,449 - -
Due from other agency funds - - - - -
Other receivables - - 8,146 - -
Total assets $1,755,546 $ - $ 1,484,127 $ 286,569 $ 522,542
Liabilities
Due to other agency funds $ - $ - $ - $ - $ 1,920
Accrued liabilities 1,755,546 - 10,907 - -
Advances payable - - 14,183 - 520,622
Assets held for the benefit of
improvement districts - - 1,459,037 286,569 -
Total liabilities $1,755,546 $ - $ 1,484,127 $ 286,569 $ 522,542
See accompanying independent auditors'report.
- 110-
Non-Profit Organ and Business
Payroll Flexible Lapsed License Tissue Improvement
Clearance Spending Warrants Plates Education District
Fund Account Fund Fund Fund 1 -Kailua Total
$ 323,344 $ 365,481 $ 221,496 $ 1,175 $ 923 $ 2,183 $ 3,496,791
- _ - - - - 1,458,449
2,246 - - - 2,246
- - 11,150 - - 14,997 34,293
$ 323,344 $365,481 $ 234,892 $ 1,175 $ 923 $ 17,180 $ 4,991,779
$ 326 $ - $ - $ - $ - $ - $ 2,246
323,018 365,48I 234,892 1,175 923 2,183 2,694,125
- - - - - - 534,805
- - - - - 14,997 1,760,603
$ 323,344 $ 365,481 $ 234,892 $ 1,175 $ 923 $ 17,180 $ 4,991,779
COUNTY OF HAWAH
Agency Funds
Combining Statement of Changes in Assets and Liabilities
For the Fiscal Year Ended June 30,2012
Balance Balance
July 1, June 30,
2011 Additions Deductions 2012
State Weight Tax Fund
Assets
Cash and cash equivalents $ 893,557 $ 18,285,628 $ 17,423,639 $1,755,546
Liabilities
Vouchers payable $ - $ 17,336,190 $ 17,336,190 $ -
Accrued liabilities - 1 - 1
Accrued liabilities-due to State of Hawaii 893,557 18,286,295 17,424,307 1,755,545
Total liabilities $ 893,557 $ 35,622,486 $ 34,760,497 $I,755,546
Improvement District No. 17 Fund
Assets
Cash and cash equivalents $ 83,314 $ 720,728 $ 804,042 $ -
Liabilities
Vouchers Payable $ - $ 83,498 $ 83,498 $ -
Assets held for the benefit
of improvement districts 83,314 230 83,544
Total liabilities $ 83,314 $ 83,728 $ 167,042 $ -
- 112-
COUNTY OF HAWAII
Agency Funds
Combining Statement of Changes in Assets and Liabilities
For the Fiscal Year Ended June 30,2012
Balance Balance
July 1, June 30,
2011 Additions Deductions 2012
Improvement District No. 18 Fund
Assets
Cash and cash equivalents $ 68,307 $ 343,083 $ 393,858 $ 17,532
Investments 1,586,399 12,314 140,264 1,458,449
Other receivables 12,014 310,969 314,837 8,146
Total assets $1,666,720 $ 666,366 $ 848,959 $1,484,127
Liabilities
Vouchers payable $ - $ 284,851 $ 284,851 $ -
Accrued liabilities 14,873 266,510 270,476 I0,907
Advances payable 11,702 14,183 11,702 14,183
Assets held for the benefit
of improvement districts 1,640,145 319,880 500,988 1,459,037
Total liabilities $1,666,720 $ 885,424 $ 1,068,017 $1,484,127
Improvement District Revolving Fund
Assets
Cash and cash equivalents $ 401,220 $ 290 $ 1 14,941 $ 286,569
Liabilities
Vouchers payable $ - $ 114,936 $ 114,936 $ -
Assets held for the benefit
of improvement districts 401,220 290 114,941 286,569
Total liabilities $ 40I,220 $ 115,226 $ 229,877 $ 286,569
Performance and Refundable
Deposits Fund
Assets
Cash and cash equivalents $ 548,549 $ 374,996 $ 401,003 $ 522,542
Due from other non-agency funds 11,600 - 11,600 -
Total assets $ 560,149 $ 374,996 $ 412,603 $ 522,542
Liabilities
Vouchers payable $ - $ 385,166 $ 385,166 $ -
Due to other agency funds 800 1,920 800 1,920
Advances payable 559,349 361,251 399,978 520,622
Total liabilities $ 560,149 $ 748,337 $ 785,944 $ 522,542
- 113 -
COUNTY OF HAWAII
Agency Funds
Combining Statement of Changes in Assets and Liabilities
For the Fiscal Year Ended June 30,2012
Balance Balance
July 1, June 30,
2011 Additions Deductions 2012
Payroll Clearance Fund
Assets
Cash and cash equivalents $1,699,774 $203,409,644 $204,786,074 $ 323,344
Due from other non-agency funds - 204,811,333 204,811,333 -
Other receivables 8,674 - 8,674 -
TotaI assets $1,708,448 $408,220,977 $409,606,081 $ 323,344
Liabilities
Vouchers payable $ - $ 94,017,611 $ 94,017,611 $ -
Due to other agency funds 1,316 326 1,316 326
Accrued liabilities 1,707,132 387,133,467 388,517,581 323,018
Total Iiabilities $1,708,448 $481,151,404 $482,536,508 $ 323,344
Flexible Spending Account
Assets
Cash and cash equivalents $ 366,905 $ 284,109 $ 285,533 $ 365,481
Liabilities
Accrued Iiabilities $ 366,905 $ 284,109 $ 285,533 $ 365,481
Lapsed Warrants Fund
Assets
Cash and cash equivalents $ 202,302 $ 20,231 $ 1,037 $ 221,496
Due from other agency funds 2,116 2,246 2,116 2,246
Other receivables 17,898 11,150 17,898 11,150
Total assets $ 222,316 $ 33,627 $ 21,051 $ 234,892
Liabilities
Vouchers payable $ - $ 1,038 $ 1,038 $ -
Accrued liabilities 222,316 39,654 27,078 234,892
Total liabilities $ 222,316 $ 40,692 $ 28,116 $ 234,892
- 114-
COUNTY OF HAWAII
Agency Funds
Combining Statement of Changes in Assets and Liabilities
For the Fiscal Year Ended June 30,2012
Balance Balance
July 1, June 30,
2011 Additions Deductions 2012
Non-Profit License Plates Fund
Assets
Cash and cash equivalents $ 1,175 $ 4,537 $ 4,537 $ 1,175
Liabilities
Vouchers payable $ - $ 4,425 $ 4,425 $ -
Accrued liabilities:
Due to non-profit agency 1,175 4,537 4,537 1,175
Total liabilities $ 1,175 $ 8,962 $ 8,962 $ 1,175
Organ and Tissue Education Fund
Assets
Cash and cash equivalents $ 577 $ 3,634 $ 3,288 $ 923
Liabilities
Vouchers payable $ - $ 3,237 $ 3,237 $ -
Accrued liabilities-due to State of Hawaii 577 3,634 3,288 923
Total liabilities $ 577 $ 6,871 $ 6,525 $ 923
Business Improvement District I-Kailua
Assets
Cash and cash equivalents $ 5,287 $ 784,080 $ 787,184 $ 2,183
Other receivables-BID I-Kailua Assessment 15,335 783,779 784,117 14,997
Other receivables - 27,469 27,469 -
Total assets $ 20,622 $ 1,595,328 $ 1,598,770 $ 17,180
Liabilities
Vouchers payable $ - $ 785,265 $ 785,265 $ -
Accrued liabilities-due to KVBID 5,287 2,183 5,287 2,183
Assets held for the benefit
of improvement districts 15,335 776,917 777,255 14,997
Total liabilities $ 20,622 $ 1,564,365 $ 1,567,807 $ 17,180
- 115 -
COUNTY OF HAWAII
Agency Funds
Combining Statement of Changes in Assets and Liabilities
For the Fiscal Year Ended June 30,2012
Balance Balance
July 1, June 30,
2011 Additions Deductions 2012
Total-All Agency Funds
Assets
Cash and cash equivalents $4,270,967 $224,230,960 $225,005,136 $3,496,791
Investments 1,586,399 12,314 140,264 1,458,449
Due from other agency funds 2,116 2,246 2,116 2,246
Due from other non-agency funds 11,600 204,811,333 204,822,933 -
Other receivables-BID 1-Kailua Assessment 15,335 783,779 784,117 14,997
Other receivables 38,586 349,588 368,878 19,296
Total assets $5,925,003 $430,190,220 $431,123,444 $4,991,779
Liabilities
Vouchers payable $ - $ 1 13,016,217 $ 113,016,217 $ -
Due to other agency funds 2,116 2,246 2,116 2,246
Accrued liabilities 2,311,226 387,723,741 389,100,668 934,299
Accrued liabilities-due to non-profit agency 1,175 4,537 4,537 1,175
Accrued liabilities-due to State of Hawaii 894,134 18,289,929 17,427,595 1,756,468
Accrued liabilities-due to KVBID 5,287 2,183 5,287 2,183
Advances payable 571,051 375,434 411,680 534,805
Assets held for the benefit
of improvement districts 2,140,014 1,097,317 1,476,728 1,760,603
Total liabilities $5,925,003 $ 520,511,604 $521,444,828 $4,991,779
See accompanying independent auditors'report.
- 116-
COUNTY OF HAWAII
Private Purpose Trusts
Combining Statement of Private Purpose Trust Net Assets
June 30,2012
Shippers' Total
Geothermal Wharf Private
Asset Trust Purpose
Assets Fund Fund Trusts
Cash and cash equivalents $ 2,158,332 $ 1,558,285 $ 3,716,617
Investments - 1,208,703 1,208,703
Total assets $ 2,158,332 $ 2,766,988 $ 4,925,320
Net Assets
Held in trust for other parties $ 2,158,332 $ 2,766,988 $ 4,925,320
Total net assets $ 2,158,332 $ 2,766,988 $ 4,925,320
See accompanying independent auditors'report.
COUNTY OF HAWAII
Private Purpose Trusts
Combining Statement of Changes in Private Purpose Trust Net Assets
For the Fiscal Year Ended June 30,2012
Shippers' Total
Geothermal Wharf Private
Asset Trust Purpose
Fund Fund Trusts
Additions
Contributions:
Puna Geothermal Venture $ 50,000 $ - $ 50,000
Investment earnings:
Net increase in fair value of investments - 169,833 169,833
Dividends - 55,919 55,919
Interest 1,532 1,398 2,930
Total additions 51,532 227,150 278,682
Deductions
Grant payments - 120,609 120,609
Total deductions - 120,609 120,609
Change in net assets 51,532 106,541 158,073
Net assets,beginning of year 2,106,800 2,660,447 4,767,247
Net assets,end of year $ 2,158,332 $ 2,766,988 $4,925,320
See accompanying independent auditors'report.
- 118
STATISTICAL SECTION
(UNAUDITED)
Contents Page
Financial Trends—These schedules contain trend information to help help the reader understand
how the County's financial performance and well-being have changed over time. 114
Revenue Capacity—These schedules contain information to help the reader assess the County's
most significant local revenue source,the property tax. 124
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. 130
Demographic and Economic Information—These schedules offer demographic and economic
indicators to help the reader understand the environment within which the County's financial
acitivities take place. 133
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. 135
Covemmental activities
Invested in capital assets,net of related debt
Restricted
Unrestricted
Total governmental activities net assets
Business-type activities
Invested in capital assets,net of related debt
Restricted
Unrestricted
Total business-type activities net assets
Primary government
Invested in capital assets,net of related debt
Restricted
Unrestricted
Total primary government net assets
Table 1
COUNTY OF HAWAII
Net Assets by Component
Last Ten Fiscal Years
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
$333,571,558 $336,435,768 $364,662,377 $386,861,296 $394,789,635 $419,174,559 $419,615,479 $469,235,881 $514,309,238 $594,384,524
27,577,754 37,333,730 41,950,262 44,737,588 54,857,023 66,977,935 63,408,379 43,958,660 51,840,697 48,360,223
(13,132,955) (10,384,644) (11,741,743) 8,885,911 21,350,091 27,329,104 42,457,132 37,623,937 40,287,046 39,340,897
$348,016,357 $363,384,854 $394,870,896 $440,484,795 $470,996,749 $513,481,598 $525,480,990 $550,818,478 $606,436,981 $682,085,644
$ 333,860 $ 324,942 $ 325,800 $ 317,534 $ 310,409 $ 307,424 $ 305,127 $ 303,244 $ 308,966 $ 315,848
180,782 180,782 182,167 182,797 183,832 184,352 184,643 184,914 185,087 185,148
876,107 873,704 850,962 813,431 636,756 608,195 609,798 497,466 449,581 455,918
$ 1,390,749 $ 1,379,428 $ 1,358,929 $ 1,313,762 $ 1,130,997 $ 1,099,971 $ 1,099,568 $ 985,624 $ 943,634 $ 956,914
$333,905,418 $336,760,710 $364,988,177 $387,178,830 $395,100,044 $419,481,983 $419,920,606 $469,539,125 $514,618,204 $594,700,372
27,758,536 37,514,512 42,132,429 44,920,385 55,040,855 67,162,287 63,593,022 44,143,574 52,025,784 48,545,371
(12,256,848) (9,510,940) (10,890,781) 9,699,342 21,986,847 27,937,299 43,066,930 38,121,403 40,736,627 39,796,815
$349,407,106 $364,764,282 $396,229,825 $441,798,557 $472,127,746 $514,581,569 $526,580,558 $551,804,102 $607,380,615 $683,042,558
Unaudited-see accompanying independent auditors'report.
Table 2
COUNTY OF HAWAII
Changes in Net Assets
Last Ten Fiscal Years
Business-type activities:
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Program Revenues
Governmental activities:
304,671
303,047
314,971
338,141
345,802
365,655
371,511
337,982
372,599
393,464
Charges for services:
147,997
143,769
135,829
141,019
134,211
125,795
135,674
136,802
133,215
131,227
General government
$ 1,911,070
$ 1,947,554
$ 3,227,420
$ 4,032,542
$ 4,460,016
$ 6,017,819
$ 5,442,950
$ 4,315,849
$ 1,856,795
$ 2,306,855
Public safety
4,349,355
5,061,174
6,262,259
6,975,962
5,798,126
5,843,733
4,846,834
4,449,519
4,447,120
5,136,278
Highways and streets
5,324,908
6,052,544
7,629,139
9,079,084
9,354,639
9,701,815
9,636,799
9,351,219
9,800,983
10,544,711
Health,education and welfare
991,725
884,075
1,272,091
980,147
799,075
754,758
532,832
713,774
424,107
454,913
Culture and recreation
1,593,620
1,588,945
1,521,127
1,439,784
1,634,008
1,595,409
1,557,597
1,609,041
1,626,178
1,601,195
Sanitation
10,596,469
13,653,722
15,465,478
16,469,745
18,486,502
18,643,952
16,415,985
14,934,570
15,889,364
14,831,846
Operating grants and contributions
31,544,494
33,327,191
36,370,993
38,252,889
38,068,138
46,117,399
42,273,795
49,571,173
50,820,951
45,767,655
Capital grants and contributions
19,064,821
9,668,981
26,221,627
14,801,828
7,805,986
9,327,408
15,728,186
13,532,669
38,810,806
86,754,033
Total governmental activites prog un revenues
75,376,462
72,184,186
97,970,134
92,031,981
86,406,490
98,002,293
96,434,978
98,477,814
123,676,304
167,397,486
Business-type activities:
Charges for services:
Health,education and welfare
304,671
303,047
314,971
338,141
345,802
365,655
371,511
337,982
372,599
393,464
Operating grants and contributions
147,997
143,769
135,829
141,019
134,211
125,795
135,674
136,802
133,215
131,227
Total business-type activities program revenues
452,668
446,816
450,800
479,160
480,013
491,450
507,185
474,784
505,814
524,691
tV Total primarygovemmentprogamrevenues
$ 75,829,130
$ 72,631,002
$ 98,420,934
$ 92,511,141
$ 86,886,503
$ 98,493,743
$ 96,942,163
$ 98,952,598
$ 124,182,118
$ 167,922,177
O
i
Expenses
Governmental activities:
General government
$ 36,461,949
$ 40,085,357
$ 51,262,329
$ 38,264,132
$ 46,349,904
$ 68,794,961
$ 69,968,534
$ 65,552,278
$ 53,439,428
$ 56,115,599
Public safety
77,131,374
90,434,696
94,422,057
106,067,466
118,010,316
137,500,608
144,755,837
148,115,428
154,008,027
152 288,979
Highways and streets
15,512,957
17,563,608
20,857,341
24,783,476
28,185,968
33,577,707
36,466,541
38,075,835
34,812,165
42,462,299
Health,education and welfare
20,205,386
23,041,963
21,503,635
20,181,685
23,203,874
14,986,972
33,783 223
30,528,977
30,336,420
28,127,691
Culture and recreation
16,430,590
15,979,854
16,124,457
19,464,962
26,948,501
20,450,172
32,633,418
14,739,755
22,167,818
23,412,948
Sanitation
19,022,213
20,084,654
26,669,660
27,265,515
42,682,281
41,254,728
40,191,704
27,527,841
35,604,394
35,049,546
Interest on long-term debt
8,680,999
9,553,966
8,718,758
10,168,710
10,303,332
13,117,325
13,914,969
14,120,398
15,176,682
14,519,382
Total governmental activities expenses
193,445,468
216,744,098
239,558,237
246,195,946
295,684,176
329,682,473
371,714,226
T 338,660,512
345,544,934
351,976,444
Business-type activities:
Health,education and welfare
450,343
466,143
484,879
547,201
698,329
556,304
525,449
590,131
550,801
517,052
Total business-type activities expenses
450,343
466,143
484,879
547,201
698,329
556,304
525,449
590,131
550,801
517,052
Total primary government expenses
$ 193,895,811
$217,210,241
$240,043,116
$246,743,147
$296,382,505
$330,238,777
$372?39,675
$339,250,643
$346,095,735
$352,493,496
Net Expense
Governmental activities
$(118,069,006)
$(144,559,912)
$(141,588,103)
$(154,163,965)
$(209,277,686)
$(231,680,180)
$(275,279,248)
$(240,182,698)
$(221,868,630)
$(184,578,958)
Business-type activities
2,325
(19,327)
(34,079)
(68,041)
(218,316)
(64,854)
(18,264)
(115,347)
(44,987)
7,639
Total primary government net expense
$(118,066,681}
$(144,579,239)
$(141,622,182)
$(154,232,006)
$(209,496,002)
$(231,745,034)
$(275,297,512)
$(240,298,045)
$(221,913,617)
$(184,571,319)
Continued next page
General Revenues and Other Changes in
Net Assets
Table 2
Governmental activities:
General revenues:
Property taxes
$ 109,151,524
$ 119,864,237
$ 129,775,410
$ [52,182,806
$ 183,611,050
$210,217,690
$229,262,980
$218,037,567
$225,055,099
$209,894,427
Public service company taxes
5,063,897
5,332,478
6,351 273
6,811,483
7,396,084
8,381,367
10,228,607
9,647,055
9,296,852
9,896,715
Public utility franchise taxes
4,816,565
5,373,144
6,016,890
7,328,887
8,520,133
9,026,841
11,1 18,365
8,963,041
9,415,624
11,065,112
Fuel taxes
7,343,088
7,552,317
7,580,740
7,857,394
8,471,453
7,887,998
7,662,113
7,405,996
7,603,501
8,293,200
Grants and contributions not restricted to
specific programs
13,931,403
15 251,443
16,734,850
18,510,262
18,999,596
19,395,089
17,888,019
17,500,038
19,533,165
19,074,105
Investment earnings
1,936,635
1,729,531
2,957,188
4,976,178
9,727,911
11,454,850
8,369,221
2,187,266
609,617
230,804
Other
4,641,884
4,825,259
3,657,794
2,110,854
3,063,413
7,801,194
2,749,335
1,779,223
5,973,275
1,773,258
Total governmental activities
146,884,996
159,928,409
173,074,145
199,777,864
239,789,640
274,165,029
287,278,640
265,520,186
277,487,133
260,227,621
Business-type activities:
General revenues:
Investment earnings
12,084
8,006
13,580
22,874
35,551
33,828
17,861
1,403
2,997
5,641
Total business-type activities
12,084
8,006
13,580
22,874
35,551
33,828
17,861
1,403
2,997
5,641
Total primary government
$ 146,897,080
$ 159,936,415
$ 173,087,725
$ 199,800,738
$239,825,191
$274,198,857
$287,296,501
$265,521,589
$277,490,130
$260,233,262
Changes In Net Assets
Governmental activities
$ 28,815,990
$ 15,368,497
$ 31,486,042
$ 45,613,899
$ 30,511,954
$ 42,484,849
$ 11,999,392
$ 25,337,488
$ 55,618,503
$ 75,648,663
Business-type activities
14,409
(11,321)
(20,499)
(45,167)
(182,765)
(31,026)
(403)
(113,944)
(41,990)
13,280
Total primary government changes in net assets
$ 28,830,399
$ 15,357,176
$ 31,465,543
$ 45,568,732
$ 30,329,189
$ 42,453,823
$ 11,998,989
$ 25,223,544
$ 55,576,513
$ 75,661,943
Unaudited-see accompanying independent auditors'report.
lv
Table 3
COUNTY OF HAWAII
Fund Balances,Governmental Funds
(Modified accrual basis of accounting)
Last Ten Fiscal Years
� g
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
General Fund:
Reserved
$ 7,062,628
$ 7,452,338
$ 8,313,800
$ 11,519,135
$ 15,659,683
$ 17,468,606
$ 14,974,272
$ 8,088,347
-
-
Unreserved
9,093,877
12,270,870
I5,664,272
23,446,072
28,950,668
31,40I,745
44,603,975
31,430,570
-
-
Nonspendable
-
-
-
-
-
-
-
-
2,835,361
3,304,551
Restricted
-
-
64,915,483
-
-
-
-
(3,290,813)
4,296,363
3,693,958
Committed
-
-
-
-
-
-
-
-
8,756,426
11,710,875
Assigned
-
-
-
-
-
-
-
17,960,596
21,840,843
Unassigned
-
-
-
-
-
-
-
-
10,809,404
8,I76,727
Total eneral fund
l6 156 505
19 723 208
23 978 072
34 965 207
44 610 351
48 870 35l
59 578 247
39 518 917
44 658 150
48 726 954
� g
NAll other Government Funds:
Reserved
58,714,024
66,991,733
66,720,836
103,359,563
122,060,550
141,972,067
177,995,184
106,555,618
-
-
Unreserved,reported in:
Special revenue fund
14,336,385
15,151,534
18,525,727
20,342,112
24,874,744
24,553,386
26,088,685
29,436,463
-
-
Capitalprojectsfund
38,966,652
32,293,518
64,915,483
48,345,838
95,684,215
39,116,365
(20,101,369)
(3,290,813)
-
-
Restricted
-
-
-
-
-
-
-
-
77,739,628
71,033,712
Committed
-
-
-
-
-
-
40,148,878
36,866,120
Unassigned
-
-
-
-
-
-
-
-
(3,609,332)
(10,258,317)
Total of other governmental funds
112,017,061
114,436,785
150,162,046
172,047,513
242,619,509
205,641,818
183,982,500
132,701,268
114,279,174
97,641,515
Total Fund Balances $128,173,566 $134,159,993 $174,140,118 $207,012,720 $287,229,860 $254,512,169 $243,560,747 $172,220,185 $158,937,324 $146,368,469
Unaudited-see accompanying independent auditors'report.
NOTE---GASB 54 was implemented in 2011.Except for the unassigned category,conversion of prior year data to new categories is not possible at this time.
Table 4
COUNTY OF HAWAII
Changes in Fund Balances,Governmental Funds
(Modified accrual basis of accounting)
Last Ten Fiscal Years
(Amounts in thousands)
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Revenuest
Property tax $109,991 $121,868 $131,087 $153,207 $181,446 $208,313 $225,858 $215,548 $216,511 $208,231
Public service company tax 5,064 5,332 6,351 6,812 7,396 8,381 10,229 9,647 9,297 9,897
Fuel tax 7,343 7,552 7,581 7,857 8,471 7,888 7,662 7,406 7,603 8,293
Public utility franchise tax 4,817 5,373 6,017 7,329 8,520 9,027 11,118 8,963 9,416 11,065
Licenses and permits 9,261 11,840 14,442 16,544 16,269 15,918 14,972 14,725 15,097 15,790
Intergovernmental 65,203 58,559 73,372 69,637 63,599 72,601 70,869 77,614 93,748 100,867
Charges for services 13,481 14,467 18,149 19,852 21,685 22,154 21,404 18,909 16,416 16,885
Investment earnings 2,066 1,806 3,104 5,223 10,291 12,144 8,914 2,253 510 405
Other 6,179 4,718 4,450 4,380 5,073 7,151 5,690 3,241 7,874 4,201
Total Revenues 223,405 231,515 264,553 290,841 322,750 363,577 376,716 358,306 376,472 375,635
Expenditures:
Current:
General government 22,317 23,070 26,183 31,153 37,652 42,991 45,882 40,586 34,251 35,088
Public safety 64,667 69,117 76,404 83,591 93,241 103,617 107,540 108,798 104,917 104,523
Highways and streets 8,675 9,542 9,787 12,608 14,033 19,529 17,159 20,222 17,114 17,338
Sanitation 16,629 17,602 21,883 26,565 31,817 33,405 35,025 35,675 28,424 29,511
Health,education and welfare 18,867 19,047 19,870 19,050 21,470 24,609 24,596 25,519 26,847 23,749
Culture and recreation 13,086 13,169 13,982 14,731 17,118 18,179 18,853 17,266 16,001 16,763
Pension and retirement contributions 7,926 1 1,081 14,204 19,937 21,796 24,296 28,870 28,509 27,284 27,773
Employees'healthinsurance 12,758 14,256 16,168 16,133 16,941 18,089 19,119 23,573 25,212 25,902
Other postemploymeni benefits - - - 13,629 14,950 15,700 17,307 -
Other 5,629 7,128 6,133 6,780 5,108 5,344 6,257 4,773 4,758 4,183
Debt service:
Principal 11,800 12,826 13,150 14,060 16,076 16,548 19,749 20,720 42,233 24,834
Interest 8,469 9,283 9,534 9,914 9,894 13,116 12,790 14,584 14,841 15,032
Capital outlay 32,952 23,474 32,816 30,588 52,285 70,156 89,368 100,653 87,782 71,220
Total Expenditures 223,775 229,595 260,114 285,110 337,431 403,508 440,158 456,578 446,971 395,916
Revenues over(under)Expenditures (370) 1,920 4,439 5,731 (14,681) (39,931) (63,442) (98,272) (70,499) (20,281)
Other Financing Sources(Uses):
Sale of assets 9 1,593 1,486 82 5 3,470 58 10 6 153
Capital leases 1,353 1,474 1,369 404 2,403 2,187 1,026 1,948 47 2,521
State Revolving Fund loans 853 - 1,504 25 6,255 1,916 280 6,811 9,257 4,569
Sale of bonds 37,262 1,725 30,000 25,000 85,000 - 50,000 45,000
Issuance of bond anticipation notes(BANS) - - - - - 19,000 -
Refunding bonds 24,595 - 31,607 -
Premium on bonds 3,025 972 3,099 185 - 2,078
Refunding bondslBANsissuance costs (129) - (218) (19)
Payment to refunded bond escrow agent (25,885) - (32,699) - -
Transfers in 29,943 39,440 42,119 45,691 59,139 64,929 5607 61,495 56,099 59,971
Transfers out (29,943) 39,440 4( 2,119) (45,691) (59,139 (64,929) (56,697) (61,495) (56,099) (59,9
Total other financing sources 39,477 4,792 35,965 26,483 95,452 7,573 51,549 27,750 56,388 7,243
Net change in fund balances S 39,107 $ 6,712 $ 40,404 $ 32,214 S 80,771 S 3( 2,358) _L([1.8931 $(70,522 $(14,111) $ 1( 3.038)
Debt service as a percentage of
noncapital expenditures 10.7% 10.8% 10.3% 9.7% 9.0% 9.3% 9.0% 10.4% 15.9% 12.3%
Unaudited-see accompanying independent auditors'report.
-123-
Table 5
COUNTY OF HAWAII
Real Property Assessed Values by Classification and Tax Rates
Last Ten Fiscal Years
(Values in Thousands)
Value of
Building
Value of
Land
Value of
Fiscal Class of Net Taxable
Tax Rates
Net Taxable
Tax Rates
Net Taxable
Year Property Building
Per$1000
Land
Per$1000
Real Property
2003 Improved Residential
Unimproved Residential
Apartment
Hotel and Resort
Commercial
Industrial
Agricultural
Conservation
Homeowners
2004 Improved Residential
Unimproved Residential
Apartment
Hotel and Resort
Commercial
Industrial
Agricultural
Conservation
Homeowners
Continued next page.
$745,956
$9.10
$982,098
$9.I0
$1,728,054
25,869
9.85
299,285
9.85
325,154
1,298,965
9.85
692,299
9.85
1,991,264
698,520
9.85
742,371
9.85
1,440,891
419,126
9.85
410,289
9.85
829,415
181,812
9.85
217,552
9.85
399,364
767,171
9.85
1,511,217
9.85
2,278,388
12,708
9.85
265,025
9.85
277,733
1,234,939
5.55
1,185,169
5.55
2,420,108
$5,385,066
$6,305,305
$11,690,371
Fiscal year 2003 total direct rate$9.13
$826,773
$9.10
$1,035,139
$9.10
$1,861,912
28,212
9.85
308,963
9.85
337,175
1,506,172
9.85
777,079
9.85
2,283,251
780,725
9.85
856,550
9.85
1,637,275
473,665
9.85
416,505
9.85
890,170
207,676
9.85
227,817
9.85
435,493
842,650
9.85
1,522,580
9.85
2,365,230
17,250
9.85
325,262
9.85
342,512
1,453,595
5.55
1,284,728
5.55
2,738,323
$6,136,718
$6,754,623
$12,891,341
Fiscal year 2004 total direct rate$9.09
Y �-
N
Table 5
Value of
Building
Value of
Land
Value of
Fiscal Class of Net Taxable
Tax Rates
Net Taxable
Tax Rates
Net Taxable
Year Property Building
Per$1000
Land
Per$1000
Real Property
2005 Improved Residential
$969,500
$9.10
$1,264,100
$9.10
$2,233,600
Unimproved Residential
30,408
9.85
366,885
9.85
397,293
Apartment
1,772,930
9.85
745,530
9.85
2,518,460
Hotel and Resort
845,026
9.85
897,268
9.85
1,742,294
Commercial
516,945
9.85
455,664
9.85
972,609
Industrial
226,265
9.85
239,022
9.85
465,287
Agricultural
917,253
9.85
1,697,117
9.85
2,614,370
Conservation
24,485
9.85
346,186
9.85
370,671
Homeowners
1,714,555
5.55
1,504,821
5.55
3,219,376
$7,017,367
$7,516,593
$14,533,960
Fiscal year 2005 total direct rate$8.92
2006 Improved Residential
$1,082,244
$9.10
$1,935,085
$9.10
$3,017,329
Unimproved Residential
29,762
9.85
470,738
9.85
500,500
Apartment
2,340,515
9.85
907,150
9.85
3,247,665
Hotel and Resort
981,538
9.85
942,988
9.85
1,924,526
Commercial
538,389
9.85
502,433
9.85
1,040,822
Industrial
255,292
9.85
280,950
9.85
536,242
Agricultural
970,198
9.85
2,082,838
9.85
3,053,036
Conservation
21,488
9.85
340,573
9.85
362,061
Homeowners
1,191,435
5.55
1,604,418
5.55
2,795,853
$7,410,861
$9,067,173
$16,478,034
Fiscal year 2006 total direct rate$8.98
2007 Improved Residential
$1,281,050
$8.10
$2,938,402
$8.10
$4,219,452
Unimproved Residential
43,372
8.10
762,664
8.10
806,036
Apartment
3,154,981
8.10
1,347,158
8.10
4,502,139
Hotel and Resort
1,209,050
9.00
1,050,628
9.00
2,259,678
Commercial
620,567
9.00
662,801
9.00
1,283,368
Industrial
317,852
9.00
397,211
9.00
715,063
Agricultural
1,195,256
8.35
3,985,647
8.35
5,180,903
Conservation
28,472
8.55
356,316
8.55
384,788
Homeowners
1,408,215
5.55
1,947,983
5.55
3,356,198
$9,258,815
S13,448,810
$22,707,625
Fiscal year 2007 total direct rate$7.96
Continued next page.
N
2008 Improved Residential
Unimproved Residential
Apartment
Hotel and Resort
Commercial
Industrial
Agricultural
Conservation
Homeowners
2009 Residential
Apartment
Hotel and Resort
Commercial
Industrial
Agricultural&Native Forest
Conservation
Homeowners
Affordable Rental Housing
20I0 Residential
Apartment
Hotel and Resort
Commercial
Industrial
Agricultural&Native Forest
Conservation
Homeowners
Affordable Rental Housing
Continued next page.
$1,520,234
Table 5
Value of Building Value of
Land Value of
Fiscal Class of Net Taxable Tax Rates Net Taxable
Tax Rates Net Taxable
Year Property Building Per$1000 Land
Per$1000 Real Property
2008 Improved Residential
Unimproved Residential
Apartment
Hotel and Resort
Commercial
Industrial
Agricultural
Conservation
Homeowners
2009 Residential
Apartment
Hotel and Resort
Commercial
Industrial
Agricultural&Native Forest
Conservation
Homeowners
Affordable Rental Housing
20I0 Residential
Apartment
Hotel and Resort
Commercial
Industrial
Agricultural&Native Forest
Conservation
Homeowners
Affordable Rental Housing
Continued next page.
$1,520,234
$8.I0
$3,843,169
$8.10
$5,363,403
40,056
8.10
430,757
8.I0
470,813
3,690,371
8.10
1,517,500
8.I0
5,207,871
1,377,492
9.00
1,194,879
9.00
2,572,371
695,318
9.00
805,168
9.00
1,500,486
370,118
9.00
474,100
9.00
844,218
1,353,403
8.35
4,529,187
8.35
5,882,590
31,771
8.55
347,798
8.55
379,569
1,687,649
5.55
2,360,873
5.55
4,048,522
$10,766,412
$15,503,431
$26,269,843
Fiscal year 2008 total direct rate$7.94
$2,385,714
$7.10
$4,287,515
$8.10
$6,673,229
4,079,199
8.10
1,561,009
8.10
5,640,208
1,542,712
9.00
1,271,240
9.00
2,813,952
742,561
9.00
905,079
9.00
1,647,640
418,607
9.00
561,220
9.00
979,827
2,245,161
6.35
4,325,743
8.35
6,570,904
44,670
8.55
340,254
8.55
384,924
2,091,891
5.55
2,623,241
5.55
4,715,132
41,793
5.55
38,026
5.55
79,819
$13,592,308
$15,913,327
$29,505,635
Fiscal year 2009 total direct rate$7.68
$2,447,576
$7.10
$3,804,696
$8.10
$6,252,272
3,602,514
8.10
1,546,866
8.10
5,149,380
1,390,884
9.00
1,177,796
9.00
2,568,680
733,260
9.00
928,999
9.00
1,662,259
453,406
9.00
593,224
9.00
1,046,630
2,272,248
6.35
3,625,585
8.35
5,897,833
46,321
8.55
337,860
8.55
384,181
2,388,048
5.55
2,686,692
5.55
5,074,740
67,746
5.55
47,703
5.55
115,449
$13,402,003
$14,749,421
$28,151,424
Fiscal year 2010
total direct rate$7.75
N
Table 5
Value of Building Value of Land Value of
Fiscal Class of Net Taxable Tax Rates Net Taxable Tax Rates Net Taxable
_ Year Property Building Per$1000 Land Per$1000 Real Property
2011 Residential
Apartment
Hotel and Resort
Commercial
Industrial
Agricultural&Native Forest
Conservation
Homeowners
Affordable Rental Housing
2012 Residential
Apartment
Hotel and Resort
Commercial
Industrial
Agricultural&Native Forest
Conservation
Homeowners
Affordable Rental Housing
$3,040,977
$9.10
$3,787,185
$9.10
$6,828,162
2,660,600
9.85
1,144,873
9.85
3,805,473
820,418
9.85
690,834
9.85
1,511,252
713,161
9.10
9083741
9.10
1,621,902
454,868
9.10
594,589
9.10
1,049,457
2,232,765
8.35
2,860,494
8.35
5,093,259
48,766
9.85
341,496
9.85
390,262
2,479,437
5.55
2,573,527
5.55
5,052,964
108,290
5.55
57,821
5.55
166,111
$12,559,282
$12,959,560
$25,518,842
Fiscal year 2011 total direct rate$8.39
$2,849,965
$9.10
$3,549,133
$9.10
$6,399,098
2,772,190
9.85
1,147,288
9.85
3,919,478
771,971
9.85
601,800
9.85
I,373,771
676,465
9.10
837,094
9.10
1,513,559
446,247
9.10
563,710
9.10
1,009,957
2,023,285
8.35
2,571,826
8.35
4,595,111
44,874
9.85
323,210
9.85
368,084
2,480,038
5.55
2,524,611
5.55
5,004,649
142,899
5.55
79,498
5.55
222,397
$12,207,934
$12,198,170
$24,406,104
Fiscal year 2012 total direct rate$8.52
Source: County of Hawaii,Department of Finance,Real Property Tax Division
NOTES: Assessed value is at 100%of market value
Property is reassessed annually.
The County Council sets the tax rates annually.
There are no overlapping property tax rates in the County of Hawaii.
The improved residential and unimproved residential classes were combined into a single class beginning with the fiscal
years ending June 30,2009.
Unaudited-see accompanying independent auditors'report.
Table 6
COUNTY OF HAWAII
Principal Taxpayers
June 30,2012 and 2003
Fiscal Year 2012 Fiscal Year 2003
Percentage Percentage
2011 of Total 2002 of Total
Assessed Assessed Assessed Assessed
Taxpayer Business Valuation Rank Valuation Valuation Rank Valuation
Mauna Kea/Hapuna Beach Corps. Developer/Hotel $ 217,554,100 1 0.7% $ - -
Hilton Land Investment 1 LLC Hotel 206,052,400 2 0.7% - -
Hualalai Investors LLC Developer/Hotel 189,089,800 3 0.6% - -
Orchid 09 LLC Hotel 116,619,400 4 0.4% - -
WB KD Acquisition LLC Developer 106,003,500 5 0.4% - -
Mauna Lani Resort Inc. Developer/Hotel 89,006,000 6 0.3% 102,923,900 7 0.7%
Hilton Resorts Corp. Timeshare 88,977,200 7 0.3% - -
Kohanaiki Shores LLC Developer 65,347,900 8 0.2% - -
Kona Coast Resort LTD Hotel 57,409,200 9 0.2% - -
BRE/Waikoloa LLC Hotel 55,610,900 10 0.2% - -
BP Bishop Estate Developer - - 428,030,800 1 3.0%
Mauna Kea Development Corp Hotels/Dev. - - 238,141,700 2 1.7%
WB Kukio Resorts LLC Developer - - 190,704,200 3 1.3%
Global Resort Partners Hotel - - 156,732,600 4 1.1%
Liliuokalani Trust Estate Land Trust - - 143,313,700 5 1.0%
FHR(ML)Hotel Holdings LLC Hotel - - 128,678,600 6 0.9%
1250 Oceanside Partners Developer - - 78,528,600 8 0.6%
Kaupulehu Makai Venture Developer - - 74,396,800 9 0.5%
RWH Inc. Hotel - - 54,723,400 10 0.4%
$1,191,670,400 4.0% $ 1,596,174,300 11.2%
Note: Gross valuation at January 1,2011: $29,720,043,200
Gross valuation at January 1,2002: $14,266,522,103
Source: County of Hawaii,Department of Finance,Real Property Tax Division
Unaudited-see accompanying independent auditors'report.
128 -
COUNTY OF HAWAII
Property Tax Levies and Collections
Last Ten Fiscal Years
Table 7
*Outstanding
* Amounts reflect subsequent adjustments
Source: County of Hawaii,Department of Finance,Real Property Tax Division
Unaudited-see accompanying independent auditors'report.
*Total
Delinquent
*Current
*Current
*Percent
*Delinquent
*Total
Collections as
*Outstanding
Taxes as
Fiscal
Tax
Tax
of Levy
Tax
Tax
Percent of
Delinquent
Percent of
Year
Levy
Collections
Collected
Collections
Collections
Current Lew
Taxes
Current Lew
2003
$106,384,903
$103,105,478
97%
$ 3,180,292
$ 106,285,770
100%
$ 99,133
0%
2004
116,508,891
113,501,954
97%
2,902,147
116,404,101
100%
104,790
0%
2005
128,842,190
126,574,921
98%
2,143,751
128,718,672
100%
123,518
0%
N 2006
150,292,119
147,712,630
98%
2,420,714
150,133,344
100%
158,775
0%
2007
181,538,661
177,326,418
98%
3,824,049
181,150,467
100%
388,194
0%
2008
207,895,260
202,702,858
98%
4,404,006
207,106,864
100%
788,396
0%
2009
226,630,144
219,437,531
97%
5,630,096
225,067,627
99%
1,562,517
1%
2010
215,272,277
207,501,307
96%
5,004,379
212,505,686
99%
2,766,591
1%
2011
215,797,530
208,106,918
96%
3,237,630
211,344,548
98%
4,452,982
2%
2012
204,944,928
198,274,186
97%
-
198,274,186
97%
6,670,742
3%
* Amounts reflect subsequent adjustments
Source: County of Hawaii,Department of Finance,Real Property Tax Division
Unaudited-see accompanying independent auditors'report.
Table 8
COUNTY OF HAWAII
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
(Amounts in thousands,except per capita)
NOTES:
(a)Includes governmental activities and business-type activities.
(b)See Table 11 for personal income and population data.
(c)Includes Bond Anticipation Notes(BANS)
Details regarding the County's outstanding debt can be found in the notes to the basic financial statements.
Unaudited-see accompanying independent auditors'report.
Business-Type
Component
Total Primary Government
Governmental.Activities
Activities
Unit
Total Primary Government
and Component Unit
General
State
Total
General
State
Percentage
Percentage
Fiscal
Obligation
Revolving
Capital
Notes
Primary
Obligation
Revolving
of Personal
Per
of Personal
Per
Year
Bonds(c)
Fund Loans
Leases
Payable
Government(a)
Bonds
Fund Loans
Income(b)
Capita(b)
Income(b)
Capita(b)
2003
$168,607,000
$31,680,295
$3,293,462
$ 1,084,667
$ 204,665,424
$I6,794,600
$2,842,108
5.50%
$ 1,297
6.03%
$ 1,421
2004
157,908,300
29,497,373
3,547,085
1,065,417
192,018,175
15,737,700
3,054,549
4.68%
1,187
5.14%
1,303
2005
182,158,285
28,760,504
3,642,928
1,041,285
215,603,002
14,657,708
2,905,354
4.87%
1,295
5.27%
1,401
i 2006
196,652,008
26,413,342
2,864,515
1,019,386
226,949,251
38,374,312
3,175,607
4.78%
1,326
5.65%
1,568
w 2007
269,281,339
30,246,751
4,085,735
995,854
304,609,679
36,708,368
5,599,767
5.94%
1,765
6.77%
2,011
O 2008
257,099,399
29,376,186
4,606,527
970,892
292,053,004
35,823,543
5,423,551
5.18%
1,66I
5.91%
1,896
' 2009
291,363,218
26,697,288
4,179,805
944,124
323,I84,435
33,954,671
8,154,507
5.68%
1,817
6.41%
2,054
2010
294,164,535
30,469,767
4,552,290
916,117
330,102,709
31,730,311
11,984,221
5.77%
1,843
6.54%
2,087
2011
311,549,005
36,555,264
3,057,082
884,232
352,045,583
44,673,293
18,012,314
N/A
1,885
NIA
2,221
2012
314,773,498
29,050,626
3,803,618
851,306
348,479,048
42,481,176
17,872,813
NIA
NIA
NIA
NIA
NOTES:
(a)Includes governmental activities and business-type activities.
(b)See Table 11 for personal income and population data.
(c)Includes Bond Anticipation Notes(BANS)
Details regarding the County's outstanding debt can be found in the notes to the basic financial statements.
Unaudited-see accompanying independent auditors'report.
Table 9
COUNTY OF HAWAII
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)
2003 $ 187,316,839 1.6% $ 1,180
2004 176,693,195 1.4% 1,082
2005 195,198,142 1.3% 1,167
2006 205,219,940 1.2% 1,199
2007 281,836,503 1.2% 1,633
2008 265,431,280 1.0% 1,510
2009 296,535,925 1.0% 1,667
2010 277,481,633 1.0% 1,549
2011 305,615,691 1.2% 1,636
2012 317,699,844 1.3% 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 I 1 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.
- 131 -
Table 10
COUNTY OF HAWAII
Legal Debt Margin Information
Last Ten Fiscal Years
(Amounts in thousands)
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Debt limit(a) $1,753,556
$1,933,701
$2,180,094
$2,471,705
$3,406,144
$3,940,476
$4,425,845
$4,222,714
$ 3,827,826 $
3,660,916
Debt applicable to limit 187,317
176,396
195,198
205,220
281,837
265,431
296,536
277,482
315,616
317,700
Legal debt margin(b) $1,566,239
$1,757,305
$1,984,896
$2,266,485
$3,124,307
$3,675,045
$4,129,309
$3,945,232
$ 3,512,210 $ 3,343,216
Debt applicable to the limit
as a percentage of debt limit 10.68%
9.12%
8.95%
8.30%
8.27%
6.74%
6.70%
6.57%
8.25%
8.68%
w
N
NOTES:
(a)State finance statutes limit the County's outstanding general debt to no more than 15 percent of the net assessed value of property. See Table
5 for net assessed value of property.
(b)The legal debt margin is the County's available borrowing authority
under state finance statutes and is calculated by subtracting the net debt applicable to the legal debt
limit from the legal debt limit.
Legal Debt Margin Calculation for Fiscal Year 2012
Net assessed value
$24,406,104
Debt limit(15%of net assessed value)
$ 3,660,9t6
Debt applicable to limit
317,700
Legal debt margin
$ 3,343,216
Unaudited-see accompanying independent auditors'report.
Table 11
COUNTY OF HAWAII
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
2002 154,576 $ 3,697,485 $ 23,920 29,826 4.6%
2003 158,442 $ 3,869,362 $ 24,421 29,635 4.6%
2004 162,852 $ 4,223,829 $ 25,937 29,827 3.9%
2005 168,237 $ 4,638,838 $ 27,573 30,262 3.3%
2006 173,536 $ 5,064,624 $ 29,185 30,539 3.0%
2007 177,733 $ 5,509,169 $ 30,997 30,618 3.4%
2008 181,506 $ 5,899,236 $ 32,502 30,408 5.7%
2009 183,629 $ 5,517,497 $ 30,047 30,138 9.9%
2010 185,381 $ 5,717,885 $ 30,844 29,741 10.0%
2011 186,738 NIA NIA 30,103 9.9%
* Amounts reflect subsequent adjustments
Source: County of Hawaii,Department of Research and Development
Unaudited-see accompanying independent auditors'report.
- 133 -
Table 12
COUNTY OF HAWAII
Principal Employers,County of Hawaii
June 30,2012 and 2003
2011 (a) 2004(a)
Percentage Percentage
of Total County of Total County
Employer Employees Rank Employment Employees Rank Employment
State of Hawaii 7,962 1 10.1% 7,608 1 10.0%
County of Hawaii 2,630 2 3.3% 2,291 2 3.0%
United States Government 1,429 3 1.8% 1,221 3 1.6%
Hilton Waikoloa Village 935 4 1.2% 1,100 4 1.4%
KTA Super Stores 750 5 0.9% 785 5 1.0%
Walmart 741 6 0.9% - -
Four Seasons Resort HualaIai 650 7 0.8% 557 8 0.7%
The Fairmont Orchid,Hawaii 616 8 0.8% 600 6 0.8%
Mauna Kea Beach Hotel 513 9 0.6% 556 9 0.7%
Mauna Lani Resort(Operations)Inc. 450 10 0.6% - -
Mauna Lani Bay Hotel - - 580 7 0.8%
Hapuna Beach Prince Hotel - - 542 10 0.7%
Total 16,676 21.1% 15,840 20.8%
Total employee count 78,950 76,200
NOTES:
(a)Data for Fiscal Year 2012 and the period of 2001 to 2003 are unavailable.
Source: County of Hawaii, Department of Research and Development
Unaudited-see accompanying independent auditors'report.
- 134-
w
to
Table 13
COUNTY OF HAWAII
Full-Time Equivalent County Government Employees by Function
Last Ten Fiscal Years
Total 2,023.31 2,053.21 2,085.87 2,198.60 2,240.33 2,412.46 2,411.56 2,379.89 2,390.45 2,319.18
Source: County of Hawaii,Department of Finance
Unaudited-see accompanying independent auditors'report.
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Function
General government:
County Council
9.00
9.00
9.00
9.00
9.00
9.00
9.00
9.00
9.00
9.00
County Clerk
41.00
42.50
38.00
54.50
54.00
68.00
55.48
56.08
53.00
54.00
Legislative Auditor
-
-
-
-
-
-
5.00
5.00
5.00
4.75
Mayor
17.90
19.90
21.58
21.70
20.68
25.17
22.49
19.00
21.99
18.50
Corporation Counsel
37.00
38.00
41.00
39.00
39.98
33.00
30.00
32.00
29.00
29.00
Finance
85.00
90.00
88.00
91.00
94.49
102.89
128.44
123.89
121.89
123.35
Human Resources
24.00
24.00
26.00
24.50
27.46
28.98
28.96
27.98
25.49
25.48
Planning
29.00
31.00
31.50
35.00
36.00
47.00
48.00
49.00
49.49
48.00
Research&Development
13.00
12.00
13.00
13.20
14.48
15.00
15.00
14.00
14.00
12.00
Information Technology
16.00
15.00
14.00
17.00
17.00
17.00
16.00
15.48
16.00
16.00
Public Works Admin&Building
115.00
121.00
121.00
123.40
141.97
166.37
170.44
162.99
158.84
155.48
Public Safety:
Police
523.25
526.50
520.80
536.20
535.23
572.51
553.37
558.32
565.99
541.25
Fire
301.48
316.98
346.23
340.20
363.71
424.07
412.05
411.53
414.08
391.28
Liquor Control
11.00
11.00
11.00
13.00
12.00
14.48
14.00
14.00
14.00
15.00
Civil Defense
5.00
5.00
7.00
6.00
5.00
5.00
7.00
7.00
7.00
7.00
Prosecuting Attorney
84.00
86.00
83.00
86.50
93.00
96.49
103.00
98.24
99.00
91.49
Highways and Streets:
Mass Transit
5.00
5.00
7.00
6.00
5.00
7.00
6.00
7.00
7.00
7.00
Traffic and Highways
156.00
153.00
151.00
168.00
169.98
183.48
182.48
174.48
176.48
178.48
Sanitation:
Administration
4.00
5.00
18.00
19.50
19.49
1998
19.49
16.98
18.49
17.00
Sewer
44.00
42.05
40.00
38.00
32.97
37.49
41.47
44.98
47.49
47.49
Vehicle Disposal
1.00
1.00
1.00
1.00
3.00
3.00
2.00
2.00
2.00
2.00
Solid Waste
52.75
56.75
57.80
69.00
86.49
87.49
93.49
93.00
95.00
99.00
Health,Education and Welfare:
Housing
39.48
42.48
43.48
39.50
43.97
46.95
44.95
47.44
47.48
43.48
Aging
10.75
10.00
10.00
12.50
13.00
12.00
12.00
11.00
12.00
13.00
Culture and Recreation
398.70
390.05
386.48
434.90
402.43
390.I1
391.45
379.50
380.74
370.15
Total 2,023.31 2,053.21 2,085.87 2,198.60 2,240.33 2,412.46 2,411.56 2,379.89 2,390.45 2,319.18
Source: County of Hawaii,Department of Finance
Unaudited-see accompanying independent auditors'report.
Table 14
COUNTY OF HAWAII
Operating Indicators by Function
Last Ten Fiscal Years
Source: County of Hawaii,Individual Departments
Unaudited-see accompanying independent auditors'report.
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Function
Public Safety:
Police:
DUI arrests
1,004
900
964
1,163
1,354
1,397
1,395
1,452
I,468
1,403
Traffic citations issued
38,974
58,432
51,818
54,435
54,606
62,736
66,461
63,883
61,947
60,967
Fire:
Fire responses
1,751
1,207
888
897
1,095
892
751
889
731
684
Emergency medicallrescue responses
11,944
14,693
13,671
14,945
15,502
16,098
15,099
15,308
15,726
16,361
Inspections-Occupancy/Fire Protective Equipment
6,415
4,210
1,843
2,131
1,958
1,858
1,479
1,579
3,021
2,050
Sanitation:
Refuse disposed(tons per year)
179,284
201,011
225,051
222,945
223,144
210,199
172,431
154,914
166,455
152,949
Highways and Streets:
In-house street resurfacing(miles)
40
12
42
15
33
26
27
23
18
20
Parks and Recreation:
Pavilion permits issued
1,567
1,739
1,908
1,888
1,744
2,055
2,310
2,340
4,667
2,805
Camping permits issued
4,576
4,627
4,765
5,146
5,200
3,870
3,998
4,290
4,019
4,450
Rounds of golf
88,889
80,015
79,101
74,677
82,182
76,648
80,229
80,407
83,358
72,162
Zoo attendance
133,086
156,184
163,176
171,958
172,315
163,601
182,286
172,737
172,677
213,537
Transit:
Bus passengers
N/A
N/A
N/A
711,608
727,677
821,359
908,651
1,060,057
1,149,042
1,315,222
Public Works:
Building permits issued
4,250
4,418
5,350
5,883
5,165
4,507
3,929
3,234
3,039
3,258
Electrical permits issued
3,999
3,896
4,750
5,097
5,072
4,569
3,869
3,602
3,821
4,080
Plumbing permits issued
2,954
1,907
3,888
4,557
4,368
3,622
2,983
2,638
2,071
1,749
Sign permits issued
59
46
63
50
51
75
62
62
58
55
Source: County of Hawaii,Individual Departments
Unaudited-see accompanying independent auditors'report.
Table 15
COUNTY OF HAWAII
Capital Asset Statistics by Functions
Last Ten Fiscal Years
2005 2006 2007 2008 2009 2010 2011 2012
8
2003
2004
Function
8
8
Public Safety:
8
13
Police:
13
10
Stations
8
8
Substations
3
3
Fire stations
20
20
Highways and Streets:
20
20
County streets(miles)
903
903
�—• Streetlights
8,823
8,949
vParks and Recreation:
954
9,017
Parks
118
119
Gyms and recreation centers
38
38
Sanitation:
121
122
Sanitary sewers(miles)
53
53
*GIs database utilized beginning FY 2008
143
144
Source: County of Hawaii,Department of Research and Development
Unaudited-see accompanying independent auditors'report.
38
Table 15
COUNTY OF HAWAII
Capital Asset Statistics by Functions
Last Ten Fiscal Years
2005 2006 2007 2008 2009 2010 2011 2012
8
8
8
8
8
8
8
8
13
I3
13
10
t0
10
10
10
20
20
20
20
20
20
20
20
903
907
927
942
943
944
946
954
9,017
9,027
9,246
9,308
9,404
9,592
9,864
9,883
121
122
123
123
143
143
143
144
38
38
38
38
61
61
61
62
53
53
58
100*
100*
111*
Ill*
112*