Comprehensive Annual Financial Report 2016

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Capital Assets (net of depreciation) June 30, 2016 and 2015 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 $356.6 million and State Revolving Fund loans of $27.5 million. At the end of the current fiscal year, the County had total bonded debt outstanding of $356.6 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 increased by $43.2million (14 percent) during the current fiscal year due to the issuance of $215.9 in bonds which were offset by the retirement of $172.7 of bonds and bond anticipation notes. 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 $4,0 billion, which is in excess of the County's outstanding general obligation debt. Currently the County's outstanding debt represents 9 percent of our debt limitation. Additional information on the County's long-term debt can be found in note 10 to the basic financial statements. ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES • The unemployment rate for the County for the current fiscal year is at approximately 4.0 percent, which represents a percentage point decline from last year's rate for the same period of 5.0 percent, a two percent decline from two years ago and an even larger decline from the high of 11.0 percent in 2011. • The number of domestic and international visitors to the County for the current fiscal year was approximately 1.51 million, with an approximately 4.3 percent increase from the previous year's count of 1.45 million. For the most part, the County is less dependent on tourism than the other islands in the State, but the Kona airport terminal modernization project is budgeted at $60-70 million. • According to the May 20, 2016 forecast from The Economic Research Organization at the University of Hawaii, the neighbor islands are seeing resort development and the beginning of an increase in residential activity, though it will be to a lesser extent than in -23 - Primary Government Governmental Activities Business -type Activities Total 2016 2015 2016 2015 2016 2015 Land and improvements $ 233,498,340 $ 201363,687 $ 753,877 $ 753,877 $ 234,252,217 $ 202,117,564 Infrastructure assets 307,227,977 278,990,393 - - 307,227,977 278,990,393 Ground and site improvements - - 62,240 66,585 62,240 66,585 Buildings and improvements 504,617,544 495,445,600 646,540 682,586 505,264,084 496,128,186 Easements 4,170,517 3,830,410 - - 4,170,517 3,830,410 Equipment 59,910,752 50,250,220 32,396 37,161 59,943,148 50,287,381 Construction work in progress 124,212,163 60,966,761 - - 124,212,163 60,966,761 Total $1,233,637,293 $1,090,847,071 $ 1,495,053 $ 1,540,209 $1,235,132,346 $1,092$87,280 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 $356.6 million and State Revolving Fund loans of $27.5 million. At the end of the current fiscal year, the County had total bonded debt outstanding of $356.6 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 increased by $43.2million (14 percent) during the current fiscal year due to the issuance of $215.9 in bonds which were offset by the retirement of $172.7 of bonds and bond anticipation notes. 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 $4,0 billion, which is in excess of the County's outstanding general obligation debt. Currently the County's outstanding debt represents 9 percent of our debt limitation. Additional information on the County's long-term debt can be found in note 10 to the basic financial statements. ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES • The unemployment rate for the County for the current fiscal year is at approximately 4.0 percent, which represents a percentage point decline from last year's rate for the same period of 5.0 percent, a two percent decline from two years ago and an even larger decline from the high of 11.0 percent in 2011. • The number of domestic and international visitors to the County for the current fiscal year was approximately 1.51 million, with an approximately 4.3 percent increase from the previous year's count of 1.45 million. For the most part, the County is less dependent on tourism than the other islands in the State, but the Kona airport terminal modernization project is budgeted at $60-70 million. • According to the May 20, 2016 forecast from The Economic Research Organization at the University of Hawaii, the neighbor islands are seeing resort development and the beginning of an increase in residential activity, though it will be to a lesser extent than in -23 -