Comprehensive Annual Financial Report 2017

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The County provides a full range of municipal services. These include police and fire protection; emergency medical care; public prosecutor; culture and recreation; sanitation; social services; water; planning and zoning; construction and maintenance of highways, streets and infrastructure; real property assessment and tax collection; and general administrative services. However, the County does not provide such other traditional services as public education, hospitals and courts. These services are provided by the State government. The County consists of the island of Hawai`i, 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, Canada and now Japan 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 unemployment rate for the County for the current fiscal year is at approximately 3%, which represents a percentage point decline from last year's rate for the same period of 4% and an even larger decline from the high of 11% in 2011. Tourism —Tourism has always been one of the major industries on the island. In addition to the mild climate and natural beauty it shares with other areas in the state, the County features the Hawai`i Volcanoes National Park. A popular attraction, the park is the most visited site in the state, with over 3.9 million visitors this past fiscal year. The number of domestic and international visitors to the County for the current fiscal year was approximately 1.65 million, with an approximately 9 percent increase from the previous year's count of 1.51 million. After a seven year absence, Japan Airlines introduced the return of their direct flights from Tokyo to Kona in September 2017. According to the Hawaii Tribune Herald, the Hawaii Tourism Authority projected that this new service would result in approximately $84.2 million in visitor expenditures and about $9.8 million in state tax revenue and support about 900 jobs in the County as well.