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HomeMy WebLinkAboutCOM 0580.000 1998-2000 vv or y ALAN S. KONISHI `",W, DONALD IKEDA Couttn° Clerk , ~ Deputy Counir Clark "r~~ CONSTANCE R. KIRIU /.egis(a(ive Auditm~ OFFICE OF THE COUNTY CLERK County of Hawaii Hawaii Countp Banding 25 Aupuni Sheet Hilo. Hawaii 96720 ~ r; ~ r~t _.1] December 9, 1999 GD TO: James Y. Arakaki, Chair - ~ and Council Members t-~ _L FROM: Constance R. Kiriu~ cn Legislative Auditor RE: Post-Audit Report of the County of Hawaii Fiscal Year Ended June 30, 1999 For your review, deliberation, and acceptance, I am submitting the post-audit Financial Audit Report of the County of Hawaii for the Fiscal Year Ended June 30, 1999, and Management Letter dated October 15, 1998, as prepazed by KPMG Peat Marwick. The Report and Management Letter satisfy the requirement of Section 10-13, Hawaii County Charter, relating to the responsibility of the County Council to conduct an annual independent audit of the accounts and other evidences of financial transactions of the County and of every county agency and executive agency. This year's Management Letter contains findings and recommendations related to: ? Procurement procedures involving purchases under $400 and web-based electronic procurement system ? The workers' compensation claims process and the compilation and analysis of accident statistics ? Collection of wastewater and solid waste receivables ? Internal controls for cash collections of municipal golf course green fees and building permit fees ? The need to update the County's Long-Runge Strategic Information Systems Plan ? Changes in the government reporting model ? Issues related to the County's Year 2000 effort The auditors will be present at the Finance Committee meeting on January 20, 2000, to answer any questions you may have. In the meantime, please feel free to contact me should you require further information. Enclosures cc w/o enc: Ralph Kanetoku, KPMG Nelson Lau, KPMG Derek Mizuno, KPMG Comm. No. Ftile No. AVl~ Ref. To: F C Ref. Hate ~ 1 0 1999 _ G; - COUNTY OF HAWAII tit `I F ~4 - * = rq w~ rQ.~P TF OF Nr Financial Audit Report for the Fiscal Year Ended June 30, 1999 COUNTY OF HAWAII Financial Audit Report For the Fiscal Year ended June 30, 1999 Table of Contents Page SECTION I - COMPLLANCE AND INTERNAL CONTROL OVER FINANCLAL REPORTING Report on Compliance and on Internal Control Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 1 Management Letter 3 Current Year's Findings and Recommendations 4 Status of Prior Year Findings and Recommendations 13 Comments by the Affected Agencies 19 SECTION II -COMPREHENSIVE ANNUAL FINANCIAL REPORT Introductory Section 1 Financial Section Statistical Sections Foreword This financial audit report is the result of the audit of the financial statements of the County of Hawaii, State of Hawaii, for the fiscal year ended June 30, 1999. The audit was conducted by KPMG LLP, certified public accountants. The audit was performed in accordance with generally accepted auditing standards adopted by the membership of the American Institute of Certified Public Accountants. In addition, the audit was governed by the "Specifications for a Financial Post-Audit and Systems and Procedures Examination of the County of Hawaii;' issued by our office. This report is divided into two sections. Section I, "Compliance and Internal Control Over Financial Reporting," includes the auditors' findings and recommendations based upon their consideration of the County's internal control in connection with their audit of the County's financial statements for the fiscal year ended June 30, 1999. It is our practice to request agencies to submit their comments on the auditors' findings and recommendations and to indicate what action has been or will be taken. Section II, "Comprehensive Annual Financial Report" for the fiscal year ended June 30, 1999, displays the financial statements and schedules of the County, the auditors' report as to the fairness of presentation of the financial statements and also includes statistical information. We wish to express our sincere appreciation for the cooperation and assistance extended by the management and staff of the various departments during the audit. Constance R. Kiriu Legislative Auditor County of Hawaii SECTION I -COMPLIANCE AND INTERNAL CONTROL OVER FINANCIAL REPORTING P O. Box 4150 Honolulu, HI 96812-4150 Report on Compliance and on Internal Cnntrol Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards To the Members of the County Council of Hawaii County of Hawaii Hilo, Hawaii We have audited the general purpose financial statements of the County of Hawaii, State of Hawaii (County), as of and for the year ended June 30, 1999, and have issued our report thereon dated October I5, 1999. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Goverrrmenr Auditing Standards, issued by [he Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether the County's general purpose financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Governmene Audrling Standards. Internal Control Over Financial Reporting In planning and performing our audit, we considered the County's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide assurance on the internal control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control over financial reporting that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the general purpose financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial reporting and its operation that we consider [o be material 1 a mMmLLP fPMG LLR.m S eai. as nadery Wnnennq e ca of avMG im nron a Swna uercmm weaknesses. However, we noted other matters involving the internal control over financial reporting, which we have reported to management of the County in a separate letter dated October I5, 1999. This report is intended solely for [he information and use of the County Administration, [he County Council and federal awarding agencies and is no[ intended to be and should not be used by anyone other than these specified parties. (~?t'tG LLB Honolulu, Hawaii October 15, 1999 2 P 0. Box 4150 Telephone 808 531 7286 Honolulu, HI 96812-4150 Fax 808 541 9321 October 15, 1999 PRIVATE & CONFIDENTIAL To the Members of the County Council of Hawaii County of Hawaii Hilo, Hawaii We have audited the general purpose financial statements of the County of Flawaii, Slate of Hawaii (County), for the year ended June 30, 1999 and have issued our report thereon dated October I5, 1999. We have also audited the County's compliance with requirements applicable to its federal financial assistance programs and have issued our report [hereon dated October IS, 1999. In planning and performing our audit of the general purpose financial statements of [he County, we considered internal control in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide assurance on the internal control over financial reporting. We have not considered internal control since the date of our report. During our audit, we noted certain matters involving intemal control over financial reporting and other operational matters that are presented for your consideration. These comments and recommendations, all of which have been discussed with the appropriate members of management, are intended [o improve internal control or result in other operating efficiencies. We have also reviewed the disposition of the recommendations made in the previous year's report dated October 23, 1998. The status of prior year findings and recommendations is also presented. A number of recommendations were adopted as suggested or in modified form. Other recommendations were not implemented and those which we felt merited reconsideration have been modified where necessary and restated in the current year's findings and recommendations section. Our audit procedures are designed primarily to enable us to form an opinion on the general purpose financial statements, and therefore may not bring to light all weaknesses in internal control policies or procedures that may exist. We aim, however, to use our knowledge of the County's organization gained during our work to make comments and suggestions that we hope will be useful to you. This report is intended solely for the information and use of the County Administration and the County Council and is not intended [o be and should no[ be used by anyone other than these specified parties. We would like to take this opportunity to express our appreciation for the courtesy and assistance extended to us by the personnel of the County of Hawaii during the course of our audit. Should you wish to discuss any of the matters contained herein, we will be pleased to mect with you at your convenience. Very truly yours, f~/~(Cz LLB 3 • mMG LLP RPMG LLP a V $ IimifM IYM1LM1 Wr,ner,mD emter of RPMG InlernaDOnal s Swnf tlarcY,~nn COUNTY OF HAWAII STATE OF HAWAII Current Year's Findings and Recommendations June 30, 1999 PROCUREMENT POLICIES AND PROCEDURES Purchases Under $400 During our review of the procurement process, we noted that the County's procurement policies and procedures for purchases under $400 are time-consuming and inefficient. Under the current policy for purchases under $400, County agencies are required to prepare and submit a confirming payment authorization (purchases < $100) or a confirming requisition for every vendor used by each department for purchases that have already occurred. A confirming requisition details information such as vendor, price and quantity. This requisition is prepared subsequent to the purchase and is submitted along with a copy of the invoice to the Purchasing Division of the Department of Finance (Purchasing Division). It should be noted that County agencies are required [o obtain approval from the Purchasing Division before the procurement of certain types of goods (i.e., televisions, cameras and video cassette recorders). Once the Purchasing Division approves the purchase, the confirming payment authorization or the confirming requisition and the copy of the invoice are forwarded to the Accounts Division of the Department of Finance (Accounts Division) where a warrant is prepared for each vendor. The process is time-consuming and results in additional labor and material costs, as it involves the completion of a confirming payment authorization or a confirming requisition and a warrant for every vendor used for purchases under $400. The County has an opportunity to streamline and improve the efficiency of this procurement process for small dollar purchases which are recurring and/or routine in nature, and for which approvals from the Purchasing Division are received subsequent to the date of purchase. The County estimates that approximately 25-50 purchases under $400 are made each day. Recommendation We recommend that the County consider changing the procurement policies and procedures to allow for the issuance of credit or debit cards to certain individuals within each department. These individuals would only be authorized to use the card to purchase items less than $400 for their respective departments. Other restrictions (i.e., prohibition of cash withdrawals and entertainment and travel purchases) may be applied on each card. Department supervisors would be responsible for approval of their authorized individuals' purchases. The department would list the approved purchases on a schedule and forward it to the Purchasing Division at the end of the month. The Purchasing Division would then review and approve the purchases, reconcile the schedule to the monthly credit or debit card statement and resolve any unusual purchases or discrepancies. Once all matters are resolved, the approved monthly bill would be forwarded to the Accounts Division for payment. In the future, the County should consider performing the review and approval process on-line. The County should weigh the potential benefits such as a substantial reduction in the amount of required forms (i.e., confirming payment authorizations, confirming requisitions and warrants) and a more efficient process against the anticipated costs. 4 (Continued) COUNTY OF HAWAII STATE OF HAWAII Current Year's Findings and Recommendations June 30, 1999 Implementation of the aforementioned process would provide the County with the same level of internal control over small purchases, as reviews of each purchase would continue and prior approval of certain items could be maintained. Furthermore, controls could be enhanced by placing restrictions on the individual cards based on the expected use and types of purchases. Web-Based Electronic Procurement System The County's procurement policy and the Hawaii Revised Statutes Chapter 103D-302 Hawaii Public Procurement Code generally require performance of the following procurement procedures: • For purchases of goods and services > $25,000, competitive sealed bidding or competitive sealed proposals with exceptions for sole source, exempt and emergency procurement actions; • For purchases of goods and services > $5,000 and < $25,000, three written quotations; or • For purchases of goods and services > $400 and < $5,000, three verbal quotations or use of the County's internal price list. With the growth in the number of Internet users, commercial and public sector entities now have access to a growing number of suppliers of goods and services. Entities, including those in the public sector, have utilized the services of application service providers such as Ariba and CommerceOne. These service providers establish a forum for the exchange of goods and services between customers and vendors. The process involves the initial enrollment by the County with the service provider. Prior to the County's enrollment, the service provider has already entered into agreements with vendors to offer their goods and services at their web site. As the need arises for the purchase of goods (i.e., copiers, computer equipment or supplies), the County would submit a request for these goods with the service provider. The service provider searches its database of price lists from the various member vendors and provides the County with the best prices. In return, the service provider receives a commission on each transaction. The commission rate is typically based on the volume of transactions with the service provider. This web- based electronic procurement system offers such benefits as access to a broad spectrum of suppliers, the ability to compare awide-range of vendors' offers before making a purchase, a streamlined workflow (i.e., manual tasks are automated), and reduced cycle times (i.e., the waiting period for return phone calls, faxes, or postal service is eliminated). Recommendation We recommend that the County consider the feasibility of deploying a web-based electronic procurement system for the procurement of certain goods. 5 (Continued) COUNTY OF HAWAII STATE OF HAWAII Current Year's Findings and Recommendations June 30, 1999 RISK MANAGEMENT PROCESS Workers' Compensation Claims Process During our review of the risk management process, we noted that the Corporation Counsel attorney working in the W'orkers' Compensation Unit of the Division of Industrial Safety (Workers' Compensation Unit) is solely responsible for the negotiation of workers' compensation claims' settlement agreements. We again noted that the majority of claims are not subject to supervisory or third party reviews to validate that the negotiated settlements are reasonable relative to the type and extent of injuries and comparable to industry guidelines. Reviews of the settlement agreements by supervisory personnel with experience in handling workers' compensation claims or by independent claims adjusters provide additional assurance that the County is settling workers' compensation claims in a manner consistent with industry standards and in the best interest of the County. During fiscal year ended June 30, 1999, County employees filed 172 workers' compensation claims and the County paid approximately $2,490,000 in claims. In addition, the workers' compensation claims liability amounted to $6,115,570 at June 30, 1999. Information regarding the number and amount of workers' compensation settlements during the fiscal year is not compiled by the Workers' Compensation Unit. We noted no instances of improper settlement agreements during our testwork. Recommendation We again recommend that the County consider the benefit of (I) hiring additional personnel with experience in handling workers' compensation claims, (2) contracting independent claims adjusters to perform periodic workers' compensation claims reviews or reviews of settlements over a stipulated monetary threshold, and/or (3) placing responsibility for review and approval of settlements over a stipulated monetary threshold with the County Council. The potential savings to the County in the form of a reduction in the number of claims or settlement amounts may outweigh the additional costs of such procedures. Compilation and Analysis of Accident Statistics The County is self-insured for workers' compensation and general liability. Therefore, it is imperative that the County pay special attention to safety conditions in the work place. Continuous improvement of the safety conditions improves employee morale and reduces workers' compensation and general liability claims. ?n the prior year and during our review of the risk management process, we noted that the Division of Industrial Safety does not compile and/or analyze statistics on the type, frequency and amount of claims relating to personal injury and property damage. This statistical information and appropriate analyses could be useful in identifying hazardous work place conditions and locations, and types of recurring accidents, which could lead to the formulation of policies and procedures to mitigate these situations. 6 (Continued) COUNTY OF HAWAII STATE OF f[AWA1f Current Years Findings and Recommendations June 30, 1999 Based on discussions with [he Division of Industrial Safety employees, such information is not compiled because, due to the lack of resources throughout the Count}', accident information is not received from the departments on a consistent and timely basis. Recommendation We again recommend that the Division of Industrial Safety obtain from the departments timely information on workplace accidents, especially those departments that have historically experienced a high rate of workplace accidents. The information should include a description of [he accident, the number of each type of accident, the total estimated damages for each accident, and the total amount of lost man hours associated with the accident. Furthermore, [he Division oflndustrial Safety should analyze those statistics, and with the assistance of the affected departments, formulate policies and procedures to mitigate these situations. This will focus the efforts of the County on addressing the specific types and locations of recurring accidents, to reduce the occurrence of accidents and claims against the County. A reduction in claims would allow [he County to use funds, previously used for claim settlements, for other County programs and needs. COLLECTION OF RECEIVABLES Timely collection of wastewater (sewer) and solid waste (landfill) « ceivables is a problem for the Department of Public Works. Sewer and landfill receivables outstanding for more than 90 days account fbr a significant portion of the respective receivable balances as follows: 1998 1999 Percentage Percentage Amount outstanding> Amount outshrnding> outstanding> 90 days to outstanding > 90 days to 90 days total 90 davs total Scwcr $ 418,000 33% $ 496,000 3S% Landfill 520,000 41% 540,000 44% The Department of Public Works utilizes a collection agency to pursue delinquent accounts < $1,000. As of June 30, 1999, the Department of Public Works has 506 sewer accounts amounting to approximately $137,000 and 475 landfill accounts amounting to approximately $27,000 with the collection agency. The current agreement with the collection agency dictates that the Ucparunent of Public Works receive 67% and 73% of all collections on sewer and landfill receivables, respectively, made by the collection agency. the Department of Public Works compiles certain information pertaining to transactions with [he collection agency. However, no data is compiled to monitor and evaluate the effectiveness of the agency's collection efforts. ~ (Continued) COUN"CY OF HAWAI[ STATE OF HAWAII Current Year's Findings and Recommendations June ~0, 1999 fhe landfill receivable delinquency problem can also be attributed to the Department of Public Works' credit extension policies. We again noted [hat the Solid Waste Division of the Dcparuncnt of Public Works extends credit to all citizens and businesses regardless of credit histor}'. Landfill use is only refused when an outstanding receivable balance exceeds 90 days. Recommendation We recommend that Department of Public Works' management perform the following procedures to monitor and evaluate the results of the collection agency's activities as reported by the agency: I. Periodic comparison of the ratio of actual collections by the collection agency, as a percentage of total accounts turned over to the agency. 2. Periodic comparison of the ratio of accounts that will not be collectible, as a percentage of total accounts turned over to the collection agenc}'. 3. Reconciliation of the 67% and 73% recovery to the total of those sewer and landfill accounts, respectively, recovered when initially turned over to the collection agency. E3ased on managements desired results for [he collection of delinquent accounts, the Department of Public Works should establish benchmarks for collections and evaluate the effectiveness of the collection agency's efforts relative to [hose benchmarks. In addition, the County should consider extending credit to landlill users only upon satisfactory credit history reviews. Until satisfactory credit approvals arc obtained, landfill users should be required to pay cash at the time of use. INTERNAL CONTROL -CASH COLLECTIONS Cnllcclhm o~Hiln Alunicipcr! GoljConrsc Greco card Corr Fec.r In [he prior year, it was noted that [here is a lack of adequate segregation of duties over the receipt of golf course green and cart fees at the Hilo Municipal Golf Course. The cashier performs both the cash collection and starter functions. The situation occurred because there arc only two staff employees responsible for the cashier, starter, and marshal functions. Onc employee serves as the starter/cashier while the other employee performs the duties of the marshal. Cash register receipts arc not required to be presented to obtain golf carts or u> play golf. Under these circumstances, it may be possible for the starter to allow golfers to play for f~rec or to pocket cash receipts and not enter it into the cash register Green and cart fees at the f Iilo Municipal GoICCourse amounted to approximately $656,000 for the fiscal year ended Junc 30, 1999. Kecommcndation We again recommend that the County consider segregating the cash collection and starter functions at the I Iilo Municipal Golf Course. Golf cart personnel should only provide golf carts to golfers with receipts fi (Continued) COUNTY OF HAWAII STATE OF HAWAII Current Year's Findings and Recommendations June 30, 1999 and [he starter should be positioned at the firs[ hole lzi review receipts, verifying that payment was made. If this is not feasible, the County should consider placing a pennmicnt sign indicating that receipts are required to play. The marshal could then randomly check golfers to ensure that they have a receipt. Collection oj[lre 6uilc(irrg Permil Fees In [he prior year, it was noted that there is a lack of adequate segregation of duties over permit fee receipts at the Euilding Division of the Department of Public Works (Building Division). The same permit clerk can collect both the cash and application form, issue the permit (which is not pre-numbered), and record the transaction in the County's computer system. At the end of the day, the supervisor reconciles the cash and permit applications. Effective internal controls require that the duties of receiving and recording cash transactions be segregated. As a result, permit clerks are able to remove the cash and permit application and issue permits with duplicate or without numbers. The permit clerks could then pocket [he cash receipts and file the application form without informing the supervisor. The applicant would not be concerned as he/she received a valid permit. Furthermore, [hc supervisor would no[ be able to detect the missing cash receipts as only the cash and permit applications, which are both missing, arc reconciled. Permit fees for the fiscal year ended June 30, 1999 amounted to approximately $992,000. Recommendation We again recommend that the County consider segregating the cash collection, permit issuance and recording functions at the [3uilding Division. One permit clerk should collect the cash and another clerk should collect the application and issue the permit. A[ the end of the da}', the cash receipts, permit applications and permits should he reconciled by the supervisor. A[ a minimum. the division should consider using pre-numbered permits and reconcile the cash and applications with the permits issued. The sequential listing of the permit numbers should also be verified. LONG-RANGE STRATEGIC INFORMATION SYSTEMS PLAN In the prior year, we noted that the original Long-Range Strategic Information Systems Plan, developed in 1991, was obsolete due to changes in the County's requirements and priorities, as well as information technology which was not available in 1991. The updated systems plan would serve as a "roadmap" to prioritize projects and allocate resources for County systems. Recommendation We again reconunend that the County update tJrcir Long-Range Strategic Information Systems Plan. 9 (Continued) COUNTY OF HAWAII STATE OF HAWAII Current Year's Findings and Recommendations Junc 30, 1999 NEW GOVF,RNMEN"f REPORTING MODEL Changes in the Government Reporving Mudd After years of study and consideration of [he needs of users of government financial statements, the Governmental Accounting Standards Board (GASB) issued its revolutionary new reporting model in June 1999. The new model dramatically changes the presentation of governments' external financial statements. In the GASB's view, the objective of the new model is to enhance the clarity and usefulness of government financial statements to the citizenry, oversight bodies, investors and creditors. It will substantially affect the County's financial data accumulation and financial statement presentation processes. Some of the key aspects of the changes follow: Manugemem's Discussion and Anu(}'sis (hlD&AJ - A comprehensive MD&A will now be included as required supplementary information. The MD&A will introduce the financial statements by presenting an analysis of the government's financial performance for the year and its financial position at year-end. The MD&A will be in addition to the transmittal letter currently required for Government Finance Officers Association (GFOA) award candidates, such as the County, but we expect that the GFOA will make changes in their requirements so as to avoid any duplication between the hvo documents. Government-{t7de Reporting -The County will be rcquircd to report financial operations and net assets, not only at the fund perspective for governmental activities, but will also have to prepare statements at the government-wide level. This Icvel will distinguish between government and business type activities. All information at the government-wide Ievcl will be reported using the economic resources measurement focus and accrual basis of accounting, as enterprise funds do under the current model. Fiduciary activities will be excluded from the government-wide level of reporting. General government filed assets, including infrastructure, and long temt liabilities of the government will need to be reported with all other governmental assets and liabilities. Statement oJAclivities -Governments will now be rcquircd to use a "net program cost' format for [hc government-wide statements instead of a traditional operating statement. This new format groups revenues and expenses by functional categories (such as public salety, public works, etc.) The purpose of the new statement is to inform readers about the cost of spccif is functions and the extent to which they arc financed with program revenues or general revenues of the government. Governments will have the option of reporting hoth direct and indirect program costs. Depreciation expense will now generally be reflected as a cost in the statement of activities. lrrjrcrstruchrre Reporting - I listorically, the County has not been rcquircd to record inGastrueture assets in its financial statements. Under the new standard, the County must report major general infrastructure assets that were acquired in fiscal years ending after Junc 30, 1980, or that received major renovation, restorations, or improvements during that period. The standard provides several alternatives for determining historical cost of infrastructure assets. Although the standard generally requires depreciation of infrastructure assets, the County may not be rcyuired to depreciate these 10 (Continued) COUNTY OF HAWAII STATE OF HA~VA[[ Current Years Findines and Recommendations June 30, 1999 assets if i[ can dentonstratc that it is preserving iLs infrastructure at approximately (or above) a disclosed condition level established by the County. Func/ Love/ Repor[urg -Pund Icvcl financial statements will still be required and will provide information about [he County's fund types, including fiduciary funds. General capital assets and general long-term liabilities will only be reported a[ the government-wide Icvcl. Pund level reporting will continue to focus on fiscal accountability and reflect the flows and balances of current financial resources. The modified accrual basis of accounting will continue to be used at the fund Icvcl_ except for proprietary and fiduciary funds which would continue reporting based on economic resources and [he accrual method of accounting. A reconciliation between the fund and the government-wide statements will be required on the face of the fund statements. Finally, proprietary fund cash flows statements must be presented using the direct method. /'reren[u(ion ojBudge[urv Lrjormu[ion -The standard requires budgetary statements for [he general fund and certain other governmental funds as required supplementary information. The original adopted budget of [he County as well as the final revised budget must be presented. Actual results on a budgetary basis will need [o be reconciled to the GAAP (generally accepted accounting principles) basis on [he face of the statements. The effective date of [he new pronouncement will require implementation by the County for its year ending June 30, 200'_'. The magnitude of these changes and the time reyuired to prepare for implementation should not be underestimated. We recommend that the County begin to look at its systems and processes to ensure that the required information will be available [o ensure timely implementation. Furthermore, we recommend that the County consider the cost of reyuired changes to its systems and processes to ensure availability of necessary' funds in its upcoming budget. YF,AR 2000 Depurtnrerrtul CunrinFenev P(nn,e The development of the County's Ycar 2000 contingency plans has been informally monitored by the Department of Data Processing. The Department of Data Processing does not have the responsibility nor the capacity to review [he adequacy of the individual departrnen[s' Year 2000 contingency plans. Without clear direction from County's executive Ievcl committee, critical departments may he under the impression that Ihcy arc not primarih' responsible liar the completion of a workable Ycar 2000 contingency plan. As of October 19, 1999, many departments have not documented their Ycar 2000 contingency plans. ~hhe Department of Data Processing has issued a target date of November 19, 1999 lix departments to submit their completed Ycar 2000 cuntingency plans. I I (Continued) COUNTY' OF HAWAII ST:1TE OF HAWAII Current Year Findins and Recommendations Junu 30. 1999 Kecommendation To ensure [ha[ the County is fully preparod for the change over to the new millennium, County management should clarify and reinforce that the departments are responsible for the development and completion of a workable Year 2000 contingency plan for [heir respective departments. In addition, [he County should ensure that all critical departments properly train their key personnel to be able to execute the plan in the event of a Ycar 2000 related failure. Odicnvisc, the plan may be rendered unusable when the need arises. Po.r[ Year 2000 7~estin~ Teum On January I, 2000, the Department of Datu Processing personnel plan to test their s}~stems to ensure that all systems are working as intended. However, i[ is our understanding that the County's other departments do not have a plan to test their systems on January I, 2000. "testing of the County's critical systems before the firs[ working day of the new millennium (January 3, 2000) is necessar~~ to ensure that those systems will work properly during the change over to the new millennium. RecommcnJation The County should consider requiring key personnel t?om selected departments to participate in and/or perform tests of dicir systems on Januap' I, 2000 as deemed necessary. 12 COUNTY OF HAWAII STATE OF HAWAII Status of Prior Year Findincs and Recommendations June 30.1999 PROCUREMENT POLICIES AND PROCF.DURF.S Observation In two instances, the Department of Parks and Recreation did not comply with the County's procurement policies requiring price quotations and dcparUncntal approvals-. These instances occurred because volunteer community croups committed the County to construction services without following [he prescribed County policies and procedures. Recommendation The County should clearly communicate the established procurement policies and procedures to all communiq groups and ensure that only authorized County personnel commit the County to contractual services. Status The Department of Parks and Recreations personnel have clarified the County's procurement policies and procedures with community groups and are in the process of developing a department guidebook for communih croups that will include procurement procedures and permit requirernen[s. We noted no instances of noncompliance For the year ended Junc 30, 1999. Comment is no longer applicable. R?SIC MANAGEMENT PROCESS 41'orkcr.c' C'ontpen.euliorr C'/uinr.c !'roces.c Obscr~ation The Claims Specialist working in the Workers' Compensation Unit of the Division of Industrial Safety is solely respatsible for the negotiation of workers' compensation claims' settlement agreements. There arc no supervisory or third party reviews to verify that [he negotiated settlements arc reasonable relative [o the type and extent of injuries and comparable to industry guidelines. In addition, actuarial studies that pruvide independent verification of the County's workers' compensation liability were not performed. Recommendation ~hhc County should consider the benefit of (I) hiring additional personnel with relevant experience, (2) contracting independent claims adjusters to perform periodic workers' compensation claims reviews or reviews oC setdements over a stipulated monetary threshold, (3) contracting an actuary to perform periodic actuarial valuations, and/or (4) placing responsibility for review and approval of settlements over a stipulated monetary threshold with the County Council. 13 (Continued) COUNTY OF HAWAII STATE OF HAWAII Status of Prior Year Findings and Recommendations June 30. 1999 Status The County has determined [ha[ its internal methodology for computing the workers' compensation liability is adequate for risk management and financial reporting purposes and, accordingly, actuarial studies' that provide independent verification of [he County's workers' compensation liability is not necessary. Refer to Appendix I for [he current ycar finding and recommendation related to superviwry or third party reviews of workers' compensation settlements. Carnpilu(iurr untlAncrltsis ufAcciclerr[ S(u(i.r(ics Observation The County's Division of Industrial Safety does not compile and analyze statistics on the type, frequency, and amount of claims relating to personal injury and property damage. Kecommendation the Division of Industrial Safely should consider compiling statistics on the number and type of accidents, analyzing those statistics and with the assistance of the affected departments, formulate policies and procedures to mitigate these situations. Status Comment is still applicable. Refer to Appendix I for the current ycar finding and rccrnnmendatiun. REVF,NUE GENERATION PROCESS /nc4c+iurr ufl3ui/clirr,~ rrrrnic+ irr [hc As.ccesnren( Na/ua[inn Observation During our review of roal property tax assessment transactions, we noted two instances where the County issued building permits for improvements which were expected to be completed prior to calendar ycar end. However, these improvements were not inspected, assessed and included in the valuation in a timely manner. As a result, the County lost revenues because it was unable to assess and collect taxes for these improvements. The County's Rcal Property "1'ax Division of the Department of Finance (Kcal Pmpeny "fax Division) implemented additional procedures to address the situation. The Real Property Tax Division clerks obtain and scan a listing by permit number, in addition [o listings by date, [o ensure that all permits arc scyucntially listed and accounted for. 14 (Continued) COUNTY OF HAWAII STATE OF HAWAII Status of Prior Year Findings and Recommendations June 30, 1999 Recommendation The Real Property Tax Division should continue to review the listings by permit nwnber to ensure that all building improvements arc accounted tor, inspected, and assessed in a timely manner. S[utus The County has continued [o perform the aforementioned reviews. Comment is no longer applicable. Solh! Waste Receivubler Observation Timely collection of solid waste Qandlill) receivables is a continuing problem mainly due [o the prohibition of cash collections at the landfill sites and the lack of credit extension policies. Because cash payments are not accepted at the landfill site, citizens who dispose of minimal waste who prefer to pay cash on site arc no[ allowed to do so. The Solid Waste Division of Public Works (Solid Waste Division) must send these customers a bill. As a result, the Solid Waste Division's accounts receivable balance consists of a lark number of accounts with small balances. In addition, the Solid Was[c Division extends credit [o all citizens and businesses without performing credit checks. Landfill use is refused when outstanding receivable balances exceed 90 days. Rccommendrtion The County should consider allowing payments to be made at the landlill site and extending credit to users only upon satisfactory credit history reviews. Additionally, the County should consider on-site cash collection capabilities in its plans for the future East Hawaii landfill. Status The Solid Waste Division now allows payments to be made at the landfill sites in the form of checks and credit cards. Comment regarding cash collections is no longer applicable. Refer to Appendix I for the curcent year finding and recommendation related to credit extension policies and collection of solid waste receivables. INTERNAL CONTROLS -CASH COLLECTIONS ('ollectinn of/!ilo Municipal Golf Caunre Green Fees' Observation There is a lack of segregation of duties over the receipt of golf course green and cart tees at the Milo Municipal Golf Course. The cashier performs both the cash collection and starter functions. Recommendation The County should segregate the cash collection and starter function at the I lilo Municipal Golf Course. IS (Continued) COUNTY OF HAWAII STATE OF H.4~VA? Status of Prior Year Findings and Recommendations June 30. 1999 Status Comment is still applicable. Refer to Appendix I for the current year finding and recommendation. Collection ojBui(din~ Divra~ioe Permit Fees Observation There is a lack of segregation of duties over permit fee receipts at [hc Euilding Division of the Department of Public Works ({3uilding Division). The same permit clerk can collect both the cash and building permit application form, issue [he permit (which is not pre-numbered), and record the transaction in the County's computer system. Effective internal controls require that the duties of receiving and recording cash transactions be segregated. As a result, permit clerks are able to remove the cash and permit application and issue permits with duplicate or without numbers. Recommendation The County should segregate the cash collection, permit issuance, and recording functions at the Euilding Division. Pre-numbered applications should also be considered. Status Comment is still applicable. Refer to Appendix I for the current year finding and recommendation. LONG-RANGE STRATEGIC INFORMATION SYSTEMS PLAN Obsen~ation The County's original Long-Range Strategic Information Systems Plan which was developed in 1991 is obsolete and needs to be updated. Recommendation The County should update its Long-Range Strategic Information Systems Plan. Status The Count}' has not updated its bong-Range Strategic Information Systems Plan. Rehr to Appendix I for the current year finding and recommendation. 16 (Continued) COUNTY OF HAWAII STATE OF HAWAII Sams of Prior Year Findings and Recommendations June 30, 1999 YEAR 2(100 County 6f icle Yecrr 2000 EJfirr! Observation The County's Year 2000 compliance efforts were viewed largely as a data systems problem and Icft up to the Data Processing Division of the Department of Finance (Data Processing Division) to resolve. The lack of a county-wide, coordinated Year 2000 effort that extended beyond the Data Processing Division was perhaps the biggest Year 2000 concern for the County. The Data Processing Division has been charged with assisting the other departments and agencies of the County in their Year 2000 efforts, but has not been given the authority to truly manage these efforts. Recommendation The County should establish an executive level committee to coordinate the millennium compliance efforts of the entire Countv. Status The County has established an executive Icvel committee to coordinate the millennium compliance efforts for the entire County. The committee includes representatives from each of the County's essential departments and the Civil Defense Agent}' Administrator has been assigned [o address Ycar 2000 contingent}' planning and preparation for essential community services. Refer to Appendix I for the current year finding and recommendation on the Year 2000 issue relating to contingency plans. Functinrrs Outsourcec! to (hc City arrcl County of Hwrnlu/u Observation The County should improve its monitoring of the City & County of Flonolulu's (City) Ycar 2000 efforts relative to the applications that the City runs on behalf of the County. These applications support the processing of vehicle registration, driver's licenses, real property taxes, and voter registration. Recommendation the County should closely monitor the City's Ycar 2000 remediation efforts relating [o the applications that the City runs of behalf of the County. The County should require the City to provide Ycar 2000 project plans for these applications and obtain objective evidence that the work identified in the plan is being performed and [ha[ target completion dates will be met. 17 (Continued) COUNTY OF HAWAII STATF, OF HAWAII Status of Prior Year Findings and Recommendations June 30, 1999 Status The County has received assurance from the City, based ai Year 2000 readiness questionnaires and conversations with key staff members of the City's Department of InRxmation "I'cchnology, that all computer- based functions outsourced to the County by the City arc Year 2000 compliant. Refer Appendix I for the current year finding and recommendation on the Ycar 2000 issue. 18 +iv Oc Stephen K. Ya mashiro ~\~61.•' Harry A. Ta kahash~ Mayor Dirtcmr sr{o,~.~ S. K. Schulte 'rE'o~~~~ Uryuty c~ouutp of ~abnaii DEPARTMENT OF FINANCE 25 Aupum Street, Room Il8 Hilo, Hawaii 96720-J 752 (tlOtl)961-tl23J Fax (NOB)961-N24N November 12, 1999 Memorandum To: Mr. Harry A. Takahashi Director of Finance From: Bill Gray~,~Purchasing Agent Re: Draft Management Letter Suggested responses per your request: 1. Purchases Under $400 we concur that significant savings in labor and material costs may be achieved through the use of a purchasing card system. The County has been working with the City and County of Honolulu, who as the lead agency, is publishing an RFP for such a system. Participants may include Maui and Kauai Counties and various State agencies. By forming a consortium for this purpose greater savings may be realized through reduced fees and perhaps volume incentive rewards. We anticipate this RFP being advertised before year end and may be able to have a pilot program in place approximately March, 2000. 2. web-Based Electronic Procurement Svstem The County would consider a web-based procurement system provided that we are assured that vendors can provide the same level of after sale support currently enjoyed from local vendors. Prices would have to include all associated shipping and delivery costs. In order to fully reap the benefits of such a system, a new accounting and procurement software package should be in place, allowing departments and agencies the ability to submit electronic requisitions. Memorandum CONFIDENTIAL Date: November 23, 1999 To: Connie Kiriu, Legislative Auditor From: Jay Sasan, Safety Coordinator ~j Re: Preliminary Draft Management Letter, November 5, 1999 As requested the information contained herein addresses the "Risk Management Process: section on pages 4 and 5. It should be pointed out that the KPMG auditor's questions were partially answered in the audit completed the previous year. The Workers' Compensation Specialist in this case essentially has the same views as the previous Workers' Compensation Specialist as does KPMG. The Workers' Compensation Specialist response is attached. There seems to be a genuine difference in understanding between the parties involved as to the nature of the work done by the section. It is my understanding that the County of Hawaii has been following the current procedure in this administration as well as previous ones. Recommendation We agree that the County could benefit by adding qualified personnel to the Workers' Compensation staff. This has been recommended to the Mayor's office but has been denied due to tight fiscal constraints. A combination of minimal additional staff and contracting a third party adjuster has also been recommended to the Mayor's office. Placing responsibility for review and approval of settlements with the County council adds another layer of bureaucracy cost and delays. Concern should be also expressed for losing some of the confidentiality aspects of workers' compensation. Compilation and Analysis of Accident Statistics Additional staffing would enable Workers Compensation to review data submitted by the departments in a more timely manner. With limited staff their work is not done on a regular basis but can be provided to departments on request. Some of the departments do not provided the data required to enable such statistical analysis accurately and timely. Departments have been excused from providing the Safety department with such data due to manpower constraints. The point made by the KPMG auditor has some merit. Administration must see that such data required for making accident statistical analysis are made available to the Safety department on a regular and timely basis. All other information and good things enumerated by the KPMG auditor will follow. With computerization, each department could maintain their own data bank and analysis. This would achieve the results enumerated by KPMG without the delays required to amass Countywide information. In order for information of this nature to be helpful, it has to be accurate and timely. MEMORANDUM TO: Jay Sasan Safety Coordinator County of Hawaii FROM: Lester J. Ishado ~~jj Deputy Corporation CoJrhs~ County of Hawaii Workers' Compensation Unit RE: 11/8/99 Memorandum from Connie Kiriu DATE: November 10, 1999 This memorandum is written in response to the memorandum from Legislative Auditor Connie Kiriu asking for comments to the Risk Management Process portion of the (draft) KPMG management letter. In reference to the Workers' Compensation Claims Process on page 4 of said letter, KPMG notes that "the majority of claims are not subject to supervisory or third party reviews to validate that the negotiated settlements are reasonable..." It appears that KPMG is not referring to day to day decisions (acceptance of claims, payment of medical bills, etc.), but to settlements of Permanent Partial Disability (PPD) benefits, disfigurement, and "wash" of future claims. It should be noted that there are guidelines and formulas in place, and little room to negotiate. For example, PPD benefits are based on a disability rating by a doctor. Before settling PPD, the County will retain an independent medical examiner to establish this rating, e.g. 10% of the whole person, 20% of the lower extremity, etc. The County will pay PPD as follows: _ no. of weeks (set by statute depending on type of injury, e.g. foot- 205 weeks, leg-288 weeks, whole person-312 weeks) X _maximum weekly compensation (set by statute depending on year injury occurred) X -percentage (determined by doctor). Jay Sasan November 10, 1999 Page Two The Department of Labor does allow a residual of 1 % to 5% to be added on to the final percentage figure. Disfigurement compensation is also set by guidelines from the Department of Labor and Industrial Relations at $100.00 per inch of scarring. A settlement of a wash of future workers' compensation benefits is also affected by guidelines ($15,000.00) set by the Department of Labor and Industrial Relations, but may be lower if the case is on appeal and approval is sought from the Labor Appeals Board. KPMG also notes that during "fiscal year ended June 30, 1999, County employees filed 172 workers' compensation claims and the County paid approximately $2,490,000.00 in claims. There may be a misconception among the readers that $2,490,000.00 was paid for the 172 claims. In fact, this is the amount paid for all claims, including those filed in the fiscal year and those filed in prior years. Finally, it should be noted that settlements have to be reviewed by a deputy corporation counsel, have approval recommended by the Safety Coordinator, and be approved by the Mayor of the County of Hawaii. Please forward these comments to Ms. Kiriu after you have had a chance to review them. Thank you. TO Jav Jasan Safety Coordinator FROM: Glen J. Dryer Workers' Compensation Specialist RE: October 23, 1998 KPMF Peat Marwick Management Letter DATE: November 25, 1998 You requested my review of, and comments in response to, [he above-referenced management letter. The observation that my position is solely responsible for negotiation of "Claims Settlement Agreements" is only partially accurate. "Claims" are not ~ se negotiable. In the event a work injury is alleged, 1 determine whether to accept liability or deny liability Should I determine a denial is appropriate, the director of the department of Labor and Industrial Relations will hold a hearing, following which a decision will issue, ordering the claim compensable or non-compensable. However, there are instances where "Settlement Agreements" are negotiated. First, in a denied claim, an agreement may be reached wherein the county agrees to pav a sum of money in exchange for claimant's agreement to withdraw his/her claim Second_ where a claimant suffers an injury which results in a ratable permanent impairment, a settlement agreement may be reached for purpose of establishing claimant's entitlement to permanent partial disability. (PPD). Third, in conjunction with PPD settlements, it is sometimes desirable to negotiate a "complete wash" settlement, wherein the county pays additional sums of money, in exchange for claimant's `waiver" of future rights or claims as a result of the industrial accident in question. The statement that "there are no supervisory or third party reviews to verify that the negotiated settlements are reasonable" is in error. [n fact, I am responsible for all settlements (and negotiations leading thereto) effected by the county in matters concerning workers' compensation. However, the report in question was, in all likelihood, researched and written prior to my date of hire. Therefore, the suggestion of supervisory or third party review of settlements is moot Concerning the suggestion of actuarial studies, the author of the report convolutes two concepts involving workers' compensation claims. As stated above, "Settlements' only apply to limited aspects ofa claim. By far the majority of claims handling involves payment of periodic sums to claimants in the tbrm of wage loss benefits (temporary total disability or TTG), third party providers (meuicai cm c, services, and supplies), and vocational rehabilitation. In pursuit ofa "Risk Management Strategry" for purpose of cost containment in claims management, I suggest it would be foolish to expend money for actuarial studies which rely upon "Industry averages" The industry averages referred to would be primarily based upon np vate industry, which operates in a completely different, "for profit" environment. Such industry averages could only be utilized as benchmarks if the county were in a position to staff and fund the workers' compensation unit in parity with private industry counterparts. With respect to recommendations, Iagree wholeheartedly with No. l; we are in need of~ staff to handle not only claims management, but clerical as well. As to No. periodic claims reviews, as with actuarial studies, would only he useful if necessary statling and funding were available to effect suggestions/recommendations resulting from such reviews. As to reviews of settlements, 1 doubt the county could find an independent reviewer with [he level of knowledge or experience I possess. No. 3 has been addressed above. No. 4 has no practical value whatsoever. Unless one or more members of the County Council is more knowledgeable in Workers' Compensation than I. how could the Council make an informed decision regarding a settlement, unless my advice was sought? In such event, the Council's decision would be based upon (and following) my advice. Therefore, while the result would be the same, an additional, unnecessary, time consuming hurdle would be added. Finally, the statement "the potential savings to the County in the form of a reduction in the number of claims or settlement amounts may outweigh the additional costs of such procedures," is preposterous. Only No 1 would aid in reducing expenditures in claims Nothine proposed would reduce the number of claims filed_ and such a sugeestion reflects the naivete of [he author. Further, as explained above, I am responsible for authorizing settlements, and none of the recommendations would alter the Value of a claim for purposes of settlement. What the author apparently does not realize is that the value of a PPD rating ispre-determined as a master of law. COUNTY OF HAWAII DEPARTMENT OF PUBLIC WORKS 25 AUPUNI STREET, ROOM 202 HILO HI 96720-4245 TELEPHONE: (808) 961-8321 FAX (808) 961-8630 ~n r ~ m MEMORANDUM C I-T ~ n r=1 ~ 1- -I DATE: November 18, 1999 w off, o ~ TO: Connie Kiriu Legislative Auditor FROM: Robert K. Yanabu Chief Engineer RE: Preliminary Draft F' anc' Audit Report for the County of Hawaii Fiscal Year Ended June 30, 1999 Attached are responses from Building Division, regarding collection of Building Permit fees, and responses from Solid Waste Division and Wastewater Division regarding collection of receivables. Solid Waste and Wastewater Divisions will continue to pursue methods to reduce outstanding receivables balances, including collections at the landfills. Additionally, we are sensitive to the tough economic times that the community is currently experiencing in Hawaii and wish to assist businesses until their financial difficulties improve. We want to be good community partners and to that end, as we make every effort to collect from businesses, we are working out payment plans that are amenable to all affected parties when required. ,Ar~e~.y~ ~ FIa Kim ~`.4Y; rrY Stephen K. 1'alnashiro A.Im7nbeaea. NaTar ~ . i, w_ i Brvcc D. Butts \r~r R' ~ Avlrtanr Ad., bu;r. v... a ~nunf~r IIf ~~futtti CI'1'(L DEFENSE AGENCY 920 Vlu4nt Srreex Hllo, iLwHt 90720 (808) ?75-0071 fii (tlOtl) 97i~6160 T0: Chief Bumatay, Fire Department Ken Sowden, Parks 8~ Recreation ~Aajor Chai, Police Department J(ro Sumada, Public Works Tom Brown, Transit Quirino Antonio, Water Supply r+' FROM: Harry Kim, Civil Defense Administrator ~ DATE: Nuverrltler 8. 1999 SUBJECT: Y2K Contingency Plan This is a follow-up to the enclosed correspondence dated April 15, 1rJ~30, regarding contingency plan development. A meeting is being called to revie>,v your department's plan: DATE: December 1, 1989 (Wednesday) TINE: 9 a.m. PLACE: Civil Defense Agency Please bring a copy of your plan to this meeting. Discussion will center mainly on your department's operational plan for the period Der..emhar:31, 1A9A, and January 1, 2000. dy Enclosure c William Davis, Managing Director CD o• „ ~Iliam G. Davis Scephea K. Yamashiro 1p•?• -"•'4.~ p~ Mays. Henry Cho ~ys~~ County of Hawaii 25 Aupuui Sueet Room 2I5 • t)li 0. Haavau 96720-1252 • (808) 96i-8211 Fu (808) 961-6557 KONA: 75-5706 Kualtiui t5dhway, Snire 107 Rnh:-Roux, Hawaii 96740 (808) 729-5226 • Fa: (808) 326-5663 November 12, 1999 TO: All Department and Agency Heads FROM: William G. Davis, Managing Director SUBJECT: Year 2000 Preparations -Contingency Planning /Testing oa January 1 This is an important reminder. Every County department and agency head is responsible for ensuring that Yeaz 2000 contingency plans aze prepazed for their organization to provide for the continuation of critical operations should unforeseen Y2K problems arise at the turn of the century. Also, key personnel should be properly trained to implement the contingrncy plans if called upon to do so. Areas. of concern include computer systems, computer applications, date sensitive/embedded chip devices, outside vendor services, and other critical business or equipmrnt operations. In October, Data Systems Departrnrnt conducted a Y2K Contingrncy Planning Workshop at which instructions and sample contingency plan forms were provided. As announced at the workshop, written contingrncy plans are to be completed for each of your critical computer systems and computer applications ¢y ovember 12. Copies of these plans are to be sent to Data Systetns Department for review. Additional Y2K contingrncy planning advice and assistance is available from Data Systems Department should you desire it. Departments and agrncies should also prepare written contingency plans for other non-computer-related systems and operations as deemed necessary. Such plans should be completed by mid-December and aze to be kept for use within your organization. Those County departments and agencies that rely upon computers to provide c ' 'cal public services should conduct Y2K assurance testing on Saturday, January 1, to determine operational status. Key employees within those organizations should be designated to validate that all such systems and operations are functioning as expected. In particulaz, any system or operation that supports public health, safety, and welfaze; issues licenses, registrations, or permits; performs taxation functions; or handles revenue collection should be tested. Also, a system or operation whose failure would create physical damage, financial loss, substantial lost work time, or legal liabilities for the County should be tested by knowledgeable personnel. Data Systems Depaztment can provide advice on recommended testing for computer systems and computer applications used by your organization. Data Systems Departtnent personnel will be working on Saturday morning, January 1, from 8:00 AM to noon to validate the Y2K readiness of the County's central computer and their Windows NT LAN system. They will also be on hand in the afternoon from 1:00-5:00 PM to provide advice and assistance to department and agency personnel who aze expected to test their systems and operations at that time. Any problems detected should be promptly addressed to ensure that full operational status can be achieved by Monday, January 3, or sooner i frequired- Your organization must be prepared to activate any contingency plans as needed. Thank you for your cooperation. `oJMxr or y~ki 1, William C. Daeis • ~ ~ hLrrnv ar Dvei by Stephen K. Ya mashim 5 3 Mnym I , _ : Henry Cho iii •o~ tw ~ Drp of a Nnnrtgrng DmrGn ~II1ITlf~J II~ ~M~IIMtt 25 Aupuni Strcep Roam 215 Hilo, H, wail 96720-4252 (F05) 961-5211 Pax (5U5) 961-6557 KONA: 75-5706 Kuakini Highway, Suilc (03 Kailu.-Kona, Hawaii 96740 (505)729-5226 Fax (505)726-5667 tD T z ~2C~ O Cn "1 ~ ; T -I(7 cn - - r-n ff~~-~ = r A O J N 3J November 15, 1999 TO: Connie Kiriu Legislative Auditor FROM: William G. Davis-~~ Managing Director RE: Year 2000 Enclosed is a memo, which is self explanatory, that was sent out to all departments November 12, 1999. Also for your information, we will be having a meeting with key departments; Fire, Parks and Recreation, Police, Public Works, Transit and Water Supply, on December 1, 1999. This important meeting will be to review their contingency plans concerning Y2K. If you have any questions on the above, please feel free to call me. ^ •'•"u~ G,A. Rock •'••s Stephen Tamashiro DataSyYenuDirzsor Afuym •N.~'i County of Hawaii DEPARTMENT OF DATA SYSTEMS 25 Aupuni Street, Room 103 Hilo, Hawaii 9G720-4253 (808) 9G1-8207 • Fax (808) 9G1-8453 DATE: November 18, 1999 TO: Connie Kiriu, Legislative Auditor ~ ' , / FROM: G.A. Rock, Data Systems Director J'~ SUBJECT: Response to Preliminary Drafr Management Letter YEAR 2000 We agree with the recommendations in the current year findings regarding the need for County departments and agencies to complete contingency plans, train key personnel to execute the plans, and arrange for Y2K testing of critical systems on January I, 2000. All of these points were addressed in a memo issued by the Managing Director to all County departments and agencies on November 12 (see attached). Data Systems Department will be taking action as needed to implement the recommendations. LONG RANGE STRATEGIC INFORMATION SYSTEMS PLAN Following completion of all required Year 2000 work, the development of a Long-Range Information Systems Plan will be addressed by the Data Systems Department. It is expected this plan will be completed by the end of the current fiscal year. It will then be used to guide to implementation of projects and allocation of resources in future years. The plan will be reviewed and updated periodically to reflect changes in County priorities, and resource availability, and advances in technology. COUNTY OF HAWAII DEPARTMENT OF PARKS & RECREATION MEMORANDUM ~ r ~ m _ O o c~-~ ~ ~n DATE: November 12, 1999 ~ m gym, n S T. TO: Connie Kiriu, Legislative Auditor m ~ y -+m FROM: Julie Tulang, Director~~ r ~ RE: Response to Preliminary Draft Management Letter Fiscal Year Ended June 30, 1999 Internal Control -Cash Collections -Collection of Hilo Municipal Golf Course Green and Cart Fees We have reviewed the Management Letter regarding the internal controls/cash collection at the Golf Course and acknowledge that the observations are correct as stated in the letter. However, we are faced with financial constraints that will not allow for the added staff positions as recommended for cost control. Currently, two starters are assigned to reconcile the cash received daily with the cash register totals and the daily logs; make the deposit with the Treasury Division and submit the report to the Parks and Recreation Administrative Office. Cash receipts are issued for green fees and carts, monthly cards are punched for the appropriate day and a receipt issued if a cart is rented. Cart assignment is via cart number and is recorded on the receipt. The cart number also allows starters to verify the use of the carts. If, for example, a cart is missing from the line-up, starters are able to do an on-site check on who has the cart. The operation and facility is small and therefore very visible from the starters' office. We will implement the second suggestion of posting signs indicating that receipts are required to play, and the marshals will randomly check golfers to ensure that they have a receipt. If you have any questions, please call me at extension 8420. WASTEWATER DIVISION ~ DEPARTMENT OP PURL/C WOR/fS MAILING ADDRESS: 25 AUPUNI STREET, RM. 202 ~r-.>_ 108 RAILROAD AVENUE-HILO, HAWAII 96720 HILO. HAWAII 96720-6252 _ (808) 961-8338 -FAX (808) 961-8644 MEMORANDUM: DATE: NOVEMBER 17, 1999 TO: CONNIE KIRIU, LEGISLATIVE AUDITOR THRU: ROBERT YANABU, CHIEF ENGINEER ` FROM: PETER BOUCHER, WASTEWATER DIVI ION SUBJECT: Response to Preliminary Draft Management Letter - Fiscal Yeaz End June 30, 1999 COllecfion ojReceivables -Wastewater Division We have reviewed the recommendations to monitor and evaluate the results of the collection agency's activities. The collection agency is already providing statistical data, which we will review and confirm. Regarding reconciliation of the 67% recovered to the total of what was referred, this is currently our procedure whenever such payments aze received from the collection agency. DEPARTMENT OF PUBLIC WORKS Solid Waste Division 108 Railroad Avenue, Hilo, H[ 96720 Te1:961-8339 Fas:9G1-8553 MEMORANDUM Date: November 15, 1999 To: Robert Yanabu, DPW Chief Engineer From: ~jB,Leslie Botelho, SWD Division Chief, T/A Subject: Comments for SWD Collection of Receivables The Solid Waste Division uses the Frank Huff Collection Agency to collect delinquent landfill accounts under $1,000. The agency provides a monthly Client Inventory Report showing the status of all delinquent accounts turned over for collection. Also included with the Client Inventory Report are performance statistics indicating month-to-date, year-to- date, and total-to-date collection activity. A status summary of the assigned accounts provides a breakdown by number of accounts, amount assigned, and amount collected by the collection agency. Monthly check payments are issued by the agency for collected accounts less the 27% commission taken by the agency. The Solid Waste Division now accepts payment for landfill fees at both the Hilo and West Hawaii scale houses by personal check or credit cards. The acceptance of cash payments will also be commencing within the fiscal year. The requirement of payment at the time of use by cash, credit card or personal check would help to alleviate the numerous delinquent accounts generated by individuals with poor credit ratings. Credit would then be extended to users only after checking for a satisfactory credit history. cc: Nancy Crawford L6/ms.mem9970 COUNTY OF HAWAII DEPARTMENT OF PUBLIC WORKS 25 AUPUNI STREET, ROOM 202 HILO HI 96720-4245 TELEPHONE: (808) 961-8321 FAX (808) 961-8630 MEMORANDUM November 9, 1999 To: Connie Kiriu, Legislative Auditor Thru: Robert K. Yanabu,-Chief Engineer From: Stanley Takemura, Building Division Subject: Preliminary Draft Management Letter November 5, 1999 Collection of Building Permit Fees -Comments by KPMG Peat Marwick The separation of collection of fees and issuance of permits by the permit clerks while representing an ideal situation would not be practical for the division. In Kona where we have only two clerks if one individual is out to lunch or on leave the remaining clerk would be forced to assume both duties. In Hilo, even with three clerks there are many times when only one clerk may be available to assist a customer. Besides collecting fees and issuing building permits, the permit clerks must also check building plans for completeness, answer general questions about building requirements, answer the phones and forward calls, research permit information requests, provide directions for routing permits, and take inspection requests. The clerks perform all of these functions in order to be able to cover any temporary staffing shortages. There are internal checks and balances which prevent a permit clerk from issuing a duplicate permit number or from issuing a permit without a number. In the former case the clerks independently check the permit sequence to confirm that no duplicate numbers have been issued. As for issuing a permit without a number the area inspector will ask the owner for the permit number when an inspection request is made and a computer check will be done to confirm issuance of that permit. With these checks and balances the need for pre-numbered permits is not required. If the intent is to have a fool proof system of collection then it would be most logical to remove the collection procedure entirely from the Building Division and to transfer this collection function to the Treasury Division. The Treasury Division could then stamp the permit application as paid and the permit clerk could then issue a building permit. We are checking into this option with Treasury. ~~v e• M- .~;F~ Stephen K. Yamashiro Hany A. Takahashi Mayor Drrectar Deputy ~uuutp of ~ataaii DEPARTMENT OF FINANCE 25 Aupuni Street, Room 116 Hilo, Hawaii 96720.4252 (808)961-8274 Fax (808)961-8248 November 9, 1999 To: Harry A. Takahashi, Director of Finance From: Dixie Kaetsu, Controller<~ ~ ~ I P(„_ ~ Re: Auditor's Current Yeaz Fin__"diin"g"s~~an~,~rd~_Recommendations New Government Reporting Model We aze very much awaze of the potential impact of Governmental Accounting Standazds Board (GASB) Statement No. 34 on the County, and during the remainder of this fiscal yeaz will be working on an implementation timetable. Additional information to assist us in our planning will become available in the next few months. An implementation guide for jurisdictions preparing financial statements is due to be issued by the GASB in early 2000. Additionally, the State of Hawaii is planning to host a workshop on this topic with resources from the mainland in February or March of 2000. It should be noted that while the required implementation date of the Statement for the County is the fiscal year ending June 30, 2002, there is a provision that allows us four more yeazs after that date for retroactive reporting of infrastructure assets acquired or significantly reconstructed, or that received significant improvements, in fiscal yeazs ending after lone 30, 1980. As recommended, the County has begun looking at the provisions of this Statement, and will do what is necessary to ensure that the information required to comply will be available when needed. We will also be evaluating the types of changes that must be made to our accounting and inventory systems so that funds for those changes can be budgeted when necessary. SECTION ll -COMPREHENSIVE ANNUAL FINANCIAL REPORT COMPREHENSIVE ANNUAL FINANCIAL REPORT Fiscal Year Ended June 30,1999 ~~,Ll~o9 =r-~~w C J OF H COUNTY OF HAWAII Hilo, Hawaii Stephen K. Yamashiro Mayor William G. Davis Managing Director Prepared by The Department of Finance Harry A. Takahashi Director of Finance COUNTY OF HAWAII Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 1999 Table of Contents INTRODUCTORY SECTION Letter of Transmittal I GFOA Certificate of Achievement 13 Organization Chart 14 List of Elected Officials I S List of Principal Officials 16 FINANCIAL SECTION Independent Auditors' Report 17 Glossary of Certain Terms Used in Financial Statements l9 General Purpose Financial Statements: Combined Balance Sheet -All Fund Types and Account Croups and Discretely Presented Component Unit 22 Combined Statement of Revenues, Expenditures and Changes in Fund Balances -All Governmental Fund Types and Expendable Trust Funds 26 Combined Statement of Revenues, Expenditures, and Changes in Fund Balances -Budget and Actual (Budgetary Basis) -General and Special Revenue Fund Types 28 Combined Statement of Revenues, Expenses and Changes in Retained Earnings -Proprietary Fund Type and Discretely Presented Component Unit 30 Combined Statement of Cash Flows -Proprietary Fund Type and Discretely Presented Component Unit 31 Notes to the Combined Financial Statements 33 Required Supplemental Information -Year 2000 Status 66 FINANCIAL SECTION (Continued) Supplemental Information: General Fund: Comparative Balance Sheets 67 Comparative Statements of Revenues, Expenditures and Changes in Fund Balances 69 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Budgetary Basis) 70 Special Revenue Funds: Combining Balance Sheet 76 Combining Statement of Revenues, Expenditures and Changes in Fund Balances (Deficit) 78 Combining Schedule of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual (Budgetary Basis) 80 Highway Fund - Schedule of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual (Budgetary Basis) 84 Parking Meter Fund - Schedule of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual (Budgetary Basis) 85 Sewer Fund -Schedule of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual (Budgetary Basis) 86 Bikeway Fund - Schedule of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual (Budgetary Basis) 87 Cemetery Fund -Schedule of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual (Budgetary Basis) 88 Vehicle Disposal Fund -Schedule of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual (Budgetary Basis) 89 Solid Waste Fund -Schedule of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual (Budgetary Basis) 90 Golf Course Fund -Schedule of Revenues, Expenditures and Changes in Fund Balance -Budge[ and Actual (Budgetary Basis) 91 Geothermal Relocation Revolving Fund -Schedule of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual (Budgetary Basis) 92 Beautification Fund -Schedule of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual (Budgetary Basis) 93 FINANCIAL SECTION (Continued) Supplemental Information (continued): Debt Service Funds: Combining Balance Sheet 95 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 96 Capital Projects Funds: Combining Balance Sheet 97 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 98 Capital Projects Fund -Schedule of Appropriations, Expenditures and Encumbrances -Budget and Actual (Budgetary Basis) 99 Enterprise Funds: Combining Balance Sheet 107 Combining Statement of Revenues, Expenses and Changes in Retained Earnings (Deficit) 109 Combining Statement of Cash Flows 110 Trust and Agency Funds: Combining Balance Sheet 1 13 Expendable Trust Funds -Combining Statement of Revenues, Expenditures and Changes in Fund Balances 114 Hawaii County Housing Agency -Schedule of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual (Budgetary Basis) 1 l5 Agency Funds -Combining Statement of Changes in Assets and Liabilities 1 16 General Long-Term Debt Account Group: Schedule of General Long-Term Debt 121 Schedule of Debt Service Requirements to Maturity for General Obligation Bonds 122 General Fixed Assets Account Group: Schedule of General Fixed Assets by Source 123 Schedule of Changes in General Fixed Assets by Function 124 Schedule of General Fixed Assets by Function and Activity 125 STATISTICAL SECTION Chart I -General Govemmental Revenues and Expenditures Comparison 127 Table 1 -General Governmental Expenditures by Function 128 Chart 2 -General Govemmental Expenditures by Function 129 Table 2 -General Governmental Revenues by Source ] 30 Chart 3 -General Govemmental Revenues by Source 131 Table 2a -General Govemmental Tax Revenues by Source 132 Table 3 -Property Tax Levies and Collections 133 Table 4 -Assessed and Estimated Actual Value of Taxable Real Property 134 Table 5 -Real Property Assessed Values by Classification and Tax Rates 135 Chan 4 -Assessed Value of Real Property 139 Table 6 -Principal Taxpayers 140 Table 7 -Computation of Legal Debt Margin 141 Table 8 -Ratio of Net Bonded Debt to Assessed Value and Net Bonded Debt Per Capita 142 Table 9 -Ratio of Annual Debt Service Expenditures far General Obligation Bonded Debt to Total General Govemmental Expenditures 143 Table 10 -Demographic Statistics 144 Table ] ] -Property Value, Construction and Bank Deposits 145 Table 12 -Miscellaneous Statistical Data 146 INTRODUCTORY SECTION JM~• 0I 4. O.' Stephen K. Yamashiro Harry A. Takahashi hfayor Ovector S. K. Schulte Depuq ~uuntp of ~aboaii DEPARTMENT OF FINANCE 2G Aupuni Street, Room 118 Hila, Hawaii 9G720-4252 (BOS) 961-8234 • Fax (808)9GI-8248 October 15, 1999 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, for the fiscal year July 1, 1998 to June 30, 1999. 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 aze the responsibility of the County government. We believe the enclosed data aze 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 and account groups of the County. All disclosures necessary to convey the maximum understanding of the County's financial activities have been included. This report presents the financial position of the County of Hawaii at June 30, ] 999 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 Hawaii's organization chart and lists of elected and principal officials. • The Financial Section contains the general purpose financial statements, related notes, the combining and individual fund and account group financial statements and schedules, 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 and account groups of the County of Hawaii, including its component unit, the Department of Water Supply, established by the County Charter as a semi- autonomous body of the County government. This component unit is included in the County's reporting entity because of its financial relationship with the County. -1- The County provides the 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 of Hawaii consists of the island of Hawaii, 4,038 square miles in size. It is twice as lazge 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. Hawaii County has an elected mayor and anine-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, adeep-water port, and Hilo International Airport which is capable of handling futly- 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, Japan and Canada through the Kona lntemational Airport. In recent years, the County's economy has endured growing pains as it evolved from primarily an agricultural based economy to more of atourism-based economy. Since 1990, the County has seen the closing of three sugar plantations, taking some 64,000 acres out of sugar cane production. Over 1,500 sugaz-related jobs were lost as a result of these closures. The movement to a tourist-based economy has encountered its own unique challenges. Nearly one-third of the state's tourists come from Asia, particularly Japan. The economic problems facing Asian nations during the past few years have contributed to declines in eastbound visitor counts. Despite these challenges, there are numerous reasons to be optimistic about the County's economic future. First, Pacific Rim nations appear to be exhibiting signs of economic recovery. Second, the Big Island is receiving direct flights from Japan and the United States mainland. These direct flights have helped mitigate declines in visitor counts. Lastly, diversified agriculture (timber, cut flowers and fresh fruit) is helping to offset the decline of the sugar industry, creating jobs for hundreds of displaced sugar workers. Tourism - 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. There are two active volcanoes and several scenic mountains on the island. Located on the slopes of the mountains are fields of macadamia nuts, orchids, and grassland for cattle. The scenery is attractive and diverse throughout the County, and the coastal waters are clean and clear throughout the yeaz. The County also boasts green, black and white sand beaches. There are an estimated 9,500 hotel rooms in the County, located mainly in Hilo, Kona and South Kohala. Since Kona and South Kohala are the major destination areas, most of the rooms (8,000) are located in these two areas. An important feature of resort projects in the past few years has been the emphasis on quality development as evidenced by a growing number of world-class resorts. The number and frequency of cruise ships stopping on the Big Island has increased substantially. In 1997, the County had a total of t41 port calls from both foreign and domestic ships. In 1998 that number grew to 200, and the forecast for this industry is very positive with strong growth planned. Agriculture - The mile climate in the County is conducive to agricultural production. Agriculture makes a substantial contribution to the County's economy and produces a variety of goods for export as well as for local consumption. Major agricultural products and their annual production value are cattle ranching, $8 million; flowers and nursery products, $35 million; coffee, $16 million; papaya, $14 million; macadamia nuts, $43 million; and vegetable/fruit production, $38 million. For the future, construction of a new sterilization plant in Hilo should boost the fruit production totals by allowing shipment of fruits to the United States mainland. Also, over 20,000 acres of former sugar cane land has been planted with eucalyptus trees for forestry, and when the trees mature and harvesting begins, more jobs will be created. Scientific researc/:/aquaculture -The County has gained a worldwide reputation because of its leadership in research related to volcanology, astronomy, meteorology, and agriculture. Recent interest has focused on ocean research at the National Energy Laboratory ofHawaii, adeep- ocean aquaculture project located in North Kona, and a proposed Pacific Aquacultural Reseazch Center in Hilo. The summit of Mauna Kea, at an elevation of 13,796 feet, is home to 13 of the finest astronomical observatories in the world. Annual operating expenses for the telescopes are over $50 million. Educations! institutions -The University of Hawaii at Hilo, comprised of the College of Arts and Sciences and the College of Agriculture, and the adjoining Hawaii Community College, is located on 250 acres of land in Hilo. Recent developments include plans to boost enrollment from 4,500 in 1997 to 5,000 students by 2007, and to develop aChina-United States Center cooperatively with Taiwanese investors. The University of Hawaii Board of Regents has also approved establishment of a School of Business at the Hilo campus. It is estimated that each off- island student annually contributes between $5,000 and $7,000 to the local economy. -3- Major Initiatives For 1/re Year . During the year, the County focused on recreation, road repairs, ADA, data processing, and other issues affecting the quality of life in the County. Aquatics - In July, 1998, the Synchronized Swimming National Championships were successfully hosted at the new Pahoa Community Swimming Pool. On April 1, 1999, the Kona Community Aquatic Center, with a 50-meter swimming pool, opened in Kailua-Kona. It has averaged in excess of 1,000 patrons a day since it opened. ADA Compliance -The County remains committed to compliance with the Americans with Disabilities Act. In May 1999, the Department of Pazks and Recreation completed a comprehensive ADA program self-evaluation and transition plan. The department is committed to the development and maintenance of policies, programs, and facilities that include and aze accessible to all of the citizenry of the County. The Department of Public Works completed the ADA self-evaluation and transition plan Cor curb cuts. In the process, 669 intersections were surveyed and ranked in order of priority. The County Council approved both the Pazks and Recreation and the Public Works transition plans, along with the funding commitment necessary to implement them. Through the use of federal Community Development Block Grant funds, the County removed architectural bamers at the Hilo Bayfront, the Na'alehu Clubhouse, and Public Safety Building restrooms. Road repairs -The County continues to use its resources as matching funds to obtain federal grants for road and bridge repairs. Kona road improvements costing in excess of $3 million were completed during the year. Under construction at year end are Hilo road improvements ($2.4 million) and Waimea improvements to Mamalahoa Highway from Kamamalu to Lindsey Road ($5 million). All of these are federal aid projects. In addition, in-house County crews resurfaced or paved 24.35 miles on 52 roads around the island during the year. Data Systems - In the November 1998 election, voters aproved an amendment to the County Charter to establish a new department to coordinate data processing activities on a county-wide basis. Effective March 1, 1999, the former Data Processing Division under the Department of Finance became the newly established Department of Data Systems. Creation of the new department should improve coordination between the various County agencies in the area of information processing. Year 2000 -Throughout the year, the County continued actively preparing for the new millenium. In addition to making modifcations to bring computer systems and applications into compliance with the Year 2000, the Civil Defense Agency was selected to coordinate a special -4- project to address Year 2000 contingency planning and preparation related to essential community services that County residents depend on for their basic daily living needs. Web site -The County activated its official Internet web site at www.hawaii-county.com. The site contains a variety of interesting material including tables, maps, photographs, and a calendar of events. Comments from citizens using the site have been very positive. Community-oriented policing -During the year, the addition of nine more officers to the community policing program allowed complete coverage in all eight police districts for the first time. This program is successful in placing officers into the community working with the community to fight crime. For the Future Year 2000 -The County expects to complete all remaining modifications, testing and validation necessary on computer systems and applications by November, 1999, to ensure that the County is ready to enter the new century with all critical systems operational. In addition, the County will work with other essential service providers to keep the public informed about Yeaz 2000 readiness in the community. ADA compliance -The County is in the process ofconducting aself-evaluation of all County facilities. When completed, the evaluation and a transition plan wilt be presented to the County Council for approval and a funding commitment. CASB 34 -The County will be assessing its accounting system and evaluating what changes will be necessary to enable it to comply with Governmental Accounting Standards Board Statement No. 34 by its effective date. A plan and timetable for determining the value of the County's infrastructure assets will be established. Financial Information 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 o£the annual budget are complied with and that expenditures do not exceed budgeted amounts. -5- Activities of the general fund, special revenue funds, and one expendable trust fund are included in the annual appropriated operating budget. Project-length financial plans are adopted for the capita] 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, one expendable trust fund, 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 awazded by the granting agency, encumbrances and unexpended allotments aze 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 reported as reservations of fund balances 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. Genera! Government Functions The following is a summary of operations for the fiscal year ended June 30, 1999, including the general fund, special revenue funds, and debt service fund. Revenues -Revenues in fiscal 1999 totaled $155,805,122, a 2.1 % decrease from the previous year. The amounts of revenues from the various sources and changes from last year follow: Increase Percent of Percent (Decrease) Increase Source Amount of Total From 1998 (Decrease) Taxes and assessments $94,644,808 60.7% ($2,687,783) (2.8%) Licenses and permits 6,951,561 4.5 600,489 9.5 Intergovernmental 35,075,355 22.5 (3,817,239) (9.8) Charges for current services 10,148,324 6.5 1,263,197 14.2 Fines and forfeitures 351,714 0.2 (15,090) (4.]) Interest and penalties 5,545,305 3.6 (335,529) (5.7) Miscellaneous 3,088,055 2.0 1,699,078 122.3 Total $155,805,122 100.0% ($3,292,877) 2.1 -6- Taxes 61 % Licenses 4% Intergovernmental 22% Miscellaneous 2% Interest/penalties 4% Charges for services 7% 1999 Revenues by Source Miscellaneous ~ ~ ~ ' I ' i Interest 8 penalties I i I i ' Fines and forfeitures ii i,,, II Charges for services I ~ Intergovernmental Licenses & permits i I ~ Taxes ° o ~ ~ ~ g ~ ~ ~ p~ p~ ~ N ~ O ~ t~D ~ W ~ S ' ~ 1999 ¦ 1998 ($000) Comparison of Revenues by Source - FY 1998 and 1999 The County's largest single source of revenues, taxes and assessments, showed a modest decrease during the year and contributed 60.7% of the total revenues. Taxes and assessments are a combination of three distinct resources: real property, fuel, and franchise taxes. Real property tax revenues were $2.6 million less than the prior fiscal year, and accounted for the decrease during the year. Assessments are based on 100% of fair market value, and reflect declining property values county-wide. Tax rates remained unchanged from the prior ycar. -7- Charges for services increased ] 4.2% to $10,148,324 due to an increase in the number of sewer accounts as well as the sewer rate increase that took effect the prior year. This was the first full fiscal year at the new higher sewer rates. Miscellaneous revenue was $3,088,055, a 122% increase over the prior year due to a refund of $1.6 million in excess employer contributions from the State of Hawaii Employees' Health Fund. Expenditures -Expenditures for general government purposes in the fiscal year ended June 30, 1999 totaled $156,703,788, a decrease of 1. ] % from the preceding period. The amounts of expenditure by major functions and changes from last year follow: Increase Percent of Percent (Decrease) Increase Function Amount of Total From 1998 (Decrease) Public safety $ 56,035,258 35.8% $ 361,952 0.7% General govenunent 20,797,092 13.3 285,629 1.4 Highways and streets 8,148,027 5.2 1,527,370 23.1 Sanitation 12,286,794 7.8 204,429 1.7 Health, education, welfare 5,309,824 3.4 299,173 6.0 Culture and recreation 12,321,155 7.9 520,904 4.4 Pension and retirement contributions 9,785,465 6.2 (4,258,669) (30.3) Health fund 9,264,393 5.9 (173,316) (I.8) Miscellaneous 3,616,274 2.3 252,036 7.5 Capital outlay 3,657,706 2.3 (1,945,528) (34.7) Debt service 15,481,800 9.9 1,253,637 8.8 Total $156,703,788 100.0% ($1,672,383) 1.1 Capital outlay 2% Miscellaneous 2°/, Debl service 10% Heatth fund 6% Pensions 6° Culture/ Public Safety 36% rec 8% eneral govt. 13% HEW 4% Sanitation 8% Highways & streets 5% 1999 Expenditures by Function -8- Debt service j Capital outlay Misc Health fund ~ - I Pension/retire Culture & recreation ' HEW Sanitation i i I Highways 8 streets i I General govt Public safety 0 0 0 0 0 0 0 °o °o o °o °0 0 0 0 0 0 0 0 N M ~ ~ ~D O 1999 ¦ 1998 I ($000) Comparison of Expenditures by Function - FY 1998 and 1999 The expenditure for highways and streets increased $1.5 million during the year due to the purchase of new buses for the transit agency and equipment for the various road crews. The actuarially-determined contribution to the Employees' Retirement System required during the year was $5.0 million less than the prior year's requirement. The expenditure for capital outlay decreased 34.7% to $3.7 million because of lower expenditures during the year for federally-funded Community Development Block Grant and HOME Program projects. Genera! Fund Balance The unreserved fund balance for the general fund amounted to $12.9 million at June 30, 1999. Of this amount, $11.6 million was designated for various purposes, including $10.1 million that was projected and anticipated as revenue to finance the ensuing fiscal year 2000 operating budget. The balance of $1.3 million was unreserved and undesignated. -9- Enterprise Operations Kulaimano Elder/y Housing Project -The operating revenue of this fund totaled $222,327 during the fiscal year, a decrease of $12,259 from the prior yeaz. Operating expenses were $147,444, down $231,325 from last year. Interest paid on long-term debt exceeded interest earned on investments by $49,994. Net income for this fiscal year was $24,889. Ouii Ekalri Affordable Housing Project -The operating revenue of this fund was $207,476, down from $207,974 in the prior year. After operating expenses of $200,019 and interest income of $502, the net income for the year was $7,959. Component Unit -Department of Water Supply Water sales totaled $20,476,091, an increase of $1 ]0,591 over the prior year. Operating expenses of $22,193,241 are $2,575,058 higher than last yeaz, resulting in an operating loss of $1,717,150. Nonoperating revenues (primarily interest earnings) net ofnonoperating expenses (primarily interest expense) totaled $426,810, resulting in net loss of $1,290,340. Pension Plan All full-time employees of the County participate in the Employees' Retirement System of the State ofHawaii, acost-sharing, multiple-employer defined benefit public employee retirement system. Debt Administration The County issued general obligation bonds to agencies of the federal government on behalf of the component unit in the amount of $404,000 during the year. The County has drawn down on twelve loans from the State Water Pollution Control Revolving Fund to finance wastewater projects in Hilo and Kona. The cash which the County had borrowed at June 30, 1999 (net of repayments) totaled $28,874,026. The total debt outstanding at June 30, ]999 was $156,407,787 (including debt of the enterprise fund and the component unit). Under current State statutes, the County's general obligation bonded debt issues are subject to a legal limitation of 15% of total assessed value of real property. As of June 30, 1999, the County's net general obligation bonded debt of $129,285,123 was well below the legal limit of $1,489,416,417. On September 14, 1999, the County issued $]8,940,000 in general obligation refunding bonds to refund the 1978 Refunding Bonds, and $30 million in general obligation bonds. The interest rates on the two new issues range from 4.25% to 6.00%. By refunding the 1978 Refunding Bonds, $8.7 million in the 1978 Sinking Fund became available to the County to finance operations. -10- Cash Management Cash temporarily idle during the year was invested in demand deposits, certificates of deposit and repurchase agreements. The average yield on investment was 5.21 The County's policy is to minimize credit and market risks while maintaining a competitive yield on its portfolio. Accordingly, with the exception of $411,944 held by bond paying agents and a rental management agent, deposits were either insured by federal depository insurance or collateralized. All collateral on deposits was held for safe keeping with aCounty-designated agent. Risk Management The County maintains insurance coverage for privately owned police vehicles as well as for other purposes. The County is substantially self-insured for its vehicles as well as for all other perils including workers' compensation and general liability. Other Information Independent Audit The Hawaii County Charter requires an annual audit by independent certified public accountants. KPMG LLP was selected by the County Council to perform the audit. Employee Union Contracts County employees are members of seven different bargaining units. Six of the bargaining units have contracts which expired June 30, 1999. Negotiations with these six units are ongoing. One unit has a contract that runs through June 30, 2003, as a result of binding arbitration. Certificate ojAclrievement The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the County of Hawaii for its comprehensive annual financial report for the fiscal year ended June 30, 1998. This was the eleventh 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 comprehensive annual financial report, whose contents conform to program standards. 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 cun•ent 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. -11- Acknowledgments The preparation of this report on a timely basis 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. HARRY A. TA~ASHI Director of Finance _I~_ Certificate of Achievement for Excellence in Financial Aeportin~ Presented to County of Hawaii For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 1998 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. t YMif~, ~ r v President hrtwa /rl ~ A' /V/ lE/xec(u/tive Director -13- County of Hawaii Organization Chart . County Electorate County Council Mayor Prosecuting Attorney County Clerk Office of the M~vor Managing Director Safety Coordinator Departments and agencies Agencies under Departments under under direct supervision administrative supervision commissions and of the Mayor and/or of [he Mayor: administrative supervision Managing Director: of the Mayor: Civil Defense Corporation Counsel OJfrce of Aging Civil Service Finance Police Data Systems Liquor Cartrol Plam»ng Housing & Community Research d Development Development Public Works Water Supply Parks & Recreation (semi-autaromous) Fire Department Mast Transportation -14- County of Hawaii Elected Officials Administrative Officers (Term: 1996-2000) Stephen K. Yamashiro Mayor Jay T. Kimura Prosecuting Attorney County Council (Term: 1998-2000) James Y. Arakaki Chair AI Smith Vice Chair Aazon S.Y. Chung Member Leningrad Elarianoff Member Julie Jacobson Member Bobby Jean Leithead-Todd Member Nancy Pisicchio Member J. Curtis Tyler, III Member Dominic Yagong Member -15- Principal Officials June 30, 1999 County Clerk Al Konishi Legislative Auditor Connie Kiriu Managing Director William G. Davis Deputy Managing Director Henry Cho Corporation Counsel Richard Wurdeman Director of Finance Harry A. Takahashi Planning Director Virginia Goldstein Director of Personnel Michael R. Ben Director of Research and Development Diane Quitiquit Chief of Police Wayne Carvalho Fire Chief Edward Bumatay Deputy Chief Engineer Jiro Sumada Director of Parks and Recreation Juliette Tulang Manager, Department of Water Supply Milton Pavao Civil Defense Administrator Harry Kim Director of Liquor Control Janice A. Pakele Transit Operations Administrator Michael Cochran Executive on Aging William T. Takaba Assistant Administrator, Office of Housing and Community Development Edwin S. Taira Safety Coordinator Jay Sasan -16- FINANCIAL SECTION P O. Box 4150 Honolulu, HI 96812-4150 Independent Auditors' Report To the Chair and Members of the County Council County of Hawaii State of Hawaii: We have audited the accompanying general purpose financial statements of the County of Hawaii, State of Hawaii (County), as of and for the year ended June 30, 1999, as listed in the table of contents under Financial Section. These general purpose financial statements are the responsibility of the County's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards 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 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 opinion. In our opinion, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the County of Hawaii, State of Hawaii, as of June 30, 1999, and the results of its operations and the cash flows of its proprietary fund type and component unit for the year then ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued our report dated October 15, 1999 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 grants. The Year 2000 supplementary information on page 66 is not a required part of the general purpose financial statements, but is supplementary information required by the Governmental Accounting Standards Board, and we did not audit and do not express an opinion on such information. Further, we were unable to apply to the information certain procedures prescribed by professional standards because of the nature of the subject matter underlying the disclosure requirements and because sufficiently specific criteria regarding the matters to be disclosed have no[ been established. In addition, we do not provide _ 17. a mM nL2LP [PMG LLP a l15 Iim~rM IndIi1Y Wrlnm,MP if of [PML inrarneuonai a S+n„ e„rc~erm assurance that the County is or will become Year ?000 compliant, that the County's Year ?000 remcdiation efforts will be successful in whole or in part, or that panics with which the County does business are or will become Year ?000 compliant. Our audit was made for the purpose of forming an opinion on the general purpose financial statements taken as a whole. The combining and individual fund and account group financial statements and schedules listed in the table of contents under supplemental information are presented for purposes of additional analysis and are no[ a required part of the general purpose financial statements of [he County of Hawaii, State of Hawaii. Such information has been subjected to the auditing procedures applied in our audit of the general purpose financial statements and, in our opinion, is fairly stated in all material respects, in relation to the general purpose financial statements taken as a whole. We did not audit the data included in the Introductory and Statistical Sections of the County's comprehensive annual financial report as listed in the table of contents and, accordingly, e~press no opinion thereon. K`P/~(G LLB Honolulu, Hawaii October 15, 1999 _ Ig_ GLOSSARY OF CERTAIN TERMS USED IN FINANCIAL STATEMENTS The following is a glossary of certain terms associated with financial statements: Fund - An independent fiscal and accounting entity with aself-balancing set of accounts recording cash and/or other resources together with all related liabilities, obligations, reserves and equities which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions or limitations. Appropriations -Authorizations granted by a legislative body [o make expenditures and to incur obligations for specific purposes. An appropriation is usually limited in amount and as to [he time when i[ may be expended. Encumbrances -Obligations in the form of purchase orders, contracts or other commitments which are chargeable to an appropriation and for which a part of the appropriation is reserved. Encumbrances cease to exist when the related expenditure is recorded. Unexpended Allotments -Reservations of capital project appropriations that are available to complete such projects in future fiscal periods. Expenditures - Cost of goods delivered or services rendered, whether paid or unpaid, including expenses and capital outlays. Expenditures are distinguished from encumbrances in that expenditures relate to goods delivered or services rendered whereas encumbrances represent commitments or obligations for goods to be delivered or services to be rendered and for which no actual liability has been incurred. Lapses - As applied to appropriations, the term denotes the automatic termination o(an appropriation. Except for continuing or indeterminate appropriations, an appropriation is made for a certain period of time. At the end of this period, any unexpended or unencumbered balance [hereof is returned to fund balance, unless otherwise provided by law. -19- This page intentionally left blank. -20- GENERAL PURPOSE FINANCIAL STATEMENTS -zi - COUNTY OF HAWAII Combined Balance Sheet All Fund Types and Account Groups and Discretely Presented Component Unit June 30, 1999 (With comparative totals for June 30, 1998) Proprietary Governmental Fund Types Fund Type Special Dcbt Capital i'ienccal BeYenue Service Proms Fnte~pnce AcceK and Other DehiK Cash and investments (notes 3 and 16): Cash and cash equivalents $ 7,231,705 $16,429,835 $ 417,424 $11,609,393 $ 263,953 Investments 19,100,398 17,829,599 13,550,000 500,000 Impress and change funds 25,695 2,200 150 Receivables Trade, net of allowance for doubtful accounts 1,683,452 15,837 Real property taxes 10,669,810 Due from other govcmments 2,761,363 16,156 3,367,294 Due from other funds (note 4) 1,765,539 45,024 223,602 Other 220,552 278,432 2,015 2,335 Inventories 2,139,769 Prepaid expenses 1,806 Restricted assets (note 3): Cash and cash equivalents 231,520 208,373 Investments Loans receivable Fixed assets, net of accumulated depreciation where applicable (notes 5, 7 and 16) 1,531,468 Deferred charges Amount available in debt service funds Amount to be provided for retirement of general long-term debt Total assets and other debits $43,914,831 $18,455,099 $18,247,023 $28,983,824 $2,523,922 See accompanying notes to combined financial statements. _22_ Fiduciary Totals - Component Fund Types Account Groups Primary Unit Totals - General Government Department Reporting Entity Trust and Long-Term General (Memorandum of (Memorandum Only) ~ I21alt Fix d Ace tc (Onlvl Water Suooly t ~n 0, 1999 t mi~1998 $8,571,2SI $ S S 44,523,561 S 277,608 $ 44,801,169 S 37,314,876 1,580,472 52,560,469 1,299,237 53,859,706 78,693,956 100 28,145 9,397 37,542 41,537 1,699,289 2,025,920 3,725,209 4,405,972 10,669,810 10,669,810 11,472,887 12,313 6,157,126 6,157,126 4,OS3,023 3,408.694 5,442,859 5,442,859 5,410,714 147,301 650,635 229,071 879,706 812,779 2,139,769 539,474 2,679,243 2,479,461 1,806 3,176 4,982 16,807 1,400,000 1,839,893 77,000 1,916,893 1,830,403 24,081,635 24,081,635 25,283,680 512,025 512,025 304,832,940 306,364,408 146,145,410 452,509,818 438,639,941 4,608,080 4,603,080 5,210,767 17,804,829 17,804,829 17,804,829 19,836,866 174,606,586 174,606,586 174,606,586 176,879,855 $15.120,131 $192,411,415 $304,832.940 $624,489,185 $179,808.033 $804,297,218 $812,383,524 (Continued) -23- COUNT-Y OF HAWAII Combined Balance Sheet All Fund Types and Account Croups and Discretely Presented Component Unit 1une30,1999 (With comparative totals for June 30, 1998) Proprietary Governmental Fund Types Fund Type Special Debt Capital ~'icncral 12evenue Ss:~ice L'iRtssts F.ntcLUltse t i~bilities Fa ~i end Other Credits Liabilities: Warrants payable 5 2,702,483 5 1,398,719 $ 5 783,254 $ 13,177 Accounts payable 1,591,361 930,691 1,200,181 941 Employee costs payable 2,465,326 1,349,571 Due to other funds (note 4) 3,037,382 I, 113,140 7,613 Due to federal government -arbitrage rebate 253,630 Accrued liabilities 8,797 400,135 7,729 Customer advances and deposits Customer deposits payable from restricted assets 25,085 Deferred revenue (note 6) 11,701,056 2,011,690 317,838 403 Bonds payable (notes 9 and 16) Notes payable (note 9) 1,146,411 Other general long-term debt (notes 7, 8, 9, 13, 14 and I b) Assets held for the benefit of improvement districts Other 602,798 170,253 Total liabilities 22,354,026 6,812,608 400,135 2,479,139 1,193,746 Equity and other credits: Investments in general fixed assets Contributed capital (notes 10 and I b) 955,663 Retained earnings (note 12): Reserved 169'117 Unreserved 205,396 Fund balances (notes 9 and 12): Reserved 8,627,195 3,490,071 17,846,888 17,687,634 Unreserved: Designated 11,633,649 3,355,087 4,032,812 Undesignated 1,299,961 4,797,333 4,784,239 Total equity and other credits 21,560,805 11,642,491 17,846,888 26,504,685 1,330,176 Total liabilities, equity and other credits 543,914,831 518,455,099 $18,247,023 $28,983,824 $2,523,922 See accompanying notes to combined financial statements. -24- (Concluded) Fiduciary Totals - Component Fund Types Account Groups Primary Uni[ Totals - General Government Department Reporting Entity Trust and Long-Term General (Mcmorandum of (Memorandum Only) A~encv RClzI Fired Acectc (Onlvl Water Suoyw I ~n 0, 1999 lone 30. 199R S 1,913,575 $ $ $ 6,811,208 $ 351,228 $ 7,162,436 $ 6,622,749 3,624 3,726,798 1,341,151 5,067,949 4,923,328 64,446 3,879,343 3,879,343 1,284,724 5,442,859 5,442,859 5,410,714 253,620 253,620 232,851 1,092,858 1,509,519 1,678,093 3,187,612 3,525,868 84,350 84,350 282,640 366,990 285,237 25,085 9,278,417 9,303,502 8,951,091 14,030,987 14,030,987 15,308,333 114,086,500 114,086,500 !2,300,850 126,387,350 133,183,850 1,146,411 1,146,411 1,159,837 78,324,915 78,324,915 78,324,91 S 76,318,221 4,742,589 4,742,589 4,742,589 6,726,939 773,051 773.051 888,437 9,186,166 192,411,415 234,837,235 25,232,379 260,069,614 263,537,455 304,832,940 304,832,940 304,832,940 294,329,967 955,663 106,061,675 107,017,338 109,241,196 169,117 16,744,496 16,913,613 18,357,744 205,396 31,769,483 31,974,879 26,705,832 3,605,530 51,257,318 51,257,318 57,993,098 615,395 19,636,943 19,636,943 24,372,298 1,713,040 12,594,573 12,594,573 17,845,934 5,933,965 304,832,940 389,651,950 154,575,654 544,227,604 548,846,069 $15,120,131 $192,411,415 $304,832,940 $624,489,185 $179,808,033 $804,297,218 $812,383,524 -25- COUNTY OF HAWAII Combined Statement of Revenues, Expenditures and Changes in Fund Balances All Governmental Fund Types and Expendable Trust Funds For the Fiscal Ycar Ended June 30, 1999 ' (With comparative totals for the fiscal year ended June 30, 1998) Governmental Fund Types Special Debt Capital fiG11L1LL1 R v nn S rVl Revenues: Taxes and assessments 584,791,838 59,852,970 5 5 Licenses and permits 3,708,264 3,243,297 Intergovernmental 34,565,760 509,595 7,981,710 Charges for current services 1,764,116 8,384,208 Fines and forfeitures 351,714 Rents 113,433 Interestand penalties 4,611,786 933,519 6,893 Miscellaneous 3,747,417 227,205 36,001 Total revenues 132,654,328 22,217,275 933,519 8,024,604 Expenditures: Currcnc Generalgovernmcnt 20,470,921 326,171 452,123 Public safety 53,270,672 2,764,586 718,931 Highways and streets 1,789,072 6,358,955 13,351,031 Sanitation 12,286,794 4,354,868 Health, education and welfare 5,306,198 3,626 Cultureandrecreation 11,477,152 844,003 6,163,084 Pension and retirement contributions (note I S) 8,692,236 1,093,229 Health fund 8,389,666 874,727 Miscellaneous 3,031,288 584,986 9.718 Capital outlay 3,657,706 Debt service: Interest and finance charges 16,947 9,318 7,481,465 Principal retirement 31,158 149,593 7,793,319 Total expenditures 116,133,016 25,295,988 15,274,784 25,049,755 Excess(deficiency)ofrevenues over expenditures 16,521,312 (3,078,713) (14,341,265) (17,025,151) Other financing sources (uses): Sale of general fixed assets 53,668 Intergovemmentalloans 1,324,602 Refund to lot owners (211.772) Operating transfers in 3,553,987 8,461,672 15,671,273 2,697,997 Operating transfers out (24,132,945) (2,833,865) (3,418,119) Total other financing sources (uses) (20,525,290) 5,627,807 12,253,IS4 3,810,827 Excess (deficiency) of revenues and other sources over expenditures and other uses (4,003,978) 2,549,094 (2,088,111) (13,214,324) Fund balances at beginning of year 25,455,132 9,093,397 19,934,999 39,719,009 Increase in reserve for invemories 109,651 Fund balances at end of year 521,560.805 511,642,491 517,846,888 526,504,685 See accompanying notes to combined financial statements. -26- Fiduciary Totals Fund Type (Memorandum Only) Expendable TILSI 1999 1.248 $ $94,644,808 $97,332,591 6,951,561 6,351,072 7,058,969 50,116,034 50,277,495 10,148,324 8,885,127 351,714 366,804 113,433 127,367 211,049 5,763,247 6,103,11 S 706,020 3,716,643 2,375,923 7,976,038 171,805,764 171,819,494 2,749 21,251,964 20,521,238 56,754,189 56,647,311 21,499,058 11,173,657 16,641,662 16,549,789 7,859,555 13,169,379 12,826,795 18,484,239 !3,891,511 188,562 9,974,027 14,263,924 9,264,393 9,437,709 3,625,992 3,375,521 3,657,706 5,603,234 7,507,730 7,755,389 7,974,070 6,475,131 S,OS0,866 189,804,409 178,521,209 (74,828) (17,998,645) (6,701,715) 53,668 17,385 1,324,602 1,404,908 (211,772) 30,384,929 27,068,347 (30,384,929) (27,068,347) 1,166,498 1,422,293 (74,828) (16,832,147) (5,279,422) 6,008,793 100,21 I ,330 105,440,847 109,651 49,905 $5,933,965 $83,488,834 $100,211,330 _27_ COUNTY OF HAWAII Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budgct and Actual (Budgetary Basis) General and Special Revenue Fund Types For the Fiscal Year Ended June 30, 1999 General Fund Special Revenue Funds Variance - Variance - Favorable Favorable B'd~nrt AC1W11 (1,Jnfavorablel B'~ p trial (llnfavnrablel Revenues: Taxes and assessments $83,008,500 $84,791,838 $ 1,783,338 $9,834,112 $9,852,970 $18,858 Licenses and permits 3,495,274 3,708,264 212,990 2,954,660 3,243,297 288,637 ]ntergovemmental 34,495,240 34,256,124 (239,116) 529,208 621,800 92,592 Charges for current services 1,874,734 1,764,116 (110,618) 8,062,702 8,384,208 321,506 Fines and forfeitures 639,000 351,714 (287,286) Rents 259,900 113,433 (146,467) Interest and penalties 4,025,000 4,554,045 529,045 Miscellaneous 4,795,635 4,705,542 (90,093) 208,300 227,206 18,906 Total revenues 132,593,283 134,245,076 1,651,793 21,588,982 22,329,481 740,499 Expenditures: CurrenC General govemmcnt 23,067,627 20,045,744 3,021,883 659,240 659,240 Public safety 56,875,155 52,463,671 4,411,484 2,993,617 2,396,999 596,618 Highways and streets 1,289,939 1,285,337 4,602 6,575,348 5,994,493 580,855 Sanitation 14,519,248 12,079,197 2,440,051 Health, education and welfare 5,498,866 5,236,353 259,213 6,000 3,626 2,374 Culture and recreation 11,057,240 10,692,080 365,160 775,224 760,803 14,421 Pension and retirement contributions 8,826,881 8,816,052 10,829 1,500,527 997,323 503,204 Health fund 9,402,688 8,389,666 1,013,022 938,529 874,727 63,802 Miscellaneous 5,247,138 3,006,058 2,241,080 1,671,434 1,091,415 580,019 Capital outlay 3,471,480 3,471,480 Totalexpenditures 124,733,714 113,406,441 11,327,273 29,639,167 24,857,823 4,781,344 Excess (deficiency) of revenues over expenditures 7,859,569 20,838,635 12,979,066 (8,050,185) (2,528,342) 5,521,843 Other financing sources (uses): Operating transfers in 3,553,519 3,553,987 468 8,461,672 8,461,672 Operatingtransfersout (26,250,200) (25,738,391) 511,809 (2,869,980) (2,833,865) 36,115 To[al other financing sources (uses) (22,696,681) (22,184,404) 512,277 5,591,692 5,627,807 36,115 Excess(deficiency) ofrevenucs and other sources over expenditures and other uses (14,837,112) (1,345,769) 13,491,343 (2,458,493) 3,099,465 5,557,958 Unbudgeted self-insurance activities 57,741 57,741 Fund balances at beginning of year 25,455,132 25,455,132 9,093,397 9,093,397 Fundbalancesatendofyear $10,618,020 $24,167,104 $13,549,084 $6,634,904 512,192,862 $5,557,958 See accompanying notes to combined financial statements. _28- Totals (Memorandum Only) Variance - Favorable $yydj~j raj (Unfavorable) $92,842,612 $94,644,808 $ 1,802,196 6,449,934 6,951,561 801,627 35,024,448 34,877,924 (146,524) 9,937,436 10,148,324 210,888 639,000 351,714 (287,286) 259,900 113,433 (146,467) 4,025,000 4,554,045 529,045 5,003,935 4,932,748 (71,187) 154,182,265 156,574,557 2,392,292 23,726,867 20,704,984 3,021,883 59,868,772 54,860,670 5,008,102 7,865,287 7,279,830 585,457 14,519,248 12,079,197 2,440,05! 5,501,566 5,239,979 261,587 11,832,464 11,452,883 379,581 10,327,408 9,813,375 514,033 10,341,217 9,264,393 1,076,824 6,918,572 4,097,473 2,821,099 3,471,480 3,471,480 154,372,881 138,264,264 16, 108,617 (190,616) 18,310,293 18,500,909 12,015,191 12,015,659 468 (29,120,180) (28,572,256) 547,924 (17,104,989) (16,556,597) 548,392 (17,295,605) 1,753,696 19,049,301 57,741 57,741 34,548,529 34,548,529 $17,252,924 $36,359,966 $19,107,042 -29- COUNTY OF HAWAII Combined Statement of Revenues, Expenses and Changes in Retained Earnings Proprietary Fund Type and Discretely Presented Component Unit For the Fiscal Year Ended June 30, 1999 (With comparative totals for the fiscal year ended June 30, 1998) Proprietary Component Fund Type Unit Totals - Depanment Reporting Entity of Water (Memorandum Only) Ente>~ise S>iRR1X 1914 144.$ Operating revenues: Water sales $ 520,476,091 520,476,091 520,365,500 Rental receipts from tenants 288,565 288,565 282,341 Rental subsidy from federal government -HUD 134,012 134,012 153,327 Miscellaneous 7,226 7,226 6,892 Total operating revenues 429,803 20,476,091 20,905,894 20,808,060 Operating expenses: Power and pumping 6,517,366 6,517,366 6,948,033 Utilities 48,831 48,831 51,692 General and administration 144,740 2,759,478 2,904,218 3,063,067 Maintenance and repairs 38,489 2,786,856 2,825,345 2,160,783 Customers'accountingandcollecting 957,104 957,104 850,581 Purification 1,069,934 1,069,934 979,328 Transmission and distribution 836,211 836,21 I 720,979 Source of supply 79,629 79,629 78,313 Lease expense 76,226 76,226 82,207 Depreciation 39,177 7,186,663 7,225,840 5,280,024 Total operating expenses 347,463 22,193,241 22,540,704 20,215,007 Operating income (loss) 82,340 (1,717,150) (1,634,810) 593,053 Nonoperating revenues (expenses): Interest income 30,994 977,067 1,008,061 1,152,727 Other revenue 279,519 279,519 90,891 Interest on long-term debt (80,486) (696,173) (776,659) (810,676) Other expenses (83,927) (83,927) (12,446) Gain (loss) on disposal of fixed assets (49,676) (49,676) 10,472 Total nonoperating revenues (expenses) (49,492) 426,810 377,318 430,968 Net income (loss) 32,848 (1,290,340) (1,257,492) 1,024,021 Add depreciation on contributed utility plant 5,082,408 5,082,408 3,850,390 Increase in retained earnings 32,848 3,792,068 3,824,916 4,874,411 Retained earnings at beginning of year 341,665 44,721,911 45,063,576 40,189,165 Retained earnings at end of year 5374,513 548,513,979 548,888,492 545,063,576 See accompanying notes to combined financial statements. -30- COUNTY OF HAWAII Combined Statement of Cash Flows Proprietary Fund Type and Discretely Presented Component Unit For the Fiscal Year Ended June 30, 1999 (With comparative totals for the fiscal year ended June 30, 1998) Proprietary Component Fund Type Unit Totals - Department Reporting Entity of Water (Memorandum Only) ~-uRR1X 1424 131.8 Cash flows from operating activities: Cash received from customers $ $21,017,817 $21,017,817 $20,750,001 Cash received from tenants 290,351 290,351 287,484 Cash received from federal government -HUD 134,012 134,012 153,327 Cash payments to suppliers for goods and services (307,607) (10,536,974) (10,844,581) (10,720,949) Cash payments to employees for services (4,689,201) (4,689,201) (4,513,418) Net cash provided by operating activities 116,756 5,791,642 5,908,398 5,956,445 Cash Flows from capital and related financing activities: Principal paid on long-term debt (13,426) (888,500) (901,926) (872,394) Proceeds from bond issue 404,000 404,000 118,350 Interest paid on long-term debt (80,486) (680,232) (760,718) (816,010) Proceeds from sale of fixed assets 8,956 8,956 17,272 Acquisition and construction of capital assets (2,179) (8,482,763) (8,484,942) (6,445,261) Capital contributions 1,294,803 1,294,803 1,523,504 Net cash used by capital and related financing activities (96,091) (8,343,736) (8,439,827) (6,474,539) Cash Flows from investing activities: Purchase of investments (1,500,000) (71,380,603) (72,880,603) (83,640,840) Proceeds from sale and maturities of investments 1,500,000 73,042,713 74,542,713 82,900,839 Interest on investments 30,939 1.004,736 1,035,675 1,140,700 Net cash provided by investing activities 30,939 2,666,846 2,697,785 400,699 Net increase (decrease) in cash and cash equivalents 51,604 l 14,752 166,356 (117,395) Cash and cash equivalents at beginning of year 420,872 249,253 670,125 787,520 Cash and cash equivalents at end of year $472,476 S 364,005 $ 836,481 S 670,125 (Continued) -31- COUNTY OF HAWAII Combined Statement of Cash Flows Proprietary Fund Type and Discretely Presented Component Unit For the Fiscal Year Ended June 30, 1999 (With comparative totals for the fiscal year ended June 30, 1998) (Concluded) Proprietary Component Fund Type Unit Totals - Depattment Reporting Entity of Water (Memorandum Only) Fns SuRP1Y 1124 142$ Reconciliation of operating income (loss) to net cash provided by operating activities: Operating income (loss) $ 82,340 ($1,717,150) ($1,634,810) $593,053 Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation 39,177 7,]86,663 7,225,840 5,280,024 Provision for uncollectible accounts 214,963 214,963 114,953 Increase in trade accounts receivable (3,869) (503,664) (507,533) (210,233) (Increase) decrease in other receivables (292) 243,340 243,048 (303) (Increase) decrease in inventory (90,131) (90,131) 52,842 (Increase) decrease in prepaid expenses (8) 11,833 11,825 920 Increase in loans receivable (393,675) (393,675) Increase (decrease)in warrants payable 268 (33,530) (33,262) (315,167) Increase (decrease)in accounts payable 419 526,988 527,407 (34,003) Increase in accrued liabilities 346,005 346,005 471,543 Increase (decrease)in deferred revenue 26 26 (153) Increase (decrease) in customer deposits payable (1,305) (1,305) 2,969 Total adjustments 34,416 7,508,792 7,543,208 5,363,392 Net cash provided by operating activities $116.756 $5,791,642 $5,908,398 $5,956,445 Noncash capital activities: During the fiscal years ended June 30, 1999 and 1998, the Department of Water Supply received infrastructure valued at $1,563,747 and $3,612,602, respectively, as contributions in aid of construction. See accompanying notes to combined financial statements. -32- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1999 The accounting policies of the County of Hawaii (County) conform to generally accepted accounting principles (GAAP) as applicable to local governmental units. The following notes to the combined financial statements are an integral part of the County's Comprehensive Annual Financial Report. 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). No organizations, activities or functions that meet the criteria in GASB Statement No. 14 for inclusion in the reporting entity are excluded from the County's general purpose 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, and 1990. The County's operations are organized by the following functions: general govemment; 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 assumes full responsibility for several major functions usually performed by local govemments, including education, welfare, health and judicial functions. There are no separate city, county or township govemments 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 govemment appoints a voting majority of an organization's governing board and is either able to impose its wilt 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 govemment. A primary govemment 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 govemment if any one of three conditions exist: (1) The primary govemment is legally entitled to or can otherwise access the organization's resources; (2) The primary govemment 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. -33- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30,1999 As required by generally accepted accounting principles as set forth in GASB Statement No. 14, these general purpose financial statements present the County of Hawaii (the primary government) and its component unit, the Department of Water Supply. This component unit is included in the County's reporting entity because of its financial relationship with the County. Discrete/y Presented Component Unit The component unit column in [he combined financial statements includes the financial data of the Department of Water Supply (Department), a semiautonomous 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 16 for required component unit disclosures for the Department. Complete financial statements of the Department can be obtained from the Department of Water Supply, 25 Aupuni Street, Hilo, Hawaii 96720. Fund Accounting The accounts of the County are organized on the basis of funds and account groups, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set ofself-balancing accounts that comprise its assets, liabilities, equity, revenues and expenditures (or expenses). Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain functions or activities. Govemmental resources are allocated to and accounted for in individual Cunds based upon the purposes for which the resources are to be spent and the means by which spending activities are controlled. The various funds are grouped by type in the financial statements. The County has the following fund types and account groups: Governmental Fund Types -Govemmental funds are those through which most governmental functions of the County are financed. The acquisition, use and balances of the County's expendable financial resources and the related liabilities (except those accounted for in proprietary funds) are accounted for through governmental funds. The measurement focus follows the flow of current financial resources concept. The following are the County's governmental fund types: -34- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1999 Genera! Fund -The general fund is the general operating fund of the County. It is used to account for all financial resources except those required to be accounted for in other funds. Specra! Revenue Funds -Special revenue funds are used to account for the proceeds of specific revenue sources (other than expendable trusts or major capital projects) that are legally restricted to expenditures for specified purposes. Debt Service Funds -Debt service funds are used to account for the accumulation of resources for, and the payment of, general long-term debt principal, interest and related costs. Capita! Projects Funds -Capital projects funds are 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. Capital outlay for relatively minor general government assets or for projects that do not need separate project centers to control costs are financed directly from operating funds (general, special revenue and some expendable trust funds). Proprietary Fund Type -The County's proprietary funds and discretely presented component unit are used to account for activities which are similar to those often found in the private sector. The measurement focus follows the flow of economic resources concept. The proprietary funds of the County and its discretely presented component unit have elected to apply all applicable Governmental Accounting Standards Board (GABS) pronouncements, as well as Financial Accounting Standards Board (FASB) pronouncements and Accounting Principles Board opinions issued on or before November 30, 1989, unless those pronouncements or opinions conflict with or contradict GASB pronouncements. The proprietary funds of the County and its discretely presented component unit will not apply FASB Statements and Interpretations issued after November 30, 1989. The following is the County's proprietary fund type: Enterprise Fund -Enterprise funds are used to account for operations (a) that are financed and operated in a manner similar to private business enterprises -where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred and/or net income is appropriate for capital maintenance, public policy, management control, accountability or other purposes. -35- COUNTY OF HAWA]I Notes to the Combined Financial Statements June 30, 1999 Fiduciary Fund Types -Fiduciary funds are used to account for assets held by the County in a trustee capacity or as an agent for individuals, private organizations, other govemmental units and/or other funds. The following are the County's fiduciary fund types: Trus! Funds -Trust funds are used to account for assets held by the County in a trustee capacity for individuals, private organizations, other governments and/or trust funds. This includes expendable trust funds which are accounted for in essentially the same manner as governmental funds. Agency Funds -Agency funds are custodial in nature and are used to receive and disburse funds for an entity/individual which is not part of the County. Agency funds function as a clearing account and do not measure results of operations. Account Groups -Account groups are used to establish accounting control and accountability for the County's general long-term debt and general fixed assets. Account groups are not funds and accordingly, do not reflect available financial resources and related liabilities. The following are the County's account groups: Genera/ Long-Term Deb! Account Group -This account group is established to account for all long-term liabilities that will be financed from govemmental funds. Long-term liabilities of the enterprise funds are accounted for in those funds. General FixedAsselsAccoun! Group -This account group is established to account for all fixed assets of the County, other than those accounted for in the enterprise funds. 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 combined financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. Mndifred Accruai Basis -The modified accrual basis of accounting is followed by the County's govemmental and fiduciary fund types. Under the modified accrual basis of accounting, 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 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 -36- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1999 generally no[ measurable until actually received. Real property [axes levied for the current year and State Revolving Fund loan proceeds are considered available when collected. [n 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 speciFc 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, moneys are virtually unrestricted as to purpose of expenditure and are usually revocable only for failure to comply with prescribed compliance requirements. These resources are reflected as revenues at the time of receipt or earlier if the susceptible to accrual criteria are met. The County reports deferred revenue on its combined balance sheet (see Note 6). Deferred 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 deferred 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 included in the general long-term debt account group and 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. Accrual Basis -The proprietary fund type and the County's discretely presented component unit utilize the accrual basis of accounting. Revenues are recognized when earned and expenses are recognized when the related obligation is incurred. Encumbrances The general, special revenue, capital projects and expendable trust funds follow encumbrance accounting under which purchase orders, contracts and other commitments are recorded as a reserve 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 reported as reservations of fund balances (see Note 12) and do not constitute expenditures or liabilities because the commitments will be honored during the subsequent year. -37- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30,]999 Unexpended Allotments Allotment accounting is employed in the general and capital projects funds to reserve appropriations to complete capital projects that were funded during a given fiscal period. Unexpended allotments represent reserves of capital projects appropriations that are available to complete such projects in future fiscal periods. 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. Investments consist of time certificates of deposit at financial institutions and bank repurchase agreements with original maturities exceeding three months. Included are participating interest-earning investment contracts (repurchase agreements) that have remaining maturities at the time of purchase of one year or less, as well as nonparticipating interest-earning investment contracts (time certificates of deposit and repurchase agreements). Both categories of investments are stated at amortized cost (see Note 3). Real Property Taxes The County's real property taxes are levied 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 and are reported as deferred revenue (see Note 6). 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. Real property tax revenue is recorded when it becomes available. Available means collected within the current period unless the amounts expected [o be collected soon thereafter (within 60 days) are material or are to be used to pay liabilities of the current period. No such amounts are included in real property tax revenues for the fiscal year ended June 30, 1999. Inventories Inventories consist of materials and supplies and are reported as expenditures a[ 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. -38- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1999 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, 1999 of $516,164 are reflected as a reserve of general fund balance (See Note 12). Fixed Assets Fixed assets acquired for general govemmental purposes are recorded as expenditures in the fund financing the purchase and are capitalized at cost in the general fixed assets account group. Gifts or contributions of fixed assets are recorded at their estimated fair market value on the date contributed. No depreciation has been provided for general fixed assets. Fixed assets consisting of certain improvements (other than buildings), including roads, bridges, curbs and gutters, streets and sidewalks, drainage systems and lighting systems, have not been capitalized. Such assets normally are immovable and of value only to the County; therefore, the purpose of stewardship for capital expenditures is satisfied without recording these assets. Depreciation is recorded in one enterprise fund, the Kulaimano Elderly Housing Project. It is computed using the straight-line method over the estimated useful lives of the assets: Buildings 50 years Furnishings and equipment 5 to 10 years Ground and site improvements 20 to 50 years Employee Costs Payable At June 30, 1999, retroactive pay and lump sum salary supplements due to County employees as a result of collective bargaining settlements with two unions approximated $3.6 million, exclusive of payroll taxes and fringe benefits. This amount, along with related fringe benefits, is accrued in the appropriate funds as Employee Costs Payable. Payments to employees were made in August 1999. Long-term Obligations The County reports long-term debt of governmental funds at face value in the general long- term debt account group. Certain other govemmental fund obligations not expected to be financed with current available resources are also reported in the general long-term debt account group. Long-term debt and other obligations financed by the enterprise funds arc reported as liabilities in the funds. -39- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1999 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. ]n 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. The amounts expected to be liquidated with expendable available resources are accrued in the appropriate funds and the amounts payable from future resources are recorded in the general long-term debt account group along with the estimated liability for FICA taxes and employers' retirement contributions on those amounts. All accumulated unpaid vacation and compensatory time off at June 30, 1999 are expected to be liquidated with future expendable resources. Sick leave accumulates without limit. Sick leave can be taken only in the event of illness and is not convertible [o pay upon termination of employment. Accumulated sick leave at June 30, 1999 totaled $42,438,289 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 7). Capital leases are recorded as fixed 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 is based upon an actuarial computation and includes the normal cost plus the level annual payment required to amortize the unfunded actuarial accrued liability over a remaining period of nineteen years from July 1, 1997. The County's policy is to fund its actuarially determined required contribution annually. Use of Estimates The preparation of the combined financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets -40- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1999 and other debits and liabilities and other credits, as well as disclosure of contingent assets and liabilities at the date of the combined 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. Total Columns Included on the combined financial statements are total columns, marked "memorandum only;' that are presented only for informational purposes. Adjustments to eliminate interfund transactions have not been recorded in arriving at such amounts and the totals are not intended to fairly present the financial position or results of operations of the County taken as a whole. Additionally, the 1998 totals presented in the total columns are intended to provide a summarized comparison with comparable 1999 amounts and are not intended to present all information necessary for a fair presentation of financial position and results of operations in accordance with generally accepted accounting principles. Certain 1998 amounts have been reclassified to conform to classifications adopted in 1999. 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, special revenue funds, and one expendable trust fund (the Hawaii County Housing Agency), and the means of financing them. Aproject-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. While budget information is detailed to the object code level, the legal level of budgetary control is -41- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1999 the department level because the Mayor can transfer funds from any unencumbered appropriation to another within a department or agency without Council approval. During the year, the budget may be amended by action of the 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 1998-99 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 $4.2 million in the general fund and $631,000 in the special revenue funds. • Appropriations for the operating budget ]apse 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, capital projects fund, and one expendable trust fund ([he Hawaii County Housing Agency). 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 Combined Statement of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual (Budgetary Basis) -General and Special Revenue Fund Types presents comparisons 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 combined 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 from a GAAP basis to a budgetary basis at June 30, 1999: -42- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1999 General Special Revenue Fund Funds Ending fund balance -GAAP basis $21,560,805 $ 11,642,491 Encumbrance adjustments: Beginning encumbrances and unexpended allotments 6, 193,041 2,685,970 Ending encumbrances and unexpended allotments (5,942,392) (3,490,071) Ending accrued employee costs payable 2,465,32G 1,349,571 Ending accounts payable in excess of the reserve for encumbrances 5,101 Increase in reserve for inventory oC materials and supplies (109,651) Increase in impress and change funds (25) (200) Ending fund balance -Non-GAAP budgetary basis $24,167,104 $12,192,8G2 Deficit Fund Balance At June 30, 1999, the Golf Course Fund, a special revenue fund, had an unreserved- undesignated fund deficit of $69,923. It is anticipated that the County will continue to provide operating subsidies to the Golf Course Fund to finance operations. 3. CASH AND INVESTMENTS Bank time certificates of deposit (TCDs) and repurchase agreements (repos) with original maturities of three months or less are considered cash and cash equivalents for purposes of balance sheet classification and the statement of cash flows, while TCDs and repos with original maturities exceeding three months are considered investments. However, for purposes of the disclosures required by GASB Statement No. 3, all bank TCDs are considered deposits and all repos are considered investments. Cash and cash equivalents of $46,391,599 and investments of $52,560,469 are included in the accompanying combined balance sheet at June 30, 1999. The following table summarizes cash and cash equivalents and investments according to balance sheet captions, and indicates how these amounts are distributed between deposits and investments for GASB Statement No. 3 disclosure purposes. -43- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30,1999 GASB Statement No. 3 Balance sheet caption: Total Deposits Investments Cash and cash equivalents 544,5?3,561 S 13,773,561 530,750,000 Restncted assets: Cash and cash equivalents 1,539,5')3 439,593 1,400,000 Impress and change funds ?5,145 Total cash and cash equivalents 46,391,599 Im~estments 5?,560,469 13,455,796 39,101,673 Total cash, cash equivalents and investments 95,952,065 Less tmprest and change funds (25,145) Classifications per GASB Statement No. 3 596,923,923 S?7,672,250 571,251,673 The County maintains a cash and investment pool that is used by the general fund, all special revenue funds, one capital projects fund, and two agency funds -state weight tax and payroll clearance. The following summarizes this pool at June 30, 1999: General fund -actual $27,524,645 Payroll clearance fund -overdraft (1,192,542) General fund - as reported 26,332,]03 Special revenue funds 16,429,835 Capital projects funds 25,159,393 Trust and agency fund -state weight tax 536,297 Total pooled cash and investments $68,457,628 The cash overdraft in the payroll clearance fund is reported as a liability due to the general fund, and as a receivable from the payroll clearance fund by [he general fund. (See Note 4.) Interest earned is credited to the general fund unless otherwise designated by statute. Deposits At June 30, 1999, [he carrying amount of the County's deposits was $27,672,250 (including $439,893 reported in restricted assets) and the bank balance was $34,9] 7,776. Of the bank balance, $900,000 was covered by federal depository insurance; $33,605,832 was covered by collateral held by the County's agent in the County's name in accordance with State statutes; and $392,885 held by bond paying agents and $19,059 held by a management agent were uncollaterali2ed. Investments The Hawaii Revised Statutes authorize the County [o invest in obligations of the U.S. Treasury, agencies and instrumentalities, time certificates of deposit, bank repurchase -44- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1999 agreements and bonds of any improvement district of any county of the State, provided the investments are due to mature not more than three years from the date of investment. Investments are classified into three categories of credit risk: (l) insured or registered, or securities held by the County or its agent in the County's name; or (2) uninsured and unregistered, with securities held by the coun[erparty's trust department or agent in the County's name; or (3) uninsured and unregistered, with securities held by the counterparty in the County's name, or by the counterparty's trust department or agent but not in the County's name. At June 30, 1999, the investment balances held for the County at banks were as follows: Reported Fair Amount Value Category I: Bank repurchase agreements $62,549,660 $62,549,660 1978 Sinking Fund repurchase agreements 8,702,013 8,702,013 Total investments $71,251,673 $71,251,673 The 1978 Sinking Fund was established to service principal and interest payments of certain public improvement bonds of the County as maturities become due. The funds in the 1978 Sinking Fund are invested in three-year repurchase agreements with certain regulated financial institutions and are collateralized by U.S. Treasury notes with a fair value of approximately $10,026,600 at June 30, 1999. A repurchase agreement is an agreement in which a governmental entity transfers cash to abroker-dealer or financial institution; the broker-dealer or the financial institution transfers securities to the entity and promises to repay the cash plus interest in exchange for the same securities. Restricted Cash Cash and cash equivalents classified as restricted assets amounted to $1,839,893 at June 30, 1999 consist of [he following: The County deposited its share of the cost of the Alenaio Stream Flood Control Project into an escrow account which amounted to $231,520 at June 30, 1999. The Atnty Corps of Engineers is authorized to draw on these funds as needed during the course oCthe construction project. Tenant security deposits received by [he County for the Kulaimano Elderly Housing Project and the Ouli Ekahi Affordable Housing Project are recorded as a restricted asset. Such funds amounted to $8,907 and $16,730, respectively, at June 30, 1999. - 45 - COUNTY OF HAWAII Notes to the Combined Financial Statements June 30,1999 Restricted amounts set aside by the Kulaimano Elderly Housing Project under its loan agreement with the Farmers Home Administration totaled $169,117 at June 30, 1999. 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 [o an agreement with the developer of the project. This restricted reserve amounted to $13,619 at June 30, 1999. The Improvement District No. 17 Fund has restricted $1,400,000 as a bond reserve at June 30, 1999 to comply with the requirements of its Kaloko Subdivision bond issuance. 4. INTERFUND RECEIVABLES AND PAYABLES Interfund receivables and payables consist of the following at June 30, 1999: Due from Due to Other Funds Other Funds General fund $1,765,539 $3,037,382 Special revenue funds: Highway fund 35,875 676,778 Parking meter fund 28 Sewer fund 152 142,306 Vehicle disposal fund 200 3,259 Solid waste fund 8,797 242,189 Golf course fund 48,580 Total special revenue funds 45,024 1,113,140 Capital projects funds: Capital projects fund 223,602 7,613 Trust and agency funds: Hawaii county housing agency 588 90,918 Performance and refundable deposit fund 638 Payroll clearance fund 3,393,496 1,193,168 Lapsed warrants fund 14,610 Totaltrustand agency funds 3,408,694 1,284,724 Total $5,442,859 $5,442.859 -46- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1999 5. FIXED ASSETS A summary of changes in the general fixed assets account group follows: Balance Balance July 1 June 30, 1998 Additions Retirements 1999 Land $ 16,157,621 $ 27,800 $ 1,878 $ 16,183,543 Buildings and structures 209,240,082 628,085 155,838 209,7(2,329 Machinery and equipment 48,690,313 3,152,612 1,925,303 49,917,622 Construction in progress 20,241,951 8,792,776 15,281 29,019,446 Total $294,329,967 $12,601,273 $2,098,300 $304,832.940 The above summary includes fixed assets of the Hawaii County Housing Agency, an expendable trust fund, in the amount of $4,774,112. The following summarizes the enterprise funds' fixed assets at June 30, 1999: Land $ 753,877 Buildings 1,136,008 Ground and site improvements 261,000 Furnishings and equipment 86,170 Less: accumulated depreciation 7( 05,587) Net fixed assets $1.531,468 6. DEFERRED REVENUE Deferred revenue at June 30, 1999 consists of the following: -47- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1999 Special Capital General Revenue Projects Enterprise Fund Funds Funds Funds Total Real property [axes $10,887,608 $ $ $ $10,887,608 Liquor control revenue 157,010 157,010 Sewer revenue 793,717 793,717 Solid waste revenue 1,015,973 1,015,973 Intergovernmental 656,438 202,000 317,838 1,176,276 Unearned rental income 403 403 Total $11,701,OS6 $2,011,690 $317,838 $403 $14,030,987 7. LEASES The County leases machinery and equipment under noncancellable leases expiring at various dates through November 2006 which meet the criteria for capitalization. These capital leases are financed from general fund and special revenue fund resources. The estimated value of the leased machinery and equipment at the inception of the capital leases, amounting to $469,210, and the related present value of the remaining obligations under the capital leases amounting to $369,177 at June 30, 1999 are included in the general fixed assets and general long-term debt account groups, respectively. The County also leases land, office facilities and other equipment under noncancellable operating leases expiring through July 2020. Expenditures for such operating leases were $444,147 for the fiscal year ended June 30, 1999. The future minimum obligations under capital and operating leases at June 30, 1999 are as follows: -as- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1999 Capital Operating Leases Leases Year Ending June 30: 2000 $63,649 $ 425,378 2001 63,023 408,020 2002 62,352 312,062 2003 61,633 13,681 2004 60,863 361 Thereafter 148,541 5,769 Total minimum lease payments 460,061 $1,165,271 Less amount representing interest 9( 0,884) Obligations under capital leases $369,177 8. SOLD WASTE LANDFILL CLOSURE AND POSTCLOSURE CARE COSTS Hi/o Landfi/! The County owns and operates a landfill located 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 [he closure and postclosure care costs in each operating period. The liability for these costs is included in the general long-term debt account group. The amount recognized each year is based on the landfill capacity used as of the balance sheet date. At June 30, 1999, the County recognized a liability of $12,930,000, based on the use of 93% of the estimated capacity of the landfill, During the fiscal year ended June 30, 1999, $89,805 was spent on closure of the landfill. The remaining $994,443 in estimated cost of closure and postclosure care will be recognized as the remaining estimated capacity is used. These amounts are based on what it would cost to perform the required closure and postclosure care in 1999. Actual costs at that time may be higher due to inflation, changes in technology, or changes in regulations. The County's permit to operate the landfill expired October 9, 1998. The County has filed for an extension which is pending approval by the state. 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. The County expects the extension to be granted. Kealake/re 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 -49- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, t999 management. The estimated cost of closure and postclosure is $15,250,000, based on what it would cost to perform the required closure and postclosure care in 1999. Actual costs may be higher due to inflation, changes in technology, or changes in regulations. Through June 30, 1999, $6,132,000 was spent on closure and postclosure care of the landfill. The remaining estimated liability of $9,118,000 is included in the general long-term debt account group. During the year ended June 30, 1999, a total of $120,728 was spent on this landfill. Of this amount, $390 was for gas monitoring and training and $120,338 was for the management of the subterranean tire. 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 Wes[ Hawaii. The present contract calls for County employees to perform the daily operations of the landfill, and for the private company to retain the overall management as well as perform all construction work on the landfill cells. Under the terms of the contract, the County has no responsibility for remediation, closure or postclosure care. Accordingly, no liability for this landfill is included in the County's combined financial statements. Financ/a/Assurance For fiscal year 1999, the County has provided for financial resources that will be available to provide Cor closure, postclosure care and remediation or containment of environmental hazards at the above landfills. The Environmental Protection Agency's financial assurance rules include a local govemment financial test consisting of a financial component, a public notice component, and a recordkeeping component. Local goverments 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. 9. 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 both primary govemment and component unit activities (see Note 16). The following is a summary of general obligation bond transactions reported in the general long-term debt account group for the County for the fiscal year ended June 30, 1999: Bonds payable at July I, 1998 $120,398,500 Bonds retired (6,312,000) Bonds payable at June 30, 1999 $1 ]4,086,500 -50- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1999 General obligation bonds payable reported in the general long-term debt account group at June 30, 1999 are comprised of the following individual issues: Public improvement and/or refunding bonds: 1977 Series A at 5.0%, due through 2012 $ 293,000 1978 Refunding at 6.35% to 6.5%, due through 2007 18,355,000 1989 Refunding at 6.65% to 6.95%, due through 2004 1,800,000 1993 Refunding & PI at 4.8% to 5.6%, due through 2013 60,255,000 1996 Series A at 5.5%, due through 2016 28,925,000 1996 Series B at 4.5% through 2016 709,000 1997 Series A at 4.875% through 2017 3,749,500 Total general government $114,086,500 Annual debt service requirements to maturity for the above general obligation bonds, including interest payments of $50,676,475, are as follows: Fiscal year ending June 30: 2000 $ 12,822,692 2001 12,787,420 2002 12,760,378 2003 12,725,707 2004 12,254,733 Thereafter 101,412,045 Total $164,762,975 Bonds Authorized and Unissued The County Council has authorized the issuance of $30 million in general obligation bonds to finance specified capital improvement projects. In addition, the County Council has authorized the issuance of general obligation refunding bonds in an amount sufficient to refund the outstanding 1978 Refunding Bond principal amount of $18,355,000. At June 30, 1999, neither of these authorized bonds were issued. Subsequent Event On September 14, 1999, the County issued $30 million in general obligation bonds (1999 Series A) and $18,940,000 in general obligation refunding bonds (1999 Series B). The interest rates on the 1999 Series A range from 4.375% to 6.000%, and on the 1999 Series B from 4.250% to 4.875%. By refunding the 1978 Refunding Bonds with the 1999 Series B, $8.7 million in the 1978 Sinking Fund became available to the County to fund operations. -51- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1999 Refunded Bonds The County issued Public Improvement Refunding Bonds in 1993. The proceeds from the series were irrevocably deposited in a refunding trust. The trust was set up to retire certain public improvement bonds of the County as maturities become due. It is anticipated that the amount deposited with the refunding trustee, together with interest earnings thereon, will be sufficient to meet all principal and interest payments on the general obligation bonds defeased by the issue as such payments become due. The balance in the trust at June 30, 1999, consisting of assets, investments (at fair value) and cash, was $29,836,094. The assets of this trust account and [he liability for the defeased bonds are not included in the County's financial statements. At June 30, 1999, $29,170,000 of outstanding general obligation bonds were considered defeased. 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 fourteen projects approved for funding with these loans. The schedule below shows the County's SRF transactions for the fiscal year ended June 30, 1999: Loans Approved Loan Balance Loan Balance Authorized Amount July 1, 1998 Additions Retirements June 30, 1999 Hilo WWTP $12,724,3] 1 $10,227,385 $ ($570,347) $ 9,657,038 Waiakea Mill 1,300,000 1,097,320 (56,620) 1,040,700 Waiakea Hslo[s 459,321 370,693 (20,672) 350,021 Waiakea Hslots II 5,024,266 AinakoA&B 2,374,000 1,924,630 (99,452) 1,825,178 Kalanianaole 1,499,944 1,401,728 (61,909) 1,339,819 Alii Drive A&B 3,210,243 2,517,648 (127,034) 2,390,614 Alii Drive C&D 3,780,000 3,217,478 238,484 (161,221) 3,294,741 Alii Drive E&F 2,300,000 1,396,413 398,165 (71,074) 1,723,504 Waiaha Bay 3,697,893 3,032,979 129,904 (140,]48) 3,022,735 Kealakehe 1,300,071 1,095,322 (56,517) 1,038,805 Holualoa Bay 3,080,000 2,749,147 173,890 (116,325) 2,806,712 PaukaaCCS 2,143,448 384,159 384,]59 Disappear. Sands 2.000,000 $44,893,497 $29,030,743 $1,324,602 $1,481,319 $28,874,026 -52- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1999 The loans bear interest at 2.06% to 3.02%, exclusive of a 1.00% loan fee, and require payments through fiscal year 2019. Debt service to maturity, including interest and loan fees of $9,495,763, is given below for the disbursements to date on these projects. Fiscal year ending June 30: 2000 $ 2,492,203 2001 2,492,046 2002 2,491,884 2003 2,491,719 2004 2,491,549 Thereafter 25,910,388 Total $38,369,789 Other General Long-term Debt The following is a summary of other general long-term debt transactions for the fiscal year ended June 30, 1999: Balance Deductions Balance July I, 1998 Additions & Payments June 30, 1999 Compensated absences $18,503,889 $ ($1,358,705) $17,145,184 Claims and judgments (see Note 14) 8,337,661 5,122,858 (3,571,991) 9,888,528 Capital lease obligations (see Note 7) 549,928 (180,751) 369,177 Landfill closure costs (see Note 8) 19,896.000 2,362,533 210 533 22,048,000 Total $47,287,478 $7,485,391 $5,321980 $49,450.889 Fund Balances -Debt Service Funds The fund balance in the debt service funds at June 30, 1999 includes $17,804,829 which is available for principal payments on general obligation bonds and $42,059 which is set aside for the payment of interest on the bonds. The amount available for principal payments also appears in the general long-term debt account group as "Amount Available in Debt Service Funds." Enterprise Fund Notes Payable The Kulaimano Elderly Housing Project is indebted to the U.S. Department of Agriculture, Farmers Home Administration on two notes payable with balances aggregating $1,146,41 I at June 30, 1999. The notes, which mature in September 2029, are repayable in monthly -53- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1999 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 part of the units within the Project. Special Assessment Bonds The County has outstanding special assessment bonds for one improvement district. In 1991, the County issued $14 million of special assessment bonds Tor Improvement District No. 17, Kaloko Subdivision, to finance a roadway and water system. The bonds mature annually through 2011 and bear interest at 9.S%. Total special assessment bonds payable were $11,800,000 at June 30, 1999. These are not general obligation bonds and the County is not obligated in any manner for the repayment of these bonds. 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. Accordingly, these bonds are not reflected on the County's financial statements. The following is a summary of special assessment bond transactions for Improvement District No. 17, Kaloko Subdivision, for the fiscal year ended June 30, 1999: Balance at July 1, 1998 $12,255,000 Deductions -maturities (455,000) Balance at June 30, 1999 $11,800,000 The following is a summary of the annual maturities including interest of $8,680,1 SO for special assessment bonds: Year ending June 30: 2000 $ 1,592,487 2001 1,593,088 2002 1,588,938 2003 1,5 89,563 2004 1,584,488 Thereafter 12, S 31,5 86 Total $20,480,1 SO -54- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1999 10. CONTRIBUTED CAPITAL Contributed capital of $4l 1,296 at June 30, 1999 in the Kulaimano Elderly Housing Project represents contributions from private and government sources at the inception of the project. Contributed capital of $544,367 in the Ouli Ekahi Affordable Housing Project at June 30, 1999 represents contributions received from developers. There were no changes in contributed capital in either fund during the year. 11. SEGMENT INFORMATION -ENTERPRISE FUNDS The County maintains two enterprise funds. The Kulaimano Elderly Housing Project (KEHP) provides low-income rental housing for senior citizens. The Ouli Ekahi Affordable Housing Project (OEAHP) provides affordable single-family rental housing to qualifying tenants. Selected segment information for the fiscal year ended June 30, 1999 is as follows: KEHP OEAHP Total Operating revenues $222,327 $207,476 $429,803 Depreciation 39,177 39,177 Operating income 74,883 7,457 82,340 Net income 24,889 7,959 32,848 Net working capital 725,054 22,667 747,721 Fixed assets, net 1,027,591 503,877 1,531,468 Total assets 1,958,942 564,980 2,523,922 Long-term notes payable 1,146,411 1,146,411 Total equity 789,118 541,058 1,330,176 12. FUND EQUITY Designated Fund Balance A designation of unreserved fund balance indicates tentative plans for the use of current financial resources in the future. Designated fund balances at June 30, 1999 consist of the following: -55- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1999 General fund: Imprest and change funds $ 25,695 Drug enforcement 32,354 Special duty police program 275,202 Future year expenditures 10,100,000 Claims and judgments 1,200,398 Total general fund $11,633,649 Special revenue funds: Equipment replacement 1,929,172 Imprest fund 200 Future year expenditures 1,424,715 Future project 1,000 Total special revenue funds 3,355,087 Capital Projects Funds: Road repairs 2,550,384 Development impact 543,169 SRF (wastewater) projects 939,259 Total capital projects funds 4,032,812 Trust and Agency Funds: Imprest fund 100 Affordable housing 101,794 Future year expenditures 513,501 Total trust and agency funds 615,395 Total designated fund balance $19,636,943 Reserved Fund Balance Reserved fund balance represents that portion of fund balance that is either not available for appropriation or is legally segregated for a specific future use. Fund balances reserved at June 30, 1999 are composed of the following: -56- COUNTY OF HAWAII Notes to the Combined Financial Statements June 3Q 1999 Special Debt Capital Trust and General Revenue Service Projects Agency Fund Funds Funds Funds Funds Total Reserved for: Encumbrances $5,942,392 $3,490,071 $ $11,747,779 $3,605,530 $24,785,772 Unexpended allotments 5,939,855 5,939,855 Inventories 2,139,769 2,139,769 Debt service 17,846,888 17,846,888 Taxi investigations 23,950 23,950 Grants 4,920 4,920 Liquor control 516,164 - 516,164 Total reserved fund balance $8,627,195 $3,490.071 $17,646,888 $17,687,634 $3,605,530 $51,257,318 Retained Earnings At June 30, 1999, the Kulaimano Elderly Housing Project reported retained earnings reserved for debt service in the amount of $169, 117 and unreserved retained earnings of $208,705. The Ouli Ekahi Affordable Housing Project reported an accumulated deficit of $3,309 at June 30, 1999. 13. COMMITMENTS AND CONTINGENCIES Contractual commitments - Contractual commitments for capital projects, expenses, and supplies at June 30, 1999, except in the enterprise funds, are reflected in the combined financial statements as fund balance reserved for encumbrances. Contractual commitments for the enterprise funds were immaterial. Intergavernmenta/ 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 grant. In the opinion of management of the County, disallowed costs, if any, would not be material. Clninrr - Numerous claims and lawsuits have been filed against the County in the normal course of its operations. A liability for probable losses is included in the general long-term deb[ account group (see Note 14). Although the outcome of the various claims and lawsuits is not presently determinable, in the opinion of the County's attorneys, the resolution of such matters will not have a material adverse affect on the financial condition of the County. Managed process jot public competition - The 1998 session of the state legislature passed a bill mandating that amulti-jurisdictional committee be Cormed to establish policies and -57- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1999 procedures to implement a managed process for public competition in the procurement of services by the state and the four counties. The purpose of this process is to determine whether a particular service can be provided more effectively, efficiently and economically by a public agency or a private enterprise. It is the legislature's intent that this process be fully implemented by June 30, 2001. A managed process for public competition will require cost accounting capability that the County does not presently have. The cost to the County to develop a system to provide the necessary data cannot be determined until the multi-jurisdictional committee completes its work and makes its recommendations to the legislature. Also, the fiscal impact of the managed process itself cannot be determined at this time. ADA campliaace -The County has been under two stipulated agreements signed by federal court to implement provisions of the Americans with Disabilities Ac[. This year, the County complied with the terms of the first stipulated agreement 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 is estimated to be $6.2 million. The cost of the first phase oCthe plan is $3 million, which will be used in high priority areas such as government facilities, schools, and hospitals. The remaining cost will cover curb cuts at parks and in low-density single family residential areas. All corrective action must be completed by the year 2005, with an estimated 308 intersections to be modified. The second stipulated agreement relates to the Department of Parks and Recreation (the Parks Department). The agreement requires the Parks Department to establish practices, policies and procedures regarding its programs, reevaluate facilities, 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. This is an ongoing effort. The second part of this stipulated agreement is the reevaluation of County park facilities, which is currently ongoing with a consultant. At the same time, the County is also reevaluating all other County facilities. Upon completion, this reevaluation will be presented to the County Council for approval. The tentative completion date of all necessary repairs and renovations is 15 years from the date [he County Council accepts the self-evaluation. The estimated cost of the facilities repairs is $40 million, which will be spent over the fifteen year period. 14. 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 -58- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1999 insurance on selected structures, medical malpractice insurance for emergency medical technicians, general liability insurance for water safety officers, aviation liability for helicopter operations, automobile coverage on transit buses, and no-fault insurance coverage for privately owned police 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 have not exceeded the insurance coverage. The County is substantially self-insured for its vehicles as well as for all other perils including workers' compensation and general liability. The County currently reports all of its risk management activities in its general fund except for workers' compensation, which is paid by the fund that employed the injured worker. Liabilities are reported when it is probable that a loss has occurred and the amount of that loss can be reasonably estimated. These losses include an estimate of claims that have been incurred but not reported (IBNR). Claim liabilities, including IBNR, are based on the estimated ultimate cost of settling the claims, and include incremental costs for the hiring of special counsel and expert witnesses. Claims liabilities are estimated by a case-by-case review of all claims and the application of historical experience to outstanding claims. Estimates of IBNR are based on historical experience. The liability for claims and judgments is reported in the general long-term debt account group because it is not expected to be liquidated with expendable financial resources. At June 30, 1999, the amount of this liability was $9,888,528. This is the County's best estimate based on available information. Changes in the reported liability since July 1, 1997 are given below. General Workers' Total Liabili Compensation Liabili Balance at July 1, 1997 $2,491,261 $4,508,739 $7,000,000 Incurred claims (including IBNR)' 1,454,549 3,873,964 5,328,5 l3 Claim payments (1,456,168) 2 534 684 3 990,852 Balance at June 30, 1998 $2,489,642 $5,848,019 $8,337,661 Incurred claims (including IBNR)• 2,365,463 2,757,395 5,122,858 Claim payments (1,082,147) 2,4( 89,844) 3,5( 71,991) Balance at June 30, 1999 $3,772,958 $6,115,570 $9,888,528 'Net of new claims liability and old claims resolved at less than previous estimate. -59- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1999 15. EMPLOYEE BENEFIT PLANS Pension Plan Plan description Al] full-time employees of the County participate in the Employees' Retirement System of the State of Hawaii (System), acost-sharing multiple-employer defined benefit pension plan. The System was established by Chapter 88 of the Hawaii Revised Statutes (HRS) and is governed by a Board of Trustees. All contributions, benefits and eligibility requirements are established by Chapter 88, HRS, and can be amended by legislative action. The System 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. All of the County's full-time employees are eligible to participate in the System. The System consists of a contributory retirement plan and a noncontributory retirement plan. Eligible employees, in service and a member of the existing contributory plan on June 30, 1984, were given an option to remain in the existing plan or join the noncontributory plan, effective January I, 1985. Alt new eligible employees hired after June 30, 1984 generally become members of the noncontributory plan. Both plans provide death and disability benefits and a cost of living adjustment. In the contributory plan, employees generally may elect normal retirement at age 55 with 5 or 10 years of credited service or elect early retirement at any age with 2S years of credited service. Such employees are generally entitled to retirement benefits, payable monthly for life, of 2% or 2'/z % of their average final salary, as defined, for each year of credited service with certain limitations. Benefits fully vest on reaching five years of service; retirement benefits are reduced for early retirement. In the noncontributory plan, employees may elect normal retirement at age 62 with 10 years of credited service or at age 55 with 30 years of credited service, or elect early retirement at age 55 with 20 years of credited service. Such employees are entitled to retirement benefits, payable monthly for life, of 1.25% of their average final salary, as defined, for each year of credited service. Benefits fully vest on reaching ten years of service; retirement benefits are reduced for early retirement. The System issues a Comprehensive Annual Financial Report that may be obtained by writing [o the Employees' Retirement System of the State of Hawaii, 201 Merchant Street, Suite 1400, Honolulu, Hawaii 96813. Funding policy Al] funding requirements are established by Chapter 88, HRS, and can be amended by the state legislature. Covered contributory plan employees are required to contribute 7.8% or 12.2% of their salary to the plan; the County is required to contribute the -60- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1999 remaining amounts necessary [o pay contributory plan benefits when due. The County is also required to contribute all amounts necessary to pay noncontributory benefits when due. The County's contribution requirements are actuarially determined based on actuarial assumptions established by Chapter 88, HRS. The County's contributions to the System for the fiscal years ended June 30, 1997, 1998 and 1999 were $11,041,700, $11,460,200, and $6,490,200 respectively, equal to the required contributions for each year. Subsequent event The 1999 state legislature passed a measure amending state statutes relating to the actuarial assumptions of the System. This amendment will reduce the County's employer contribution for the fiscal year ending June 30, 2000, to $3,136,000. Post-Retirement Benefits In addition to providing the pension benefits described above, the County is required by state statute to contribute to the Hawaii Public Employees Health Fund (Health Fund), a statewide program which provides health and group life insurance for all retired and active County employees, their dependents and their beneficiaries. The state and other counties also participate in [he fund. For employees hired prior to July 1, 1996 who retire with at least ten years of credited service, the County is required [o pay 100% of [he premiums of the medical, adult dental, prescription drug, vision, and group life insurance plans elected by the retiree. For employees hired prior to July 1, 1996 who retire with less than ten years of credited service, the County is required to pay half of the monthly premium cost of the above plans. For employees hired July 1, 1996 or after, the amount of the premium cost the County is required to pay varies depending on the employee's years of service at the time of retirement. Currently, the County has 962 former employees who have retired with at least ten years of credited service and are receiving the full benefit. An additional six employees have retired with less than ten years of service and have half of their medical premiums paid by the County. For each retiree and retiree's spouse eligible for Medicare, the County also pays $43.80 per month as reimbursement of their Medicare premiums. The County's contribution is recorded as an expenditure when paid. The amount of the contribution is limited by state statute to the actual cost of benefit coverage. During the fiscal year ended June 30, 1999, [he County's contribution to the Health Fund for retired employees totaled $4.l million. 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 [o a -61- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1999 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 [hem 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, in accordance with GASB Statement No. 32, Accowrling and Financial Reporting for Internal Revenue Code Section ~J57 Deferred Compensation Plans, deferred compensation plan assets are not reported in the accompanying financial statements. 16. COMPONENT UNIT DISCLOSURES Cash and Im~estments For purposes of the statement of cash flows, the Department of Water Supply (the Department) considers all highly liquid investments with an initial maturity of three months or less to be cash equivalents. However, for the required GASB Statement No. 3 disclosures, all bank TCDs are considered deposits. The amount of $354,608 shown on the balance sheet as cash and cash equivalents consists of cash on hand (deposit in transit) of $226,128 and balance in the checking account of $128,480. Deposits At June 30, 1999, the carrying amount of the Department's deposits was $2S,S09,3S2 and the bank balance was $25,521,204. The entire bank balance was covered by collateral held by the County's agent in the County's name in accordance with state statutes. This deposit amount includes cash received by the Department that is refundable or restricted as to use, and is recorded as a restricted asset. Such funds amounted [o $24,158,635 at June 30, 1999. Loans Receivable At June 30, 1999, loans receivable from various community associations for water system improvements were as follows: -62- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1999 Paauilo Camp Community Association $ 77,000 Ookala Community Association 1 12,375 Paauhau Village Community Association 322,650 Total $512,025 Fixed Assets The Department began operations as of January 1, 1950. At that date, the utility plant in service was transferred to the Department from the County at the cost of the utility plant assets acquired by the County for its water system from January 1, 1924 to December 31, 1949, less accumulated depreciation. Acquisitions prior to 1924 and acquisitions by gift or grant prior to 1950 are not included in utility plant. Additions to utility plant since January 1, 1950 are stated at original cost and include contributions by governmental agencies, private subdividers and customers at their cost or estimated cost. Construction costs include amounts for contract work, engineering supervision and other direct and indirect costs. Depreciation on the Department utility plant assets in service is computed using the straight-line method over the estimated useful lives of the assets as follows: Structures and improvements 40 to 50 years Machinery and equipment 5 to 20 years Water systems 10 to 40 years Depreciation expense on assets acquired with contributions in aid of construction is charged to contributed capital. The fixed assets of the Department at June 30, 1999 were as follows: Utility plant in service $202,083,414 Less: accumulated depreciation (72,499,243) 129,584,171 Construction in progress 16,561,239 Net fixed assets $146,145,410 -63- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1999 Long-term Debt The County has issued general obligation bonds on behalf of the Department. The Department is responsible for the payment of the debt service on these bonds, but the County remains liable because they are general obligations of the County. The Department has recorded a liability for these general obligation bonds, which amounted to $12,300,850 at June 30, 1999. General obligation bonds payable issued on behalf of the Department at June 30, 1999 are comprised of the following individual issues: Public improvement bonds: 1981 Series A at 5.0%, due through 2016 $ 523,000 1993 Series A at 3.8% to 5.6%, due through 2013 8,465,000 1998 Series A at 4.5%, due through 2033 512,850 Total public improvement bonds 9,500,850 Public improvement refunding bonds: 1989 Series at 6.2% to 6.95%, due through 2004 2,800,000 Total Department $12,300,850 Annual debt service requirements to maturity for these general obligation bonds, including interest payments of $5,146,870, are as follows: Fiscal year ending June 30: 2000 $ 1,582,696 2001 1,552,574 2002 ],525,602 2003 1,493,267 2004 1,516,334 Thereafter 9,777,247 Total $17,447,720 Contributed Capital The following is a summary of contributed capital of the Department for the fiscal year ended June 30, 1999: -64- COUNTY OF HAWAII Notes to the Combined Financial Statements June 30, 1999 Balance Balance July 1, June 30, 1998 Additions 1999 Contributed by County of Hawaii $ 1,132,683 $ $ 1,132,683 Contributions in aid of construction: Federal government 5,716,218 !31,596 5,847,814 Stateo(Hawaii 52,246,865 52,246,865 CountyoCHawaii 8,331,584 8,331,584 Non-government 94,606,195 2,726,954 97,333.149 Total contributions in aid of construction 160,900,862 2,858,550 163,759,412 Less: accumulated amortization (53,748,012) 5,0( 82.408) (58,830,420) Net contributions in aid of construction 107,152,850 2 22( 3,858) 104,928,992 Contributed capital $103,285,533 ($2,223.858) $106,061,675 Capital of $1,132,683 contributed by the County to the Department represents utility plant in service transferred from the County to the Department at its inception on January I, 1950. Commitments and Contingent Liabilities Claims and judgments - The Department is self-insured for workers' compensation and other perils. The liability at June 30, 1999 for workers' compensation claims of $170,000 was estimated based on a combination of case-by-case review and the application of historical experience to outstanding claims. Consfruc(iorr contracts -The Department is obligated under construction contracts for the utility plant and other projects. Such commitments approximated $8,256,000 at June 30, 1999. -65- COUNTY OF HAWAII Required Supplemental Information - Ycar 2000 Status (Unaudited) June 30,]999 The Year 2000 issue is the result of shortcomings in many electronic data processing systems and other electronic equipment that may adversely affect the County's operations. Through June 30, 1999, the County has spent $517,600 on efforts to make its computer systems and other electronic equipment Year 2000 compliant. An additional $12,000 is expected to be spent in the following year. The County has conducted an inventory of computer systems and other electronic equipment that may be affected by the Year 2000 issue and that are necessary to conducting County operations. Based on this inventory, at June 30, ] 999, 82% of the County's computer applications, 66% of the County's multi-user computer systems, and 99% of the County's personal computer systems have been remediated, tested and validated for Year 2000 compliance. Subsequent events At September 30, 1999, the status is that 92% of computer applications, 82% of multi-user computer systems, and 99% of personal computer systems have been remediated, tested and validated for Year 2000 compliance. Computer applications and systems still requiring remediation at September 30, 1999, are: Kona Prosecuting Attorney computer system: New hardware arrived in September, with installation, testing and validation scheduled for October 1999. Department or Wafer Supply computer system and applications: Original plans called for the system to be replaced before the end of 1999, but the replacement has been postponed. The present plan is to have an outside vendor upgrade the system in October 1999, after which the software applications will be remediated, tested and validated. Local area nenrorks: Four departments have local area networks that are scheduled to be remediated by outside vendors through replacement or upgrades no later than November 1999. Testing and validation will follow. Fuel and fleet management PC applications: Three personal computer applications will be upgraded by outside vendors no later than November 1999, with testing and validation to follow. Because of the unprecedented nature of the Year 2000 issue, its effects and the success of related remediation efforts will not be fully determined until the Year 2000 and [hereafter. Management cannot assure that the County is or will be Year 2000 ready, that the County's remediation efforts will be successful in whole or in part, or that parties with whom the County does business will be Year 2000 ready. See accompanying independent auditors' report. -66- GENERAL FUND The General Fund accounts for all financial resources except those required to be accounted for in another fund. COUNTY OF HAWAII General Fund Comparative Balance Sheets June 30, 1999 and 1998 1211 1998 Assess Cash and investments: Cash and cash equivalents $7,231,705 $5,856,536 Investments 19,100,398 22,142,657 lmprest and change funds 25,695 25,670 Total cash and investments 26,357,798 28,024,863 Receivables: Real property taxes: Delinquent 10,669,526 11,472,887 Litigated claims 284 Total real property taxes !0,669,810 l 1,472,887 Due from other govemments Due from State of Hawaii 1,292,556 1,005,430 Due from federal government 1,468,807 1,065,487 Total due from other govemments 2,761,363 2,070,917 Due from other funds 1,765,539 1,810,387 Other 220,552 300,728 Total receivables 15,417,264 15,654,919 Inventories 2,139,769 2,030,118 Total assets $43,914,831 $45,709,900 (Continued) -67- COUNTY OF HAWAII (Concluded) General Fund Comparative Balance Sheets June 30, ] 999 and 1998 1222 1228 liabilities and Fund Balance Liabilities: Warrants payable $ 2,702,483 $ 2,884,711 Accounts payable 1,591,361 1,198,300 Employee costs payable 2,465,326 Due to other funds 3,037,382 2,956,125 Due to federal govemmen[ -arbitrage rebate 253,620 232,851 Deferred revenue: Real property taxes 10,887,608 11,719,975 Liquor control revenue 157,010 l OS,330 Intergovernmental 656,438 439,390 Total deferred revenue 11,701,056 12,264,695 Other 602,798 718,086 Total liabilities 22,354,026 20,254,768 Fund balance: Reserved for: Encumbrances 5,942,392 6,193,041 Inventories 2,139,769 2,030,]18 Taxicab investigations 23,950 18,870 Grants 4,920 Liquorcontrol 516,164 301,573 Total reserved fund balance 8,627,195 8,543,602 Unreserved: Designated for: lmprest and change funds 25,695 25,670 Dmg enforcement 32,354 32,354 Special duty police program 275,202 258,747 Future year expenditures 10,100,000 14,000,000 Claims and judgments 1,200,398 1,142,657 Total designated fund balance 11,633,649 15,459,428 Undesignated 1,299,961 ],452,102 Total fund balance 21,560,805 25,455,132 Total liabilities and fund balance $43,914,831 $45,709,900 -68- COUNTY OF HAWAII General Fund Comparative Statements of Revenues, Expenditures and Changes in Fund Balances For the Fiscal Years Ended June 30, 1999 and 1998 14`12 1.22$ Revenues: Taxes and assessments $84,791,838 $87,420,313 Licenses and permits 3,708,264 3,268,071 lntergovemmental 34,565,760 38,437,063 Charges for current services 1,764,116 1,660,651 Fines and forfeitures 351,714 366,804 Rents l 13,433 127,367 Interest and penalties 4,611,786 4,948,075 Miscellaneous 2,747,417 I ,027,314 Total revenues 132,654,328 137,255,658 Expenditures: Current: General government 20,470,921 20,481,226 Public safety 53,270,672 53,146,612 Highways and streets 1,789,072 1,263,890 Health, education and welfare 5,306,198 5,006,905 Culture and recreation 1 (,477,152 10,994,518 Pension and retirement contributions 8,692,236 12,325,588 Health fund 8,389,666 8,591,942 Miscellaneous 3,031,288 2,800,022 Capital outlay 3,657,706 5,603,234 Debt service: Interest and finance charges 16,947 30,644 Principal retirement 31,158 49,824 Total expenditures 116,133,016 120,294,405 Excess of revenues over expenditures 16,521,312 16,961,253 Other financing sources (uses): Sale of general fixed assets 53,668 17,385 Operating transfers in 3,553,987 1,153,627 Operating transfers out (24,132,945) (23,066,109) Total other financing uses (20,828,290) (21,895,097) Deficiency of revenues and other sources over expenditures and other uses (4,003,978) (4,933,844) Fund balance at beginning of year 28,485,132 30,339,071 Increase in reserve for inventories 109,651 49,905 Fund balance at end of year $21,560,805 $25,455,132 -69- COUNTY OF HAWAII General Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 1999 Variance Favorable Budeet Actual (Unfavorablel Revenues: Taxes and assessments -real property taxes $83,008,500 $84,791,838 $ 1,783,338 Licenses and permits: Nonbusiness licenses and permits 2,156,892 2,447,897 291,005 Business licenses 1,066,382 978,645 (87,737) Street use 272,000 281,722 9,722 Total licenses and permits 3,495,274 3,708,264 212,990 Intergovernmental: Federal: Programs for the aged 1,250,090 1,164,721 (85,369) Community development block grants 2,177,000 2,177,000 Civil defense 107,900 108,008 108 Law enforcement 1,486,153 1,011,845 (474,308) Other 1,779,860 2,179,191 399,331 Total federal 6,801,003 6,640,765 (160,238) State: State General Fund -Act 185, SLH 1990 15,337,000 15,773,404 436,404 Emergency medical services 7,659,019 7,866,830 207,81 1 Other 3,766,402 3,067,904 (698,498) Child support enforcement 931,816 907,221 (24,595) Total State 27,694,237 27,615,359 (78,878) Total intergovemmentalrevenue 34,495,240 34,256,124 (239,116) Charges for current services: General government 843,334 895,276 51,942 Culture and recreation 385,600 437,835 52,235 Highways and streets 627,800 416,855 (210,945) Public safety 18,000 14,150 (3,850) Total charges for current services 1,874,734 1,764,116 (110,618) Fines and forfeitures 639,000 351,714 (287,286) Rents 259,900 113,433 (146,467) (Continued) -70- COUNTY OF HAWAII General Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 1999 Variance Favorable Budeet Acwal (Ilnfavorablel Revenues (continued): Interest and penalties 4,025,000 4,884,045 529,045 Miscellaneous 4,795,635 4,705,542 (90,093) Total revenues 132,593,283 134,245,076 1,651,793 Expenditures: Curren[: General government: Finance 5,950,875 5,325,140 625,735 Automotive equipment 1,889,220 1,710,316 178,904 General govemment building 1,873,697 1,739,193 134,504 Legislative 2,819,195 2,024,906 794,289 Law 2,924,041 2,683,970 240,071 Planning and zoning 1,807,272 1,489,820 317,452 Research and development 1,480,875 1,278,026 202,849 Mayor's office 993,683 894,998 98,685 Engineering 1,000,314 957,768 42,546 Personnel services 822,705 681,070 141,635 Chief engineer 668,094 591,313 76,781 Data Systems 296,550 233,546 63,004 Elections 541,106 435,678 108,428 Total general government 23,067,627 20,045,744 3,021,883 Public safety: Police department 30,744,965 28,066,462 2,678,503 Fire department 17,127,774 16,614,826 512,948 Prosecuting attorney 5,012,277 4,369,341 642,936 Protective inspection 1,427,805 1,306,242 121,563 Liquor control 953,156 642,272 310,884 Flood control 204,045 t 13,298 90,747 Civil defense agency 458,013 413,643 44,370 Humane Society 667,620 667,620 Industrial safety 279,500 269,967 9,533 Total public safety 56,875,155 52,463,671 4,411,484 Highways and streets: Mass transit 1,289,939 1,285,337 4,602 (Continued) _71_ COUNTY OF HAWAII General Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 1999 Variance Favorable fl4d~1 A~tw11 (Unfavorable) Expenditures (continued): Current (continued): Health, education and welfare: Office of Aging 1,295,184 1,187,028 108,1 S6 Elderly Activities 2,572,882 2,491,984 80,898 Education 290,000 252,417 37,583 Social programs 900,000 900,000 Cemeteries 336,214 303,638 32,576 Physical examination 101,286 101,286 Total health, education and welfare 8,498,866 5,236,353 259,213 Culture and recreation: Community music 149,996 148,715 1,281 Organized recreation: Maintenance 4,888,268 4,451,213 104,088 Recreation 1,360,626 1,332,216 28,410 Aquatics 2,310,800 2,211,670 99,130 Hoolulu Park complex 722,091 712,276 9,815 Administration 626,901 567,143 59,758 Children's zoo 426,395 400,931 25,464 Summer fun 261,665 260,188 1,477 Culture and arts 1 16,266 110,656 5,610 Elderly activities administration 527,232 497,072 30,160 Total culture and recreation ] 1,087,240 10,692,080 365,160 Pension and retirement contributions 8,826,881 8,816,082 10,829 Health fund 9,402,688 8,389,666 1,013,022 Miscellaneous 5,247,138 3,006,058 2,241,080 Total current 121,262,234 109,934,961 11,327,273 Capital Outlay: Community Development Block grants (HUD): CDBG 1993 2,160 2,160 CDBG 1995 389,685 389,685 CDBG 1996 106,032 106,032 CDBG 1997 (72,985) (72,985) CDBG ]998 (387,001) (387,001) CDBG 1998 2,205,589 2,205,589 Total Community Development Block Grants (HUD) 2,243,480 2,243,480 (Continued) _72_ COUNTY OF HAWAII General Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30. 1999 Variance Favorable B i~icet Actual (Unfavorable! Expenditures (continued): Capital Outlay (continued): HOME Program 1,228,000 1,228,000 Total capital outlay 3,471,480 3,471,480 Total expenditures 124,733,714 113,406,441 11,327,273 Excess ofrevenues over expenditures 7,859,569 20,838,635 12,979,066 Other financing sources (uses): Operating transfers in: Golf Course Fund 135,868 135,868 1978 Sinking Fund 3,417,651 3,418,119 468 Total operating transfers in 3,53,519 3,553,987 468 Operating transfers out: Sewer Fund (661,751) (661,751) Solid Waste Fund (7,625,775) (7,625,775) GoIFCourse Fund (174,146) (174,146) Debt Service Fund (17,788,528) (17,276,719) 511,809 Total operating transfers out (26,250,200) (25,738,391) 511,809 Total other financing uses (22,696,681) (22,184,404) 512,277 Deficiency ofrevenues and other sources over expenditures and other uses: (14,837,112) (1,345,769) 13,49!,343 Unbudgeted self-insurance activities 57,741 57,741 Fund balance at beginning of year 25,455,132 25,455,132 Fund balance at end of year $ 10,618,020 $24, 167,104 $13,549,084 -73- This page intentionally left blank. _7q_ SPECIAL REVENUE FUNDS HIGHDVA}' FUND -Used to account for the costs of maintaining the County's highways and streets. Financing is provided primarily b}' fuel, motor vehicle weight and public utility franchise taxes. 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. SEWER FUND -Used to account for costs of operating the County's various sewerage systems. Financing is provided by charges to users for sewer services. BIKEWAY FUND -Used to accumulate moneys for the construction of bikeways within the County. Financing is provided by bicycle license 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. VEHICLE DISPOSAL FUND -Used to accumulate moneys for the towing, removal, disposal and recycling of abandoned or discarded automobiles and automobile partr. Financing is provided by annual fees collected with motor vehicle registrations. 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. GOLF COURSE FUND -Used to account for the cost of operating the Hilo Municipal Golf Course. Funding is provided from green fees and paymentr from restaurant and pro shop concessionaires. GEOTHERMAL RELOCATION REVOLVING 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. BEAUTIFfCATION FUND -Used to accumulate moneys Eor the beautification of highways and disposal of abandoned vehicles within the County. Financing is provided by assessments on vehicle registrations. This page intentionally left blank. -75- COUNTY OF HAWAII Special Revenue Funds Combining Balance Sheet June 30, 1999 (With comparative totals for June 30, 1998) Parking Highway Meter Sewer Bikeway Cemetery Fund Fund Fund F1tnd Eutld ASSNS Cash and cash equivalents $5,803,537 $16,706 $4,499,385 $58,622 $37,950 Impress fund 100 Receivables: Waste disposal charges receivable, net of allowance for doubtful accounts of $780,811 793,717 Due from State of Hawaii Due from federal government 16,156 Due from other funds 35,875 152 Other 234,452 Total receivables 35,875 1,028,321 16,156 Totalassets $5,839,412 $16,706 $5,527,806 $74,778 $37,950 Liabilities and Fund Balances Liabilities: Warrants payable $ 183,484 $ $ 84,158 $ $ Accounts payable 209,860 21,647 4,289 Employee costs payable 749,707 227,570 Due to other funds 676,778 28 142,306 Accrued liabilities Deferred revenue 202,000 793,717 Totalliabilities 2,021,829 28 1,269,398 4,289 Fund balances (deficit): Reserved for encumbrances 1,568,294 763,864 972 Unreserved: Designated for: Equipment replacement 1,929,172 Impress fund 100 Future year expenditures 1,210,000 214,715 Future project 1,000 Total designated fund balance 1,211,000 2,143,987 Undesignated 1,038,289 16,678 1,350.557 69,517 37,950 To[al fund balances (deficit) 3,817,583 16,678 4,258,408 70,489 37,950 To[al liabilities and fund balances $5,839,412 $16,706 $5,527,806 $74,778 $37,950 -76- Vehicle Solid Golf Geothermal Beau[i- To[als Disposal Waste Course Relocation tica[ion Eutld F~Ild Fund Rev. Fund Fund lY9Y ~ $613,253 $4,507,023 $79,523 $458,541 $355,295 $16,429,835 $(1,831,173 100 2,000 2,200 2,000 889,735 1,683,452 2,538,435 7,971 16,156 200 g,797 45,024 111,991 42,852 1,128 278,432 175,872 200 941,384 1,128 2,023,064 2,834,269 $613,453 $5,448,507 $82,651 $458,541 $355,295 $18,455,099 $14,667,442 $ 4,418 $1,120,592 $ 4,569 $ 16 $ 1,482 $ 1,398,719 $ 591,889 79,514 611,195 1,632 1,742 812 930,691 928,190 2,688 281,324 88,282 1,349,571 3,259 242,189 48,580 i,113,140 1,330,390 8.797 8,797 35,401 1.015,973 2,011,690 2,688,175 89,879 3,280,070 143,063 1,758 2,294 6,812,608 5,574,045 78.472 606.461 3,511 468,497 3,490.071 2,685,970 1,929,172 2,052,775 100 200 2,000 1,424,715 1,693,792 1.000 1,000 100 3,355,087 3,749,567 445,102 1,561,876 (63,923) (11,714) 353,001 4,797,333 2,657,860 523,574 2,168,437 (60,412) 456,783 353,001 11,642,491 9,093,397 $613,453 $5,448,507 $82,651 $458,541 $355,295 $18,455,099 $14,667,442 _77_ COUNTY OF HAWAII Special Revenue Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances (Deficit) For the Fiscal Year Ended June 30, 1999 (With comparative totals (or the fiscal year ended June 30, 1998) Parking Highway Meter Sewer Bikeway Cemetery Eunsl Fund fund ELLlld Eunti Revenues: Taxes $ 9,852,970 $ $ $ $ Licenses and permits 2,579,020 54,896 Intergoverttmental 236,862 50,731 Charges for current services 35,875 15,736 4,807,688 Miscellaneous 64.313 597 13,550 Total revenues 12,769,040 15,736 4,808,285 105,627 13,550 Expenditures: Current: General government Public safety 2,751,811 12,775 Highways and streets 6,233,922 70,979 Sanitation 3,090,591 Health, education & welfare 3,626 Culture and recreation Pension and retiremen[ contributions 599,426 1,284 195,462 Health fund 469,328 445 126,706 Miscellaneous 397,679 77,506 Debt service: Interest charges Principal retirement Total expenditures 10,455,792 14,504 3,490,265 70,979 Excess (deficiency) of revenues over expenditures 2,313,248 1,232 1,318,020 34,648 13,550 Other financing sources (uses): Operating transfers in: General Fund 661,751 Highway Fund Operating transfers out: General Fund Parking Meter Fund Public Improvement Bond Fund (2,547,997) (150,000) Total other financing sources (uses) (2,547,997) 511,751 Excess (deficiency) of revenues and other sources over expenditures and other uses (234,749) 1,232 1,829,771 34,648 13,550 Fund balances at beginning of year 4,052,332 15,446 2,428,637 35,841 24,400 Fund balances (deficit) at end of year $ 3,817,583 $16,678 $4,258,408 $70,489 $37,950 _78_ Vehicle Solid Golf Geothermal Beau[i- Totals Disposal Waste Course Relocation fica[ion Eutld 1_VUtld Fund Rev. Fund Fund 1999 192$ $ $ $ $ $ $ 9,852,970 $ 9,912,278 487,504 121,877 3,243,297 3,083,001 222,002 509,595 455,531 193 2,772,950 751,766 8,384,208 7,224,476 100 360 148,285 227,205 234,296 487,797 2,995,312 751,766 (48,285 121,877 22,217,275 20,909,582 326,171 326,171 30,237 2,764,586 2,526,694 54,054 6,358,955 5,356,767 349,152 8,847,051 12,286,794 (2,082,365 3,626 3,746 844,003 844,003 805,733 3,944 226,735 66,378 1,093,229 1,718,546 1,348 218,113 58,787 874,727 845,767 109,354 447 584,986 564,216 9,318 9,318 149,593 149,593 354,444 9,560,164 969,615 326,171 54,054 25,295,988 23,934,071 133,353 (6,564,852) (217,849) (177,886) 67,823 (3,078,713) (3,024,489) 7,625,775 174,146 8,461,672 7,575,583 30.000 (135,868) (135,868) (135,868) (30.x) (2,697,997) (2,818,611) 7,625,775 38,278 5,627,807 4,621,104 133,353 1,060,923 (179,571) (177,886) 67,823 2,549,094 1,596,615 390,221 1,107,514 !19,159 634,669 285,178 9,093,397 7,496,782 $523,574 $2,168,437 ($60,412) $456,783 $ 353,001 $11,642,491 $ 9,093,397 -79- COUNTY OF HAWAII Special Rcvenuc Funds Combining Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 1999 Parking Meter Highway Fund Fund Sewer Fund Budeet Asttlal 9usigu Actual Budeet Actual Revenues: Taxes $9,834,112 $9,852,970 $ $ $ $ Licenses and permits 2,380,000 2,579,020 lntergovemmental 181,770 236,862 Charges for curent services 120,000 35,875 129,500 15,736 4,461,862 4,807,688 Miscellaneous 40,100 64,313 100 597 Total revenues 12,555,982 12,769,040 129,500 15,736 4,461,962 4,808,285 Expenditures: Curenc General government Public safety 2,866,311 2,384,224 127,306 12,775 Highways and streets 6,380,910 5,890,859 Sanitation 3,891,454 2,972,385 Health, education & welfare 6,000 3,626 Culture and recreation Pension and retirement contributions 816,000 546,149 23,691 1,284 286,241 179,290 Health fund 490,000 469,328 9,000 445 ]58,383 126,706 Miscellaneous 642,649 392,368 787,635 584,503 Total expenditures 11,201,870 9,686,884 159,997 14,504 5,123,713 3,862,884 Excess (deficiency) of revenues over expenditures 1,354,112 3,082,486 (30,497) 1,232 (661,751) 945,401 Other financing sources (uses): Operating transfers in 661,751 661,751 Operating transfers out (2,584,112) (2,547,997) (150,000) (150,000) Total other financing sources (uses) (2,584,112) (2,547,997) 511,751 511,751 Excess (deficiency) of revenues and other sources over expenditures and other uses (1,230,000) 534,489 (30,497) 1,232 (150,000) 1,457,152 Fund balances at beginning of year 4,052,332 4,052,332 15,446 15,446 2,428,637 2,428,637 Fund balances at end of year $2,822,332 $4,586,821 ($15,051) $16,678 $2,278,637 $3,885,789 -80- Bikeway Fund Cemetery Fund Vehicle Disposal Fund Solid Waste Fund Budget Actual Budget Actual Budget Actual Budget Actual 18,000 54,896 441,660 487,504 61,438 61,438 286,000 323,500 100 193 2,S 15,000 2,772,950 8,000 13,550 100 100 360 79,438 116,334 8,000 13,SSO 441,860 487,797 2,801,000 3,096,810 79,438 78,369 428,629 374,791 10,199,165 8,732,021 6,721 3,753 286,610 206,743 1,360 1,348 221,000 218,114 S, f 50 220,000 1 14,097 79,438 78,369 441,860 379,892 10,926,775 9,270,975 37,965 8,000 13,550 107,905 (8,125,775) (6,174,165) 7,625,775 7,625,775 7,62S,77S 7,62S,77S 37,965 8,000 13,SS0 107,905 (500,000) 1,451,610 35,841 35,841 24,400 24,400 390,221 390,221 1,107,514 1,107,514 $35,841 $73,806 $32,400 $37,950 $390,221 $498,126 $607,514 $2,559,124 (Continucd) _gl_ COUNTY OF HAWAI[ Special Revenue Funds Combining Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 1999 Geothermal Relocation Golf Course Fund Revolving Fund Beautification Fund Bucleet Actual 13udeet Actual Budeet Actual Revenues: Taxes $ $ $ $ $ $ Licenses and permits 115,000 121,877 ]ntergovemmental Charges for current services 836,240 751,766 Miscellaneous 160,000 148,286 Total revenues 836,240 751,766 160,000 148,286 115,000 121,877 Expenditures: Current. General government 659,240 659,240 Public safety Highways and streets 115,000 25,265 Sanitation Health, education & welfare Culture and recreation 775,224 760,803 Pension and retirement contributions 81,264 60,104 Health fund 58,786 58,786 Miscellaneous 16,000 447 Total expenditures 931,274 880,140 659,240 659,240 115,000 25,265 Excess (deficiency) of revenues over expenditures (95,034) (128,374) (499,240) (510,954) 96,6]2 Other financing sources (uses): Operating transfers in 174,146 174,146 Operating transfers out (135,868) (135,868) Total other financing sources (uses) 38,278 38,278 Excess (deficiency) of revenues and other sources over expenditures and other uses (56,756) (90,096) (499,240) (S 10,954) 96,612 Fund balances at beginning of year 119,159 119,159 634,669 634,669 285,178 285,178 Funds balance at end of year $62,403 $29,063 $135,429 $123,715 $285,178 $381,790 _g2_ (Concluded) Total Special Revenue Funds Variance Favorable Budgie[ A~ILal ([infavorable) $9,834,112 $9,852,970 $18,858 2,954,660 3,243,297 288,637 529,208 621,800 92,592 8,062,702 8,384,208 321,506 208,300 227,206 18,906 21,588,982 22,329,481 740,499 659,240 659,240 2,993,617 2,396,999 596,618 6,575,348 5,994,493 580,855 14,519,248 12,079,197 2,440,051 6,000 3,626 2,374 775,224 760,803 14,421 1,800,827 997,323 503,204 938,529 874,727 63,802 !,671,434 1,091,415 580,019 29,639,167 24,857,823 4,781,344 (8,050,185) (2,528,342) 5,521,843 8,461,672 8,461,672 (2,869,980) (2,833,865) 36, l I S 5,591,692 5,627,807 36,115 (2,458,493) 3,099,465 5,557,958 9,093,397 9,093,397 $6,634,904 $12,192,862 $5,557,958 -83- COUNTY OF HAWAII Highway Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Ac[ual (Budgetary Basis) For the Fiscal Year Ended June 30, 1999 Variance Favorable Budeet ACtt181 fUnfavorablel Revenues: Taxes: Fuel tax $ 5,984,112 $ 5,900,404 ($83,708) Public utility franchise tax 3,850,000 3,952,566 102,566 Total taxes 9,834,112 9,852,970 18,858 Licenses and permits - moor vehicle weight taxes 2,380,000 2,579,020 199,020 Intergoverttmental 181,770 236,862 55,092 Charges for current services 120,000 35,875 (84,125) Miscellaneous 40,100 64,313 24,213 Total revenues 12,555,982 12,769,040 213,058 Expenditures: Public safety -traffic engineering 2,866,311 2,384,224 482,087 Highways and streets 6,380,910 5,890,859 490,051 Health, education & welfare 6,000 3,626 2,374 Pension and retirement contributions 816,000 546,149 269,851 Health fund 490,000 469,328 20,672 Miscellaneous 642,649 392,368 250,281 Total expenditures 11,201,870 9,686,554 1,515,316 Excess of revenues over expenditures 1,354,112 3,082,486 1,728,374 Other financing uses -operating transfers out: Capital Projects Fund (2,584,112) (2,547,997) 36,115 Excess (deficiency) of revenues over expenditures and other uses (1,230,000) 534,489 1,764,489 Fund balance at beginning of year 4,052,332 4,052,332 Fund balance at end of year $ 2,822,332 $ 4,586,821 $1,764,489 -84- 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, 1999 Variance Favorable AEI (Ilnfavorahlel Revenues: Charges for current services -highways and streets $129,500 $15,736 ($113,764) Expenditures: Public safely -parking 127,306 12,775 114,531 Pension and retirement contributions 23,691 1,284 22,407 Health fund 9,000 445 8,555 Total expenditures 159,997 14,504 145,493 Excess (deficiency) of revenues over expenditures (30,497) 1,232 31,729 Fund balance at beginning of year 15,446 15,446 Fund balance (deficit) at end of year ($15,051) $16,678 $31,729 -85- 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, 1999 Variance Favorable $llSI&C1 ACtll3I (Unfavorahlel Revenues: Charges for current services -sewer fees $4,461,862 $4,807,688 $345,826 Miscellaneous 100 597 497 To[alrevenues 4,461,962 4,808,285 346,323 Expenditures: Sani[a[ion 3,891,454 2,972,385 919,069 Pension and retiremen[ contributions 286,241 179,290 106,951 Health fund 158,383 126,706 31,677 Miscellaneous 787,635 584,503 203,132 Total expenditures 5,123,713 3,862,884 1,260,829 Excess (deficiency) of revenues over expenditures (661,751) 945,401 1,607,152 Other financing sources (uses): Operating transfer in -General Fund 661,751 661,751 Operating transfer out -Capital Projects Fund (150,000) (150,000) Excess (deficiency) of revenues and other sources over expenditures and other uses (150,000) 1,457,152 1,607,152 Fund balance at beginning of year 2,428,637 2,428,637 Fund balance at end of year $2,278,637 $3,885,789 $1,607,152 -86- 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, 1999 Variance Favorable {Unfavorable) Revenues: Licenses and permits-bicycle tax $18,000 $54,896 $36,896 Intergoverttmental 61,438 61,438 Totalrevenues 79,438 116,334 36,896 Expenditures -highways and streets 79,438 78,369 1,069 Excess of revenues over expenditures 37,965 37,965 Fund balance at beginning of year 35,841 35,841 Fund balance at end of year $35,841 $73,806 $37,965 -87- 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, 1999 Variance Favorable (Ilnfavorablel Revenues -miscellaneous -sale of cemetery plots $ 8,000 $13,550 $5,550 Fund balance at beginning of year 24,400 24,400 Fund balance a[ end of year $32,400 $37,950 $5,550 _gg_ COUNTY OF HAWAII Vehicle Disposal Fund Schedul= of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 1999 Variance Favorable ]3~e1 A t ~~l {1)afavorahlel Revenues: Licenses and permits -vehicle disposal fee $441,660 $487,504 $ 45,844 Charges for services -towing charges 100 193 93 Miscellaneous 100 100 To[alrevenues 441,860 487,797 45,937 Expenditures: Sanitation 428,629 374,791 53,838 Pension and re[irement contributions 6,721 3,753 2,968 Health fund 1,360 1,348 12 Miscellaneous 5,150 5,150 Total expenditures 441,860 379,892 61,968 Excess of revenues over expenditures 107,905 107,905 Fund balance at beginning of year 390,221 390,221 Fund balance at end of year $390,221 $498,126 $107,905 _gg_ COUNTY OF HAWAII Solid Waste Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Budge[ary Basis) For the Fiscal Year Ended June 30, 1999 Variance Favorable B ACIU21 (Unfavorable) Revenues: In[ergovernmental $ 286,000 $ 323,500 $ 37,500 Charges for services -tipping fees 2,515,000 2,772,950 257,950 Miscellaneous 360 360 To[alrevenues 2,801,000 3,096,810 295,810 Expenditures: Sanitation 10,199,165 8,732,021 1,467,144 Pension and retirement contributions 286,610 206,743 79,867 Health fund 221,000 218,114 2,886 Miscellaneous 220,000 114,097 105,903 Total expenditures 10,926,775 9,270,975 1,655,800 Deficiency of revenues over expenditures (8,125,775) (6,174,165) 1,951,610 Other financing sources -operating transfers in: General Fund 7,625,775 7,625,775 Excess (deficiency) of revenues and other sources over expenditures (500,000) 1,451,610 1,951,610 Fund balance at beginning of year 1,107,514 1,107,514 Fund balance at end of year $ 607,514 $2.559,124 $1,951,6]0 -90- COUNTY OF HAWAII Golf Course Fuud Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 1999 Variance Favorable i raj (Unfavorable) Revenues -charges for services $836,240 $751,766 ($84,474) Expenditures: Culture and recreation 775,224 760,803 (4,421 Pension and retirement contributions 81,264 60,104 2I,L60 Health fund 58,786 58,786 Miscellaneous 16,000 447 15,553 Total expenditures 931,274 880,140 5!,134 Deficiency of revenues over expenditures (95,034) (128,374) (33,340) O[her financing sources (uses): Operating transfers in -General Fund 174,146 174,146 Operating transfers out -General Fund (135,868) (135,868) Total other financing sources 38,278 38,278 Deficiency of revenues and other sources over expenditures and other uses (56,756) (90,096) (33,340) Fund balance at beginning of year 119,159 119,159 Fund balance a[ end of year $ 62,403 $ 29,063 ($33,340) -91- COUNTY OF HAWAII Geothermal Relocation Revolving Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Ac[ual (Budgetary Basis) For the Fiscal Year Ended June 30, 1999 Variance Favorable $udgei Asllt31 (Llnfavorahlel Revenues -miscellaneous -geothermal royalties $160,000 $148,286 ($11,714) Expenditures -general government 659,240 659,240 Deficiency of revenues over expenditures (499,240) (510,954) (11,714) Fund balance at beginning of year 634,669 634,669 Fund balance a[ end of year $135,429 $123,715 ($11,714) -92- 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, 1999 Variance Favorable i ACillal (Ilnfavorablel Revenues -licenses and permits -highway beautification $115,000 $121,877 $ 6,877 Expenditures -highways and s[reets 115,000 25,265 89,735 Excess of revenues over expenditures 96,612 96,612 Fund balance at beginning of year 285,178 285,178 Fund balance at end of year $285,178 $381,790 $96,612 -93- This page intentionally left blank. -94- DEBT SERVICE FUNDS 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 1978 Sinking Fund and for payment of general obligation bonds. Moneys required to retire the bonds and service the Sinking Fund are transferred from the General Fund one year in advance of maturity. 1978 SINKING FUND -Used to accumulate moneys for a sinking fund for the 1978 Series general obligation bonds. Contributions to the Sinking Fund, which are determined by the bond ordinance, are transferred from the Bond Redemption Fund on established due dates. COUNTY OF HAWAII Debt Service Funds Combining Balance Sheet June 30, 1999 (With comparative totals for June 30, 1998) General Obligation Bonds Bond 1978 Totals Interest Redemption Sinking Eunsl Fstnd Fund 1242 144 Assets Cash and investments: Cash and cash equivalents $187,424 $ 230,000 $ $ 417,424 $ 291,837 Investments 19,770 9,107,816 8,702,013 17,829,599 19,877,177 To[alassets $207,194 $9,337,816 $8,702,013 $18,247,023 $20,169,014 Liabilities and F ~n~ d Bees Liabilities: Accrued interest payable $165,135 $ $ $ 165,135 $ 128,865 Bonds payable 235,000 235,000 105,150 Total liabilities 165,135 235,000 400,135 234,015 Fund balances: Reserved for debt service - redemption of bonds and interest thereon 42,059 9,102,816 8,702,013 17,846,888 19,934,999 Total liabilities and fund balances $207,(94 $9,337,816 $8,702,013 $18,247,023 $20.169,014 -95- COUNTY OF HAWAII Debt Service Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances For the Fiscal Year Ended June 30, 1999 (With comparative totals for the fiscal year ended June 30, 1998) General Obligation Bonds Bond 1978 Totals Interest Redemption Sinking Fund Fynd Fund 1924 124.8 Revenues - interes[ $ $ $ 933,519 $ 933,519 $ 932,759 Expenditures: Interest and finance charges 7,481,465 7,481,465 7,724,699 Principal retirement 7,793,319 7,793,319 6,422,996 Total expenditures 7,481,465 7,793,319 15,274,784 14,147,695 Excess (deficiency) of revenues over expenditures (7,481,465) (7,793,319) 933,519 (14,341,265) (13,214,936) Other financing sources (uses): Operating transfers in - General Fund 7,425,391 8,245,882 15,671,273 15,372,771 Operating transfers out - General Fund (3,418,119) (3,418,119) (932,759) Total other financing sources (uses) 7,425,39] 8,245,882 (3,418,119) 12,253,154 14,440,012 Excess (deficiency) of revenues and other sources over expenditures and other uses (56,074) 452,563 (2,484,600) (2,088,111) 1,225,076 Fund balances at beginning of year 98,133 8,650,253 11,186,6]3 19,934,999 18,709,923 Fund balances at end of year $ 42,059 $9,102,816 $8,702,013 $17,846,888 $19,934,999 -96- CAPITAL PROJECTS FUNDS CAPITAL PRO/ECTS FUND -Used to account for the costs of constructing County capital improvements financed with general obligation bond proceeds, federal and state grants, and general and special revenue fund revenues. IMPROVEMENT DISTRICT NO. 16 -Used to account for the costs of construction of improvements in Improvement District No. 16, Keaau Agricultural Lots Subdivision. The improvements were financed with the proceeds of the sale of special assessment bonds. IMPROVEMENT DISTRICT NO. 17 -Used to account for the costs of construction of improvements in Improvement District No. 17, Kaloko Subdivision. The improvements were financed with the proceeds of the sale of special assessment bonds. COUNTY OF HAWAII Capital Projects Funds Combining Balance Sheet June 30, 1999 (With comparative totals for June 30, 1998) Capital Improvement Totals Projects District Fund 1~.0.-_11 1244 129$ ACCPfC Cash and investments: Cash and cash equivalents $10,769,887 $839,506 $11,609,393 $ 8,021,684 Investments 13,550,000 13,550,000 33,100,000 Total cash and investments 24,319,887 839,506 25,159,393 41,121,684 Receivables: Due from other govemments: State of Hawaii 102,815 102,815 102,815 Federal governn[ent 3.264,479 3,264,479 1,786,546 Total due from other govemments 3,367,294 3,367,294 1,889,361 Due from other funds 223,602 223,602 211,073 Private contributions receivable 2,015 2,015 2,015 Total receivables 3.592,911 3,592,911 2,102,449 Restricted asses -cash and cash equivalents 231,520 231,520 224,727 To[al assets $28,144,318 $839,506 $28,983,824 $43,448,860 Liabilities and Fund Balances Liabilities: Warrants payable $ 783,254 $ $ 783,254 $ 1,224,397 Accoun[s payable 1,200,181 1,200,181 1,977,260 Due to other funds 7,613 7,613 2,757 Deferred intergoverrtmentalrevenue 317,838 317,838 355,086 Other 170,253 170,253 170,351 Total liabilities 2,479,139 2,479,139 3,729,851 Fund balances: Reserved for: Encumbrances 11,747,779 (1,747,779 17,217,553 Unexpended allotments 5,10(.420 838,435 5,939,855 6,956,625 Total reserved fund balance 16,849,199 838,435 17,687,634 24,174,178 Unreserved: Designated for: Road repairs 2,550,384 2,550,384 1,537,891 Development impact 543,169 543,169 528,691 SRF projects 939,259 939.259 2,534,028 Total designated fund balance 4,032,812 4,032,812 4,600,610 Undesignated 4,783,168 1,071 4,784,239 10,944,221 Total fund balances 25,665,179 839,506 26,504,685 39,719,009 Total liabilities and fund balances $28,144,318 $839,506 $28,983,824 $43,448.860 _97_ COUNTY OF HAWAII Capital Projects Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances For the Fiscal Year Ended June 30, 1999 (With comparative totals for the fiscal year ended June 30, 1998) Capital Improve. Improve. Totals Projects District District Fund No. 16 No. 17 1212 19`1$ Revenues: Intergovernmental $ 7,981,710 $ $ $ 7,981,710 $ 3,482,093 ln[erest 6,893 6,893 7,391 Miscellaneous: Developer's contributions 14,478 14,478 436,426 Other 18,310 3,213 21,523 31,244 Total revenues 8,021.391 3,213 8,024,604 3,957,154 Expenditures: General goverrtment 452,123 452,123 Public safety 718,931 718,931 974,005 Highways and streets 13,351,031 13,351,031 4,553,000 Sanitation 4,354,868 4,354,868 4,467,424 Culture and recreation 6,163,084 6,163,084 2,091,260 Miscellaneous 7,856 1,862 9,718 11.283 Total expenditures 25,047,893 1.862 25,049,755 12,096,972 Excess (deficiency) of revenues over expenditures (17,026,502) 1,351 (17,025,151) (8.139,818) Other financing sources (uses): State Revolving Fund loans 1,324,602 1,324,602 1,404,908 Refund to lot owners (211,772) (211,772) Operating transfers in: General Fund 117,755 Highway Fund 2,547,997 2,547,997 2,818,611 Sewer Fund 150,000 150,000 Operating transfers out: General Fund (85.000) Total other financing sources (uses) 4,022,599 (211,772) 3.810,827 4,256,274 Excess (deficiency) of revenues and other sources over expenditures and other uses (13,003,903) (211,772) 1,351 (13,214,324) (3,883,544) Fund balances at beginning of year 38.669,082 211,772 838,155 39,719,009 43,602,553 Fund balances at end of year $25,665,179 $ $839,506 $26,504,685 $39,719,009 -98- COUNTY OF HAWAII Capital Projects Fund Schedule of Appropriations, Expenditures and Encumbrances - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 1999 Authorizations 1998 Encumbrances Lapsed Prt~'e t Titl Farms ATmonri:~tinn< Inlal FF^rvndi~ Fn~~~ R, Public Safety: Fire: Kawailani Fire Sation Garage S 5,900 5 5 5,900 5 5.900 5 b Kawailani Fire Station Apparatus 25,000 25,000 25.000 HPP Volunteer Firc Station Water 2.200 2.200 2.200 Fire Maintenance Shop Extension 7.384 3,384 3.384 Central Fire Station Hose Tower 96,000 96,000 96,000 HOVE Fire House 2,414 2.414 2 414 Waimea/Central Fire Station Retrofit 40.000 71.000 111.000 23 461 87,539 Toul Fire 78.898 167,000 245,896 62,339 183,539 Police: Police Air Duct Removal 403.343 403.343 248.393 154.950 Islandwide Communication Tower Replacement 312,188 - 312.188 286.425 25.763 Toul Police 715.531 715,531 534,618 180,713 Fluod Control: Waiakea Stream aMP Project -Federal Funds 90.000 90.000 90.000 East Hawaii Drainage Improvements 214,0'_6 214,026 175 213.851 North Kona Drainage Improvements 28,800 28,800 15.640 13.160 West Hawaii Drainage Improvements 100.000 100.000 100.000 - Toul Fload Control 342,826 90,1)00 432.826 115.815 717.011 - Total Public Safety !.137,255 257,(X10 1.391,255 712.992 681.263 Highways and Sveels: Puna Highway/Traffic Division Projects 134,412 200.000 334,412 97,394 237,018 Nanawale Estates Road Improvements 200,000 200.000 93,343 106.657 Puna Highwaylfraffic Division Projects 44 4't ~ Puna Highway Intraswcture -Federal Funds 500.000 500.000 6.300 493.700 Puna Emergency Access Road 250.000 250,000 240,606 9,394 Puna HighwayITratfic Division Projects 29,862 29,862 29,862 Puna Highway Infrastructure -Federal Funds 250,000 2SO.lXX) 250,000 Old Volcano Road -Private 8.060 8,000 8,060 Puna Emergency Access Road 911,406 911,406 657,963 53,443 South Hilo Traffic Signal Upgrade -Federal Funds 1,835.1XX) 1.835.000 999 1,634,1X11 South Hilo I,aal Road Improvements 672,000 672.1X10 672,000 Hoomana/Malanai/Spring Strccts 100,000 100,000 65,481 34,519 Ululani Strttt 16,780 !6.780 16.780 Ululani Street 266.861 266.861 266.861 Mohouli Extension -Federal Funds 3.586,900 3.586,900 2,042 3,584.858 Mohouli Extension -County Funds 14!.053 141,053 49,362 91,691 (Continued) -99- COUNT-Y OF HAWAII Capital Projects Fund Schedule of Appropriations, Expenditures and Encumbrances - Budget and Actual (Budgetary Basis) For the Fiscal Ycar Ended June 30, 1999 (Continued) Authorizations 1998 Encumbrances Lapwd lpjret Title ForwaNed Annrnnriaiinnc Ttr :~l F^r,end~ Fnyhr+n~rc BalaaCCS Highways and Strrels, continued: Haaheo SchoUl Stdrwalks 99,215 99,215 40,991 58,224 Lanikaula-Manono Traffic Signal -County Funds 27,852 27,852 27,852 lanikaula-Manono Traffic Signal-Frderal Funds 565,000 565,000 565,000 Komohana Bridge -Federal funds 180,303 180,303 32.281 148,022 Komohana Bridge -County Funds 15.879 15.879 6,071 9,808 Kaahakini Bridge -Federal Funds 587,090 567.090 587.090 Kaahakini Bridge -County Funds 22,000 22,000 22.000 Reeds Island Bridge -Federal Funds 1.985,666 1,985.666 38.320 1.9x7,346 Reeds Island Bridge - Coumy Funds 390.000 390.000 9,347 380.653 Mohouli Street Improvements 374,718 374,718 149,935 224.783 Kawailani/Pohakulani/Aimula/Iwalani Sviceu 154,133 IS4, 133 39,057 4a,16x 70.912 Haaheo Sehuol Sidewalk Improvements 155,618 155.048 155,478 Kaumana/Ainako Signal- Federal Funds 6x.559 64.559 4,681 59,878 Honomu/Mamalahoa Bridge -Federal Funds 123,842 123.842 88.255 35.587 Honomu/Mamalahoa Bridge -County Funds 30,437 30,437 21,407 4,089 4,9x1 Kalaoa/Mamalahoa Bridge -Federal Funds 107,068 107,068 107,068 Kalaoa/Mamalahoa Bridge -County Funds 27.000 '-7.000 27.000 Onomea Camp Road Bridge - Federal Funds 3x,921 34,921 7,458 27 463 Onomca Camp Road Bridge -County Funds 8.770 8.770 1,816 1,456 5,x98 Hilo Road Improvements Phase III -Federal Funds 58.819 58.819 5.585 53.234 Komohana/Ponahawai Signal- Federal Funds 2.008,576 2,008.576 950.138 1,058,438 Saddle Road Resurfacing 1.301,764 1,301,764 1,167,139 134,625 Mohouli Street Ezmnsion 92.000 1,328.000 1.420.000 1,420,000 Hilo Road Improvements 117,492 117,492 (2.508) 120,000 Hilo Road Improvements Phax III -County Funds 900.650 (200,000) 700,650 126.829 573,821 Kapiolani Street 700,000 200,000 900,000 484 899,516 South Hilo Highway/TmfOc Division Projects 4,678 4,678 4,678 Kaumana Drainage Improvements 125,000 125,000 59.073 65,927 Haaheo School Sidewalk Improvements 196,521 196.521 165,660 30,861 Hilo Road Improvements Pharr III -Frderal Funds 4,000.000 4.000.000 587,786 3.412.214 Waiakea Houselots Resurfacing 250.000 (125,000) 125,000 125,000 Mohouli/Komohana-Kilauea -Federal Funds 3.200.000 3.200.000 3.200.000 Kawailani/Pohakulani/Ainaola -Federal Funds 1,500.000 1.500.000 1.500.000 Kawailani/Pohakulani/Ainaola - Cnunry Funds 50,000 50,000 50,000 Kalopa/Mamalahoa Bridge -Federal Funds 820,433 820,433 36,579 783.854 Kalopa/Mamalahoa Bridge - Cuumy Funds 15.989 15.989 8,705 7,284 Opea/Mamalahoa Bridge -Frderal Funds 564.000 564.000 431 563,569 Waikaalulu/Mamalahoa Bridge -Federal Funds 820,549 620,549 8,686 811,863 Waikaalulu/Mamalahoa Bridge -County Funds 15,989 15,989 2,172 13,817 Inoino Bridge Rrplacrmeta -Federal Funds 104,550 141,550 44,432 60,116 Inoino Bridge Replacement - Couny Funds 26,493 26,493 11,091 15A02 Nosh Hilo Highway/Traffic Division Projects 8,411 8,411 8,411 - Nonh Hilo Highway/Traffic Division Projects 100,350 100,350 100,350 Hamakua Highway/Traffic Division Projects 1.644 1.644 1.644 Hamakua Highway/Traffic Division Projects 114,600 114,600 108,753 5.847 (Continued) - 100 - COUNTY OF HAWAII Capital Projects Fund Schedule of Appropriations, Expenditures and Encumbrances - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 1999 (Continued) Authorizations 1998 Encumbrances lapsed Prniecl Title Forwarded ATnrnnriatinm I711a1 F~w•ndinirec FnFnei~hnnrL Rat Highways and Streets, continuM: Ahualoa Homestead Road 150,000 150,000 150,000 North Hilo Highway/Traffic Division Projects 49.683 49,683 37,255 12,428 Hamakua Highway/Tra(fic Division Projects 5.977 5.973 5.973 Hamakua Wooden Bridges and Road Repairs 62.250 62,250 62,250 Kalopa Bypass/Sand Gulch 1,000 1.000 1.000 Mamalahoa/Waimea Town 434,105 434,105 80.189 353,916 Mamalahoa/Lindsey-Kamamalu ?5.307 25.307 25,307 Mamalahoa/Waimea Town 400,000 400,000 286.507 113.493 LindseyRoadlmprovements-Federal Fulls 2,18fi,?12 2,186,212 3.055 2,183,157 Lindxy Road Improvements -County Funds 500.000 500.000 48,395 451,605 North Kohala Highwayfl'raffic Division Projects 66.553 66,553 44,475 22.078 South Kohala Highwayll'raffic Division Projects 29,450 29,450 29.450 - Mamalahoa /Lindsey-Kamamalu 124,798 124,798 1119,525 15.273 - NoM Kuhala Highway~fraffic Division Projects 132.750 13?.750 96,258 36,492 South Kohala Highwaylfraffic Division Projects 132.950 132.950 132,950 - Kamartulu Street '_50.000 250,000 192,733 57,256 Mamalahoa/Lindsey-Kamamalu -Federal Funds 5.152.681 5.152,681 4,359.673 793,638 North Kohala Highway/Traffic Division Projects 632 672 672 South Kohala Highway/Traffic Division Projects 17,570 17,570 17,570 Waikoloa Road Shoulder Improvements -Federal Funds 1,195,177 1.195.177 3.219 1,191.958 Waikoloa Road Shoulder Improvements -County Funds 300.000 300.000 300.000 Mamalahoa/Lindsey-Kamamalu -Private 71.414 71,414 566 70.828 Mamalahoa/Lindsey-Kamamalu -Private 48,670 48,670 48.670 Waikoloa Road Improvements -Federal Funds 760,000 760,000 760.000 - Mamalahoa/Lindsey-Kamamalu -Federal Funds 1,000.000 1.000,000 LWO.WO Mamalahoa/Lindsey-Kamamalu 150,000 150,000 150,000 Alit Drive Design and Archeological Study - Fnlcral Fund 1.283.815 1,283,815 246.951 1.036,864 Alit Highway, Private Funds 225.010 225,010 70.017 154,993 - Knna Road Improvements -Federal Funds 307.162 307,182 73.621 - 273,561 Kuakini/Palani Road -Hualalai 7447 7.447 7.'417 Kaloko/Mamalahoa Hwy -Private Funds 48.000 48.000 48.000 Napoopoo/Mamalahoa Hwy • Private Funds 161,250 161,250 161.250 Kuakini/Palani Road -Hualalai 7,465 7,465 7,465 Mamalahoa/Holualoa-Kcauhou 5445 5,445 5445 - - Kona Road Improvements -Federal 28.215 28,215 8.371 19,844 Kona RoaJ Improvements Phau II -County Funds 252,980 252,980 251.278 1.702 Kuakini Highway Improvements 6.569 6.569 6.569 Palani Road Sidewalks !50.000 150,000 145.832 4,168 Alit Drive Bikeway Extension 65.211 65.211 33,970 29,451 1.790 Alit Drive Bridge Replacement -County Funds 125.000 125.000 17.297 20,625 87.078 Alit Drive Bridge Replacement -Federal Funds 499,755 499,755 66,718 433.077 Alit Drive Shoreline Protmtion 53.000 57.000 53.000 Kona Road Improvements Phase II-Federal Funds 4,168.343 4.168,743 1,679.624 2,288,719 Alit Drive Shorclinc Prornction 97,000 97,000 73.000 24,000 Mamalahoa Highway Improvements 300.000 300,OOD 29,540 270.460 (Continued) - IDI - COUNTY OF HAWAII Capital Projects Fund Schedule of Appropriations, Expenditures and Lncumbrances - budgct and Actual (budgetary basis) For the Fiscal Year Ended June 30, 1999 (Cominucd) Authorizations 1998 Encumbrances ~P~ Pn~rrt T~ FnrwardrA ATnnrnnri:ninnc Tn~t:~l F_snrnA'uu~ Fn n1 mhrynrrc R:,L~rr< Highways and Sweets, continued: Kona Road Improvements 114,801 114,801 4,507 110,294 Kom Road Improvements Phase II 262,316 (262.274) 42 42 - Kona Road Improvements Phax 111 262,2M 262.274 262,274 Kona Road Improvements Phase 11 777,600 777.600 777.600 South Kona Highwaylfraffic Division Projects 234,013 234,013 234,013 Kona Road Improvements Phase 11 198,134 198,134 198,134 SouN Kona Highway/Traffic Division Projttts 446 446 446 Kuakini Highway/Palani-Kualalai 155,0(1(1 155.000 155.000 Ka'u Highway/Tra(0c Division Projttts 76.293 76,293 75,874 419 Ka'u HighwaylTraffie Division Projects 232,21X1 232,200 11.513 220.687 - Ka'u Highway/Traffic Division Prujcns Il?1.960 104,960 6,848 98.112 seismic Bridge Reuo0t -Federal Funds 25?,000 252.000 252,000 Island-wide Right-of-way Land Acquisition 69,121 69,121 24.802 31.830 12,489 Manicnic/Kaiwiki Bridge -Federal Funds 1,624,000 1,624,000 1.624,000 Manienie/Kaiwiki Bridge 406.000 406.000 406.000 Oshiro and Other Bridges 1.983.060 1,983.060 134,238 1,848,822 Circle Island Highway/Traf0c Division Projects 4.861 4.861 4.861 Bridge Replacement Program 594,646 594,646 37,980 556,666 Bridge Inspection. Mainuin, Repair 250.000 250,000 - 250,1X10 Bridge InspectioNAppraisal -Federal Funds 38.955 38,955 1,492 37,463 - Tool Highways and Streets 48.664.352 12,110.503 60.774,855 14,072,113 45.301.990 1400.752 Saniution and Warm Disposal: Solid Waste Disposal: Hilo Landfill Closure 1.792 1,792 1,792 Land011 Closure 298.673 296,873 55.890 242,983 Hilo Landfill Closure 20.805 20,805 4,989 15.816 Kailua Landfill Closure 20.952 20.952 390 20,562 Kcauhou Transtcr Station 666,934 666.934 459,092 116.730 91,112 Keauhou Transfer Station 5 428 - 5.428 5.428 Tool Solid Waste Disposal 1,014 784 1.014,784 520,600 387,056 106,928 Sewers: Kapttho Wastewater System 2~.~ (I W000) 1~•~ 1~•~ Hilo STP DemulitioNRchabiliution 648.550 648,550 35.397 23,943 589,210 Papaikou Collector Sewer 55.722 55,722 24,150 31,572 Banyan Drive SPS Rehabilitation 250,000 250.000 45,851 4,515 199,634 Ainako Inttrcrptor Sewer A&B -SRF 316,951 316,951 82,330 115.502 119.119 Waiakea Pond Sewer Easement Improvements 229,761 229.761 7,954 3.132 218,675 Kamehameha Avenue Sewer Rehabiliation 337,917 337,917 157,184 173,433 7,300 Paukaa Collector Sewer -SRF 1,678,286 1,678.286 505,723 1,172,563 N'aiakea Houselot Collector Sewer-SRF 6.900,000 (1,875,734) 5.024,266 1.972,127 2,623,673 428.466 Paukaa Collector Sewer 178,750 178,750 13,529 165.221 HouselotsCollttmr Sewer Phase II 11,039 11,039 (13,13a) 24,173 (Cominued) - 102 - COUNTY OF HAWAII Capital Projects Fund Schedule of Appropriations, Expenditures and Encumbrances - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 1999 (Continued) Authorizations 1998 Encumbrances Lapsed PIIS/15St T~[~e Forwarded Appronri~_iinnc Tn ~I ~nrndirurec Fn iir m~nnrr< Rat Saniation and Waste Disposal, continued: Sewers, continued: Wailoa Force Main Replacement 150,000 !50,000 150,000 Wailuku Sewage Pump Station 300,000 300.000 300,000 Old Waiakea Mill Sewer -State 28,758 28,758 28.758 Kamehameha Avenue Sewer Rehabiliation 9,640 9,640 9,640 Kaumana Gardens Sewer 43 A27 43,427 43,427 Papaikou Collector System 301,077 301,047 2,805 298.242 Kamehameha Avenue Sewer 9,569 9,569 9.569 Paukaa Sewer Collector System -SRF 465,162 465,162 98.996 190.233 175,933 Puako Wastewater System 200,000 (100,000) 100.000 100.000 Kealakehe Wastewater Treaunent Plant 99.623 99,623 5,760 93,863 Kealakehe EfOuent Disposal 96.139 96,139 96,139 Alii Drive/Waiaha Pump Station 33.343 33.343 33,343 Waiaha Bay SPS -SRF 1,688 1,688 1.688 Alii Drive Interceptor Sewer - ARB -SRF 113,772 113.772 113.772 Kealakehe Wastewater Treatment Plant Expansion 308.337 308.347 (85.085) 393 432 Alii Drive Interceptor Sewer - E&F -SRF 593.764 593.764 239,130 354,634 Hulualoa Bay SPS 186.387 186,38) 125.558 45,000 15,825 Sewer Facility Rehabilitation 77,550 77,550 48,555 28,986 9 Waiaha Bay SPS -SRF 53,874 53.874 51,298 2.576 Alii Drive Interceptor Sewer A&B -SRF 340,738 340,738 183,454 - 157,284 Kealakehe Sewage Effluent Disposal 1,059.176 (200.000) 859.176 163.692 695 484 Alii Drive Sewer/Waiaha Pump Station 250,000 250.000 130,294 119,706 Alii Drive Interceptor Sewer - E&F - 63,104 63,104 1,248 61,856 Holualw Bay SPS -SRF 404,175 467,175 404,175 Disappearing Sands SPS -SRF 2,000.000 2.000.000 2.000,000 Alii Drive Interceptor Sewer C&D -SRF 24,117 24,117 14,829 9,288 Hazard Mitigation for Wastewater - FEMA Funding 293.785 297,785 293,785 Haiard Mitigation for Wastewater • DBED Funding 9.500 9.500 9,300 Hazard Mitigation fur Wastewater - ERF Funding 150.000 150,000 150,000 Hazard Mitigation for Wastewater -County Funding 346.715 346.715 346,715 Alii Drive Sewer Projects 37,568 )7.568 - 37,568 Total Sewers 12.973.096 3.609.110 16.582.206 3,794.259 10.517.920 2.270.027 Total Sanitation and Waste Disposal 13.987,880 3.609.110 17,596.990 4,315.059 10.904.976 2,376.955 Culmrc and Recreation: Shipman Park Expansion and Improvements 1.209 !•209 - 1.209 Kalapam Community Facility Improvement 83,723 (61,918) 1.805 1.631 174 Pohoiki Park Improvements 20.000 20,000 18,746 1.254 Puna parks 9.116 9,116 3.200 5.916 Kcaau Park Ballpark/Tcnnis Lights 18.307 (410) 17,897 14.897 ).000 Hawaiian Beaches Soccer Field 5,000 5.000 5,000 Pohoiki Beach Park Expansion 101,977 101,977 101,977 Cooper Center Outdoor Coun 350,000 350.000 211,767 323.233 Hilo Bayfron[ Park Improvements 101.848 101,848 101.848 (Continued) - 103 - COUNTY OF HAWAII Capital Projects Fund Schedule of Appropriations, Expenditures and Encumbrances - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 1999 (Continued) Authorinttions 1998 Encumbrances lapsed PrpJrcl Tillr Fnrwardrd ATnrnnri2linnc Tnt:~l Fxnrndimrrt Fn ~mhr'mrrc $;tf;tptt,5 Cuhurc and Recreation, continued: Panarwa 20o Primate Rnof 4,213 4,213 4,213 Panaewa Zoo Facility Improvements 25.899 25.699 13.914 11.985 Park Improvements -District 2 92,517 (54,578) 37,939 10.57$ 27,364 Onekahakaha Beath Park Improvements 52.330 (52,330) Keaukaha-Panaewa Gym Planning 250,000 250,000 250,000 Kawanamkoa/Hwlani Gym 95,217 95,217 56,703 38,514 Kawamoto Swim Stadium 3.537 3.537 3.537 Hilo Municipal Golf Couru Improvemrnts 3.950 3,950 3.950 - Council District 4 Park Improvemrnts 36,061 15,040 $1,101 23,104 27,997 Civic Auditorium Improvements 225,000 225,000 203,862 21.138 Kawamoto Swim Sodium 333,728 333.728 320,461 13.267 Hoolulu Complex Electrical Improvements 11,843 11.843 11.643 Hilo Bayfront Park Improvements 118,364 581 420 699,784 476,820 222,964 Kawamoto Swim Stadium 2,030 2,010 2,040 Council District 3 Park Improvemrnts 55.500 55.500 55.500 Hilo Municipal Golf Course 1,345 1,345 1,345 Downtown Hilo Landscaping 135,000 135.000 98,959 36,041 Keaukaha-Pamcwa Gym Plan 4,783 4,783 4.783 Hoolulu Park Expansion 54,578 54,578 54,576 Waiakca Peninsula Improvements 750,000 750.000 28,616 721.384 Seven Seaz Luau House Improvements 30,900 30,900 10,815 20,085 Council District 1 Park Improvements 12,500 43.500 56.000 33,940 22,060 Council District 9 Park Improvements 7 X39 7,239 7,239 New Waikoloa Park 87,736 (23.914) 63.622 25,758 38.W4 Noah/South Kohala Park 46,725 (21,075) 25,650 25,650 Waimea Soccer Fields 19.999 (19,998) 1 1 South Kohala Trails and Grecnways 60.000 60.000 7,660 52,340 New Waikoloa Park 4,967 4,987 4,987 Waimea Trails and Greenways -Federal Funds 313.700 313,700 30,642 283,058 Kailua Playground Park 894 894 894 Kona Gym Showers/Lockers 250,000 (150,000) 100,000 100.000 Htwkem Park Water Tank 4,366 4,366 4,366 Old Kona Airport Swimming Pool 32,500 32,500 32.500 Kailua Playground Park 17,742 17,742 17.742 Dis. Sands/Pahoehoe/Kahaluu Parks -Private 70.561 70,561 70,561 Kona Swimming Pool 28,000 28,000 28,000 Council District 8 Park Improvements 1,292 1,292 1,292 Kona Swimming Pool 500.000 500,000 500,000 Kahuku Park Imprnvements -Private 10,000 10,000 4,750 S X50 Arthur Grccnwell Park 2,406 2,406 (179) 2,555 Kona Swimming Pool 653,460 653.d60 458,974 194,486 Hookena Beach Composting Toilets 98,283 98.283 11,336 86,947 Miloli'i Beach Composting Toiln 15,000 15.000 13.298 1.702 Hale Halewai Repairs/Improvements 59,000 59,000 56,000 3.000 Kona Swimming Poul 3,000,000 3,000,000 ?,772,182 227,818 Council District 7 Park Improvements 35,000 35,000 22.812 12,188 (Continuetl) - 104 - COUNTY OF HAWAII Capital Projects Fund Schedule of Appropriations, Expenditures and Encumbrances - Budget and Actual (Budgetary Basis) For the Fiscal Year Ended June 30, 1999 (Concluded) Authorizations 1998 Encumbrances VPs rS.! T~!15 Forte AT,mnnrialinnc T?lal F_x_pt•n liy to c Fncnmhranrec $9L7t1L6 Culture and Recreation, continued: Council District 8 Park Improvements 23.600 20,000 43.600 25 483 18,1 I7 - Hookena Beach Park Improvements 150,000 150,000 150,000 Hale Halawai Improvements 3.065 3.065 3,065 Handicap Barrier Removal 135.144 410 135,554 127.200 8,354 Island-wide ADA Compliance 477,399 477,399 345,806 131,593 Wastewater System Upgrade 100.163 134,248 234,411 95.989 138,422 - ADA Compliance 300,000 300,000 155,664 144,336 - Repairsto Facilities - 150,000 150,000 109.664 40.336 - Total Culture and Recreation 7,291,016 2,748.125 10.039,141 6.270,701 3.762,046 6.394 Miuellaneous: FasUWest Hawaii Office Rrnovation - 3,474,000 3,474,000 372,123 3.101,877 - FasUWcst Hawaii Office Renovation 280.100 260,100 80,000 200.100 - Alae Cemetery Improvements IS.000 15.000 1,984 !3,016 - Alae Cemetery Expansion 50.000 50,000 50.000 Ka'u Agricultural Water System - Sute Funds 500.000 - 500.000 500.1100 Tool Miuellaneaus B70. 100 3.489,000 4,319,100 454.107 3.864.993 - Tool Capiul Projects Fund 571.910.603 522.213.736 594,124,341 525.824 972 561,515.268 53.784,101 - 105 This page intentionally left blank. - 106 - PROPRIETARY FUNDS ENTERPRISE FUNDS KULAIMANO ELDERLY HOUSING PRO/ECT -Used to account for the operation of a housing project for low income elderly persons located north of Hilo. Revenues are from rents collected and federal rent subsidies. OULI EKAHI AFFORDABLE HOUSING PRO/ECT -Used to account for the operation of a 33-unit single-family affordable housing project located in Waimea. Revenues are from rents collected. COUNTY OF HAWAII Enterprise Funds Combining Balance Sheet June 30, 1999 (With comparative totals for June 30, 1998) Kulaimano Ouli Ekahi Totals Elderly Affordable Housing Housing Pro!ect Ec41€ct 1.422 122$ Assts Current assets: Cash and cash equivalents $249,770 $ 14,183 $263,953 $215,046 Investments 500,000 500,000 500,000 Impress fund 50 100 150 150 Accounts receivable 592 15,245 15,837 11,968 Interest receivable 1,109 85 1,194 1,139 Other receivable 1,141 1,141 849 Prepaid expenses 1,806 1,806 1,798 Total current assets 753,327 30,754 784,081 730,950 Restricted assets -cash and cash equivalents: Tenan[ security deposits 8,907 16,730 25,637 27,070 Debt service reserve 169,117 169,117 165,288 Operating reserve 13.619 13,619 13,318 Total restricted assets -cash and cash equivalents 178,024 30,349 208,373 205.676 Fixed assets: Land 250,000 503,877 753,877 753,877 Buildings 1,136,008 1,136,008 1,136,008 Grounds and site improvements 261,000 261,000 261,000 Furnishings and equipment 86,170 86,170 86,206 1,733,178 503,877 2,237,055 2,237,091 Accumlated depreciation (705,587) (705,587) (668,625) Fixed assets, net of accumulated depreciation 1,027,591 503,877 1,531,468 1,568,466 Total assets $1,958,942 $564,980 $2,523,922 $2,505,092 (Continued) - 107 - COUNTY OF HAWAII Enterprise Funds Combining Balance Sheet June 30, 1999 (Wi[h comparative totals for June 30, 1998) (Concluded) Kulaimano Ouli Ekahi Totals Elderly Affordable Housing Housing Prniect Proiect 1122 122$ 1_ iahiliti ¢ and Fa~v_ Current liabilities: Warrants payable $ 13,177 $ $ 13,177 $ 12,909 Accoun[s payable 94! 941 522 Due to developer 7,729 7,729 7,729 Unearned rental income 45 358 403 377 Notes payable -current 14,110 14,110 13,140 Total current liabilities 28,273 8,087 36,360 34,677 Current liabilities payable from res[ricted assets - Tenant security deposits payable 9,250 15,835 25,085 26,390 Notes payable 1,132,301 1,132,301 1,146,697 To[alliabilities 1,169,824 23,922 1,193,746 1,207,764 Equity: Contributed capital: Developers 250,500 544,367 794,867 794,867 Intergovernmental 160,796 160,796 160,796 Total contributed capital 411,296 544,367 955,663 955,663 Retained earnings (deficit): Reserved for debt service 169,117 169,117 165,288 Unreserved 208,705 (3,309) 205,396 176,377 Total retained earnings (deficit) 377,822 (3,309) 374,513 341,665 Total equity 789,118 541,058 1,330,176 1,297,328 Total liabilities and equity $1,958,942 $564,980 $2,523,922 $2,505,092 - 108 - COUNTY OF HAWAII Enterprise Funds Combining Statement of Revenues, Expenses and Changes in Retained Earnings (Deficit) For the Fiscal Year Ended June 30, 1999 (With comparative totals for [he fiscal year ended June 30, 1998) Kulaimano Ouli Ekahi Totals Elderly Affordable Housing Housing Project Project 1242 124$ Operating revenues: Rental receipts from tenants $ 85,563 $203,002 $288,565 $ 282,341 Rental subsidy from federal government -HUD 134,012 134,012 153,327 Laundry receipts 2,752 2,752 3,010 Miscellaneous 4,474 4,474 3,882 Total operating revenues 222,327 207,476 429,803 442,560 Operating expenses: Utilities 26,599 22,232 48,831 51,692 General and administration 56,708 88,032 144,740 159,863 Maintenance and repairs 24,960 13,529 38,489 261,664 Lease expense 76,226 76,226 82,207 Depreciation 39,177 39,177 41,398 Total operating expenses 147,444 200,019 347,463 596,824 Operating income (loss) 74,883 7,457 82,340 (154,264) Nonoperating revenues (expenses): Interest income 30,492 502 30,994 34,135 Interest expense on notes payable (80,486) (80,486) (82,018) Loss on disposal of assets (266) To[al nonoperating revenues (expenses) (49,994) 502 (49,492) (48,(49) Net income (loss) 24,889 7,959 32,848 (202,413) Retained earnings (deficit) at beginning of year 352,933 (11,268) 341,665 544,078 Retained earnings (deficit) at end of year $377,822 ($3,309) $374,513 $341,665 - 109 - COUNTY OF HAWAII Enterprise Funds Combining Statement of Cash Flows For the Fiscal Ycar Ended June 30, 1999 (With comparative totals for the fiscal year ended June 30, 1998) Kulaimano Ouli Ekahi Totals Elderly Affordable Hcg Project Hsg. Project J.QQQ ]QQ$ Cash flows from operating activities: Cash received from tenants $ 88,263 $202,088 $290,351 $287,484 Cash received from federal goverrtment -HUD 134,012 134,012 153,327 Cash paymen[s to suppliers for goods and services (107,040) (200,567) (307,607) (563,064) Net cash provided by (used in) operating activities 115,235 1,521 116,756 (122,253) Cash flows from capital and related financing activities: Principal paid on notes payable (13,426) (13,426) (11,894) Interes[ paid on notes payable (80,486) (80,486) (82,018) Acquisition and construction of capital assets (2,179) (2,179) (6,427) Net cash used by capital and related financing activities (96,091) (96,091) (100.339) Cash flows from investing activities: Purchase of investments (1,500,000) (1,500,000) (1,500,000) Proceeds from sale and maturities of investments 1,500,000 1,500,000 1,500,000 Interest on investments 30,416 523 30,939 34,757 Net cash provided by investing activities 30,416 523 30,939 34,757 Net increase (decrease)in cash and cash equivalents 49,560 2,044 51,604 (187,835) Cash and cash equivalents at beginning of year 378,284 42,588 420,872 608,707 Cash and cash equivalents at end of year $427,844 $44,632 $472,476 $420,872 Reconciliation of operating income (loss) to net cash provided by operating activities: Operating income (loss) $ 74,883 $ 7,457 $ 82,340 ($154,264) Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation 39,177 39,177 41,398 Increase in accounts receivable (156) (3,713) (3,869) (4,262) Increase in other receivables (292) (292) (303) Decrease (increase) in prepaid expenses (8) (8) 619 Increase (decrease) in warrants payable 816 (548) 268 (3,542) increase (decrease) in accounts payable 419 419 (1,422) Decrease in due to developer (3,293) Increase (decrease)in unearned rental income (238) 264 26 (153) Increase (decrease) in tenant security deposits payable 342 (1,647) (1,305) 2,969 Total adjustments 40,352 (5,936) 34,416 32,0]1 Net cash provided by (used in) operating activities $115,235 $1,521 $116,756 ($122,253) - 110- TRUST AND AGENCY FUNDS EXPENDABLE TRUST FUNDS PARK DEDICATION FUND -Used to account for moneys deposited with the County by subdividers to provide land for parks and playgrounds in subdivisions. HAWAII COUNTY HOUSING AGENCY'- Used to account Eor Federal and County moneys used to provide public housing assistance within the County. GEOTHERNEAL ASSET FUND -Used to account for funds received from geothermal developers to mitigate the effects of geothermal energy development. AGENCY FUNDS STATE WEIGHT TAX FUND -Used to account for the collection and payment to the State of motor vehicle weight taxes collected by the County on behalf of the State. IMPROVEMENT DISTRICT NOS. 16 AND 17 -Used to account for the collection of assessments and related interest Erom property owners in improvement districts for financing the payments of special assessment bond interest and principal. Proceeds from such bonds are used to finance the conshuction of improvements and are accounted for in the capital projects funds. IMPRO VEMENT DISTRICT REVOLVING FUND -Used to accumulate any surplus balance of an improvement district after final payment of all bonds. Such moneys are available to make up deficiencies in other improvement dishicts. IMPROVEMENT DISTRICT BOND AND INTEREST REDEMPTION FUND -Used to account for debt service on special assessment bonds. PERFORMANCE AND REFUNDABLE DEPOSITS FUND -Used to account for miscellaneous deposits left with the County. PAYROLL CLEARANCE FUND -Used to account for the payment of County payroll with moneys transferred from the respective departments. FLEXIBLE SPENDING ACCOUNT -Used to account for funds that employees elect to have withheld from their pay checks to be used to pay unreimbursed medical and dependent care expenses on a pre-tax basis: LAPSED WARRANTS FUND - As requried by state law, used to accounts for funds remaining when County warrants are not cashed before they lapse. This page intentionally left blank. -111- COUNTY OF I~AWAII Trust and Agency Funds Combining Balance Shcct lunc30,1999 (With comparative totals for June 30, 1998) Expendable Trust Funds swan County State Improvement Improvement Park Housing Geothermal Weight District District Dedication Aeencv 455c1 Tas I~1~-16 Tlfl.--LZ Accetc Cash and investments: Cash and cash equivalents $ $4,691,012 $ $536,297 $25,036 $3,082,068 Investments 123,113 158,798 1,021,931 Impress fund 100 Totalcash andinvestmcnts 123,113 4,849,910 1,021,931 536,297 25,036 3,052,068 Receivables: Due from federal government 12,313 Due from other funds 888 Other 148,883 SO Totalreceivables 188.784 SO Restricted assets -cash & cash equiv. 1,400,000 Totalasscts $123.113 $5,008,664 $1,021,931 $536.297 $25,086 $4,452,068 I.i~hili[i c end Fa~ity Liabilities: Wartantspayable $ $ 51,187 $ $536,297 $11,195 $ Accounts payable 3,624 Employee costs payable 64,446 Due to other funds 90,918 Accrued liabilities 9,568 Customer advances and deposits Assets held for the benefit of improvement districts 13,891 4,452,068 Total liabilities 219,743 536,297 25,086 4,452,068 Fund balances: Reserved for encumbrances 2,631,784 973,746 Unreserved: Designated for: Impress fund 100 Affordable housing 101,794 Future year expenditures S 13,501 Total designated fund balance 615,395 Undesignated 123,113 1,541,742 48,185 Total fund balances 123,113 4,788,921 1,021,931 Totalliabilitiesandfundbalances $123,113 $5,008,664 $1,021,931 $536,297 $25,086 $4,452,068 - 112 - Agency Funds er ormancc Improvement and Flexible Lapsed Totals District Refundable Payroll Spending Wartants R .vim Deposits ('learance A.ac~nt funA 1222 1228 $ $97,151 $ $169,687 $ $8,571,251 $10,862,964 276,630 1,580,472 1,314,820 100 100 276,630 97,151 169,687 10,151,823 12,177,884 12,313 84,774 3,393,496 14,610 3,408,694 3,277,263 1,398 147,301 111,6!5 3,394,894 14,610 3,568,308 3,473,652 1,400,000 1,400,000 $276,630 $97,151 53,394,894 $169,687 $14,610 $15,120,131 $17,051,536 $ $12,163 $1,302,733 $ 5 S 1,913,575 $ 2,033,884 3,624 4,893 64,446 638 1,193,168 1,284,724 1,121,442 898,993 169,687 14,610 1,092,858 1,085,794 84,350 84,350 69,791 276,630 4,742,589 6,726,939 276,630 97,151 3,394,894 169,687 14,610 9,186,166 11,042,743 3,605,530 2,654,349 100 100 101,794 96,754 513,501 465,839 615,395 562,693 1,713,040 2,791,751 5,933.965 6,008,793 $27G,630 $97,151 $3,394,894 $169,687 $14,610 $15,120,131 $17,051,536 - 113 - COUNTY OF HAWAII Expendable Trust Tunds Combining Statement of Revenues, Expenditures and Changes in Fund Balances For the Fiscal Year Ended June 30, 1999 (With comparative totals for the fiscal year ended June 30, 1998) Hawaii County Totals Park Housing Geothermal Dedication Aeencv ASSCI 1222 122.8 Revenues: ]ntergovernmental $ $7,058,969 $ $7,058,969 $7,902,808 ]merest 5,924 156,939 48,186 211,049 214,890 Miscellaneous: Donations 50,000 50,000 81,360 Resale ofproperty 656,020 656,020 564,675 Other 608 Total revenues 5,924 7,871,928 98,186 7,976,038 8,764,341 Expenditures: Current: General government 2,749 2,749 9,775 Health, education and welfare 7,859,555 7,859,555 7,816,144 Pension and retirement contributions 188,562 188,562 219,790 Debt service: Interest charges 46 Principal retirement 2.31 I Total expenditures 8,048,117 2,749 8,050,866 8,048,066 Excess (deficiency) of revenues over expenditures 5,924 (176,189) 95,437 (74,828) 716,275 Fund balances at beginning ofyear 117,189 4,965,110 926,494 6,008,793 5,292,518 Fund balances at end ofyear $123,113 $4,788,921 $1,021,93 ] $5,933,965 $6,008,793 - 114 - 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, 1999 Variance Favorable gy~{g~ A~ual ([lnfavorablel Revenues: Intergovernmen[aL Federal grants: Housing preservation grant $ 67,297 $ 67,297 $ HUD -Housing assistance 6,126,700 5,348,002 (778,698) HUD -Voucher program 1,678,400 1,684,563 6,163 Total in[ergoverrunental 7,872,397 7,099,862 (772,535) Interest earned 11,380 156,939 145,559 Resale of property 656,020 656,020 O[her 8 8 Total revenues 7,883,777 7,912,829 29,052 Expenditures: Health, education & welfare 8,051,024 7,818,083 232,941 Pension and retirement contributions 260,400 127,397 133,003 Health Fund 56,700 56,586 ll4 Total expenditures 8,368,124 8,002,066 366,058 Deficiency of revenues over exenditures (484,347) (89,237) 395,110 Fund balance at beginning of year 4,965,110 4,965,110 Fund balance at end of year -budgetary basis $4,480,763 4,875,873 $395,1 l0 Adjustments to conform with generally accepted principals: Encumbrances at beginning of year (2,654,290) Encumbrances at end of year 2,631,784 Accrued employee costs payable (64,446) Fund balance at end of year - GAAP basis $4,788.921 - 115 - COUNTY OF HAWAII Agency Funds Combining Statement of Changes in Assets and Liabilities For the Fiscal Year Ended June 30, 1999 Balance Balance July 1, June 30, 129_$ AddiliQns reductions 1QQQ Stale Weight Tax Fund Asseu Cash and cash equivalents $509,799 $ 6,062,400 $ 6,035,902 $536,297 1.13t111111S;S Warrants payable $509,799 $ 6,062,400 $ 6,035,902 $536,297 Accmed liabilities -due to State of Hawaii 6,062,400 6,062,400 Totalliabilities $509,799 $12,124,800 $12,098,302 $536,297 Improvement District No. 16 ASCC[C Cash and cash equivalents $2,195,152 $393,187 $2,563,303 $25,036 Other receivable 50 50 Total assets $2,195,152 $393,237 $2,563,303 $25,086 l.iahilities Warrants payable $ $2,574,498 $2,563,303 $ 11,195 Accrued liabilities 120 120 Assets held for the benefit of improvement districts 2,195,032 393,357 2,574,498 13,891 Total liabilities $2,195,152 $2,967,855 $5.137,921 $25,086 Improvement District No. 17 Assets Cash and cash equivalents $2,868,589 $1,784,305 $1,600,826 $3,052,068 Restricted assets -cash and cash equiv. 1,400,000 1,400,000 Total assets $4,268,589 $1,784,305 $1,600,826 $4,452,068 t.iahiliti s Assets held for the benefit of improvement districts $4,268,589 $1,784,305 $1,600,826 $4,452,068 (Con[inued) - 116- COUNTY OF HAWAII Agency Funds Combining Statement of Changes in Assets and Liabilities For the Fiscal Year Ended June 30, 1999 (Continued) Balance Balance July 1, June 30, 1QQ$ Additions reductions 1.924 Improvement District Revolving Fund AcCPIS Cash and cash equivalents $ $ 13,312 $ 13,312 $ Investments 263,318 13,312 276,630 To[alassets $263,318 $26,624 $13,312 $276,630 Liabilities Assets held for the benefit of improvemen[ distric[s $263,318 $13,312 $ $276,630 Improvement District Bond and Interest Redemption Fund ASSP.IS Cash and cash equivalents $11,959 $1,597,612 $1,609,571 $ .iabilities Accrued liabilities -debt service on special assessment bonds $11,959 $1,597,612 $1,609,571 $ Performance and Refundable Deposits Fund ACSPIS Cash and cash equivalents $81,095 $208,780 $192,724 $97,151 I .iabilities Warrants payable $11,034 $194,222 $193,093 $ 12,163 Due to other funds 270 638 270 638 Cus[omer advances and deposits 69,791 208,781 (94,222 84,350 To[alliabilities $81,095 $403,641 $387,585 $97,151 (Continued) -117- COUNTY OF HAWAII Agency Funds Combining Statement of Changes in Assets and Liabilities For the Fiscal Year Ended June 30, 1999 (Continued) Balance Balance July 1, June 30, 1.24fl Additions Deductions J.312 Payroll Clearance Fund Asseu Cash and cash equivalents $ $ 74,536,317 $ 74,536,317 $ Due from other funds 3,277,263 74,612,155 74,495,922 3,393,496 O[her assets 26,640 25,242 1,398 Totalasse[s $3.277,263 $149.175,]12 $149,057,481 $3,394,894 f .iabiliti s Warrants payable $1,352,775 $74,661,370 $74,711,412 $1,302,733 Due to other funds 1,017,446 1,208,881 1,033,159 1,193,168 Accrued liabilities 907,042 15,641,761 15,649,810 898,993 Total liabilities $3,277,263 $91,512,012 $91,394.381 $3.394,894 Flexible Spending Account Assts Cash and cash equivalents $157,105 $481,634 $469,052 $169,687 1 iabiliti s Accrued liabilities $157,105 $481,634 $469,052 $169,687 Lapsed Warrants Fund P. Due from other funds $ 14,610 $ $14,610 l .iabilities Accrued liabilities $ 14,610 $ $14,610 (Continued) - 118- COUNTY OF HAWAII Agency Funds Combining Statement of Changes in Assets and Liabilities For the Fiscal Year Ended June 30, 1999 (Concluded) Balance Balance July 1, June 30, 1QQ8 Additions reductions 1292 Total -All Agency Funds ASSCIS Cash and cash equivalents $ 5,823,699 $ 85,077,547 $ 87,021,007 $ 3,880,239 Investments 263,318 13,312 276,630 Due from other funds 3,277,263 74,626,765 74,495,922 3,408,106 Other receivables 26,690 25,242 1,448 Restricted assets -cash and cash equivalents 1,400,000 1,400,000 Total assets $10,764,280 $159,744,314 $161,542,171 $8,966,423 Liabilities Warrants payable $ 1,873,608 $ 83,492,490 $ 83,503,710 $ 1,862,388 Due to other funds 1,017,716 1,209,519 1,033,429 1,193,806 Accrued liabilities 1,076,226 23,798,017 23,790,953 1,083,290 Customer advances and deposits 69,791 208,781 194,222 84,350 Asses held for the benefit of improvement districts 6,726,939 2,190,974 4,175,324 4,742,589 Total liabilities $10.764,280 $110,899,781 $112,697,638 $8,966,423 -I19- This page intentionally left blank. - 120 - GENERAL LONG-TERM DEBT ACCOUNT GROUP This account group accounts for the long-term debt of the Primary Goverrunent except that related to the Enterprise Fund. COUNTY OF HAWAII General Long-Term Debt Account Group Schedule of General Long-Term Debt June 30, 1999 With Comparative Amounts for June 30, 1998 1242 1228 Amount Available and to be Provided For Retirement of General Long-Term Deht Amount available in Debt Service Funds $ 17,804,829 $ 19,836,866 Amounts to be provided for general long-term debt: General obligation bonds 97,854,087 102,020,887 State Revolving Fund loans 27,301,610 27,571,490 Accrued compensated absences 17,145,184 18,503,889 Estimated claims and judgments 9,888,528 8,337,661 Capital lease obligations 369,177 549,928 Landfill closure and pos[closure care costs 22,048,000 19,896,000 Total amoun[s to be provided for re[irement of general long-term deb[ 174,606,586 176,879,855 Total $192,411,415 $196,716,721 neral .ong-Term Debt Payable General obligation bonds payable: 1977 Series A, public improvement bonds $ 293,000 $ 309,000 1978 Series, refunding bonds 18,355,000 20,075,000 1989 Series, refunding bonds 1,800.000 2.250,000 1993 Series, refunding and public improvement bonds 60,255,000 63,150,000 1996 Series A, public improvement bonds 28,925,000 30,000,000 1996 Series B, public improvement bonds 709,000 736,500 1997 Series A, public improvement bonds 3,749,500 3.878.000 Total general obligation bonds payable (14,086,500 (20,398,500 Other general long-term debt: State Revolving Fund loans 28,874,026 29,030,743 Accrued compensated absences 17,145,184 18,503,889 Estimated claims and judgments 9,888,528 8,337,661 Capital lease obligations 369,177 549,928 Landfill closure and postclosure care costs 22,048,000 19,896,000 Total other general long-term debt 78,324,915 76,318,221 Total $192,411,415 $196,716,721 - 121 - COUNTY OF HAWAII Central Long-Term Dcbt Account Group Schedule of Debt Service Requirements to Maturity for General Obligation Bonds June 30, 1999 Total Bonds Bonds Fiscal Outstanding Year at Ended Beginning Total Lune 30 of Year pljtiCjpal Interest Requirements 2000 $114,086,500 $6,625,500 $6,197,192 $12,822,692 2001 107,461,000 6,953,500 5,833,920 12,787,420 2002 ]00,507,500 7,313,000 5,447,378 12,760,378 2003 93,194,500 7,677,500 5,048,207 12,725,707 2004 85,517,000 7,612,500 4,642,233 12,254,733 2005 77,904,500 8,027,500 4,227,559 12,255,059 2006 69,877,000 8,488,500 3,786,061 12,274,561 2007 61,388,500 8,940,000 3,311,881 12,251,881 2008 52,448,500 6,438,000 2,808,317 9,246,317 2009 46,010,500 6,791,000 2,467,508 9,258,508 2010 39,219,500 7,143,500 2,103,810 9,247,310 2011 32,076,000 7,532,000 1,719,382 9,251,382 2012 24,544,000 7,942,000 1,311,318 9,253,318 2013 16,602,000 8,341,000 878,985 9,219,985 2014 8,261,000 2,520,500 424,735 2,945,235 2015 5,740,500 2,651,000 294,893 2,945,893 2016 3,089,500 2,786,500 158,325 2,944,825 2017 303,000 303,000 14,771 317,771 $114,086,500 $50,676,475 $164,762,975 -122- GENERAL FIXED ASSETS ACCOUNT GROUP This account group accounts for all fixed assets of the Primary Government other than those recorded in the Enterprise Fund. COUNTY OF HAWAII General Fixed Assets Account Group Schedule of General Fixed Assets by Source June 30, 1999 With Comparative Amounts for June 30, 1998 1212 112$ General fixed assets: Land $ 16,183,543 $ 16,157,621 Buildings and swctures 209,712,330 209,240,082 Machinery and equipment 49,917,621 48,690,313 Cons ruction in progress 29,019,446 20,241,951 Total $304,832,940 $294,329,967 Investment in general fixed assets by source: Capi[al Projects Funds: General obligation bonds $ 92,276,810 $ 86,944,584 Federal grants 69,786,389 66,091,688 Slate grants 3!,623,975 31,623,975 General Fund revenues 30,407,(81 30,526,021 General Fund -Federal revenue 6,088,917 5,589,072 General Fund -State revenue 1,718,858 1,62(,972 Special Revenue Funds revenues 8,512,947 7,5!8,384 Contributions 3,226,234 3, l 17,333 Assets acquired prior to 1979 (sources undetermined) 61,191,629 61,296,938 Total $304,832,940 $294,329,967 - 123 - COUNTY OF HAWAII General Fixed Assets Account Group Schedule of Changes in General Fixed Assets by Function For the Fiscal Year Ended June 30, 1999 Balance Balance July i, June 30, 122$ Addttiflns n d i tionc 1222 General government $ 14,355,899 $ 1,170,012 $ 584,848 $ 14,941,063 Public safety 42,991,013 890,772 444,225 43,437,560 Highways and streets 10,207,669 998,254 140,525 11,065,398 Sanitation 130,824,299 234,166 431,285 130,627,180 Health, education and welfare 566,623 9,430 6,487 569,566 Culture and recreation 61,682,352 505,090 316,933 61,870,509 Educational facilities 8,553,571 25,466 8.528,105 Housing and community development 4,906,590 773 133,250 4,774,113 Construction in progress 20,241,951 8,792,776 15,281 29,019,446 Total $294,329,967 $12,601.273 $2,098,300 $304,832,940 - 124 - COUNTY OF HAWAII General Fixed Assets Account Group Schedule of General Fixed Assets by Function and Activity June 30, 1999 Buildings Machinery and and I,~d 8tn~cmres Fa__~um~~ Total General govertunent: General government buildings $ 475,075 $ 5,186,398 $ $ 5,661,473 Mayor's office 3,421,519 3,421,519 County clerk 284,805 284,805 Finance 1,171,822 1,171,822 Corporation Counsel 158,671 158,671 Prosecuting attorney 880,149 880,149 Planning 375,230 375,230 Personnel services 132,990 132,990 Research and development 84,338 84,338 Public works 2,770,066 2,770,066 Total general goverttmen[ 475,075 5,186,398 9,279,590 14,941,063 Public safety: Public safety buildings 1,902,047 20,593,945 22,495,992 Police 7,485,802 7,485,802 Fire 12,841,918 12,841,918 Liquor 124,611 124,611 Civil defense 489,237 489.237 Total public safety 1,902,047 20.593,945 20,941,568 43,437,560 Highways and streets 1,822,018 2,200,246 7,043,134 11,065,398 Sanitation 600,608 123,142,344 6,884,228 130,627,180 Health, education and welfare 72,574 406,730 90,262 569,566 Culture and recreation 9,846,115 46,633,319 5,391,075 61,870,509 Educa[ional facilities 26,001 8,502,104 8,528,105 Housing and community development 1,439,105 3,047,244 287,764 4,774,113 Total general fixed assets alloca[ed to functions and activities $16,183,543 $209,712,330 $49,917,621 275,813,494 Construction in progress 29,019,446 Total general fixed assets $304,832,940 - 125 - This page intentionally left blank. - 126 - STATISTICAL SECTION (UNAUDITED) Chart l COUNTY OF HAWAII General Governmental Revenues and Expenditures Comparison Last Ten Fiscal Years (In Thousands) $i 60,000 $140,000 ` ` ~ ` ~ . ~ ~ ` ~ ` 0 Revenues ~ ` ` ~ ` ~ ~ ~ ~ ~ ~ ~ Expenditures ~ ` ` ~ ` ~ $120,000 ; ` ~ . ~ ~ ` ~ ~ ~ ~ ` ` . ~ ` ~ ` ~ ` ~ ~ ` ~ ` ` ` . ~ ` ~ ` ` . . ` ~ $100,000 ` ` . ` ` ` ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ` ~ ~ ~ ~ ~ $80,000 ` ~ ~ ` ` ~ . ~ ~ ` ~ ~ ` ~ ` ~ ~ ` ` ` ` ~ ` ~ ~ ` ` ~ \ . ~ ` ` ~ \ . ` ~ ~ \ ` . . ~ ` . ~ $60,000 ~ ` ` ~ ~ ` ` ~ ` ~ \ ~ ` ~ ` ~ ~ \ ~ ~ ~ ~ $40,000 ` . . ` ` . ~ ` . ` ~ . ~ ~ ~ ` ~ . ~ . ` ~ ~ ~ ` ~ \ ~ ~ ` \ ~ ` . ~ ~ ~ $20,000 . ` ` ` . ` ~ . ` ~ ~ . . ~ ` ~ ` . ~ . ~ ~ ` ~ ~ ~ ~ ~ $ I I I I I 9~ 9` 9~' 9~ 9a 05 96 99 ~96g 199 ?991 ,991 ~9g~ ,99a X996 1996 ~99~ ,996 - 127 - L ul ~ O O~0 M N ON ~ O L N 'R O ~ Q~ ~ N O M r N rl N h M < O~ O M OD ~O I"' 00 O N M ^ V ~ ^ v1 N r N r O~ M O ~/1 OO N h ~ V'1 ^ ul h ~h N 00 _ `S M O~ r ~O O ~ N V ~ 00 O~ O~ ON-. N ~ O h Q ~ a O v ~n ~o r ~ ~o r o0 w M v~ r r rn rn M o0 it m ~ rn o e~ oro ~ v~~ C ~ M - O h M O V C 7 GL ~ e oo ~ e v ~o ~n v ~n C N O~ pp N OO N O~ 00 r ~D O~ M O O M N ~ r r7. ~ .Q N N G ~ ~ ~ O O M O V O~ Q 7 y a Q 'O } m ~ o. ~ s ~ a$ h g~ v o v g~ y~ v. F- ? ~ ~ ~ ao a o o - ~v O W c ° U ~ va CO F w _ v_ Z c E ~ N r rn a ~n ~n - y N r Q ~ r ~ N K n v r O N U L O vl ~D ~D O~ O~ O N N V ~ 7 ~ I~ C v ~ L ~ L ~ ~ Or0 ~ ~ ~ N ~ ~p 'U C ? ~ ~n ~ vi ~o v; w ~o ~D ~o 0o u d t ~ ~ y _ ~ L pp L Oro N~ N O N OO Q~ r M G ~ O~ 00 ~D V r M M ~O O ~ _ v ~ rN•1 M V O ~ ~ ~ h ~ ~~/1 ~ vv v v N N h 00 vl W 00 N r ~ W O N b O `~O N ~O v1 ~ C~ N ~ ~ ~ r OO aD B O O h N b9 V L C v v N iv O N M a ul ~ r 00 O~ ~ ."'I P ~ P T O~ Q. O~ O~ O~ O~ L ~1 ~ -128- Chart 2 COUNTY OF HAWAII General Governmental Expenditures by Function Last Ten Fiscal Years ([n Thousands) $tso,ooo 00ther ~ Debt service ? Capital outlay ¦ Pensions and retirement $140,000 m Culture and recreation ~ ® Sanitation 0 Highways and streets ®Public safety O General government $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 19990 199~,9~ 199, 92 199ry93 199 9A 199p 95 ,9g59~' ,9969'l X991 98 ,99g 99 - 129 - Table 2 COUNTY OF HAWAII General Governmental Revenues by Source* Last Ten Fiscal Years (Values in Thousands) Licenses Charges Interest Fiscal Taxes and and Inter- for and yEyi Accrc~mentc Pfffi11S Governmental S rvi c Ptllallie5 4311eL Tsltal 1990 $58,653 $4,928 $24,559 $3,281 $3,742 $1,902 $97,065 1991 66,632 5,496 22,451 3,290 6,223 1,543 ]05,635 1992 75,774 5,331 27,188 3,576 4,150 2,613 118,632 1993 86,964 4,941 26,617 4,555 3,039 3,995 130,111 1994 97,893 5,107 28,581 4,983 3,068 1,676 ]41,308 1995 100,028 5,788 31,684 5,439 4,205 1,588 148,732 1996 101,755 5,836 33,656 8,032 4,692 2,500 156,471 1997 96,124 6,124 36,016 7,796 5,859 2,009 153,928 1998 97,332 6,351 38,893 8,885 5,881 1,756 159,098 1999 94,645 6,952 35,075 10,148 5,545 3,440 155,805 Includes General, Special Revenue and Debt Service Funds. - 130 - Chart 3 COUNTY OF H.~WA[I General Governmental Revenues by Source Last Ten Fiscal Y'cars (In Thousands) 5160,000 _ ti 'e , Interest and penalties I m Charges for services ?Intergovernmental j - - - 5740,000 ' ~~'i t7 Licenses and permits ©Taxes .•l 5120,000 Jv I lX I ~ 5100.000 _ - - _ _ _ ~ : ~ . /i ~ :;'y 580.000 ~ l~ 5so.ooo - - - 540.000 520,000 g0 9~ 92 9'S ga 95 96 q1 9~ g9 `9~9, ,99~" ,99~, ,992, ,99 j" ,99a, ,995. ,9~~" ,99~. ,99~, - 131 - Table 2a COUNTY OF HAWAII General Governmental Taa Revenues by Source'" Last Ten Fiscal Years (Values in Thousands) Real Fiscal Progeny Fuel Franchise Year Tax Tax Tax Tstal 1990 551,652 $5,101 51,900 558,653 1991 59,132 5,269 2,231 66,632 ]992 67,922 5,321 2,531 75,774 1993 79,000 5,349 2,615 86,964 1994 89,538 5,504 2,851 97,893 1995 91,200 5,6]3 3,215 100,028 1996 92,512 5,820 3,423 101,755 1997 86,490 5,783 3,851 96,124 1998 87,420 5,832 4,080 97,332 1999 84,792 5,900 3,953 94,645 " Includes General, Special Revenue and Debt Service Funds. - 132 - M N ,q y ~ ~C ? ~n Y r ~r~ vl M M - - t- j "J J V M - CO a x ~n x r O ~ ~ rl ~i i n r ~ iO x n _ ,y 'S O Q~ Vl - M 01 M x x ~ ? ~p ~n r M N N r M N Ol ? S vt a N rl M v~ a r ~O C x ~1 V1 O -t x ~ -t ~O y hl N M x ? Vl t+l M ~ O O Q ~ r L V ~ ~ ~ ~n ~i a - ~ = O ~ a v ~ a ~ ~ M ~l p~ - ~O M x l O -i v-. r ~ ~l X rl O ^1 ~ ~ O~ E.., ~O - O~ ~J ~n rv v~ -t ? 1~ - a r a - ~i ~ r Y vi v'. b r x a a x x x "r L:. ~ ~ - r r i ~ ~ a ~ N K ~1 I .a - r V', v O x x M M Z ~ T N rl nl N O v Y Y v ~n y ~ V r y. L. ~ (`O C~ L`° ~C ~Y ~ w ~`u Cm _ = = ~ r x r i x .O K .p ~ a a a a x a a a a a a 't ~D x M M ~n K v'J Y x M O x -t v ~ K o r x a ^ x M y M a M 'Xi a Vl ? M i r r x x O r F a n x a M p .O vl '-t xr v`,, .v'o ~ z -mac l x x M a M x Q+ `^J M x r r M a r Y ~f 00 ~n M M M Nl O x ~T ~h i, oo ~i ~n ~O O~ -1 C r~ ri v~ - O T O a ~G M O -T J r r M r M ~L` 'n 1 !n v-~ b x T a x x x O~ a a a ~ a a a s a a a Q~ a a a a a s O~ - ~ - Table 4 COUNTY OF HAWAII Assessed and Estimated Actual Value of Taxable Real Property Last Ten Fiscal Years (Values in Thousands) Ratio of Real Property Total Assessed to Fiscal Assessed Estimated Total Es[imated YCat Yd111C A t ial Val ~e Actual Value 1990 $5,515,928 $5,515,928 100% 1991 6,299,590 6,299,590 100 % 1992 7,323,123 7,323,123 100% 1993 9,220,304 9,220,304 100% 1994 10,812,347 10,812,347 100% 1995 10,618,892 10.618,892 100% 1996 10,611,589 IO,ti11,589 100 % 1997 ]0,279,240 10,279,240 100 % 1998 10,156,903 10,156,903 100% 1999 9,929,443 9,929,443 100 % Notes: There is no personal property tax in Hawaii. Assessment ratios are uniform statewide. - 134 - 'Y. t~ T M Vl N T Vl W Vl W C 01 ? 01 Y - y ~ 'K r r W - W N ~ ~ GC ~C M a ~ Vl Q, ^ ~ L OC O1 M N t^1 CO Y ~!l - 'V N O ~/l V1 M M O~ V'. N OC t~ M N Y - V1 f rl CT OO Y N ~J - N - F v~ .p i v = ~ ~ ~ ~ z z 8 8 8 8 8 8 8 ° 8 8 5 8 8 8 8 x ;n x o 0 0 o c c c o0 0 0 0 0 0 o d v r G V J :3 ~i Y. v T a Y ri M v, - M ~n - o- Y M c~ ~O r vi ~ 00 h ~D ? J M f~ ~ OCi Y Y ~ ~ OG OA O ~ ~O M Vl O Q~ 01 O ~ N M Vl "J y ~ T Y r b Y ~/1 rl - rl P o0 N alt M I~ M in M v'J r Y ~O T ~ O M -f T oc a N ~O v7 ~ s co of ri ri - O - O o N M n - - 7 ~ F _ ~ _ j > v - ~ M M -L ~ ~ Ge i~ p .J p 0 0 0 O 0 0 0 0 0 0^ v U } ~ ? = «n ac x x oc o0 00 ~0 00 00 oc z z oc oc o0 oc O ~ r- r _ v 'r _ ~ ~ Q ~ - J Q, r Vl M M O1 Y -T ~ ^ M ^ GG 'Y ~G ~ U ~ - Ol N GC r rl vl Y Y ~i ~C f~ iD t"1 OG O Y CI N f~ M Y ~O rl ~C O~ M O~ Q~ O T CG M r - O L G JG Y ~r, ~C f~ M. - Vl M Y f~ ~ Y - OC T 'JC v'J Y 'J: ~ Y rl V^. ~ N N ^..J GG ~O N - ~/l M f~ M ~ ^I N hl ~ rl M (n ?1 r; L L ^Ci x °v v 7 v 'J 2v' ~ ~ ~ r ~ ~ ti .r ~ ~ ~ _ C ~ _O ~ ~ y C C ~ ~ ~ _ C G O C~ G~ O~ L G O O ^J, O G L_ _ 7 h ~ T ~ r L P T C L ~ _ - C U - l3~ - ~ O N 00 00 r M r 00 M pNp N N 00 ~O T 00 M N OO D\ V 00 R 00 r L vt r 0 ~D vi vl O~ O r W V 0~0 00 N ~ r'1 ~ r N M vt N N W t~~t A D C O O V N~ ~D r H O% p n~ r OM ~ b M~ N rpp b N h M O ON N M N r~~ V M b^ ~ ~y 00 M N O T N 00 ^ M ~/1 M h 0 V1 M N N M N 00 h r O~ M r M w1 00 0. r N T N O 7 d A ~ W IJi ~ ~ z c °8888888 °88888888 °8888888 ~G~pp a~ o0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 r 00 O O O O O C O< .7 ac yi vi ~ ^ m H 0. L ~ O st ~ vii ~ N O N ~~/t h ~ 8 ~ P m W OV'0 ~ T ~ O~ ~ V~1 Oro ~D ~D r r C n h h~ oo N M O ph 00 r N~ Vl r 00 0\ ~ M DD r M W N r R v c v e- o- M r v M V ~o ~n - r 'O ~O ~D O N ~O h ~ O O M h R N ~ ~ N 00 ? ~ ~ ~ ~ ~ r ^ O D\ ~ F N M vt V N rt ^ N N ...11 _ _ 7 v b9 ~ Vi ^ ~ Vf N ~ z ~ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 g 0 0 0 0 0 0 0 0 ~n ry h h h h ~/1 vl h V1 h N Vl h h h V1 ~/1 h Y1 h h h Vl V1 O ? 0.' w o0 00 00 00 00 0o ao 00 00 0o ao 0o aD o0 00 0o r o0 00 00 00 00 00 00 0o c ~ x ~ vi ~ m F 0. v o h r o rn o. v r^ m o` M m h M oo r N ao v ao ^ M M v o N ~o ~o r O oo M v o v ~n ~n r yy ~o 00 ~o e M o 0o ~p N v~ oo r w p~ r .G D: U N ~D v r Y1 r M V1 D\ ~ C N O M O~ ~D M OO O M r OO M O 00 O ~p C _ _ p~ v R 'O ~ N ~D ^ r V 0^ ONO W N N a O~ M r D\ ? b N T b M~ ~O ~ Vl ~ ~ r r ~D N ~'1 O N O h M^ Vl 'Q r b d ~ ~ bM9 ~ ~ ~ ~ Z ~ N A is C m C u v ~ N d ~ ~ O 9 y ~ •p N ~ 'O L U a a ~ C ~ N N~ o 'O o v °c tO c o u c .v. m 2 tO 3 a~Oi ~ v c~~ tO 3 v v> v v~ Z o > tO " Z o o E r v E v ,v„ o Q E r v~~ c E c .E a .01 E~ c E A a 'c n o o~ m o~ n ~c c o o 'o m o o c c o o 'a m o o a E ~ Q S U .c- ¢ U E~ Q x U~ Q U 2 4 2 U ~ Q U S x v c M Y., v ~ rn rn c o U - 136 - ~ h 00 V1 ~ Yl h D\ ~ N N ~ N N M 00 r r h O~ ~ pp y N r ~O D\ O L v M p ~ OO N~ M N V ~ ~ M r O~ v1 r T r 7 OO N^ O 7 ~D r OO ~ w ^ O~ - O N i0 [ a0 00 O V M vi o0 N N M M vt 7 V 4\ W M N V a N O A O r M M QD V1 ~ N 00 M Q\ b~ 00 Y ~O V1 ^ W ~/l Q\ 7 r N M ~O 0\ L K O M M E^ O~ r O- O O ~D r N 0 Q\ M M V1 a\ ~ W r U h r ~ [ry ~ 00 R h Q\ r M r M r ~O OO OO r 'C r M 00 ~O OO M~ 00 r M h N~ N N O N O N O v ~ ~ ^ fiA ~ b9 Vj W za aA~ °8888888 °8888888 °8888888 ~aai o000oooooa o0000000o v o000ooooov F 4 ~D N r M M ~ r N M ~ ~ V V1 ~ 00 D\ ~ V ~ Q\ R ~ ONO y~y N V1 ~O O y ~O ~ 00 h~ h O M N O DD r h 00 V1 r O~ h N r O\ V1 ~O M M r 00 L K C h O ~h N O 0 0 O~ K M M R O D\ Q\ r N O 00 h ~O r y ~O F" R ^ C Yt 7 M N N~ ~/1 M v1 V M N O N O V ^ M M~ M~ 00 N O w .J _ ~ L tH N ^ Vi bq N ^ Vi ffi ^ 6Ii z ~ ~ o000oooo~n o0000000~, o000oooo~n ~N h h h h vt vt h h R Vt vt h h h h h v'1 V ~/1 u'1 vt h h r1 ~/1 h V `q ao 0o m o0 00 00 00 0o v ao 00 00 00 00 00 0o m v o0 00 0o ao ao 00 00 0o v ~ x w va w ~ F d v O O K O~ 0\ N T V OO O~ M N ~/t ~n O oo O~ ~O O~ ~O O N T O a0 O V r r 00 M O 00 O ~/l r 00 ~ N M ? O O OO M ~ ~O 00 V1 OO N N M O~ C 4\ N r M 0 ~pO ~D ~/1 ~O 00 M Vl 00 M R r vl V O pp~~ M N~ N r ~a~p0 ^ r V j N 9 n N W OHO v~j ~ b~ h r W~ M~ W OM. f~~1 N O N r Vr'1 W ONO O ON lN~1 O ~ E.., :E ~ rn v M ~o ~o o w a+ M - ~o r - r~ oo v M ^ r m N ~ v 07 ~i w ~i Z ~ a A v v A O` ~ L ~ p U ~ O L O O O V d y a V C h y~ d C` U a d C ~ a gi C is ` O y C ~i fY ro ~ o v C N C is ` ~ C ~ o v~~ m 2~ c $ o v~ E o ~ o v~~ 8 td 3 . p a. E ~ u u o E u h v o ~ EE H 'u_ v °u E ~ ~ ~ c E n ~ ~ .°3 ~ ~ c E `o..E m E ~ e E m E~¢ S V~¢ U 2 E_¢ S U U E~¢ x U=¢ V x a X N C iv ~n ~o r v u ~ ~ c r p U - 137 - ~ ~/t M P O oo C r M - 0` y r O rn wt M ~'t M v v w O r ~n u~ M O M p p e N~ ta o ~n N r ~ ~D M r M 00 r V1 O `O O~ 00 N U O ~ V'1 D\ ~ M `o m v o 00 o N ~o c: r ~o ~ a; r rn N oo pp oo QoQ a: F K O~ N-~ 00 M T N y W T N M O 01 D\ 00 GJ N ~ A ~ r M N a\ 00 M M N O ~O N N O W M N D` 7 d w ~ N N O ~ N ry~ Z a ~o A25 °gggggggv °gggggggv tcQaw o000oooooti o000ooooov .J K b9 - - - Vi A F a ~ vt r 00 r K N o0 M V1 O N O r D\ - O~ r W. v'i O ff- D\ N O Q` V N vi c r U V N 0` M O A r N V N r M N r T - ~/1 V Vl D\ W ~D 'O O N V N N r V D` W Q\ D\ - N vl - r N 0 A N C ~ O~ GO ~ T O N r N M r ~O 00 O~ Q~ O T r N Vl .`JY O N M 'C M N ~p N- 00 T N M O M N R N O ~/1 L Iry ~ ~ - b~9 Z ~ 0 0 0 0 0 0 0 0 ~n 0 0 0 0 0 0 0 0 ~n E is _ vi vi v~ v~ v~ .n v, vi v ~n v, vi N vi v~ v~ ~n v W 00 OO 00 00 00 00 Op 00 V 00 OO 00 00 00 00 00 OO 'J' R K Vi 07 F a m n~ M 'C b~p~ N t~~t ~ O b ~D o~0 V r 0 O n G T O M-~ O N r a0 O~ P N W h M O~ a\ W ~O M K M ao r ~O o0 O r D\ p ~ O r C O~ V~ O_ rv a u O F r N aMp ~ v r O~ M r N o~ v~'~ V~ ~O D\ M O V b ~ ~ ~ ~ i b9 Z `u Y N E W r. O A N O n v m y v y L. ,C ~ .C .v U A ~ y r ~ O ~ G' ~ y a N U a u v c ~ v v c S O: y a A A~ v a v R: n is .O v o u~ v ~ Z c ° o v A v .y ~ Z c A O E r v E u y v o E C v E u h o C C 6 0 C 'd c0 O O d G 6 0 0 M O O A E~¢ 2 U°¢ V x E 2 U 5¢ U x > u ~ a rn F ~ o. rn p z - 138 - Chart 4 COUNTY OF HAWAII Assessed Value of Real Property Last Ten Years (In Thousands) $12,000,000 ? Land © Buildings $10,000,000 $8,000,000 $6,000,000 4• $4,000.000 r~. i~• ?1• r{. r~• ?4. rti. r1' L• Y i. r. r. 1. i• r~• r- ri• d1. r:• r~• ?L. ?4. i1• rL• r. V. rti• ?ti• r1~ I. L• L• iV' ry ?1. i~• r• ?1 J. ?5• i. r. y. ti. r. r. S. S. $2,000,000 i`• j:' i:' ?j. r`• r1. ?i r{. - r. r. 1. S. r. 4. r. S. 1. rM1. 4. y r1• r1• f. i• r. t. r. L. J• 1. r\• i\. r1. rti• Jy ?L. r~• ?1. r:• ?L L. i1' 4. r:• r:• rti• ti. r`• rti S• r4. r~• J. r. 1. L. r. rte. r• r. ti. r. $0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 -139- Table 6 COUNTY OF HAWAII Principal Taxpayers June 30, 1999 Percentage 1998 of Total Assessed Assessed Tax~aver ]3,cin cc Valuation Valuation Kaupulehu Makai Venture Developer $153,200,100 1.3% Global Resort Partners Hotel 122,500,000 I.0% South Kohala Resort Corp. Hotel 102,123,700 0.9% B. P. Bishop Estate Land Trust 83,292,500 0.7% Mauna Kea Beach Hotel Corp. Hotel 96,063,200 0.8% Mauna Lani Resort Inc. Developer 77,960,100 0.7% M. L. Hotel Investors LP Hotel 65,543,100 0.5% KM Kona Partners Developer 54,628,600 0.4% Kona Resort Ltd. Time Share 45,528,800 0.4% Mauna Lani Resort Inc. (Operations) Hotel 4],618,600 0.3% $842,458,700 7.0% Note: Gross valuation at January 1, 1998: $12,074,938,272 - 140 - Table 7 COUNTY OF HAWAII Computation of Legal Debt Margin June 30, 1999 Total assessed value $9.929,442.778 Limitation as set by the Constitution of the State of Hawaii (A) 1,489,416,417 Amount of debt applicable to deb[ limit: (B) County general obligation bonds $126,387,350 Stale Revolving Fund loans 28,874,026 Other debt 1,146,411 156,407,787 Less: Bonds maturing in current fiscal year 7,530,400 SRF loan principal maturing in current fiscal year 1,561,899 Bonds reimbursable by DWS 11,395,950 Pro rata share of 1978 Sinking Fund 6,634,415 27,122,664 Total amount of debt applicable to debt limit 129,285,123 Legal debt margin $1,360,131,294 (A) The bonded deb[ limitation of the County of Hawaii is established at 1596 of the total assessed value of all county real property as established for tax purposes on the last tax assessment rolls. (B) The Constitution of the State of Hawaii, as amended in 1978, states that the debt limitation is not applicable to indebtedness incurred under revenue bond statutes; or by a public enterprise when the only security for such indebtedness is the revenues of such enterprise; or of indebtedness incurted under special improvement statutes when the security for such indebtedness is the properties benefited or improved or the assessments thereon; or, under cettain conditions, to certain types of general obligation bonds issued by the County or State of Hawaii. - 141 - v A z o Q r~~ oMO °r~ ~ rn~ rn Z. m z" v v ° v ~ ae se ae ae ae ae ae ae ae ae r O N vi N - c O Q LO ~ ~O O U L d ,Q ~ h O~ ~ M I~ r r M N 61 ^ L N M M - 00 Vl ~Np ~ ~ M F~1 Z O ~ O N pN v~'~ M ~Np O ~ ~ ~ 'fl p ~ oM0 ~ O O n e ~ N ` O oD T Ci ~ a. c c ~ ° 'o .r A U 3 ~ VI N y ~ ~ ~ i ~ ~ ~ i ~ ~ G C ~ u U a E v v u a x = L O v s O ~ n y ~ ~ u w A O ~ F - r r oo r~ v- N V c o ~ ~ w ~ v°Oi m r ~ ~ M N v1 c n v ~7 H N py O U~,' O Q •J ~ O M rn r oo ao v~ ~p R `D p~ w A c U O y N pNp h M ~N~pp - ~O C 9 V m W W O~ 0 0 can y ~ N a 9 A ~ ~ O M A u d ~p ~C N T Q L ~O O~ ~/1 00 M O~ 00 Yl OD N A 9 U ~ ~ T P f~~l V~'1 VM"~ ~D V~1 r ~ G. d ~ ~p r O~ - - r N o0 O ONo N ~ O u~ d` h N OM n W h N P < O y ` r z H h O~ M O N oo O~ ~O O~ y V c a v1 N M N 00 ~O ~O N N U 3 E d ~U U F v Q h e r o~ 0 0 0 0 0 0; c A ~ ,c F w 3 a g c v ~ " $ a oQ o v?" ~O N T m ~'h ~ E c r O N V r ~D 00 vl C T ~L ti N W Y1 r 01 00 M N R y N p ~ 9 m M M N N V1 r 00 _Q ~ L C Q ° N M~ n M n v v z' E c T h is E „ u c c H v Q u7 ~ S rn rn rn a rn rn rn rn rn < n? U - ] 42 - Table 9 COUNTY OF HAWAII Ratio of Annual Debt Service Expenditures For General Obligation Bonded Debt To Total General Governmental Expenditures Last Ten Fiscal Years Ratio of Debt Total Total Service to General Fiscal Debt General Governmental ]'~g~ ~jp~73j interest S rvi F^n ndi gyres >:~nenditurec 1990 $3,022,000 $5,083,110 $8,(05,110 $85,213,673 l0% 1991 2,681,000 6,324,606 9,005,606 102,457,902 9'% 1992 3,026,000 6,137,804 9,163,804 115,070,212 8% 1993 3,992,000 5,936,363 9,928,363 123,140,556 8% 1994 4,923,187 6,459,361 11,382,548 134,984,061 836 1995 5,335,443 6,245,235 1!,580,678 139,831,035 8~, 1996 5,327,414 6,067,082 11,394,496 140,225,931 8% 1997 5,984,439 7,597,939 13,582,378 153,420,338 9`Jb 1998 6,422,996 7,724,699 14,147,695 158,376,171 9°6 1999 7,793,319 7,481,465 15,274,784 156,703,788 10% -143- Table 10 COUNTY OF HAWAII Demographic Statistics Last Ten Fiscal Years Fiscal Per Capita School Unemployment Year P~nulation Income Enrollment Rate (Al 1989 116,S8S 514,833 25,923 3.9% 1990 120,317 * 16,393 26,745 4.0~ 1991 127,350 16,642 27,834 4.5% 1992 131,272 16,948 28,587 8.1% 1993 134,191 17,284 29,433 7.5 1994 136,284 17,710 30,164 10.8% 1995 138,537 18,352 28,188'" 10.2% 1996 139,726 18,825 30,497"" 9.9% 1997 141,848 19,147 30,599 ]0.2~ 1998 143,135 N/A 30,7IS 9.7~ (A) Calendar year. Sources: ; 1990 Census (all other population figures as estimated by State Department of Planning and Economic Development). Public school enrollment only. Other data from County Department of Research and Development. - 144 - ~ o ^ ~ ~ ~ _Q ~ ~ Q, ~ Vl N M < Vl IXi 7 Z. Z Z j. Z Z ~ ~ M ~C T ~ r oc o0 C ~O O -t M K P T M V1 00 ~ 1~ N 00 f~ b nl 1~ O h N U ~ O M O ~O oo O N ~D o0 O~ `D O~ 1 M V1 1~ M t` ~O -T O ao O+ O Y C N M M M - - _ ~ U ~ G M 'S N W OO W W W ~O ~O Y O O x O ~ x ~ M v ^J v M M M N ~ f`I ~ 'gin C ' O G 1 1 C P a - M 'JO 00 K Vl O O 4' ` P r O oC v; ~ - 00 -f O ` ~O r h t~ ~ VJ 1~ ~ V rfi ~ ~ ~ ~ ~ R ~ .c. > O _ ~ c v f~ M~ O N - t` O rl y C C Y ~/l Y V'1 Vl ? Vl M M M ~ y ~ U ° V ~ C p ~ t U - _ ri ~ x a r ~ a ~ ~ ;i ~ a nl ~n r oc cc -r a~ ~ ~ . -t ~ ri M - T oC ni ~n -i y M r r- M x oo M ~n c v L, ~ oC x P N - O N N y Cl ~ N N L. ti ~ CII ^J Vl ni ~D N nl 'T p p CO W M t~ P'J O1 Vl N N M ~ ' N N ~/1 ~f N M K V1 ~t n ~j - c c y o o~ N o, M r- - r -r - o ~ ~ co M r o ~n -r r v, rn a r, r N nl f~ ao P ~O ~O M i `v M -t v-, r o0 00 00 00 00 00 ~ c ~ y vi p c v ~ n r, y ~ M oo N ~D N N N rn r O ~ v * o~ O 1 ~ O ~n N O ~n ~p p~ O~ N M K t` O t` O P M U M M G ~ '~j r N 1~ O oo f~ O - oo W U' M t` O~ t~ V': ~ ~ y` N N M y' M M M M M ~ ~ y L_ z O m T O N M ~T ~n ~ t` W w P P P P P U P P P O~ P O~ O~ P P P P U P M - - Table 12 COUNTY OF HAWAII Miscellaneous Statistical Data June 30, 1999 Date first charier adopted June 1968 Form of government Mayor/Council Area in square miles 4,038 Miles of streets (County only) 870 Number of street lights 8.239 Fire protection: Number of stations 18 Number of fire fighters and officers (exclusive of volunteer fire fighters) 276 Police protection: Number of stations 8 Number of substations 4 Number of police officers 386 County water service: Number of consumers 34,254 Average consumption in gallons per day 22,392,205 Miles of water lines 1,083 Miles of sanitary sewers (County ottly) ~ Number of building permits issued: Building permits 3,158 Electrical permits 2,760 Plumbing permits 2,316 Sign permits 69 Recreation and culture: Number of parks 1 I8 Number of gyms and recreation centers 38 - 146 -